In March 2021, Yieldstreet invested $3.3M of equity (with $7.1M of senior debt provided by an investment grade financial institution) into a $10.5M investment originated by Avenue One for the acquisition of 43 single family rental properties in the Atlanta, Georgia area. The investment had an expected term of 24 months, with the option of a 12 month extension, and a targeted annualized return of 11 – 13%. At the time of the investment, rents on the underlying properties were well below comparable properties and the sponsor set out to perform minor cosmetic renovations in order to re-rent the homes at increased rates.
The investment continues to meet expectations as properties across the portfolio continue to see extraordinary rent increases, largely driven by strong market fundamentals. The Atlanta MSA has continued to be a strong housing market with high rent growth and home price appreciation. According to John Burns Research, SFR rental rates increased by 9.8% in 2021 while home prices increased by 26.8% due to low supply and heavy demand for housing.
Since the start of the investment, 35 of the 43 properties have seen substantive rental rate increases through new leases that are 20% above rents at the time of acquisition. Two additional leases are scheduled to commence in April. The remaining 6 properties in the portfolio are awaiting turnover and continue to be rented at lower rates.
The investment portfolio continues to be on track with its business plan to rent the acquired properties at substantially higher rates ahead of a targeted portfolio sale to an institutional buyer.
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