Offering Update: Florida Multi-Family Development Preferred Equity

Offering overview

Yieldstreet Real Estate closed and funded a $5.6M preferred equity investment in a special purpose vehicle controlled by an experienced Florida-based developer (Sponsor). The Sponsor is developing a 288-unit garden-style multifamily complex on a 16.27 acre parcel of land (Property) in the city of Kissimmee, Florida. Below are additional details:

  • The $5.6M Investment is senior to $10.1M in equity contributed by the Sponsor and its investor syndicate and is subordinate to $35M in senior secured debt from a publicly listed investment grade rated bank. The total project cost is $50.7M, equating to an Investment loan-to-cost ratio (LTC) of 80%.
  • The Investment has approximately 26 months remaining with one optional twelve-month extension subject to certain conditions, including the completion of a substantial portion of the development and that the extended maturity date is not scheduled prior to the effective maturity date of the senior loan.
  • Yieldstreet investors are scheduled to accrue and compound monthly interest at an annualized target rate of 10%. Principal and interest are expected to be repaid through the sale or refinance of the Property at or before maturity. Any cash flow after property level expenses and debt service will go to Yieldstreet investors until all accrued interest and principal have been repaid.  

Offering updates

As of September 2020, the clubhouse has received its certificate of occupancy and leasing has commenced. Buildings four and five are scheduled to receive their occupancy certificates by the end of October 2020. The first tenants have taken occupancy, signifying a major milestone in the life of this investment. Despite COVID-19, work has continued and progress continues to be made. At this time, the Sponsor anticipates construction completion to occur ahead of the initial January 2021 projection.  

About the Sponsor

The Sponsor is an investment entity controlled by a Florida based developer (Principal) who has overseen billions in real estate investments, including the development and acquisition of over 30,000 residential units. The Principal manages the Sponsor and affiliated entities, which are actively developing in and around the subject location. Such projects include the development and sale of over 600 residential units and a hospital facility in the Orlando Regional Healthcare System that is currently in progress. The experience of the Sponsor was a key factor driving Yieldstreet’s investment decision.

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