Offering Update: Multi-Family Development Preferred Equity [2021]
Offering overview
Yieldstreet Real Estate closed and funded a $7.1M preferred equity investment for the development of a 368-unit garden-style multi-family complex and five retail pads in Riverview, Florida in August 2020. Riverview is approximately 15 miles southeast of Downtown Tampa and is part of a recent wave of development surrounding the city. Below are additional details:
- The $7.1M Investment is senior to $14.1M in equity contributed by the developer and its investor syndicate and is subordinate to $47.5M in senior secured debt from a publicly listed investment-grade rated bank. The total project cost is expected to be $68.7M, 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 9.75%. Principal and accrued returns are expected to be repaid with proceeds from the sale or refinance of the property at or before maturity of the Investment. Any cash flow remaining after property level expenses and debt service are paid will be paid to Yieldstreet investors until all principal and accrued returns of the Investment have been repaid.
Offering update
Recently, the developer successfully repaid a similar Yieldstreet preferred equity investment, Florida Multi-Family Preferred Equity Investment, in full at the targeted return. The property was located in the Orlando, FL area and the developer was able to complete ground-up construction and sell the property prior to stabilization for a price exceeding the underwritten projection.
The subject investment continues to progress on plan and vertical construction is ongoing as the framing of walls and floors on all nine buildings are substantially completed.The project is on track to be completed by July 2022, which leaves ample runway for lease-up and a sale or refinancing ahead of the Investment’s maturity.
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