Offering Update: Multi-Family Development Preferred Equity [2020]

October 22, 20203 min read
Offering Update: Multi-Family Development Preferred Equity [2020]
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Offering overview

Yieldstreet closed a $7M preferred equity investment in a special purpose vehicle that is controlled by an experienced Florida based developer. The Sponsor is developing a 368-unit garden-style, multi-family complex and five retail pads on a 33.6-acre parcel of land in Riverview, FL.

  • The Sponsor previously sponsored another Yieldstreet offering: Florida Multi-Family Development Preferred Equity, which is part of the same brand of multi-family properties. 
  • The initial $4M tranche was funded into a Yieldstreet controlled account on 7/28/20.  The Sponsor is in the process of deploying their equity into the project. Once that has been completed, they will commence drawing down on the $4M tranche. The second $3.1M tranche is expected to be funded on or before 1/31/21.

Offering updates

Although the project experienced initial delays as a result of COVID-19 holding up the permitting process, the project is now progressing as expected. Barring any major setbacks, the construction completion date is anticipated to be July 2022.

  • As of October 2020, the final approval of permits was received and construction began. The first phase is site preparation. The majority of the trees that were on the property have been removed and are now being mulched and hauled away. The site is in the process of being balanced with 40% having already been leveled. In addition, a few of the roads for the property are now being shaped. 
  • One of the retail parcels has an executed purchase and sale agreement for use as a gas station with a gross sale price of $2M. The Sponsor has separately obtained a construction loan that hasn’t been drawn yet. Net proceeds from the purchase and sale agreement would be held in an account and used to pay down the construction loan as soon as an equal or greater amount has been drawn. The anticipated purchaser of this retail parcel is currently in their due diligence period, and closing is expected to occur in Q1 2021. Should the sale close, it will essentially serve as a de-leveraging event as the senior leverage provider will be advancing $2M less than they were expected too. 

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 properties 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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