Yieldstreet funded a $3.325M first mortgage loan (“Loan”) to refinance an existing $3.45M loan that was previously offered on the Yieldstreet platform to investors as North Florida Pre-Development Financing. The Sponsor contributed $1.8MM of new cash equity, and with a total cost of $5.14M, the Loan-to-Cost (“LTC”) is 64.7%.
Yieldstreet funded this Loan to coincide with the sale of the underlying collateral to a new party, a joint venture entity (“Sponsor”) owned and controlled by two experienced Florida-based real estate owners, operators and developers (“Principals”). The Principals of the new Sponsor collectively have substantial multi-family, single-family, and retail development and operating experience. The strength of these Principals’ experience was a significant factor in Yieldstreet’s decision to refinance the loan.
The Loan is secured by three parcels (14.51 acres total, of which 12.35 acres are buildable) of retail-zoned land in St. Johns County, Florida. The Sponsor plans to sell or lease subdivisions of the three collateralized parcels to retail developers. This property is part of a greater development that upon completion is expected to consist of over 3,200 residences, 700,000 square foot (“SF”) of retail, 200,000 SF of office space, and 1,500,000 SF of flexible/light industrial space. As of July 2020, over 900 residences have been sold or leased.
The previous Loan that was refinanced had a principal balance of $4M and was secured by four parcels of land totaling 23.5 acres. A portion of the collateral was sold to a builder for $3.75M on July 2,2020, and the builder secured a 20-year lease to one of the largest regional supermarket grocery chains in the U.S. The supermarket is considered to be an anchor tenant, and is expected to provide an important service to the overall development as well as driving retail traffic to the surrounding retail developments.
The Sponsor has made significant progress on the business plan to sell or lease subdivisions of the three collateralized parcels. The supermarket remains on schedule to open by July 2021. As of December 14, 2020, the Sponsor has indicated that there are four interested parties to purchase four separate subdivisions of 5.1 total acres at an indicative total purchase price of approximately $4.9M. The Sponsor expects the closing of these four potential sales to occur by the end of 2Q 2021 and has signed Purchase and Sale Agreements with two of the four potential buyers. Agreements with the other two buyers are expected to be signed in early January 2021. Additionally, the Sponsor has targeted three potential tenants to lease up the additional space. We are pleased with the early progress the Sponsor has made on its business plan as proceeds from these potential sales would be used to repay Yieldstreet investors in line with expectations.
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