Park City Luxury Property Refinancing

Annualized Yield3

Initial Term

11 months

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Status

Fully repaid

Recently funded

Accepting $10,000 - $500,000 investments

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Accepting $10,000 - $500,000 investments

Overview

Invest indirectly in a $13.1M first mortgage loan secured by an under-construction ultra-luxury home and two completed single-family homes located in Park City, Utah. Park City is a premier second-home ski destination that caters to wealthy West Coast residents. The property is under construction with financing proceeds being used to repay existing debt, fund a construction reserve, fund interest & tax reserves and pay closing fees. This offering refinances Park City Luxury Property, which was first offered to investors on Yieldstreet in July 2020.

As of 1/5/21, construction is approximately 65% complete. The borrower has negotiated a guaranteed maximum price with the general contractor for the full hard costs remaining of $8.1M, of which $1.97M was paid at closing for work already completed. This refinancing provides the borrower with an increase in construction reserves, sufficient to cover the guaranteed maximum price plus $100k in contingencies. The borrower expects construction to be completed by October 2021. Demand for homes in Park City has been strong, with total unit sales for 2020 up 64% year-over-year, while total sales volume was up $889M, an 83% increase. Furthermore, the median price of a single-family home across the city rose 26% over 2019.

The loan has a target term of 12 months. There is a possibility that the property is not sold within the loan term in accordance with the sponsor's business plan, in which case the borrower may require an extension or seek to refinance the loan. If that were to occur, the lender may renegotiate to modify or extend the loan at their discretion. Investors are expected to receive monthly interest payments at a target annualized yield of 8.65%. Principal is expected to be repaid at maturity.

Yield

Yieldstreet Fee

1.25%

Target Net Yield

8.65%

Interest Type

Actual 360

Schedule

Payment schedule

Monthly Payments

Prefunded

Yes

Term

Date

Target Term

Mar 1, 2022

Structure

Tax document

1099-INT

Offering structure

BPDN

Expenses

First Year Expense

$100

Annual Flat Expense

$30

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Yield
Yieldstreet Fee
1.25%
Target Net Yield
8.65%
Interest Type
Actual 360
Schedule
Payment schedule
Monthly Payments
Prefunded
Yes
Term
Date
Target Term
Mar 1, 2022
Structure
Tax document
1099-INT
Offering structure
BPDN
Expenses
First Year Expense
$100
Annual Flat Expense
$30

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Essentials

Please refer to the Series Note Supplement for any additional details.

Capital Structure

Where does Yieldstreet lie in terms of priority?

Yieldstreet has purchased a $9.85M participation in a first mortgage loan with equal payment priority under the loan as the originator and its investors.

Based only on the ultra-luxury home, the fully-disbursed loan’s basis is $817/SF and the loan’s basis at closing (net of reserves) is $349/SF. The appraised valuations for the ultra-luxury home equate to an “as-complete” loan-to-value of 35.6% and an “as-is” loan-to-value (net of reserves) of 31.1%.

Cash Flow

How do I get paid?

The loan has a target term of 12 months. Investors can expect to receive monthly interest payments at an annualized target yield of 8.65%. Principal is expected to be repaid at maturity upon a sale or refinance of the property.

There is a possibility that the property is not sold within the loan term in accordance with the borrower’s business plan, in which case the borrower may require an extension or seek to refinance the loan. If that were to occur, the lender may renegotiate to modify or extend the loan at their discretion.

Assets

What is the collateral underlying the transaction?

The loan is secured by one under-construction ultra-luxury home and two single-family residences located in Park City, Utah. The home under construction is located within a ski-in/ski-out gated community nestled in the heart of Park City Mountain, which offers direct ski access as well as a network of hiking, biking, and horseback riding trails. Upon completion, the home is expected to feature six bedrooms, six bathrooms, an indoor/outdoor pool and hot tub, a gym with steam and plunge pool, a bowling alley, a golf simulator, an indoor sports court, an aerial tower lounge, a spa, a heated driveway entrance and a watch tower. The two single-family homes are adjacent to each other and well located, bounded on the east by a major road, on the south by Deer Valley Resort, and on the west by Park City Mountain.

The borrower is a real estate development company which focuses on new construction single and multi-family residentials. The principals of the borrower have provided a full recourse guarantee for the loan. As of 2/22/21, the principals reported a combined net worth of $7.5M held personally and $10.4M beneficial interest in trusts.

Highlights

Collateral Coverage

Market

Execution Team

Experienced Originator

Experienced Borrower

A certified real estate appraiser concluded that the ultra-luxury home had an “as-complete” valuation of $36.8M, or $2,295/SF, and an “as-is” valuation of $18.0M, or $1,112/SF. Based only on the ultra-luxury home, the fully-disbursed loan’s basis is $817/SF and the loan’s basis at closing (net of reserves) is $349/SF. The appraised valuations for the ultra-luxury home equate to an “as-complete” loan-to-value of 35.6% and an “as-is” loan-to-value (net of reserves) of 31.1%. As of 1/5/21, construction is approximately 65% complete, with completion expected in October 2021. The two single-family homes serve as additional collateral and were valued on an “as-is” basis by an appraiser at $3.9M (combined). The two homes are currently listed on the market for $4.5M combined, and proceeds from a sale are required to pay down the loan.
According to the Park City Board of Realtors, while the home sales market dipped in April 2020, by mid-June, the market had recovered fully and by year end 2020 the market had set records for total sales and median prices. Demand is high relative to supply, with many instances of homes selling shortly after listing with multiple offers, often above listing price. The increase in demand has been driven by COVID-related out-of-state migration into Utah and historically low interest rates.
The borrower has retained one of the highest ranked luxury home realtors specializing in the Park City market, who has sold over $2.0 billion of homes comprising over 1,000 transactions in the last ten years. The realtor has listed the ultra-luxury home on the market for $35M+.
The general contractor for the ultra-luxury home is a reputable home builder focused on luxury homes in Utah. It has received numerous industry awards, including recognition as the National Custom Home Builder of the Year by the National Association of Home Builders. The lender has also engaged a construction consultant who has over 35 years of experience to oversee construction progress and confirm completion of work for funds to be released from the reserve. Lastly, as mentioned above, the borrower has retained one of the highest ranked luxury home realtors to market the ultra-luxury home.
Avatar was capitalized in 2003 by one of the world’s largest university endowments. Since inception in 2003, Avatar has originated over $620M across 268 loans, resulting in an average loan size of $2.3M but range up to $20M. Since 2009, Avatar has originated over $371M across 171 loans, with an average loan of $2.1M.
The borrower is a real estate development company which focuses on new construction single and multi-family residentials. The principals of the borrower have provided a full recourse guarantee for the loan. As of 2/22/21, the principals reported a combined net worth of $7.5M held personally and $10.4M beneficial interest in trusts.

Resources

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS AltNotes I LLC ("Issuer"). The Offering is made only by means of the Private Placement Memorandum dated January 14, 2022 and the Series Note Supplement relating to the Offering (collectively, the "Offering Documents"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the Offering Documents, or as incorporated in the Offering Documents by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Documents or in any marketing or sales literature issued by the Issuer or Yieldstreet Management, LLC, as adviser thereto, and referred to in the Offering Documents, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Documents in their entirety prior to investing in the securities.

Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.

¹ Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

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⁴ Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

⁵ Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

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