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Real Estate•Harbor Group International

Harbor Group Multi-Family Eq Portfolio II

Annualized return3

Target net annualized cash yield

~5%

Term

60 months

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Status

Closed

Recently funded

Accepting $40,000 - $500,000 investments

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Accepting $40,000 - $500,000 investments

Overview

Performance update

View the most recent update for Harbor Group Multi-Family Equity II.

Important Notes

This offering is not available to pension plans, defined benefit plans, defined contribution plans, retirement plans, IRAs, 401(k) and 403(b) funds, and funds comprised of these plans and funds.

Highlights

Desirable location
Strong rental market - Columbus, OH
Strong rental market - Cincinnati, OH
Business plan
Experienced team

  • Columbus attracts a young and educated demographic thanks to Ohio State University and a cost of doing business that’s 2% lower than the national average. The employment growth coupled with the attractive cost-of-living has seen the population in Columbus increase by 15% over the last decade, pushing the demand for rental units higher.

    Cincinnati offers residents a low cost of living relative to other major cities around the country, with living expenses amounting to approximately 21% of the median household income. According to U.S. News & World Report, the low cost of living, coupled with a healthy job market featuring Fortune 500 companies such as Kroger and Procter & Gamble, has seen Cincinnati awarded the best place to live in Ohio in 2021. The attractiveness of Cincinnati continues to drive new residents into the area.

  • According to CoStar, the Columbus multi-family market has seen demand increase over the past 12 months with net absorption (total amount of space that tenants physically moved into – total amount of space that tenants physically moved out of) amounting to 7.8k units. This strong demand was mainly a result of the market's quick recovery from the pandemic.

    Employment fundamentals are strong in the market, which is driving more people to the area, while rising homeownership costs will continue to limit the number of young families that can afford to purchase their own homes, forcing them to rent instead. The vacancy rate currently sits at 5.1% market wide and over the past 12 months rents increased 7.4%. CoStar expects vacancy to remain stable and rent growth to average 4.48% over the next 5 years.

  • According to CoStar, The Cincinnati multi-family market has strong fundamentals as it is an affordable area to live relative to other major cities, as such rental demand has increased while new multi-family development has slowed. Vacancy in the market sits at 3.7% while rents have increased 6.7% over the past 12 months. Over the next five years rent growth is expected to average 3.5% per year and vacancy rates are expected to remain stable.

  • The Sponsor plans to spend $28.5M to complete common area and interior renovations on ~60% of units prior to raising rents closer to the market average.

    Harbor intends to renovate 37 units per month, with renovations commencing in month 6 and concluding in month 45 of the investment.

    The renovation program is expected to raise rents on renovated units by $110 per unit, resulting in a 20% return-on-income. View expected rent growth year-over-year here:

    In addition to increasing rents, the Sponsor expects to reduce the portfolio's operating expenses to be in line with the market and institutional ownership standards. For example, the Sponsor currently operates other multi-family buildings in the area for $1K less per unit per year in comparison to this portfolio of properties. View expected rent growth year-over-year here.

  • Founded in 1985, HGI is a leading global real estate investment and management firm. HGI owns and manages 362 assets worldwide, consisting of 53K multi-family units and 4.4M SF of commercial space, investing across the capital stack in both debt and equity to generate strong risk-adjusted returns for investors.

    With 36 years of experience in the real estate industry, HGI has approximately 1.38K employees worldwide. HGI utilizes an in-house management company, Harbor Group Management Co. (HGMC), which provides expertise in property management, property leasing, and construction management. HGMC currently manages approximately 43.3K apartment units across 18 states, and more than 4.1M SF of commercial properties across 12 states.

Essentials

Please refer to the Investment Memorandum in the Documents section for more details about this offering.

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Returns & Management fees

Ann'l management fee

2%

Target ann'l net return

12% - 14%

Inv share in excess profits

100%

Target equity multiple

1.6x - 1.8x

Target ann'l cash yield

~5%

Schedule

Payment schedule

Quarterly + event based

Prefunded

Yes

Target term

5 years

Structure

Tax document

K-1

Offering structure

SPV

Expenses

Ann'l flat expense

0.25%

Docs

Content

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS HGI REQ II LLC ("Issuer"). The Offering is made only by means of the Investment Memorandum relating to the Offering (the "Offering Document"). 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 Document, or as incorporated in the Offering Document 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 Document or in any marketing or sales literature issued by the Issuer or YieldStreet Management, LLC, as adviser thereto, and referred to in the Offering Document, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Document in its 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.

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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.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

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.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

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