Brooklyn Multi-Family Portfolio

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Status

Fully repaid

Recently funded

Accepting $5,000 - $250,000 investments

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Accepting $5,000 - $250,000 investments

Overview

Yieldstreet issued a loan secured by a first priority position in four cross collateralized mortgages. The mortgages are backed by three multi-family properties and one mixed-use property in the Park Slope, Boerum Hill, and Carroll Gardens neighborhoods of Brooklyn, NY. 2Q20 market data indicates that the Prospect Park (Park Slope and Carroll Gardens) and Downtown Brooklyn (Boerum Hill) multi-family sub-markets ended the quarter with vacancies of 1.86% and 2.53%, respectively. StreetEasy’s August 2020 Market Report highlights that house prices rose in Prospect Park and Boerum Hill — up 3.0% and 19.9% respectively.

Urban Standard Capital (“Originator”) originated the four mortgages, with the $7.1M loaned by Yieldstreet and their own capital. The Sponsor spent $13.2M to purchase the properties, pay for closing costs, including $3.2M of their own cash. The Sponsor is also contributing another $910K to finance renovations and reconfigure 10 of the residential units.

Yieldstreet investors can expect to receive monthly interest payments at a target annualized rate of 6%, with principal at maturity, when the four properties are sold or the mortgages are refinanced.

Important Note

• A recent update on this offering is available here

Yield

Gross yield

7%

Yieldstreet fee

1%

Target yield

6%

Interest Type

Actual 360

Schedule

Payment schedule

Monthly Interest

Prefunded

Maturity

Date

Initial Maturity

Jun 19, 2021

Extended Maturity

Dec 19, 2021

Structure

Tax document

1099-INT

Offering structure

Expenses

First year expense

$0

Annual flat expense

$30

Slide 1 of 3
  • Yield

    Gross yield

    7%

    Yieldstreet fee

    1%

    Target yield

    6%

    Interest Type

    Actual 360

  • Schedule

    Payment schedule

    Monthly Interest

    Prefunded

    Maturity

    Date

    Initial Maturity

    Jun 19, 2021

    Extended Maturity

    Dec 19, 2021

  • Structure

    Tax document

    1099-INT

    Offering structure

    Expenses

    First year expense

    $0

    Annual flat expense

    $30

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Essentials

Please refer to the Series Note Supplement for more details about this offering.

Capital Structure

Where does Yieldstreet lie in terms of priority?

Yieldstreet has a first priority interest in four mortgages issued by the Originator to the underlying Sponsor. The Originator has used the proceeds of the loan obtained from Yieldstreet, plus $1.8M of their own cash, to finance four cross collateralized mortgages to the Sponsor. In addition to the loaned amount, the Sponsor added $3.2M of their own cash to purchase the properties and pay for closing costs.

If the Sponsor fails to service its debt obligations with the Originator, the Originator may then become unable to service its debt obligations with Yieldstreet. In such an event, Yieldstreet has the option to take control of the four mortgages and exercise its rights and remedies to recover principal and any outstanding interest owed. Rights and remedies available to Yieldstreet include foreclosure on the underlying properties so they can be sold to recover capital.

Cash Flow & Payment Schedule

How do I get paid?

The Sponsor will service its debt obligations with the Originator, who will then, in turn, service its debt obligations with Yieldstreet. When fully leased, the properties are expected to generate ~$769k in yearly Net Operating Income (NOI), i.e. a potential 8.7% debt yield.

You can expect to receive monthly interest payments for the entirety of your investment at an annualized target rate of 6%. Principal is expected to be repaid at maturity with proceeds from the sale or refinance of the four underlying properties.

Assets

What is the collateral underlying the transaction?

Yieldstreet’s loan is secured by four mortgage loans, which in turn are each backed by an individual property and are cross-collateralized.

The collateral of the mortgage loans consists of three multi-family properties and one mixed-use property located in the neighbourhoods of Park Slope, Boerum Hill, and Carroll Gardens neighborhoods in Brooklyn. These are generally residential areas, particularly popular with young families and professionals.

The Appraiser valued the four properties on an “As-Is” basis at $12.6M and on an “As-Stabilized” (i.e. valuation of the properties once renovated and tenanted) basis at $14.5M. Based on these numbers, the Yieldstreet loan has an LTV of 56.5% and 49.1%, respectively. As of September 2020, renovations to the properties were well underway as shown by actual images of the properties on the right.

Highlights

Collateral Coverage
Equity cushion
Collateral Insurance
Sponsor
Experienced Originator
  • Yieldstreet’s exposure represents 56.5% of the appraised “As-Is” value of the four properties. Upon stabilization of the properties, i.e. when fully tenanted after renovations have been completed (expected within six months), Yieldstreet’s exposure is expected to represent 49.1% of the appraised “As-Stabilized” value. This suggests that the value of the properties would need to fall by more than 43% before the amount of Yieldstreet’s loan would exceed the value of the collateral securing it.

  • At the closing of the four mortgages, the Sponsor contributed $3.2M to acquire the properties and pay for closing costs. The Sponsor is expected to contribute $910K in additional equity to renovate the units and reconfigure 10 of the 14 residential units. The Sponsor’s contributed equity is first loss capital to the mortgages and effectively subordinated to the Yieldstreet loan, i.e in the event of default, the Yieldstreet loan would be fully repaid before the Originator and Sponsor were entitled to see any return of capital.

  • The collateral for the mortgage loans has insurance customary for such properties from insurers with an A.M. Best rating of A or better. The policies are currently valid and in effect with total coverage of the collateral in excess of the Yieldstreet loan.

  • The Sponsor is a vertically-integrated owner and operator of residential and commercial real estate in the Greater NYC area. It focuses on the repositioning of multi-family and mix-use assets. Since 1Q16, the Sponsor has acquired over 15 buildings and 400 apartments with a cumulative market value over $250M.

  • The Originator of the mortgages, Urban Standard Capital, is an NYC-based real estate investment company with three lines of business: ground-up development, renovations, and short-term financing. It also has a captive property manager, which provides real-time market intelligence to facilitate with due diligence and underwriting. Since 2016, it has originated 47 loans, totaling over $176M, secured by properties all in the Greater NYC area.

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.