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.
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Essentials
Please refer to the Series Note Supplement for more details about this offering.
Please refer to the Series Note Supplement for more details about this offering.
Capital Structure
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
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
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
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.
2 Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]