Overview
Invest in an equity ownership of a 100% occupied industrial/office complex in the Columbus, OH metropolitan area. The property benefits from its two long-term tenants, the State of Ohio and Robinson Logistics, who have been occupying the space for 15 years on average. The sub-market where the property is located is supported by a deep pool of commercial renters, including Walmart, FedEx and DHL, given its desirable location as a distribution center and last mile delivery hub for the area’s over 500k population.
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 last mile distribution warehouses and office space.
The sponsor, Heritage Capital Group, expects to hold the property for approximately 5 years, collect its cash flows over the period generated by underlying rents, almost half of which are paid by the State of Ohio, and benefit from potential capital appreciation at the time of eventual sale by increasing rents or selling the upside potential to the next buyer.
The offering is expected to provide investors a targeted annualized return of 16-18%, with an annualized ~8.5% of the expected return being distributed quarterly as current income. The balance of the returns are expected to be achieved via appreciation of the property at the time of sale. Since this is an equity investment, there is potential for returns to be above or below the target range.
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
Sale leaseback strategy
Strong current cash flows
Sticky tenants
Desirable location
Market dynamics
Experienced team
Essentials
Please refer to the Investment Memorandum in the Docs section for more details about this offering.
Please refer to the Investment Memorandum in the Docs section for more details about this offering.
Capital structure
Capital structure
Where does Yieldstreet lie in terms of priority?
Yieldstreet’s $10.4M equity position is junior to ~$16.5M of senior debt. The senior loan was provided by one of the largest French investment banks. The remaining equity was provided by the sponsor, Heritage Capital Group.
Cash flow
Cash flow
How do I get paid?
Over the life of the investment, investors are expected to receive a target annualized return of 16% - 18%, net of Yieldstreet’s management fee and structuring fee as further described in the Investment Memorandum. Investors are expected to receive cash flows from two sources: ~8.5% of annualized income from property rents, which is expected to be paid quarterly, and the balance of the returns are expected to be achieved via appreciation at time of sale of the property, which is anticipated to be within 5 years.
Assets
Assets
What is the asset underlying the transaction?
The property is a two-building, 485k SF, 100% occupied, industrial/office complex in Reynoldsburg, OH. The property is located 10 miles to the east of downtown Columbus, OH. The property was built in 1977 with additions and renovations in 1980 and 1989. The first building consists of 382k SF (77% of net rentable area) of industrial logistics space with 33’ ceilings and 42 dock doors. The second building consists of 112k SF (23% of net rentable area) of office space.
The logistics space is fully occupied and operated by a third party logistics company, Robinson Logistics. Robinson provides warehouse space, fulfillment centers, shipping/receiving, packing, etc. services to other companies.
The office building is 100% occupied by the State of Ohio, rated AA+ by S&P. The tenant has occupied this space since 1997 and has spent their own funds upgrading the furnishings in recent years. The State operates two divisions of the Ohio Department of Commerce in this building and regularly holds public hearings on site. The State of Ohio’s current lease is set to expire in June 2023 and has a rate of $9.27 per SF with three, two-year extension options available. The extension options increase rent by 2.25%. Due to state policy, the tenant is only allowed to sign two-year renewals and has operated this way since the beginning of their tenancy in the building in 1997. The Sponsor conducted a tenant interview with the State of Ohio, which stated its intent to stay in the building long-term.
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Returns & Management fees
Ann'l management fee
2.5%
Target ann'l net return
16% - 18%
Inv share in excess profits
100%
Target equity multiple
1.9x - 2.1x
Target ann'l cash yield
~8.5%
Structure
Tax document
K-1
Offering structure
SPV
Expenses
Ann'l flat expense
0.25%
Docs
Content
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]