Accepting $10,000 - $500,000 investments
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Accepting $10,000 - $500,000 investments
Invest in an equity ownership of Sevona Avion, a 97% occupied multi-family property in Dallas-Fort Worth (DFW), Texas. The three story garden-style apartment complex was built in 2012 and is located equidistant from both Dallas and Fort Worth central business districts (CBD).
The Property’s location benefits from major employment centers in the immediate area that drive renter demand, including American Airlines' corporate headquarters, the DFW International Airport, and the Great Southwest Industrial District, which is one of the largest industrial parks in the nation. Given the job demand drivers in the vicinity, the Dallas-Fort Worth area attracts young professionals and young families looking for ample job opportunities, which has contributed to the area having the largest population gain in the U.S in 2020. According to CBRE, available jobs grew by 147k in 2020.
The sponsor, InterCapital Group is an investment management firm focused on the acquisition and repositioning of multi-family assets in the U.S., with realized investments on 43 assets and an average gross IRR of 24%. InterCapital Group plans to upgrade 100% of unit interiors, common areas, and further improve curb appeal. The sponsor expects to increase rents on average by $157 per unit once the renovations are complete, which will bring rents closer to market, but still below newly constructed properties, helping to ensure that the complex remains competitively positioned. In addition to expected increased rents over the life of the investment, investors are also expected to benefit from capital appreciation at time of sale, which is expected to be within 5 years.
The offering is expected to provide investors a targeted net annualized return of 14-16%, of which an annualized ~6% is expected to be 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.
• Unrelated business taxable income (UBTI) is income earned by a tax-exempt entity that is not related to its exempt purpose. UBTI tends to be generated when a tax-exempt entity becomes an owner (in part or full) of a business (such as a limited partnership). LPs may generate taxable income in a retirement account if the partnership borrows money. As such, 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.
Please refer to the Investment Memorandum in the Documents section for more details about this offering.
Where does Yieldstreet lie in terms of priority?
Yieldstreet’s $20.7M equity position is junior to $62.8M of senior debt. The senior loan was provided by a national private direct lender with over $16.6B of loans originated in 2020 and the remaining equity was provided by the sponsor, InterCapital Group. It is expected that ~$9M of Yieldstreet's $20.7M equity position will be assigned to an affiliate fund not yet launched to the public.
How do I get paid?
Over the life of the investment, investors are expected to receive a target annualized return of 14 - 16%, 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: ~6% of annualized income from property rents, which is expected to be paid quarterly beginning second quarter 2022, 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.
What is the collateral underlying the transaction?
Built in 2012, Sevona Avion is a three-story garden-style apartment complex located equidistant from Dallas and Fort Worth CBDs. In total, the property has 344 units, which consist of one bedroom (62% of units), two bedroom (35% of units), and three bedroom (3% of units) apartments. The property has been well-maintained since completion, helping to uphold its high quality curb appeal. Sevona Avion’s amenity package includes a resort style pool, poolside cabanas with TVs and refrigerators, outdoor lounge with fireplace, grille stations, fitness center, coffee bar and kitchen, business center, dog park, and attached garage parking in select units. Interiors of the units include stainless steel appliances, granite countertops, walk-in closets, crown molding and a private balcony or patio.
As of November 2021, the property was 97% occupied with an average in-place rent of $1,428/unit ($1.51 PSF) and limited concessions. The property will be managed by InterCapital’s internal property management arm, Dayrise Residential, founded in 2010 and managing over 19k apartment units across four states.
Ann'l management fee
Target ann'l net return
14 - 16%
Inv share in excess profits
Target equity multiple
1.7x - 1.9x
Target ann'l cash yield
Quarterly + event based
First expected payment date
Ann'l flat expense