Upper West Side Residential Property

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Status

Closed

Recently funded

Accepting $20,000 - $1,000,000 investments

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Accepting $20,000 - $1,000,000 investments

Overview

YieldStreet will act as a co-lender in a portion of a mezzanine loan for the acquisition of a 16-story rental building in a premier area on New York City’s Upper West Side.

The mezzanine loan has full term of 60 months, consisting of a 36-month initial term and two 12-month extensions. YieldStreet investors are expected to receive monthly interest payments at a target annualized rate of 9.5%, 8.0% of which is in cash and 1.5% in accrued interest, which are scheduled to be paid once principal repayment begins, expected to begin in month 32. From the initial close of the mezzanine loan until the refinance of the bank bridge loan by the senior bank loan (contractually required within 120 days of close, but expected by the originator to be within 60 days of close), all interest payments will accrue, meaning there will be no cash interest payments to mezzanine loan investors, including YieldStreet investors, during such period.

The senior bank loan and mezzanine loan are structured such that only interest will be paid until condominium sales begin, which is expected in month 20. Proceeds from the sale of condominiums are first applied to accrued and cash interest payments with remaining cash flow used to first repay the senior bank debt, followed by the mezzanine loan A, and finally mezzanine loan B. The senior bank loan is expected to be repaid by month 32, the mezzanine loan A by month 40, and the mezzanine loan B by month 43.

Things to consider

Foreclosure Risk

The Property may need to be liquidated to recover funds in the event of a default.

  • The Property has a closing LTV of 71.1% based on its appraised valuation of $155.0M, which means the net proceeds from foreclosing and selling the Property would have to return less than 71.1% for mezzanine loan A principal to be at risk.

Market Risk

The Borrower may be unable to sell the condominiums at the expected price due to a downward movement in the UWS condominium market.

  • The realized sales price on the condominiums would have to decrease approximately 35% for the mezzanine loan A to experience a loss. During the Great Recession of 2008/09, the median sales price for condominiums on the UWS decreased by 21%.

  • In the event the UWS housing market experiences a material decline, historically, these periods have been relatively temporary. Despite decreasing by 21% in 2009, the median UWS condominium sales price increased 9% within a year.

  • The UWS neighborhood has strong underlying demographics, consisting of wealthy, permanent family- and community-oriented households. This helps stabilize valuations relative to other premium residential submarkets, which have experienced considerable development in recent years driven by more elastic demand from foreign investors.

Construction and Condominium Conversion Risk

The Borrower may be unable to convert the Property to condominium status in a reasonable timeframe and/or experience overruns in the cost or timing to complete the remaining renovations.

  • The Borrower has experience in condominium conversions and is familiar with the required steps. Additionally, the Borrower has hired a real estate legal adviser to provide counsel on the process and time needed to complete the conversion.

  • The remaining renovation is relatively minimal and includes items such as upgrading amenities and replacing existing hallway flooring with marble and hardwood.

  • The two guarantors have provided a completion guaranty, which requires them to provide additional equity in the case of delays and/or cost overruns.

Returns & Management fees

Gross yield

10.7%

Yieldstreet fee

1.2%

Target yield

Login to view

Interest Type

Monthly

Schedule

Payment schedule

Monthly

Maturity

September 23, 2022

Structure

Tax document

1099-INT

Offering structure

BPDN

Expenses

First year expense

$100

Annual flat expense

$30

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  • Returns & Management fees

    Gross yield

    10.7%

    Yieldstreet fee

    1.2%

    Target yield

    Login to view

    Interest Type

    Monthly

  • Schedule

    Payment schedule

    Monthly

    Maturity

    September 23, 2022

  • Structure

    Tax document

    1099-INT

    Offering structure

    BPDN

    Expenses

    First year expense

    $100

    Annual flat expense

    $30

Docs

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.