Overview
Invest in an equity ownership of Eliot on the Ocean, a 94% occupied multi-family mid-rise apartment complex built in 2016 along Revere Beach in Boston’s North Shore suburb. The submarket where the property is located has emerged as a residential alternative to Boston and Cambridge due to its relative affordability, quality of life and easy commute to downtown Boston. The submarket has seen significant development over the past few years with institutional firms such as Rockpoint Group investing in the area.
According to CBRE, Greater Boston is the #1 life science hub in the U.S., anchored by leading academic institutions including Harvard and MIT, top research hospitals such as Massachusetts General Hospital and Brigham and Women’s Hospital, and some of the most innovative companies in the world such as Novartis, Moderna and Microsoft. The high salary employment opportunities, coupled with attractive cost-of-living relative to downtown Boston, have seen the population in Revere increase by 20% over the last decade, according to 2020 Census Data, increasing the demand for its luxury oceanfront apartments.
The sponsor, Invictus Real Estate Partners, is a New York-based real estate PE firm. For this offering, Invictus has opportunistically acquired the luxury apartment complex, charging one of the lowest rents along the Revere oceanfront. It plans to spend $1M to complete light cosmetic renovations prior to potentially increasing rents and benefitting from capital appreciation at time of sale.
The offering is expected to provide investors a targeted annualized net return of 14-16%, of which an annualized ~4% 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.
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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
Desirable location
Market dynamics
Quality asset
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 $24.75M equity position is junior to ~$60.9M of senior debt. The senior loan was provided by an international investment management firm that has over $380B in AUM. The remaining equity was provided by the sponsor, Invictus Real Estate Partners.
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 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: ~4% 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 4 years.
Assets
Assets
What is the asset underlying the transaction?
Built in 2015, the luxury property consists of 194 market-rate residential units with 219 parking spaces. Units feature in-unit washer/dryer, granite countertops, hardwood floors and island kitchen benches. Building amenities include an electronic doorman, outdoor deck, lounge, co-working space and a fitness center.
As of 9/8/21, the property was 94% occupied with an average in-place rent of $2.3K/unit ($3.2/SF). During 2020, as a response to Covid-induced market weakness, the property manager reduced rents to boost occupancy. Signalling signs of recovery following the height of the Covid-19 pandemic, the 15 leases signed in August 2021 showed an average effective rent of $2.5k/unit ($3.5/SF), or 17.1% increase year-over-year from the prior year leases’ average. According to Costar, rent growth is projected to be 8% in 2022, trending to 3% per year by 2025.
Returns & Management fees
Ann'l management fee
2%
Target ann'l net return
14% - 16%
Inv share in excess profits
100%
Target equity multiple
1.6x - 1.8x
Target ann'l net cash yield
~4%
Structure
Tax document
K-1
Offering structure
SPV
Expenses
Ann'l flat expense
0.25%
Docs
Content
This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS IVC REQ II LLC. The Offering is made only by means of the Investment Memorandum relating to the Offering (the "Offering Document"). 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 Document, or as incorporated in the Offering Document 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 Document or in any marketing or sales literature issued by the Issuer or Yieldstreet Management, LLC, as adviser thereto, and referred to in the Offering Document, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Document in its 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]