Real Estate

Real Estate Opportunity Fund

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Status

Closed

Recently funded

Accepting $25,000 - $250,000 investments

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Accepting $25,000 - $250,000 investments

Overview

Notable Updates

• Harbor Group International was recently featured in the Real Deal after announcing the acquisition of an $81M multi-family property in Boca Raton, Florida (Real Deal, March 30, 2021).

• Mitch Rosen, Head of Real Estate, highlights why he’s excited about the Fund and also spoke recently with T. Richard Litton, President of Harbor Group International for a conversation around real estate investing. See the short video and webinar below.

There are many ways to participate in real estate investing, including lending to a borrower or investing to own the property. However, very few strategies available to retail investors are able to opportunistically invest across the entire capital structure to seek to find the best relative value. Typically, such strategies require investment minimums of $250,000 or more. True to our mission, Yieldstreet makes it accessible at a fraction of that number.

Yieldstreet is excited to present its new fund, the Real Estate Opportunity Fund, that will seek to place a portion of its commitments under the management of Harbor Group International (HGI), which manages over $12.7B in real estate investments and has realized 333 investments since 1985. Harbor Group’s executive team has managed assets through multiple market cycles and has proprietary access to real time data through their network of owned properties.

COVID-19 has had a broad impact on multiple sectors of the U.S. economy and all areas of commercial real estate have been impacted to a degree. This has caused liquidity issues for property owners, with some seeking relief from their lenders or considering a sale of their properties.

The Fund’s Real Estate Strategy expects to participate in financing such liquidity needs faced by property owners and, as the economy continues to recover, capitalize on the potential increase in demand. Investments are expected to be made across the capital structure, in multiple asset classes and geographically diversified.

The Real Estate Opportunity Fund expects to provide investors with a target annualized return of 10%-12% throughout its life. Given the supportive market backdrop, 100% of net returns above the target range will go to investors.

Returns

Management fee

2%

Target net return

10% - 12%

Share in excess profits

100%

Incentive fee

0%

Schedule

Payment schedule

Periodic & Event Based Payments

Term

Date

Target term

5 - 7 Years

Target liquidity events

Year 4

Structure

Tax document

K-1

Offering structure

SPV

Expenses

First year expense

$200

Annual flat expense

$150

Slide 1 of 3
  • Returns

    Management fee

    2%

    Target net return

    10% - 12%

    Share in excess profits

    100%

    Incentive fee

    0%

  • Schedule

    Payment schedule

    Periodic & Event Based Payments

    Term

    Date

    Target term

    5 - 7 Years

    Target liquidity events

    Year 4

  • Structure

    Tax document

    K-1

    Offering structure

    SPV

    Expenses

    First year expense

    $200

    Annual flat expense

    $150

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.

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Essentials

Please refer to the Private Placement Memorandum in the Resources Section for more details about this offering.

Real Estate Strategy Manager

Who is Harbor Group International?

Harbor Group International (“HGI”) is a vertically integrated real estate investment and management firm with more than 35 years of experience, focused on acquiring investment grade commercial and multifamily real estate and real estate related assets. Since 1985, HGI has realized 333 investments with aggregate sales proceeds of $9.3B. The company currently has approximately 46,000 multi-family units in its portfolio with a total of $12.7B of AUM. HGI targets investments in real estate assets that seek to provide its investors with stable, favorable current cash returns and the opportunity for long-term capital appreciation. HGI seeks investments that are generally geographically focused on markets with strong demographics, employment fundamentals and favorable supply-demand dynamics. The company undertakes an extensive process utilizing detailed third-party research, data from the US census bureau, development pipeline and absorption reports, and management feedback to identify attractive markets and opportunities that match its investment criteria.

HGI’s discretionary capital and deep bench of institutional equity investors enable it to take a multi-strategy approach of investing in a variety of markets, product types and risk profiles. This multi-focused approach provides HGI with the ability to seek outsized returns by capitalizing on opportunities wherever they present themselves along the risk-reward continuum.

The sheer size of the company’s operations provide it with a 360-degree perspective on the real estate industry. In addition to its traditional multi-family, commercial, urban, retail and industrial lines of business, HGI has invested in alternative real estate related securities such as mezzanine loans, preferred equity and Freddie Mac Subordinate Debt Offerings. The team leverages its extensive network of relationships with brokers, owners, lawyers, financial institutions and family offices to seek to secure valuable and attractive assets for its private equity offerings.

Over time, the Real Estate Strategy may also include additional managers other than Harbor Group International.

Investments

What type of investments will the Fund make?

The Fund will employ two strategies during its initial period after launch. The primary strategy will be the Real Estate Strategy, which will periodically call capital from the Fund to make investments in the commercial real estate equity and debt space. To reduce cash drag on capital that has not yet been called by the Real Estate Strategy, the Fund will also employ an Uncalled Capital Strategy that is expected to be wound down once the Real Estate Strategy has called all of the Fund’s capital, which is expected to last for up to 13 months, with the option for one six-month extension.

Via the Real Estate Strategy, the Fund will invest as a limited partner in a Harbor Group fund that is expected to make both equity and debt investments in commercial real estate in the U.S. and the U.K and is targeting annualized net returns of 10-15%. Examples of these types of investments include equity, mezzanine loans, preferred equity and Freddie Mac K-series subordinate bonds. The Harbor Group fund has a perpetual term.

At the onset of the Real Estate Opportunity Fund, not all capital raised will be immediately deployed to the Real Estate Strategy and will instead be invested in the Uncalled Capital Strategy managed by Yieldstreet. The Uncalled Capital Strategy will invest in Yieldstreet Short Term Notes designed exclusively for this Fund and are expected to earn a target annualized interest rate of 5.5%. Each Short Term Note is expected to have a maturity of 3 or 6 months and as each matures, expected capital needed for the Real Estate Strategy will be assessed and capital that is not expected to be called may be reinvested in a new Short Term Note.

The Fund may also make additional investments in other opportunity funds similar to Real Estate Strategy.

Cash Flow

How do I get paid?

The Fund will have two sources of cash flows, with the primary cash flows expected to be generated by the Real Estate Strategy. The Real Estate Strategy will seek to deploy all capital into opportunities within the first 13 months, subject to extension. Capital that has been called and deployed in certain real estate investments is expected to generate cash flows that will be paid quarterly. In addition, once all capital has been called, the Real Estate Strategy will enter the harvesting period whereby the portfolio will be actively managed. Quarterly cash flows are expected to continue during the harvesting period, and as investments are exited, principal and associated net profits are expected to be distributed.

The second source of cash flows will be generated by the Uncalled Capital Strategy until all capital is called from the Fund by the Real Estate Strategy. Through the Uncalled Capital Strategy, the Fund is expected to earn a target annualized interest rate of 5.5%, which will be distributed on a monthly basis. The Short Term Notes program that the Uncalled Capital Strategy will invest in is expected to have a maturity of 3 or 6 months.

Given the combination of the two strategies and based on the expected timing of capital calls, the Fund is expected to return 10%-12% to investors on an annualized basis over its life.

Highlights

Diversified Offering:
Market Dislocation:
Access to Institutional Financing:
Multiple Sources of Cash Flow:
Accessibility:
  • The Real Estate Strategy is expected to offer indirect diversified exposure to a portfolio of investments across different capital structures, property types and countries. The Real Estate Strategy may provide exposure to various capital structures including equity, debt, and real estate related securities. It is expected that a large percentage of capital will be invested in multi-family opportunities, and smaller investments will be made in office, industrial, and retail properties, as appropriate. The diversity of the portfolio helps to reduce single investment risk relative to investing in only a single investment. As the Real Estate Strategy grows, investors may benefit from increased diversification by asset type, geography, and property type.

  • COVID-19 has had a broad impact on multiple sectors of the U.S. economy, with commercial real estate arguably being hit hardest. As such, liquidity issues have arisen for property owners, with many being forced to seek relief from their lenders or into a sale of their properties, creating opportunities for real estate investors to provide the needed liquidity to these distressed property owners. The Real Estate Strategy expects to participate in financing such liquidity needs and, as the economy re-opens, capitalize on the potential recovery in demand.

  • The Real Estate Strategy will make use of prudent leverage to maximize returns. The ability to place low-cost debt on an asset at several multiples of the equity contributed could amplify the returns for the Fund. Investors in the Fund are expected to benefit from institutional borrowing rates that are only made available to firms like the Real Estate Strategy manager.

  • Commercial real estate is generally secured by long-term leases, representing one of the biggest benefits of the asset class, as these long-term leases provide a predictable income stream that is often higher than tradeable stock dividend yields. In addition to income generation, real estate is viewed as an appreciating asset class, having historically provided market beating value appreciation when compared to other investment types. Appreciation in property prices is often seen when effective and proactive property management is combined with favorable changes to supply and demand levels, and interest rates.

  • The Fund allows investors to indirectly invest in a private equity investment strategy that is traditionally offered with high minimums (typically $250K and up), and only to institutions, family offices, and ultra high net worth individuals. Eligible investors must verify that they are Qualified Purchasers. 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.

Resources

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS CRE TP QPF I LLC ("Fund"). The Offering is made only by means of the Private Placement Memorandum dated April 1, 2021 relating to the Offering (the "PPM"). 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 PPM, or as incorporated in the PPM 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 PPM or in any marketing or sales literature issued by the Fund or Yieldstreet Management, LLC, as adviser thereto, and referred to in the PPM, and, if given or made, such information or representations must not be relied upon. All investors must read the PPM in their entirety prior to investing in the securities. This offering page may include the actual and forecasted performance results made by prior funds sponsored by HGI. Neither HGI nor the Fund will own any interest in such prior investments, and therefore the results of HGI and the Fund will differ from the results of such prior investments. There can be no assurance that HGI or the Fund will achieve similar results or that any projected favorable conditions in the real estate industry will occur.

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.