Real Estate•Avant Capital Partners

Chicago River North Condominium Property

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Status

Fully repaid

Recently funded

Accepting $10,000 - $200,000 investments

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Accepting $10,000 - $200,000 investments

Overview

Yieldstreet participated in a first mortgage loan secured by 13 apartments and 31 car parking spaces in a brand new 12-story Class A condominium building in the River North neighborhood of Chicago, Illinois. The River North neighborhood is a well-established and vibrant community within downtown Chicago. To date, 60% (21/34) of the units have already sold and closed for a total of $30.5M. These closings occurred during the height of the Covid-19 pandemic with no discounts provided and no instances of buyers backing out of the sale.

The $16.0M loan provides financing as the sponsor continues to sell the remaining units. $8.25M of the $16.0M (51.6%) was provided by a senior leverage provider. The sponsor is an experienced Chicago-based real estate investment, development and management firm, having developed over 70 properties in the Chicago area, including several luxury condominium buildings. This is the second deal originated by Avant Capital Partners to be offered on the platform; all previous deals have performed and are performing in line with expectations.

Once the deal is fully allocated, investors can expect a target 9.5% annualized interest up until April 30, 2021, to be paid upfront. From May 2021 onwards, investors can expect to receive monthly interest payments. Principal is expected to be repaid as units are sold.

Yield

Gross yield

10.5%

Yieldstreet fee

Target yield

9.5%

Interest Type

Actual 360

Schedule

Payment schedule

Monthly Interest

Prefunded

Yes

Maturity

Date

Initial Maturity

May 1, 2022

Extended Maturity

Nov 1, 2022

Structure

Tax document

1099-INT

Offering structure

BPDN

Expenses

First year expense

$100

Annual flat expense

$30

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Yield
Gross yield
10.5%
Yieldstreet fee
1%
Target yield
9.5%
Interest Type
Actual 360
Schedule
Payment schedule
Monthly Interest
Prefunded
Yes
Maturity
Date
Initial Maturity
May 1, 2022
Extended Maturity
Nov 1, 2022
Structure
Tax document
1099-INT
Offering structure
BPDN
Expenses
First year expense
$100
Annual flat expense
$30

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Essentials

Please refer to the Series Note Supplement for more details about this offering.

Capital Structure

Where does Yieldstreet lie in terms of priority?

Yieldstreet invested $5.25M in the $7.75M subordinated portion of a $16M mortgage. The senior position was funded by a family office that provided $8.25M of leverage.

Term and Cash Flow

How do I get paid?

Investors can expect to receive approximately 6 months of prepaid interest at a target annualized rate of 9.5% shortly after the offering is fully allocated on Yieldstreet’s platform. From May 2021 until maturity, interest is anticipated to be paid on a monthly basis. Principal is expected to be repaid incrementally upon the sale of units.

The investment has an initial duration of 18 months, with the potential for two 3-month extensions subject to certain criteria.

Assets

What is the collateral underlying the transaction?

13 units and 31 parking spaces in a 12-story Class A condominium building in the River North neighborhood of Chicago, Illinois secure the loan. The building has 34 residential units and 63 parking spaces, with 60% of units already sold and closed. Property amenities include a rooftop sun deck with an outdoor kitchen/bar and grill, a fire pit, a garden area, party room, workout and yoga rooms and a pet recreation area. Each residential floor has four units, and each unit is a corner unit with a private terrace.The units securing the mortgage have an average size of 2,452 SF and are listed for an average price of $2.2M.

The collateral was appraised at $27.3M gross sale value, implying net sale value of $25.2M and LTV of 63.6%.

Highlights

Collateral Coverage

Trending Neighborhood

Guarantees

Aligned Interests

Expense Reserves

Experienced Originator

Experienced Sponsor

The loan’s exposure equates to $1.2M per unit or $502 per SF. Integra Realty Resources appraised the units as of October 5, 2020 at $26.3M, or on average $2.0M per unit and $823 per SF. It valued the parking spaces at $1.0M, assuming 15 of the 31 spaces to be concessions. The appraisal arrived at a gross sale value of $27.3M for the collateral, or $2.1M per unit and $857 per SF. After taking into account selling expenses of 8%, the net sale value is $25.2M, or $1.9M per unit and $789 per SF. Based on the appraisal’s implied net sale value, the loan has a loan-to-value ratio (LTV) of 63.6% and, absent any other factors, the loan would be fully repaid after the sale of 9 of the 13 units. \ \ The units already sold and closed transacted at an average sales price of $1.8M per unit or $788 per SF. While the 21 units entered into contract pre Covid-19, all units closed post the onset of Covid-19 without any decrease in sales price, which is viewed favorably.
The western part of River North, where the property is located, has good access to employment areas within Downtown Chicago and has become increasingly residential over recent years due to the new development of luxury residential projects. The condominium building has frontage on a street connecting it to arterial roadways, and is in close proximity to a CTA subway stop.
The borrower’s principals have provided an unconditional interest, carry and bad-actor carve-out guaranty to Avant Capital. As of 2020, the principals reported a combined liquidity of $809k and net worth of $6.1M.
Avant Capital has invested in this loan alongside Yieldstreet, contributing $2.5M of capital from itself and its investor syndicate to the subordinated position of the loan.
The borrower is obligated to maintain an interest, tax and HOA reserve with a 3-month minimum balance. In the event that Avant reasonably determines that the existing reserve is insufficient, the borrower is required to replenish the reserve with the amount of the deficit.
Avant Capital Partners is a New York-based real estate bridge lender with a focus on $2 to $20M loans. Avant lends to middle-market borrowers seeking capital for properties that may not qualify for traditional bank debt, financing under-performing and/or transitional properties, borrowers with imperfect credit histories or transactions with time constraints. Avant Capital is comprised of senior investment professionals with experience in real estate, loan origination, loan servicing, restructuring, and asset management. Since inception in 2007, the Originator has originated 85 loans, of which 69 were in the New York Metropolitan area and 9 were development/redevelopment.
The sponsor is a Chicago-based real estate investment, development and management firm founded in 2009. The company has been the court-appointed receiver, asset manager, and broker for over 70 properties in the Chicago area, including luxury multifamily towers, condominiums, townhomes, as well as single family residences. \ \ The sponsor’s principals have been focused on real estate in the Chicago metro area for the past 26 years. They have more than 135 years of combined experience and have developed/led more than $1.5B worth of real estate transactions throughout their careers.

Resources

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.

¹ Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

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]

³ "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

⁴ Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

⁵ Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

⁶ The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

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844-943-5378

[email protected]

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