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How is Marine Finance Like Real Estate?

May 29, 2018 • 2 min read

At YieldStreet we like to think of shipping vessels as floating buildings. Our Marine Finance Vessel Acquisition offering and typical Commercial Real Estate Offerings share strong parallels. Real Estate offerings often involve a real estate company that wants to purchase a building to lease out to a tenant or tenants.

Similarly, in our current Marine offering, the vessel owner, which is YieldStreet in this case, is leasing the vessel to a company that manages vessels which deliver raw goods and materials across the globe. In the same way that cash flow from tenets in a commercial building is used to service an outstanding real estate loan, the money generated from the vessel charters service the marine loan.

Further, during the term of the investment, if there is an interested buyer for the vessel, in the same way a real estate owner would be open to selling a building for a higher price than it was purchased if market value increases, the vessel owner reserves the right to sell the vessel to a new party for a gain. Based on current trends in the shipping industry, we currently anticipate a sale may occur within the first 18-24 months of this offering.

Also similar to real estate offerings, investors in Marine Finance Vessel Acquisition are expected to receive regular monthly interest payments through the duration of the investment. Finally, it’s worth nothing this offering includes several additional measures that help protect investors principal like Residual Value Insurance which insures the future value of the vessel as well as significant cash reserves from the borrower.

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