Portland Multi-Family Financing Offering On Yieldstreet Offers 10.3% Yield

The crowdfunding investment platform Yieldstreet has announced the last call for an offering of a multifamily property in the Slabtown neighborhood of Portland, Oregon.

The offering is a debt investment that is backed by a 124-unit property now under construction. Construction began in April and is expected to take 18 months to complete. Within the last 10 years, the general contractor has built over 45 projects totaling $1.7 billion in contract value and currently has 19 projects under construction. 

Half of the interest is paid out to investors on a current monthly basis, and the remaining half will compound and accrue with a deferred payment occurring at the maturity of the deal. Investing in debt as opposed to equity does limit the ceiling potential of the return. But in the current uncertain market conditions, debt investment offers less risk because of the backing of physical property. The 80% loan-to-cost ratio of the loan offers investors the security of an equity cushion that can be paid out at the time of sale should the owner be unable to meet obligations.

The property will feature ground-floor retail and resident parking. The developer plans to sell the property shortly after it’s stabilized, which is expected to be by month 30. The quick turn time between investment and maturity also offers investors security because it’s not beholden to property values that could drop years down the road. 

Demand for multifamily is surging in the Slabtown neighborhood, which features major employment and retail. Rents in this area are expected to grow 4.9% annually for the next three years. At the time of the property sale, the loan is expected to be repaid with all principal and deferred interest paid to investors.

• Minimum investment: $10,000
• Target annual yield: 10.3%
• Target investment term: 30 months

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Yieldstreet is a private market investment firm that presents investors with a variety of asset-class opportunities, including real estate. The platform has skin in the game by providing the entirety of the mezzanine loan, which equates to $11.6 million invested in the deal. 

Since the company’s founding in 2015, it has funded over $4 billion dollars on the platform, paid out over $1.8 billion in principal and returns and boasts a net annualized return rate of 9.61%.

Photo courtesy of Colliers