YieldStreet: Savannah Built-For-Rent Portfolio I

The crowdfunding investment platform Yieldstreet has 7% of funding space remaining in a build-for-rent community in Savannah, Georgia. 

The Savannah portfolio will entail the development of 38.5 acres of land into a 142-unit built-for-rent (BFR) single-family homes. Land development began in May 2022 and is expected to be completed by September 2023. The portfolio is expected to be fully leased and stabilized by July 2025 and sold in a single transaction during the first quarter of 2027.

The land was acquired for $15,000 per lot. Total capitalization, including development and construction costs, is projected to be $236,000 per unit. The developers expect to receive a sales price of $329,000 per unit, representing a 40% yield on the total capitalization price.

Savannah is in a growth period, both economically and in population. Population growth is being primarily driven by the increase in industry and the diverse economy. The build-for-rent community is 20 minutes from downtown Savannah, 25 minutes from the Port of Savannah which employs more than 51,000 people, and 15 minutes from $5.5 billion Hyundai EV manufacturing facility now under construction. Metropolitan Savannah has seen a growing tech industry added to its diverse mix of the manufacturing, healthcare, tourism and film industries. 

The metropolitan area’s housing supply has been unable to keep up with its population growth, causing a rise in rents. Over the last three years, the median renting rate for a three-bedroom unit in Savannah has increased by 31%. According to John Burns Consulting, single-family rental rates in the area are projected to increase by an average of 4.5% over the next three years. With the growing region in need of housing, this built-for-rent investment should benefit from the growing housing demand.

Savannah BFR Portfolio I is a 50/50 joint venture between Arabella Capital and Gordian Growth & Income Fund. Arabella has extensive experience in construction of build-for-rent communities and multifamily properties in general. Since the firm’s inception, it’s completed over 1,000 transactions totaling more than $265 million split between built-for-rent communities, multifamily acquisitions and raw land developments. The group is demonstrating its commitment to the portfolio by providing $1.2 million of equity to the project.

• Minimum investment: $15,000
• Target annual yield: 21%
• Target equity multiple: 2.05-2.15x
• Target investment term: 59 months

Yieldstreet is a private market investment firm that presents investors with a variety of asset-class opportunities, including real estate. Since the company’s founding in 2015, the platform has funded over $3 billion and paid out over $1.8 billion in principal and returns. Since 2015, the firm boasts a net annualized return rate of 9.7%, which compares favorably to the results of a traditional portfolio of stocks and bonds that has returned 6.5% during the same time frame. 

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Photo courtesy of Travel and Leisure