Nashville Multi-Family Equity II.A Investment Not Meeting Expectations

Kevin V

Investors in Yieldstreet's Nashville Multi-Family Equity II.A offering have been hit with disappointing news as the multifamily property in Downtown Nashville has seen declining occupancy and the investment is not expected to hit its target returns.

Investors were anticipating a cash distribution in Q3 2022, which they did not receive. In fact, sources say the sponsor has needed to contribute over $1 million as a member loan to cover debt service on the property and projects that another $1.5 million will be needed to stabilize the property.

Yieldstreet investors put up a total of $19.2 million for equity in the newly-built Class A high-rise apartment building in hopes of realizing the 17%-19% target annualized return.

The original business plan for the property, which was only 33% occupied at the time of acquisition, was to fully lease up the building, raise rents by a projected 5% annually over three years, then seek an attractive valuation to sell the property and exit the investment. However, at the end of Q3 2022, the property was only 84% leased.

The property's slow growth is said to be a result of increased competition from new buildings in the market. The trend is expected to continue for the next couple of quarters, which will slow the property's rent growth.