Yieldstreet’s high-yield real estate bets implode

Retail investors drawn to Yieldstreet’s promise of private-market, high-yield real-estate deals are confronting a harsh reality and devastating losses. 

Several marquee projects have imploded, with $370 million from investors spread across 30 real estate projects recognizing $78 million in defaults in the past year, according to CNBC. The outlet tracked the majority of at least 55 deals the company offered investors between 2021 and 2024.

Founded in 2015, Yieldstreet positioned real estate as a haven against inflation and rising rates. 

But the firm told CNBC that rising interest rates and market conditions “significantly impacted” its real estate equity offerings. Investors told the outlet the deals carried far greater risk than they were warned, and they have watched as the market has skewered the values. 

Justin Klish, a financial services worker and Yieldstreet investor, plowed $400,000 into two of the firm’s offerings — a luxury apartment building in Nashville backed by former WeWork CEO Adam Neumann’s family office, and a three-building renovation in Chelsea. The Nashville deal was declared a total loss in May, wiping out $300,000 of the investment. The Chelsea project is now hanging on by a thread, in need of additional capital just to stave off the same fate. Both projects had targeted annual returns of roughly 20 percent.

“I consider myself moderately financially savvy, and I got duped by this company,” Klish told the outlet. “I just worry that it’s going to keep happening to others.”

Another Yieldstreet investor, Mark Underhill, told CNBC that he invested $600,000 across 22 of the company’s funds, and is now facing $200,000 in losses. He told CNBC that Yieldstreet downplayed the risks. 

“With any investment, there’s a risk of loss,” Underhill told the outlet. “But there’s no consideration of these type of gut-punch losses. They talked about how their deals were backed by collateral, and they gave you all these reasons that make you feel there’s something left if the deal goes south.”

– Quinn Waller