Red Oak Completes Acquisition Loan for Washington D.C. Multifamily Property

Red Oak Financial, a Michigan-based commercial real estate finance company, originated a $6.8 million acquisition loan for a 36-unit multifamily apartment in Washington, D.C.’s Fort DuPont Park neighborhood.

Red Oak Financial, a Michigan-based commercial real estate finance company, originated a $6.8 million acquisition loan for a 36-unit multifamily apartment in Washington, D.C.’s Fort DuPont Park neighborhood. The apartment buildings will undergo renovations in order to qualify for the District of Columbia Housing Authority’s housing voucher program.

The 12-month loan term is set at 10 percent with an 8 percent pay rate and a 2 percent accrual.

Constructed in 1965, the property is located on a nearly 0.7-acre site on Benning Road and C Street and consists of three buildings totaling 28,800 square feet. The property is 55.6 percent occupied.

The sponsor plans to convert the unit mix from one-bedroom/one-bath and two-bedroom/one-bath units to three-bedroom/one-bath units, specifically for DCHA program recipients, which has a waiting list of more than 10,500 people.

Renovated units will include a stainless steel appliance package consisting of a gas range/oven, refrigerator, garbage disposal, dishwasher, and built-in microwave oven. Renovations are underway and scheduled for completion in July 2021.

“The Red Oak team seeks to support sponsors who are advancing affordable housing options in the D.C. market,” said Gary Bechtel, Red Oak’s chief executive officer. “Given the high demand for high-quality housing for DCHA voucher residents and the high occupancy levels of a Fort Dupont Park location, we expect an expedited lease-up period.”

Bechtel noted that the financing is part of Red Oak’s environmental, social, and corporate governance initiatives. This is the third loan Red Oak has originated for this sponsor in the D.C. market, where they already own more than 20 multifamily assets.

Red Oak Capital Holdings is a family of commercial real estate finance and investment companies that includes Red Oak Financial, Red Oak Holdings Management, and Red Oak Capital GP. Red Oak Financial originates short-term commercial real estate loans for sponsors seeking $1 million to $15 million of debt financing.

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