Red Oak Provides $8.3 Million Bridge Loan for Chicago Property
Red Oak Capital Holdings, a commercial real estate finance company and Regulation A+ sponsor, has provided an $8.3 million bridge loan for Prairie Stone Commons in Chicago.
The Class B office property consists of two buildings totaling 101,981 square feet of net rentable area in Northwest Cook County, Illinois. Red Oak says the funds will be used to refurbish, re-tenant and increase occupancy and rental rates at the asset.
“This property is located in a top submarket within Greater Chicago, which itself ranks as the third metropolitan statistical area in the country, with a large, diverse economy,” Gary Bechtel, chief executive officer, said.
Situated on 7.56 acres within the Prairie Stone Business Park in Hoffman Estates, Illinois, the property features a pair of three-story concrete, glass and metal structures. Built in 1996 and 2000, each building contains two wings connected by a walkway on the second and third floors, as well as lobbies on the first floors.
“Further, the sponsor is a highly experienced regional investor, developer and property manager with an extensive portfolio of office properties in a number of states,” Bechtel added. “The combination of a highly experienced sponsor with a firm business plan and a property in a top-tier market made the decision to fund this loan an easy one.”
The sponsor entity, YP Trillium LLC, is managed by Zaya S. Younan, president and chief executive officer of investment and brokerage firm Younan Properties Inc. The Los Angeles-based firm has successfully acquired, repositioned and managed office buildings within the top 10 markets of the U.S. for over two decades.
Having initially purchased Prairie Stone Commons for $16.35 million in March 2005, YP Trillium says it plans to use the majority of the loan proceeds to invest into tenant improvements and leasing commissions to stabilize occupancy and rental rates before exiting the Red Oak loan via either permanent financing or a sale.
Red Oak says the loan represents a loan-to-value of 92.22% based on the property’s current valuation, and a loan-to-stabilized-value of 67.76% based on its expected stabilized value upon completion. According to the company, the debt carries a note rate of 8.25% and a term of 24 months with two six-month renewal options.
Red Oak Capital Holdings is a group of commercial real estate capital entities that lends and invests on commercial real estate, raising capital through retail and institutional channels. The firm has more than $400 million of assets under management and commitments from both retail and institutional investors.
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