Red Oak Capital Holdings, a commercial real estate finance company and Regulation A+ sponsor, has provided a $2.65-million bridge loan for the purchase and refurbishment of a garden apartment community located at 4725 Minnesota Ave. NE in Washington, D.C.
Red Oak says all 12 units of the three-level property will ultimately be leased to residents under the district’s housing choice voucher program.
The loan carries a fixed rate of 10.0%, with an initial term of 12 months with two six-month renewal options. The proceeds provide for the property’s purchase and approximately $300,000 for capital improvements and closing costs. The loan represents a 66.25% loan to “as-stabilized” value with funds provided by Red Oak Fund.
The borrowing entity, 4725 Minnesota Ave NE LLC, is led by a private investor who owns and manages more than 25 multifamily properties in the Mid-Atlantic.
“This represents the sixth time Red Oak has worked with this borrower, who has a proven track record of acquiring, renovating, leasing and refinancing multifamily real estate,” said Gary Bechtel, Red Oak’s chief executive officer. “We’ve also had great success in lending on properties under the District of Columbia’s housing voucher program, which all but guarantees rental subsidies.”
Built in 1965, the 9,600-square-foot property sits on a quarter acre of land within the Deanwood neighborhood of upper northeast Washington, D.C. Upon completion of the upgrades, all 12 of the renovated apartments will feature three-bedroom, one bath layouts of approximately 800 square feet each, with all-new appliance packages, flooring, bathrooms, bedrooms and living areas.
Legacy Construction LLC, a recognized regional development leader, has been tapped as general contractor for the renovations. Kanga Property Management will be responsible for continued day to day operations. The borrower intends to exit the Red Oak loan through a permanent loan refinance or sale.
Demand for debt products over the past several years has positioned Red Oak as one of the nation’s leading small to mid- balance bridge lenders. With extensive funding capacity amongst its various business lines, the firm has more than $400 million of assets under management and commitments from both retail and institutional investors.
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.
Click here to visit The DI Wire directory page.