Red Oak Capital Holdings, LLC provided $14.5 million in financing for Gateway Center, a 272,300-square-foot regional shopping center in West Bloomfield, Michigan.
The loan was written under the firm’s Core-Plus Bridge Loan Program, a floating-rate program for institutional-quality assets in transition. The proceeds will be used to refinance a portion of the multi-tenant property, which sits in a highly trafficked retail corridor in the densely populated, affluent Detroit suburb.
The interest-only loan carries a 24-month initial term, floor rate of 10.00%, and an LTSV of 68.19%. Stratos Athanassiades, Red Oak’s Regional Manager-Midwest, originated the loan, which was underwritten by Thomas Gorski, Senior CRE Underwriter and closed by Jesus Martinez, Senior CRE Loan Administrator. Matt Shane, principal with SF Capital Group, brought the loan to Red Oak on behalf of the sponsor, CFM Properties. The full-service asset and property management firm owns and manages 66 assets totaling over seven million square feet primarily in Southeast Michigan, Florida, Colorado and Ohio.
Situated on a three-acre site at 7130-7440 Orchard Lake Road, Gateway Center is 95% occupied and anchored by Whole Foods, Kohl’s, Walgreens and Dunham’s Sports. The Red Oak loan is secured by the 115,491-square-foot portion of the center containing Kohl’s, Harbor Seafood, J. Alexanders Restaurant, four in-line tenants and a vacant outparcel. The remaining 156,802 square feet of the shopping center will be refinanced with a new $24-million CMBS loan from Citigroup.
The sponsor plans to retain ownership of the Kohl’s pad and in-line stores, ultimately sell each of the outparcels and use the proceeds to pay down the Red Oak loan. The borrower will then either redevelop the Kohl’s into a luxury multifamily community or renew the Kohl’s ground lease and refinance the pad with long-term debt.
