Red Oak Capital Holdings, LLC has provided a $4 million bridge loan for the Bon Air Apartments, a multifamily complex in Indianapolis, Indiana.
The funds will be used to pay off an existing loan and complete the renovation of the Marion County property.
The interest-only loan carries a note rate of 11.50% and a two-year term with two 6-month extension options. The non-recourse debt represents 54.4% of the property’s estimated stabilized value of $7.35 million.
Red Oak’s Stratos Athanassiades, Regional Manager-Midwest, Senior Underwriter Thomas Gorski, and Jesus Martinez, Senior Loan Administrator, originated and underwrote the debt under the firm’s Opportunistic Bridge Loan Program, a higher-leverage product with a small equity component for assets with a substantial value-creation element. The transaction was brought to Red Oak by Paul Meyer of Bristol Capital.
Located in Downtown Indianapolis at 21 West 16th St., Bon Air Apartments consists of a trio of three-story buildings with 42 apartment units and 56 parking spaces. Originally built in 1960, the 33,810-square-foot property sits on 1.18 acres spread across two parcels, one of which is undeveloped land.
The borrower, 21 West QOZ, LLC, is a group of seasoned professionals with years of experience in commercial and residential real estate investment, development and finance. Its plans for Bon Air call for the gut renovation of the three existing buildings at the site into a high-end, luxury multifamily offering, followed by a new ground-up building to be built on an adjacent vacant parcel along with common area and amenity spaces between and connecting all four buildings. The sponsor ultimately intends to exit the Red Oak loan via the future financing tied to the final building’s development.
