OPPORTUNITY

A borrower group consisting of seasoned multifamily investors approached Red Oak for a bridge loan to acquire and complete renovations on Ocean Shores Apartments, a garden apartment community located in D'Iberville, MS. Situated on nearly 11 acres at 10472 Gorenflo Road, the 128-unit property currently operates under the Low-Income Housing Tax Credit program.

In addition to completing cosmetic renovations initiated by the seller, sponsor Ocean Shores Property Owner LLC intends to utilize voucher programs to increase rents beyond the LIHTC maximums as tenants are cycled through—a strategy it has successfully executed on other LIHTC properties in the past.

Located in the Gulfport-Biloxi MSA, the gated community consists of 10 buildings housing 128 units, a clubhouse and maintenance building. Built in 2009, it offers a business center, conference room, fitness center, laundry facility, media center, playground, outdoor pool, picnic areas, sand volleyball court and 256 parking spaces.

SOLUTION

Red Oak provided $7.70 million under its CorePlus Bridge Loan Program, a fixed-rate program for institutional-quality assets in transition. The interest-only loan has a two-year term with two extension options of six months each. The non-recourse loan also carries an all-in rate of 9.50% and represents loan-to-stabilized-value of 62.60%.

Red Oak’s Jeff Joyner, Regional Manager-Southeast; Hermann Wendorff, Senior Underwriter; and Jesus Martinez, Senior Loan Administrator, originated and underwrote the loan, which was brought to the company by Craig Hall from CBRE Capital Markets.