Red Oak Capital Holdings, LLC has provided $6.3 million to refinance Laura Street Trio, a collection of assets in the core of Downtown Jacksonville, Florida.
The structures, considered to be among the most significant and endangered historical buildings in the city, are the subject of a $179-million adaptive reuse project proposed by the sponsor, a major local developer and investor.
The interest-only loan carries a note rate of 11.00% and a one-year term with an option to extend for six months. Red Oak’s Jeff Joyner, Regional Manager-Southeast; Thomas Gorski, Senior Underwriter; 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 opportunity was brought to Red Oak by Denise Spinelli of Spinelli Commercial Capital.
The sponsor, Stephen Atkins, is owner and managing principal of SouthEast Development Group, a seasoned local player with significant expertise in urban development and the adaptive reuse of historic properties across the Southeast.
“Given the history of these buildings and their location in the heart of the CBD, we understand what this redevelopment means for the ongoing revitalization of Downtown Jacksonville,” commented Red Oak’s Thomas Gorski. “If Steve’s passion for this project and success with previous historic rehabs is any indication, the Laura Street Trio will serve as a catalyst for continued investment in, and growth of, the local economy.”
Situated on a one-acre site at the intersection of North Laura and West Forsyth Streets, the Laura Street Trio are among the last remaining unrestored structures built in the wake of the Great Fire of 1901 that destroyed much of Downtown Jacksonville. They include the former Florida National Bank Building, a two-story, 16,238-square-foot structure that opened in 1902 as the Mercantile Exchange Bank; the 10-story, 48,145-square-foot Bisbee Building, built in 1909 as Jacksonville’s first-ever skyscraper; and the 11-story, 28,560-square-foot Florida Life Building, which was the state’s tallest building when it was delivered in 1912. Acclaimed architect Henry J. Klutho designed both towers in a Chicago-influenced Prairie Style.
Atkins acquired the Laura Street Trio—and the nearby landmark Barnett National Bank Building—for $3 million in 2013 and has since been working to rehabilitate the properties. Although they remain structurally sound, the buildings deteriorated while sitting vacant for over two decades despite going through multiple owners and redevelopment proposals. The $55-million historic preservation and adaptive reuse of the Barnett was completed in 2019; the 18-story building now houses 107 apartments as well as office and retail space.
The sponsor has already entered into a franchise agreement with Marriott and has invested over $4 million into predevelopment costs to date. The Laura Street Trio redevelopment has also secured some $50 million in public funding and significant financing from other sources, as well as approvals from virtually all stakeholders, including the National Park Service and Florida’s State Historic Preservation Office.
“Everything is lining up perfectly for the City Council to formalize its support for the redevelopment,” added Gary Bechtel, CEO of Red Oak. “We look forward to seeing the final pieces come together so this ambitious project can finally be put into motion.”
