Red Oak Capital Holdings, LLC has provided a $4.55 million loan for Eagle Crest Village Apartments, a 98-unit residential community in North Bend, Oregon.
The funds will be used to retire the existing debt and complete renovations on the garden-style apartment property. The loan was written under Red Oak’s Opportunistic Bridge Loan Program, a higher-leverage, fixed-rate lending program for properties with a substantial value-creation component.
Amenities at Eagle Crest Village Apartments within the property include a library, media room, fitness center, laundry facility, onsite restaurant and deli, and 119 parking spaces. Built in 1957 as a residential care facility, the property sat vacant for several years until the borrower acquired it in 2021. The sponsor has since invested over $2.3 million to convert the asset into 100% multifamily, with work roughly 85% complete at the time of the loan closing.
“While this may be an unconventional conversion, this sponsor has 40 years of expertise in acquiring, renovating, and selling real estate assets,” stated Dave Christensen, Red Oak’s Regional Manager-West. “His leasing team has already secured tenants for the single-family home and nearly half the units at rental rates that are over 20% higher than market averages. With renovations nearly complete, we expect Eagle Crest Village to be fully stabilized and occupied by the end of this year.”
The non-recourse loan carries an 11.00% interest rate, three-year term, and represents 53.40% of the property’s stabilized value. Christensen originated the loan, which was underwritten and administered by Hermann Wendorff, Senior CRE Underwriter, and Jesus Martinez, Senior CRE Loan Administrator. Peter Breen, Director of Production for LendingStandard, brought the transaction to Red Oak on behalf of the borrower, a seasoned real estate investor.
Eagle Crest Village is located in the Coos Bay Micropolitan Statistical Area in Central Oregon, where Bend is region’s largest city. Once known for logging and agriculture, North Bend has recently developed a reputation as a bedroom community to Seattle and Bellevue. Career opportunities in the technology, bioscience and aviation industries are attracting new residents and increasing residential demand in North Bend, which is becoming increasingly supply constrained.
“This financing underscores our commitment to supporting projects in regions with strong economic growth and limited housing supply,” said Gary Bechtel, CEO of Red Oak. “With North Bend’s evolving economic landscape and pent-up demand for housing, Eagle Crest Village Apartments is well positioned to meet the housing needs of this dynamic community.”
The sponsor intends to exit the Red Oak loan via a conventional refinance and manage the community in the long term.
