Red Oak Financial, a Michigan-based commercial real estate finance company, has funded an $8.4 million bridge loan for Centennial Office, a nearly 60,000-square-foot office complex in North Las Vegas.
The financing was structured with a 12-month term and an initial interest rate of 8.25 percent. The financing was used to retire a maturing loan and provide time for the local sponsor to pursue permanent financing.
“Red Oak was attracted to the Las Vegas market due to its office fundamentals that are weathering the economic challenges of the pandemic very well,” said Gary Bechtel, Red Oak’s chief executive officer. “That includes positive net absorption, decreasing vacancy and a moderate pace of new supply. Demand for office space is regaining ground and leasing activity is expected to pick up in 2021, despite the shift to working remotely that occurred because of the pandemic.”
The property was built in 2007 and consists of three, two-story buildings on a 10-acre site. The buildings underwent a capital improvement program from 2008 to present and are 97 percent occupied. The tenant mix includes professional services firms, a fitness facility, a non-profit and a church.
“The sponsor is an experienced commercial real estate investor that was part of a group of investors that originally built the properties. The local owner sought short-term financing to take out a maturing loan, while allowing them time to arrange permanent financing,” Bechtel added.
Red Oak Capital Holdings is a family of commercial real estate finance and investment companies that includes Red Oak Financial, Red Oak Holdings Management, and Red Oak Capital GP. Red Oak Financial originates, short-term commercial real estate loans for sponsors seeking $1 million to $15 million of debt financing.