Grand Rapids, MI – January 12, 2021 – Red Oak Financial, a Michigan-based commercial real estate finance company, funded a $2,812,500 loan for Hunt Manor, a 15-unit apartment community in Washington, D.C.’s Deanwood community. The financing was used to acquire the asset and provide capital improvements that encompassed the conversion of market-rate apartments to affordable housing as part of the District of Columbia Housing Authority’s (DCHA) Housing Voucher Program.
Red Oak’s Gary Bechtel said, “The financing allowed renovations to be completed as part of the government-paid and guaranteed Housing Voucher program that currently has a waiting list exceeding 10,500 people. Deploying capital into deals that deliver a benefit to the overall community is an easy decision for us to make, since this loan involved a conversion of apartments into affordable housing.”
The financing was structured as a 12-month term, with a full return of capital expected within 6-12 months based on the borrower’s previous projects. The sponsor is a repeat borrower and already owns more than 20 multifamily properties in and around the D.C. area. This financing is part of Red Oak’s ESG (Environmental, Social, and Corporate Governance) initiatives that seek to support real estate opportunities that fit ESG guidelines.
Renovations to the property included a full interior rehab, exterior paint and landscaping and each unit receiving its own washer/dryer, water tank and HVAC systems. The revitalization helped bring the property to 100% leased in four months.
The property was constructed in 1951 and consists of a building on a half-acre site at 4400 Hunt Place NE, Washington, D.C. The unit mix includes floorplans of just three-bedrooms/one-baths, with residences averaging 660 square feet in size. The community is located near transportation, job centers, parks, schools and shopping.
Bechtel added, “Red Oak was attracted to this opportunity because the sponsor already has a sizeable portfolio in the area and brought a demonstrated expertise for revitalizing multifamily assets in the area.”