OPPORTUNITY

Seeking capital to complete the refurbishment and re-tenanting of a suburban office property in Hoffman Estates, IL, a longtime Chicago-area property owner turned to Red Oak Capital Holdings for a solution. Situated on a 7.56-acre site within the Prairie Stone Business Park in Northwest Cook County, IL, Prairie Stone Commons is comprised of two Class “B” office buildings totaling 101,981 square feet. Built in 1996 and 2000, the buildings are connected by a walkway on the upper floors

SOLUTION

Red Oak provided the sponsor with an $8.3-million bridge loan structured with an initial term of 24 months with two 6-month renewal options. The loan represents an “As-Is value of 92.22%, and a loan to “As-Stabilized” value of 67.76%, based on its expected stabilized value upon completion. The debt carries an interest rate of 8.25%

The borrower plans to use the majority of the loan proceeds for tenant improvements and leasing commissions to stabilize occupancy before exiting the Red Oak loan through either permanent financing or via a sale.

CONSIDERATIONS

Despite the lackluster performance of the general office sector, the combination of a highly experienced sponsor with a firm business plan and the property being located in a top-tier market, made the decision to fund this loan an easy one. Prairie Stone Commons is situated within one of the top submarkets in Greater Chicago, which itself ranks as the third MSA in the country, with a large, diverse economy.

The sponsor entity, YP Trillium, LLC, is managed by Zaya S. Younan, President and CEO of investment and brokerage firm Younan Properties, Inc. For more than two decades, Los Angeles-based YPI has completed more than $6 billion in transactions on behalf of itself and other third-party investors.