D’IBERVILLE, MISS. — Red Oak Capital Holdings LLC has provided a $7.7 million loan for Ocean Shores Apartments, a 128-unit affordable housing asset in D’Iberville. Craig Hall of CBRE brought the opportunity to Red Oak Capital. Jeff Joyner, Hermann Wendorff and Jesus Martinez of Red Oak Capital originated the loan. The fixed-rate loan is interest-only and carries a two-year term, with an all-in interest rate of 9.5 percent.
The borrower, an entity doing business as Ocean Shores Property Owner LLC, will use the loan to acquire the property. The funds will also be used to complete renovations begun by the seller, such as new flooring and paint, HVAC maintenance, reglazing existing kitchen countertops and replacing appliances in most of the units.
Ocean Shores Apartments was built in 2009 on an 11-acre site. The garden-style community offers one-, two- and three-bedroom apartments averaging 1,008 square feet. Amenities include a clubhouse with a business center, conference room, fitness center, laundry facility and media center, as well as a playground, pool, picnic areas, sand volleyball court and 256 parking spaces. The property was 94 percent occupied at the time of financing.
The property operates under a land use restrictive agreement (LURA) through 2047, which requires units to be rented to households earning less than the area median income. After the renovations, the borrower plans to boost rental rates by using vouchers that allow for rents greater than those imposed by the LURA.