Red Oak Capital Holdings, LLC has provided a $5.8-million bridge loan for the Hawaii Avenue Apartments, a pair of multifamily buildings located in Washington, DC. The funds will be used to acquire and rehabilitate the properties into 22 multifamily units to be rented under the DC Housing Authority's Housing Choice Voucher Program (DCHCVP).

Hawaii Avenue Apartments consists of adjacent buildings located at 89 & 93 Hawaii Avenue NE in Washington, DC’s Brookland neighborhood. The borrower intends to convert the existing vacant units into 12 two-bedroom and 10 three-bedroom apartments with projected monthly rents of $2,439 and $3,256, respectively. The rehabilitation is expected to be finished within a year, with full stabilization by late 2025.

The financing was provided through Red Oak’s Participating Bridge Loan Program, in which the firm provides an equity component—thereby taking on some project risk—in exchange for a percentage of the project’s value creation at exit. The interest-only loan carries a 12-month term with two 6-month extension options and an all-in interest rate of 11%. The non-recourse debt represents an LTSV of 72.3% based on the property’s forecast stabilized value of $8 million.