LANDISVILLE, PA - RED Capital Group recently arranged a $7.8 million construction loan for Tobacco Road apartments, an adaptive reuse of an historic building in Landisville (Lancaster County), Pennsylvania. Total project cost is $9.6 million.
The loan will be used to develop the currently vacant brick warehouse into a 66-unit apartment community. The structure, a former tobacco warehouse consisting of four connected buildings, was built in the early 1900s and is on the National Register of Historic Places. The redevelopment will take advantage of some of the historic features, including refinishing wood floors in certain areas and exposed wood beams.
The apartments will help fulfill a substantial need in the region for market-rate units. They will be developed by S. B. Conrad. The complex will include one-, two- and three-bedroom units, an elevator, lounge area and fitness center, among other amenities.
“We identified this project as a regional opportunity,” said David Bonomo, Director at RED. “We directed our efforts toward local community lenders, and we are very pleased with the results.”
“This is an exciting opportunity,” said Steve Conrad, President of S. B. Conrad. “Tobacco Road will provide high-quality rental apartments in the Lancaster area marketplace, where the demand far exceeds the supply. To do so while preserving such a meaningful local real estate asset makes it even more rewarding.”
RED acted as exclusive structuring agent, and managed the solicitation effort on behalf of S. B. Conrad. They negotiated favorable pre-payment provisions, which will allow Conrad to refinance the bank loan within two years with no prepayment penalty.
“The RED team made this happen for us,” said Conrad. “They managed the financial side of the equation, allowing us to focus on what we do best – development. RED targeted the appropriate segment of construction lenders, delivered a term sheet in a matter of days, and positioned us to close within a few weeks.”
“This effort demonstrates the full-service capabilities of RED’s team,” said Trent Brooks, President and Head of Production at RED Mortgage Capital.