Historic Rhode Island Property Receives Financing for More Apartments
- Jul 25, 2011
East Providence, R.I.–Rumford Center, a mixed-use office, retail and apartment redevelopment of a historic mill complex that once housed the Rumford Baking Powder Co., has obtained $15.5 million to complete the residential aspect of the development. The lender is Webster Bank, and the borrower is PK Rumford L.L.C., a joint venture between Peregrine Holdings and Kirkbrae Development, which bought the derelict property in 2006.
The Rumford Baking Powder Co. was a pioneer in the mass production of baking powder in the 19th century, which made baking quicker and more reliable. The facility remained an industrial plant, occupying a little more than eight acres in the Rumford neighborhood of the city of East Providence, R.I., until its closure in 1968.
Rumford Center is comprised of eight buildings totaling 200,000 square feet that currently contain 89 finished residential apartments and more than 36,000 square feet of office and retail space. Retail tenants include Seven Stars Bakery and Avenue N American Kitchen, a new restaurant owned by Providence, R.I., chef Nick Rabar and his wife Tracy.
According to Webster Bank, about $2.5 million of the loan will go toward completing 23 more apartments at Rumford Center and covering expenses related to the available commercial space. About $13 million will go toward refinancing existing debt on the property.
Trouble with refinancing has been the bane of commercial real estate since the credit freeze of 2007, but the Rumford Center developers were able to persuade the bank of the property’s essential money-making potential. “Eighty-nine units had already been built out and fully leased, so there was a very good demonstration of the market for this type of unit in this location,” Claudia Piper, senior vice president, commercial real estate for Webster Bank, tells MHN.
Significant equity participation by developers, even for the strongest of properties, is also de rigueur in these credit-tight days. Piper adds that the borrower put in additional equity towards the cost of the additional 23 units, though she doesn’t specify an amount.