Red Capital Arranges Loan for Historic PA Conversion

Former tobacco warehouse to be converted

Red Capital Group LLC (RED) has arranged a $7.8 million construction loan for the adaptive reuse of an historic Landisville, Pa., building. The loan will be used to develop a currently vacant brick warehouse into Tobacco Road Apartments, helping meet a significant need in the Lancaster County region for market-rate rental housing. 

The historic building was once a tobacco warehouse featuring four connected buildings. Built in the early 20^th Century, it is on the National Register of Historic Places. As part of the redevelopment, wood floors and exposed wooden beams will be refinished in some areas.

The 66 one-, two- and three-bedroom units will be developed by S.B. Conrad. Tobacco Road Apartments will also feature an elevator, lounge and fitness center, among other amenities.

“We identified this project as a regional opportunity,” said David Bonomo, director at Red Capital Group, in a prepared statement. “We directed our efforts toward local community lenders, and we are very pleased with the results.”

Historic treasure

“Tobacco Road will provide high-quality rental apartments in the Lancaster area marketplace, where the demand exceeds the supply,” said Steve Conrad, president of S.B. Conrad, in prepared remarks. “To do so while preserving such a meaningful local real estate asset makes it even more rewarding. 

“(RED) 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.”

Red Capital Group acted as exclusive structuring agent, managing the solicitation effort on behalf of S.B. Conrad. The team negotiated favorable pre-payment provisions, which will allow Conrad to refinance the bank loan within two years with no prepayment penalty.

Image courtesy of RED