Red Oak Capital Closes $6M Bridge Loan for Catalina Island Hotel & Apartments
Red Oak Capital Holdings, LLC has closed a $6 million bridge loan for the Hermosa Hotel & Apartments, a historic property on Catalina Island. Located at 131-171 Metropole Avenue in Avalon, the financing will be used to retire existing debt on the century-old asset.
Structured under Red Oak’s Core-Plus Bridge Loan Program, the interest-only loan features a two-year initial term and a loan-to-stabilized value (LTSV) of 55.24%. Red Oak’s David Christensen served as the regional manager on the deal, with underwriting led by Thomas Gorski and loan administration handled by James Myatt. Deryl Deese, senior director at Tauro Capital Advisors Inc., arranged the financing on behalf of the borrower, a subsidiary of McKinney Capital, a value-add investment firm.
The Hermosa Hotel & Apartments consists of 46 structures, comprising 44 hotel rooms, 26 multifamily units, and a commercial space currently occupied by a spa. Since acquiring the property in 2019, McKinney Capital has invested about $3 million in renovations.
“Properties like the Hermosa Hotel & Apartments offer a rare mix of character, history and reliable income from both hospitality and housing operations,” said Christensen. “The sponsor’s strategic investments have already transformed this site into a differentiated boutique destination with a loyal visitor base and ongoing upside.”
