Private real estate lender Trez Capital has closed a $37.34 million construction loan for the redevelopment of office buildings into multifamily housing in the Cincinnati suburb of Springdale.
The borrower, Trinity Square Holdings, will use the financing to convert the recently acquired office buildings, which were constructed in the early 1980s, into 129 apartments as well as add 97 rental townhomes to the 10.86-acre site. The office buildings were vacant at the time of the acquisition. In addition, the Warren County Port Authority is investing approximately $8 million to the redevelopment.
Trez Capital’s Brett Forman, executive managing director, Eastern U.S., and Scott Mehlman, vice president of originations, originated the construction loan for the borrower.
“Demand for multifamily housing in suburban Cincinnati is strong, while the office market has been sluggish,” Forman said. “This redevelopment will add much-needed multifamily product to the area and enhance the broader community and tax base.”
Forman added that more office conversions could be coming.
“Expect to see more office-to-multifamily conversations in the year ahead, as older office buildings become obsolete,” he said. “We are seeing it with aging and poorly located retail properties, so there is precedent for these multifamily redevelopment plays.”
Trez Capital, which provides short-term debt and equity financing typically between six and 36 months in term and up to $100 million in loan value in the U.S. and Canada, was on pace to originate about $2 billion in loans by the end of 2021.
