AVALON, CALIF. — Red Oak Capital Holdings has provided a $6 million bridge loan for the Hermosa Hotel & Apartments in Avalon, a city on Santa Catalina Island. The loan proceeds will retire existing debt at the century-old property, located at 131-171 Metropole Ave. Hermosa Hotel & Apartments contains 46 buildings offering a total of 44 hotel rooms, a commercial unit occupied by a spa and 26 multifamily units. Since acquiring the property in 2019, the sponsor has invested approximately $3 million into renovations, reorienting the hotel as a boutique alternative to large-scale resorts while maintaining the multifamily component as stable, year-round housing for service workers.
The interest-only loan was structured under Red Oak’s Core-Plus Bridge Loan Program and carries a two-year initial term and a loan-to-servicing value of 55.2 percent. David Christensen of Red Oak originated the loan, with underwriting led by Thomas Gorski and loan administration by James Myatt. Deryl Deese of Tauro Capital Advisors arranged the financing on behalf of the borrower, a subsidiary of value-add investment firm McKinney Capital.