Red Oak Debuts Hybrid Fund for Commercial Real Estate Debt
Red Oak Capital Fund VI, LLC, a $75-million Regulation A+, Tier II General Solicitation hybrid offering sponsored by Grand Rapids, MI-based Red Oak Capital Holdings, has been qualified by the SEC and is open to investors. The fund is bifurcated into two distinct products, a bond offering and a preferred units offering, that will focus on U.S. senior-secured, small-balance sheet real estate debt investments in primary and secondary markets.
This is a first-of-its-kind vehicle for Red Oak. “Banking regulations and a changing market have limited borrower access to traditional sources of capital,” said Red Oak’s CEO, Gary Bechtel. “This, combined with high levels of fragmentation and operating inefficiencies in the small-balance bridge lending industry, presents a significant opportunity for our investment strategy.”
As with prior vehicles, Red Oak will primarily use Fund VI’s proceeds to originate and make short-term, first-lien loans and acquire other senior-secured real estate debt investments backed by income-producing real estate.