Red Oak Capital Holdings, LLC closed on a $6-million bridge loan for the Hermosa Hotel & Apartments on Catalina Island. The loan proceeds will retire existing debt at the century-old property, located at 131-171 Metropole Ave. in Avalon. 

The interest-only loan was structured under Red Oak’s Core-Plus Bridge Loan Program and carries a two-year initial term and an LTSV of 55.24%. Red Oak regional manager David Christensen originated the loan, with underwriting led by Thomas Gorski and loan administration by James Myatt. Deryl Deese, senior director at Tauro Capital Advisors Inc., arranged the financing on behalf of the borrower, a subsidiary of value-add investment firm McKinney Capital.

Hermosa Hotel & Apartments contains 46 buildings encompassing 44 hotel rooms, a commercial unit occupied by a spa and 26 multifamily units. Since acquiring the asset in 2019, the sponsor has invested approximately $3 million into 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.”

Red Oak CEO Gary Bechtel will be among the featured speakers at the 9th Annual Connect Los Angeles 2025, June 18 at the Intercontinental Los Angeles Downtown.