Red Oak Capital Provides $8.4M Loan for Hotel-to-Multifamily Conversion in Covington

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Red Oak Capital Holdings LLC has provided an $8.4 million loan to an investment group represented by Nebo Capital for the acquisition and conversion of a former WeStay Suites hotel in Covington, Louisiana into an 87-unit apartment community. The 12-month bridge loan will cover the $6.9 million purchase price and $1.8 million in planned renovations to reposition the 89,831-square-foot, five-story property.

Why it matters

This hotel-to-multifamily conversion project is part of a broader trend of adaptive reuse in the real estate industry, as developers seek to repurpose underutilized commercial properties into much-needed residential units. The Covington area has seen similar conversions, indicating strong demand for this type of project.

The details

The former WeStay Suites hotel at 140 Holiday Blvd. in Covington was built in 2009 on 2.9 acres and features an outdoor pool, fitness center, and community rooms. The investment group plans to renovate the property and convert it into an 87-unit apartment community. Red Oak Capital's bridge loan will fund the $6.9 million acquisition and $1.8 million in planned improvements, with the borrower intending to refinance with permanent or agency debt upon completion of the renovation.

• The former WeStay Suites hotel was built in 2009.

What’s next

The borrower plans to refinance the bridge loan upon completion of the renovation with permanent or agency debt.