Northmarq secures $45M mortgage loan for bourbon facility in Shelby County, KY

SHELBYVILLE, Ky. (Jan. 13, 2025) — Senior Vice President Randall Waddell of Northmarq’s Louisville office finalized a $45 million loan for The Blending House development, a collaboration between The Koetter Group (Floyds Knobs, Indiana) and The Spirits Group (Louisville, Kentucky) located on a 108-acre site at 1917 Vigo Road in Shelby County, Kentucky.  Northmarq arranged the financing through its relationship with a regional bank.

The loan refinances existing debt on the first phase of the development and provides construction financing for the second and final phase. Waddell secured the $25.3 million construction financing for Phase 1 of the property in 2023.

Upon completion, The Blending House will consist of seven premium rickhouses utilizing The Koetter Group’s innovative K-RAX barrel storage system along with a 30,000-sq.-ft. blending and bottling facility providing a home base for clients of The Spirits Group. The transaction was structured on an interest-only basis for two years, amortizing for the balance of a five-year term on a 25-year schedule.

Phase I, consisting of the blending and bottling facility and three storage buildings, is completed and fully leased. Phase II, containing four additional rickhouse buildings, is substantially pre-leased. The project is thought to be the first speculative barrel storage facility of scale in Kentucky, as the team anticipated the need for increased quality barrel storage when the market began overproducing inventory in early 2020. K-RAX, a Koetter subsidiary, “was formed to create and manufacture a superior storage system for distilled spirits focused on operational safety, improved structural integrity, and improved airflow,” said Bob Koetter, CEO of The Koetter Group.  

The Spirits Group develops strategic plans for clients, brokers bulk whiskey, and creates whiskey blends for clients. “The Blending House development will be a showroom for the K-RAX rickhouses, provide a home base for our core clients and supply third-party storage for other non-distilling producers (NDPs),” said Monica Wolf, managing partner of The Spirits Group. The new facility will bring those third-party services under one umbrella to ensure enhanced quality control throughout the process.