Northmarq’s Louisville office secures $25.3 million construction financing for bourbon barrel storage facility in Shelbyville, Kentucky

LOUISVILLE, KENTUCKY (February 28, 2023) — Randall Waddell, senior vice president of Northmarq’s Louisville debt/equity office, secured a $25,296,000 loan for the construction of a bourbon barrel storage facility to be built on a 107-acre site located at 2517 Vigo Road in Shelbyville, Kentucky. Northmarq arranged the financing through a Kentucky-based banking institution. The fixed-rate construction/mini-perm loan is structured with a five-year term consisting of three years of interest-only payments amortizing over a 25-year schedule thereafter.

“Our client, a joint venture comprised of an experienced distilled spirits consulting firm that brokers bulk whiskey barrels and a design/construction firm that has developed a premium storage system, was particularly pleased that our lender honored an extremely attractive interest rate committed prior to the recent run-up in interest rates," said Waddell. “With the first rickhouse now under construction, the borrower hopes to qualify for phase-two funding by year-end.”

The loan is for the first of two phases of development and will consist of three rickhouses and one blending/bottling building. Seven rickhouses, each of which will hold 19,800 barrels along with the blending/bottling building will exist upon completion of the development. The project is thought to be the first speculative barrel storage facility of scale in Kentucky where a severe shortage of quality facilities exists to meet the demands of record levels of new bourbon production. 

The blending/bottling facility will allow the full cycle of expert blending services and high-quality bottling along with premium barrel aging in one location, something sorely lacking in the whiskey industry for non-distilling brands. The Spirits Group, the distilled spirits partner, in addition to brokering bulk whiskey barrels also blends whiskey for client brands, historically relying on third party bottling facilities. This new facility will bring those third-party services under one umbrella to ensure enhanced quality control throughout the process.  

The storage partner, K-RAX, has developed a superior storage system for distilled spirits that responds to distiller’s concerns with structural integrity and compliance with modern building codes and safety regulations. Their product, the result of years of research and input from leading distillers, offers a longer life, significant reductions in staffing, and reduced liability to barrel owners resulting in insurance savings. Assembled under controlled conditions and erected in modules, proper air flow is insured for the proper aging of Kentucky’s timeless spirit.

Koetter Construction will serve as general contractor on the project.