Commercial Real Estate Bridge Loans
Commercial Bridge Financing for Your Value-Add and Rehab Loans
Commercial Real Estate Loans, Inc. has a proprietary bridge loan platform that offers temporary financing for borrowers seeking to rehab or reposition commercial properties. These are properties that may not qualify for permanent financing. They could also be properties whose short-term goals require short-term financing.
Commercial bridge loans are generally structured to account for capital expenditures. Depending on the situation, they also account for interest reserve and other reserves. Bridge financing for commercial property is generally used to bring a property to stabilization for a sale or recapitalization and permanent financing. If the transition to permanent financing is preferred, Commercial Real Estate Loans, Inc. can assist in an easy shift to the most suitable financial mechanism for that situation.
Commercial Bridge Loan Terms
Minimum Loan: $1MM
Term: 12-24 months
Leverage: Up to 75% LTC
Amortization: Interest only
Recourse: Non-recourse options available
Prepayment: Usually none
Fees: From 2% of the loan amount
Rates are determined by strength of the sponsorship and the loan purpose. Existing property with in-place cash flow will receive more aggressive financing. In contrast, bridge loans for credit and legal issues or bridge loans that require an extremely expedited close (i.e. 2 weeks) will receive more expensive financing.
Loans over 65% LTC or under $10MM will be full recourse. Larger loan amounts at lower leverage points will be non-recourse with standard carve-outs. Non-recourse financing is available at higher leverage or lower loan dollars at higher interest rates (generally double digit).
Commercial Bridge Loan Pros
Loan amounts determined by total project cost.
Fast closing process.
Available when other lines of credit are not attainable.
An alternative to permanent financing.
Allows for recapitulation at stabilization.
Commercial Bridge Loan Cons
Very high rates if financing is for financial, legal or credit issues.
Loans are short term and generally need to be refinanced inside 24 months.