COMMERCIAL BRIDGE LOANS
Reliable capital for the acquisition and refinance of commercial real estate and multifamily properties nationwide.
We Specialize in Bridge Loans and Other Alternative Real Estate Financing.
Integra Real Estate Capital is a trusted source of bridge financing for institutional and private real estate investors in need of immediate access to flexible and creative capital. Working with Integra, you can expect competitive rates, flexible loan structures and a reliable closing process. Our loan professionals will offer you a full suite of bridge loan products designed to meet and exceed your financing objectives.
Get in Touch
(212) 353-2800
Call or E-Mail to discuss your bridge financing needs with our loan professionals.
Bridge Loan Parameters
Loan-to-Cost (LTC)
Up to 85%
Term
12-36 month initial term, with an option to extend.
Guarantee
Non-Recourse in most cases. Some loans may have partial recourse requirement.
TI & LC
Up to 100% future funding of tenant improvements and leasing commissions (TI/LC).
Eligible Locations
We arrange loans in 50+ states with strong emphasis on middle market locations.
Property Types
Multifamily
Access higher leverage and lower rates by tapping into Integra’s multifamily lending community.
Shopping Centers
Non-Recourse financing alternatives for anchored and non-anchored retail centers.
Office
Tailored bridge financing for the acquisition and refinance of transitional office properties.
Hotels
Our hospitality finance group sources competitive capital for acqusition and renovation of hotels.
Industrial & Warehouse
Short-term capital for single- and multi-tenant industrial properties, including warehouse, distribution and manufacturing facilities.
WE ARRANGE DYNAMIC COMMERCIAL REAL ESTATE BRIDGE LOANS.
What is a Bridge Loan?
A bridge loan is a type of loan that provides real estate investors with short-term capital to finance a transitional property. Gap and interim financing are other names frequently used when discussing this topic.
The bridge debt is secured by a first-position mortgage on a property and plays an intricate role when it comes to commercial real estate loans because it offers borrowers an opportunity to stabilize an asset by either rehabbing vacant units, increasing occupancy levels or executing an adaptive re-use business plan. The entire goal of bridge financing is to take a sub-performing property and bring it to stabilization at which point the borrower can refinance out of bridge and into a longer term fixed-rate mortgage with a more competitive interest rate.
Eligible Property Types
Many property types can qualify, some of which include: apartment buildings, shopping centers, office, hotel, industrial and self storage properties. Our loan experts can also finance warehouses, mobile home parks, student housing, marinas and parking garages.
Bridge Loan Rates
Bridge loan rates can vary and are generally based on a spread over a specific LIBOR index. So how do lenders determine bridge loan spreads? They are determined by underwriting various underlying factors that impact the risk profile of the loan. Some of these factors include:
- Loan-to-Cost (LTC) – Bridge lenders can loan up to 85% LTC. Lower LTC’s can produce lower spreads, therefore reducing the overall interest rate.
- Property Location – Since there is a direct correlation between loan spreads and risk, properties in stronger markets with better demographics will benefit from reduced spreads.
- Tenant Roster – A diversifed tenant roster for commercial properties can be beneficial when compared to a single-tenant asset, which creates binary risk for a lender. A tenant’s credit rating can play a role here as well – as tenants with strong balance sheets and a higher credit rating are less likely to default and are more desirable to bridge lenders.
- DSCR/Debt Yield – Lenders typically require a minimum debt service coverage ratio (DSCR) of no less than 1.00x for most property types. There are times when lenders make exceptions and dip below that threshold, so long as there is a fundementally strong business plan to lease up the vacant units of a property. Hotels are usually underwritten to a stricter standard due to its seasonality factor. Naturally, the higher the DSCR the lower the risk. Same applies for an underwritten minimum Debt Yield, which is more commonly used when sizing a commercial loan. Minimum Debt-Yield varies by lender and is tailored to individual transaction.
- Sponsorship Experience – Bridge loans are almost always non-recourse, with standard lender “bad-boy” carveouts. Having said that, bridge lenders compete harder for borrowers with experience in leasing, property management and general ownership. Lenders will reduce spreads, offer lower debt-yield requirements and improved overall deal terms to beat out the competition to secure such relationships.
Common Loan Uses
Bridge lenders generally fill the void when conventional lenders are reluctant to lend to certain borrowers based on their legal partnership entanglement, lower occupancy levels at the property, and any previously filed bankruptcies. There are many other reasons why short-term bridge loans make sense, some of which are listed below:
- Purchase of Foreclosed Asset (REO)
- Refinancing Maturing Loan
- Property With Limited Cash Flow
- Take Out of Construction Loan
- Discounted Payoff
- Future Funding of Tenant Improvement & Leasing Commissions (TI/LC)
- Foreign National Borrower
- Rehabilitation or Redevelopment of a Property (Adaptive Re-use)
- Earn Out Requirement
- Non-stabilized Property Without Historical Financials
Note:
Most loans facilitated by Integra are non-recourse, with standard lender carve-outs. In addition, most of new tenant improvement and leasing commissions (TI/LC) are paid directly by the lender as “good news money” when new tenant leases are signed, preserving the owner/investors personal capital.
Bridge Loan Lenders
It is important to understand that not all commercial bridge lenders are created equal. Each has its own geographical preference, property type niche as well as varying appetite for risk.
The largest and most active bridge lenders are generally debt funds, private money lenders and hedge funds. Conventional banks take a back seat in this space due to regulations that are imposed on these institutions when making risky loans. Unlike CMBS lenders and conventional banks that mainly loan on stabilized properties with consistent cash-flow, bridge lenders focus more on the borrower’s business plan to bring an underperforming asset to stabilization via lease-up of vacant units, rehab, redevelopment and management change for mismanaged properties. Bridge lenders have a strong emphasis on the “exit strategy” upon loan maturity date. At the end of this loan cycle, borrowers will usually have permanent financing lined up to retire the exisiting bridge debt.
Whether an acquisition or a refinance of a commercial real estate property, borrowers need to understand the true cost of the loan by factoring in lender origination/exit fees, minimum interest requirements and overall closing costs.
How Can I Apply?
Applying for a commercial real estate bridge loan is easier than you think. We have an experienced team of analysts who will seamlessly underwrite the income and expense statements and draft a cash flow analysis in order to expedite a loan quote. We are with you every step of the process. You can click on the tabs below to see the information needed for a quote and submit the information via email or by calling us directly: (212) 353-2800
- Current Rent Roll
- Last 3-Years of P&L Statement
- Property Address
- Sponsor Information
- CapEx Schedule for Last 5 Years (if available)
- Current Rent Roll (with lease start/end dates and sq/ft for each tenant)
- Last 3-Years of P&L Statements
- Property Address
- Sponsor Information
- CapEx Schedule for Last 5 Years (if available)
- Tenant Sales (if required to report)
- Most Recent Trailing (12) Month Income and Expense Statement
- Prior (3) Years of Income and Expense Statements
- Most Recent STR Report
- Summary of Franchise Agreement
- Historical Occupancy Report
- Sponsor Resume
BRIDGE LOAN PARAMETERS
Loan Amount: $3,000,000 mimimum, no maximum
Locations: Nationwide
Eligible Properties: Multifamily, Office, Retail, Mixed-Use, Industrial, Hotel, Warehouse, Self-Storage, Mobile Home Parks, Parking Garages, Marinas & Student Housing
Maximum LTC: Up to 85% of cost and 75% loan-to-value (LTV) at exit.
Loan Term: 12-36 month initial term (option to extend may be available)
Amortization: Typically, interest-only payments
Recourse: Generally, non-recourse, with industry standard carve outs
Prepayment: Flexible
Minimum DSCR: 1.25x at exit with appropriate in-place DSCR; lower DSCRs considered if payment supported by pre-funded interest reserves or guarantees.
Fees: Negotiable, generally 1% origination and 1% exit fee
Debt Yield: Tailored to each transaction
Interest Rate: LIBOR-based floating rate. Spread varies based on risk and terms.
Loan Purpose: Acquisition or refinance
Closing Time: Generally 30 days from the date of signed application.
Our consultations and quotes are absolutely FREE. Let’s Talk!
Call Us
(212) 358-2800
Email at
Integra Real Estate Capital offers a full gamut of financing options for stabilized and transitional properties nationwide. Our team of professionals will help you realize the full potential of your commercial real estate portfolio and maximize its financial performance. We are committed to every debt & equity transaction, particularly where timing, structure and certainty of execution are of the utmost importance.
