Commercial Real Estate Bridge Lending

In October 2020, Newport Commercial Capital provided a bridge loan in the amount of $4,300,000 secured by a retail property in Los Angeles. The property had two mortgages and was in default with one of the previous lenders. A new partner joined the ownership group and used his own cash to pay off the 2nd mortgage. He then turned to NCC to refinance the 1st mortgage and save the property from foreclosure. We ordered an appraisal, and the value came it at around $8,775,000. So our loan-to-value was only 49%. The property consists of 8 retail units. 6 were occupied and the other 2 were undergoing tenant improvements but had leases in place. The property also consists of an adjacent vacant lot, and the owners plan to build a 40,000 square foot storage facility. Some of the proceeds from our bridge loan were to be used for the soft costs, and we may end up providing the construction loan next year.

BridgeInvest, a direct CRE private lender, funded a $4,000,000 bridge loan secured by 78-acres of suburban land located in the Dallas Fort Worth metro area, TX. The collateral consists of two separate tracts that are both currently in the design and pre-development phase. The first parcel located in Garland has 35 acres and is approved for a 400-unit senior housing development. The second parcel located West of Dallas consists of 43 acres and is planned for a 322-unit build-for-rent, single-family home development. The Sponsor is a full-service real estate investment and development firm based in Dallas, with a focus on single-family and multifamily development. The Sponsor intends to use the proceeds from BridgeInvest’s loan to refinance the property’s prior debt, complete entitlements, and fund project soft costs. This CRE bridge loan was funded in September 2020.

In September 2020, Newport Commercial Capital provided a CRE bridge loan in the amount of $2,895,000 secured by vacant commercial land in San Bernardino, CA. The Borrower was seeking a cash-out refinance loan to pay off the existing debt and utilize the additional proceeds to complete several milestones in preparation for the vertical construction phase. The lot, consisting of 18 acres, was recently entitled to a 420-unit senior care facility. The Borrower is an investment group that initially came to us in February. Due to a disagreement among the partners, the deal fell apart. They came back to us in September, and we were able to close quickly. We ordered an appraisal, and the value came at just under $10,000,000. So our loan-to-value was only 30%. The loan term was set at 12 months, we expected to be paid back when the Borrower secures a ground-up construction loan. Very few lenders are willing to consider land deals of this size in the Inland Empire. We have funded land loans through the pandemic and continue to be bullish on infill urban land deals with low loan-to-values.

BridgeCore Capital closed a $16.5MM bridge loan for the acquisition of two contiguous mixed-use buildings in the Greenwich Village neighborhood of Manhattan, New York City. The Borrower required a non-recourse private loan to purchase the properties that contain 72 multifamily units and ground floor retail. The apartments are 53% vacant, and the retail space is 100% vacant at purchase. BridgeCore’s 24-month term, including two six-month extension options, is providing the Borrower the necessary time to make renovations, including a re-balancing between market-rate and rent-stabilized units, and to position the property for an exit with conventional financing once stabilized. Our competitively structured loan terms allowed the Borrower to quickly execute the purchase of a transitional asset when conventional financing has not been readily available during the current COVID-19 economic environment. Loan terms include three months of prepaid interest; an interest rate of 7.65% for the first 12 months and a floating rate at Prime + 4.40%, with a floor of 7.65%, for the second 12 months; and collection of monthly escrows from the Borrower for interest, taxes, and insurance. BridgeCore employed its decades of experience and innovative strategies to solve the Borrower’s array of unique challenges, securing highly competitive loan terms and closing within a tight time frame on a “sign and close” purchase transaction. This bridge loan was funded in July 2020.

Ontario Wealth Management Corporation, a direct private mortgage lender, funded a $3,000,00 1st lien position bridge loan secured by a commercial plaza located in Tomball, TX. The Borrower needed to cash out equity on the property to use for the acquisition of inventory for their business. The property is a 23,000-square-foot newly built commercial retail plaza 35 miles north of Downtown Houston. Although the property had a good amount of equity, the Borrower pledged an additional property to maximize the loan amount. The property that we cross-collateralized is a 1,200-square-foot residential condominium unit in Midtown Manhattan, NY. This CRE equity cash out loan was funded in April 2019.

First Bridge Lending, a direct private lender, funded a $5,000,000 1st lien position bridge loan secured by a large industrial property in Hollister, San Benito County, CA. The Borrower is an experienced investor who has been a full-time landlord for more than 25 years, and they were seeking an equity cash-out loan for business expenses and capital improvements. They purchased the property in 2008 for $12.5M, then leased it for 10 years. The tenant vacated at the end of the lease term. The property was owned free-and-clear of any mortgages, with the exception of a cross-collateral property that was to be refinanced. First Bridge Lending provided an initial funding of $3,000,000 with a first draw of $1,000,000 and subsequent draws of $250,000 each to provide refinance shortfall funds as needed. We did our own in-house valuation and did not require an appraisal. We estimated the value to be around $16,000,000 which out our loan at a very conservative 31% LTV. The loan term is 12 months. The Borrower’s exit strategy was to complete the improvements, lease to a new tenant and refinance with permanent financing. This equity cash-out loan was funded in March 2019.

BridgeCore Capital, a direct private lender in Beverly Hills, provided a $5,500,000 1st lien position refinance bridge loan secured by a creative industrial property and production offices in the heart of the Hollywood Media District, CA. The loan proceeds were needed to refinance two existing loans on the property and a significant equity cash-out was required to expand the Borrower’s business. Although the Borrower was not able to secure the required amount of loan proceeds from other lenders, BridgeCore performed seamlessly and quickly to meet the previous lender’s pay-off deadline. BridgeCore’s 24-month term, including one 6-month extension option, places the Borrower in an optimum position for either a sale or refinance with a conventional lender. BridgeCore’s terms aligned with the Borrower’s economic requirements, providing for a 10-month, pre-paid interest reserve from loan proceeds and an interest rate of 8.375%. BridgeCore employed its decades of experience to solve the Borrower’s array of challenges, securing highly competitive loan terms, providing comprehensive market and property underwriting to determine current value, and efficiently navigating through the complexities of the borrowing entity. The loan-to-value was 67%. This bridge loan was funded in February 2020.

Avatar Financial Group, a direct private money lending firm, funded a $30M 1st lien position bridge loan to refinance a portfolio of 4 student housing properties across three states – Missouri, Ohio, and Indiana. The Borrower is a large nationwide developer of student housing, and their properties were set to be refinanced in a year-end securitization. They are new construction and did not achieve the occupancy requirement of 90% by the securitization date and were dropped. With the loans coming due at year-end, the Borrower was facing a possible default situation. Avatar was able to underwrite and fund the transaction within 30 days and meet the year-end closing deadline. Our interest rate was 8.25% for a term of 12 months and loan-to-value of 70%. The deal was brought to us by a mortgage broker to whom we paid a commission of $450,000. This CRE bridge loan was funded in December 2019.