Acquisition Bridge Loan for Office Building in Downtown Cleveland, Ohio

In August 2020, BridgeCore Capital closed an $8MM bridge loan for the acquisition of an office building in Downtown Cleveland, Ohio. The building occupancy was 42%, and the plans to convert the building into a 436-unit, Class A multifamily apartment property, with a complementary mix of office and retail. They raised some equity capital and brought 35% cash to the closing. BridgeCore’s 12-month term, including two six-month extension options, with a fully funded reserve, is providing the Borrower the necessary time to complete the pre-development plan and position the property for an exit with construction financing. BridgeCore’s competitively structured loan terms allowed the Borrower to execute the purchase of a transitional office asset at a time when conventional financing is not readily available because of the COVID-19 economic environment. Loan terms include a fully funded reserve for interest, real estate taxes, and insurance; a pay rate and accrual to lower the amount of the interest reserve; and limited recourse to $2 million, subject to standard carve-out and debt service guarantees. Although most of our bridge loans are non-recourse, this deal had an added layer of risk with the Sponsor’s ownership structure.