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Bridge loans run the entire spectrum of pricing and structure. A bridge loan is typically floating rate and is called a bridge loan because it usually bridges the time period in between two events. Examples of bridge loans are:
Construction Loans: typically recourse loans
offered by banks and credit companies. Pricing runs
from LIBOR plus 175 basis points to more than Prime
plus 3%. Pricing, leverage and recourse determined
by project type, pre-sales, pre-leasing, strength
of sponsor, experience of sponsor, business plan and
deal by deal specifics. Non-recourse construction
loans are available.
Transition Loans:
can be recourse or non-recourse. These loans are used
typically to create value. A lender in this instance
underwrites the sponsors business plan. Examples of
business plans would be renovating a property, re-tenanting,
improving a property quality, upgrading tenancy, changing
a property use, buying and improving a distressed
proeprty. Lenders will look intently on the market
and sponsorship skill in similar business plans executed
in the past.
Stabilized Property Loans: typically non-recourse.
Sometimes, borrowers simply do not want to fix a rate.
Reasons might include waiting for fixed rates to fall,
the possibility that a property might be sold, avoiding
yield maintenance, avoiding defeasance or any number
of reasons.
To get more information on what rate you might expect for your project, please use the text box below to explain simply what you seek. Please include your email address. You will receive more personalized feedback once this information has been reviewed.
TEXT BOX INSTRUCTIONS - Please explain loan amount request, loan term request, current property condition and reasons for junior loan request. Helpful information also includes current property net operating income, major tenants and an explanation of the business plan for the loan term. Information on the proposed senior loan would also be helpful.
Your message will be emailed to Tim Radomski of BridgePointe Advisors.
* - Required
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