Commercial Real Estate Bridge Loans

Commercial Real Estate Bridge Loans | Montgomery Lending

🌉 Bridge the Gap. Execute the Deal.
 

In today's fast-moving, transitioning commercial real estate market, opportunity rarely waits for the slow, traditional bank process.

Commercial Real Estate Bridge Loans are short-term, asset-backed financing solutions designed to provide immediate capital to seize value-add opportunities or stabilize an asset before securing long-term, permanent financing.

At Montgomery Lending, we specialize in connecting sophisticated investors with the customized, flexible capital necessary to beat competitors to the closing table and execute complex business plans.

 
 What is a Commercial Bridge Loan?

A bridge loan is temporary financing—typically 6 months to 3 years—that "bridges the gap" between the time you need cash now and the time you qualify for a long-term commercial mortgage (the "exit strategy").

Key Characteristics:
 

Term: Short-term (12–36 months)

Speed: Extremely fast closing (often 10–30 days) to secure time-sensitive deals.

Underwriting: Asset-Focused. Based more on the property's potential value (after stabilization/renovation) than the borrower's in-place cash flow.

Repayment: Usually Interest-Only payments, with the full principal due as a balloon payment when the loan matures (or is refinanced).

Exit: Always requires a clear, defined exit strategy (e.g., permanent refinance or sale).
 
Top Use Cases for Bridge Financing
 

Bridge loans are the ideal tool for investors focused on value creation and speed of execution across all asset classes (multifamily, industrial, retail, etc.).

Value-Add Acquisition: Quickly acquire a distressed or underperforming Class B/C asset. The bridge loan funds both the purchase and the necessary capital expenditures (CapEx) for renovation and repositioning.

Stabilization & Lease-Up: Purchase a newly constructed or recently vacant property that has not yet reached the occupancy or debt service coverage ratio (DSCR) required by traditional banks for permanent financing. The loan covers the lease-up period.

1031 Exchange / Quick Close: Execute a tax-deferred exchange under strict deadlines. The speed of a bridge loan ensures you close on the replacement property before the 45-day window expires.

Maturity Default/Refinance: Pay off an existing loan with an impending balloon payment that cannot be refinanced through traditional means due to current market conditions. The bridge loan buys time to wait for better rates.

Fix-and-Flip (Commercial): Fund the acquisition and renovation of a commercial property intended for quick resale (flipping) within a 6–18 month timeline.
 
Why Partner with Montgomery Lending?

As an expert commercial mortgage brokerage, Montgomery Lending provides a critical advantage in the bridge lending space.

We are not restricted to a single bank's credit box; we shop your deal across the national landscape of private, institutional, and correspondent lenders.

Our Bridge Loan Advantage:
 

Access to Private Capital: We have deep relationships with non-bank bridge lenders who specialize in complex, flexible, and value-add financing that traditional banks avoid.

Optimal Structure: We don't just find a rate—we structure the entire loan, negotiating key components like:

Lowest All-In Cost: We seek the lowest blended rate, points, and exit fees to maximize your return.

Construction Draws: Ensuring the loan funds CapEx as quickly as you need them.

Non-Recourse Options: Where possible, we structure the loan to limit personal liability.

Certainty of Execution: Our team underwrites your deal internally first, ensuring your package is perfect before submission, which guarantees a high degree of confidence and rapid closing.
 
 📊 Current CRE Bridge Loan Rates and Terms
 

The rates for a Commercial Real Estate (CRE) Bridge Loan are typically higher than traditional long-term financing, reflecting their short-term nature and the transitional risk of the property (e.g., being under renovation or unstabilized).

Interest Rate: Most frequently found in the 8% to 12% range. Rates are often variable (floating), tied to a benchmark like the Secured Overnight Financing Rate (SOFR) plus a spread (e.g., SOFR + 450 to 800 basis points).

Loan Term: 12 to 36 months. Shorter terms of 1 to 3 years are standard, with a clear expectation that the loan will be paid off (or "taken out") by selling or refinancing the property.

Loan Structure: Interest-Only. Borrowers only pay the interest during the loan term, with the entire principal balance due in a single balloon payment at maturity.

Leverage (LTV): Up to 75% of the project's total cost or After Repair Value (ARV). Lenders often focus on the property's potential value (the "stabilized" value) rather than its current, distressed value.
 

Factors That Determine Your Rate
 

The specific rate you are quoted for a CRE bridge loan depends heavily on the risk profile of the deal, including:

Property Type: Stabilized multifamily properties often get lower rates, while riskier assets like hotels, non-essential retail, or vacant land typically see rates toward the higher end of the range.

Loan-to-Value (LTV): The less you borrow relative to the property's value (lower LTV), the lower the risk for the lender, which generally results in a better interest rate.

Borrower Quality: Investors with significant experience, strong credit scores, and high liquidity (net worth/cash reserves) can qualify for the most competitive rates.

Business Plan Quality: A clear, feasible plan to stabilize the property and a definitive exit strategy (e.g., a signed contract for long-term refinancing) will help secure a lower rate.

Ready to move faster than the market?
 

Contact Montgomery Lending today to discuss your time-sensitive acquisition or value-add strategy.