Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.

Whether deal sponsors are focused on industrial, multifamily, or hospitality transactions, flexible bridge loan solutions are often required to capitalize their value-add deals. With no shortage of bridge lenders lending up to 65-75% LTC, sponsors continuously require more flexibility to cover the capital gap up to 85% LTC. While this “gap capital” often manifests as subordinate debt, this single-family office provides a more streamlined solution by originating higher leverage as a single-source senior lender up to 85% LTC (subject to max 75% LTV at stabilization). Extensive experience and comfort in owning and operating real estate affords the lender an ability to underwrite aggressively and reach higher levels of proceeds than the average private capital source. Their check size ranges $5MM to $40MM, targeting light- to heavy-value-add projects. Pricing ranges between 9.0% (for lighter lift projects) up to 11.5% (for heavier value-add and higher leverage projects) with options for both fixed and floating rates. It is important to note that while this lender cannot lend on ground up construction projects, they do fund heavy value-add deals and have an appetite for well thought out conversion projects. Additionally, by avoiding the more crowded top-tier markets, the lender seeks out opportunities in strong secondary and tertiary markets that are often overlooked by your average private lender.

Capital Type

Focus on Senior Bridge (Selectively, Mezzanine and Preferred Equity Investments)

Geography

Nationwide with focus on primary and robust secondary markets. Certain tertiary markets with strong market fundamentals may also be entertained.

Property Types

Multifamily, Industrial, Retail, Office (selectively), Net Lease, Self-Storage, Hospitality

Use of Funds

Value-add Acquisitions, Refinancing & Recapitalizations, Conversions, Lease-Up, Note Purchases, Distressed Situations

Construction

Light to Heavy Value-add; excluding Ground-Up Construction.

Sponsorship

Experienced sponsors with a strong local presence

Recourse

Non-recourse with standard “bad-boy” carve outs; subject to industry carveouts

Check Size

$5MM to $40MM

Loan to Cost / Loan to Value

Up to 85% LTC / Max 75% LTV at stabilization

Interest Rate / Returns

Senior Debt: 9.0% – 11.5% (Subject to leverage, market, and value-add profile.) Subordinate Debt: Mid to High Teens
Floating or Fixed rates offered

Origination Fees

1 point in, 1 point out

Term

1-5 years

Prepayment Structure

Flexible based on business plan; typically 12-18 months minimum interest

Underwriting Requirements

Less than 1.0x DSCR permitted if supported by interest reserves
Min stabilized debt yield: 7-8% subject to market and deal profile.
*Based on Investor’s internal underwriting

Collateral Requirements

If Senior Debt: First Mortgage

If Subordinate Debt: Second Mortgage, UCC/Perfected Pledge, or Preferred Equity Units

Intercreditor Requirements / Recognition Agreements

Applicable only in the event of subordinate debt.

Deposits

Market Standard Deposits

Closing Time Frame

Typically, 30 -45 days; can move more quickly if 3rd party reports are completed

If this capital source may be of interest, book a call to discuss a potential capital arrangement.

Read our last Capital Spotlight: Capital Spotlight: Construction and Completion Capital – $5MM to $20MM Stretch Senior and Mezzanine Loans in Secondary and Tertiary Markets