Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.
Valencia Realty Capital is always hunting for capital sources that uniquely solve financing problems commonly encountered by sponsors. In this Capital Spotlight, we wanted to highlight a National Bank lender that offers a non-recourse, multifamily bridge loan product that caters towards experienced agency borrowers. The purpose of the bridge product is to provide more leverage on transitional Multifamily assets, that will be better suited for an agency loan in a 24–36-month period. We often hear sponsor’s concerns over utilizing an agency plus preferred equity or private debt solution to close a proceeds gap. This lender provides the flexibility and speed of a private lender, at slightly less leverage and with pricing in the low-to-mid 6%’s.
Highlighted Product: Non-Recourse Bridge Debt at Bank Pricing
This loan product is geared towards experienced sponsorship teams, with agency borrowing experience, that are going after heavier value-add multifamily acquisition strategies. Cash flow is likely not strong enough to qualify for an attractively leverage agency product, but through proven value-add strategies, one can reasonably conclude that the target acquisition will be ready for an agency take out loan in a 24–36-month time frame. With that in mind, this lender crafts their bridge loan product with the flexibility needed to ensure both sponsorship acceptance and a seamless transition to their agency loan programs.
Key Loan Terms:
- Typical Deal Size: $10MM – $70MM
- Loan to Cost: Up to 65% LTC
- Interest Rates: SOFR + 200-300 bps
- Term: 24-36 months
- Amortization: Interest-only
- Lender Points: 50 bps in, 150 bps **waved if refinanced to a permanent facility with lender in question.
- Recourse: Non-recourse and limited recourse options available
This bank is geographically agnostic and will entertain opportunities nationwide in a variety of MSA’s. Sponsorships with experience executing a proven value-add business plan are necessary. Vintage is discretionary but there are not strict restrictions on older vintage assets.
Targeted Deal Types
- Asset Classes: Multifamily
- Geography: Nationwide
- Project Type: value-add
- Sponsorship: Experienced sponsorships with a proven track record completing similar value-add multifamily projects.
Conclusion
This bank is extremely active and seeking opportunities where they can show their competitive nature. If you are trying to increase terms from a bank that is handcuffed by leverage and recourse mandates this group is an ideal capital partner. With cost of capital marginally higher than traditional banks when pushing leverage, they fit a niche in-between regional banks and private credit funds with this product.
If this capital source may be of interest, book a call to discuss a potential capital arrangement.
| Capital Types | Senior Bridge Debt |
| Geography | Nationwide |
| Property Types | Multifamily |
| Check Size | $10MM – $70MM |
| LTV/LTC | Bridge up to 65% LTC |
| Interest Rates | Bridge Debt: SOFR + 200-300 bps |
| Lender Points | 50 bps in 150 bps out **Exit fee waved if refinanced with an internal agency debt |
| Term | 2-3 years, with extension options |
| Vintage | 1960’s+ |
| Closing Timeline | 60 days |
If this capital source may be of interest, book a call to discuss a potential capital arrangement.
Read our last Capital Spotlight: “Private Credit Group Structuring Quick Closing Bridge Debt at SOFR + 275-375″