Capital Spotlight: Active CRE Private Credit
VRC recently interviewed an exciting balance sheet bridge lender headquartered in California, which has established itself as a significant player in the commercial real estate lending space. With satellite offices in Dallas, Miami, and New York City, this debt fund is making waves in the short-term spectrum of CRE lending. Currently operating their fifth fund with $1.5 billion in assets under management, this lender is quietly preparing to roll out Fund 6. That said, Fund 5 remains open-ended and active in the market. This lender focuses on bridge loans across all asset classes nationwide.
Loan Characteristics
- Average Deal Size: $35 million (Sweet spot: $20MM-$50MM)
- Average Loan Term: 18 months (with options for 3+1+1 extensions)
- Pricing: 395-550 basis points over SOFR
- Portfolio LTV Constraint: 70% LTV (up to 80% LTC)
Flexibility and Structure
- A network of B-note participants to fill gaps
- Openness to preferred equity solutions positioned behind them
- Flexible prepayment terms on short-term products
- Can structure 36-month terms with minimal yield maintenance/min interest
Value-Add Deals
For value-add opportunities, this lender typically structures term sheets with a full loan amount and an initial funding amount, tied to LTV based on as-is and as-stabilized appraisals. While the primary fund is typically limited to ~67.5%-70% LTV, this group can facilitate the origination of a B-note to increase leverage closer to 80% LTV, and still close within a 30 day timeframe.
Core+ / Perm Deals
In stabilized scenarios, with institutional quality assets and sponsorship groups, this group can provide competitive private perm debt relative to what the current banking landscape is offering. Credit tenancy, institutional asset management and reporting, and strong sponsorship track record / balance sheet are the points of emphasis as of late for this specific product type.
Insurance-Driven Certainty of Execution
This lender’s partnerships with insurance companies as capital providers give them direct access to property insurance underwriting data, streamlining the loan underwriting process. By eliminating reliance on third-party insurance providers, they reduce due diligence timelines and mitigate execution risks, particularly in high-risk coastal markets. Borrowers benefit from faster closings and greater confidence in execution, even in challenging insurance environments.
Conclusion
With a lean team strategically positioned across key markets, this lender offers a personalized, insurance-enhanced approach to commercial real estate lending. Their balance sheet model allows for quick decision-making, flexible terms, and unparalleled certainty of execution—especially in markets impacted by fluctuating insurance conditions.
As the CRE market continues to evolve, lenders like this, with their ability to adapt and bring unique advantages such as insurance-backed underwriting, are well-positioned to support investors and capitalize on opportunities nationwide.
| Capital Structures | Senior Bridge Debt, Perm (Core+) Debt |
| Geography | Primary and Secondary markets Nationwide. |
| Property Types | This fund invests in a variety of asset classes, including multifamily, condominiums, industrial, self-storage, and hospitality, data centers, BTR, Grocery Anchored Retail, Life Sciences, Medical Office. For Core+ / Perm product, it must be an institutional quality asset. |
| Construction | Heavy value add, no ground up right now |
| Sponsorship | The fund prefers to work with experienced sponsors who have completed at least a few similar projects, with general contractors who have a track record of comparable projects. |
| Recourse | Most loans are non-recourse, with additional guarantees put in place depending on scope of project (eg. heavy value add -> completion and carry guarantee) |
| Check Size | Bridge: $15MM to $100MM Core+ / Perm: $20MM to $60MM |
| Loan to Cost / Loan to Value | More focused on LTV (<70%) and debt yield. |
| Sponsorship Equity Contribution | Sponsor must have skin in the game. Ability to write a 10-20% (of total cost) check (flexibility on a deal-by-deal basis) |
| Interest Rate / Returns | Bridge: SOFR + 395-550 Core+: 5.75%-6.5% Fixed |
| Fees | 1-2 in, 0-1 out |
| Term | Bridge: 12-36 Months Core+ / Perm: 5-10 Years |
| Underwriting Requirements (Based on Investor’s UW) | Bridge:
Core+ / Perm:
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| Collateral Requirements | First Mortgage / UCC Lien |
| Deposits | Market standard deposit required upon signing of term sheet to fund appraisal, environmental, title, legal. Deposits are subject to deal size. (typical deposit: $50k) |
If this capital source may be of interest, book a call to discuss a potential capital arrangement. Read our last Market Insight: Quick Closing Bridge Capital for Middle Market Investments