The Deal
Commercial Lending Solutions arranged a $22.5M bridge loan for a power center anchor in Phoenix, AZ. The property was undergoing a repositioning or lease-up phase that required short-term capital before the asset would qualify for permanent financing at stabilized values. The sponsor had a clear business plan targeting specific tenant categories with demonstrated demand in the submarket, and the bridge loan provided the runway needed to execute leasing, complete tenant improvements, and reach targeted occupancy. The deal required a lender comfortable with retail transitional risk in a market with strong underlying consumer fundamentals.
The Challenge
Retail bridge lending contracted significantly as lenders reassessed risk following changes in consumer shopping patterns. Many bridge lenders who had been active in retail repositioning reduced their retail allocations or required extensive pre-leasing commitments before funding. The sponsor had executed letters of intent with several target tenants but had not yet signed binding leases, which placed the deal in a gap between what most bridge lenders required pre-leasing and what the borrower could deliver prior to closing. Finding a lender willing to fund on a business-plan basis required accessing specialized bridge capital sources.
The Solution
Trevor Damyan at Commercial Lending Solutions identified a debt fund with an active retail bridge program that evaluated deal quality on submarket fundamentals, sponsor track record, and tenant letter of intent quality rather than requiring executed leases at closing. The loan was structured at 60% of as-is appraised value with an 18-month initial term, two 6-month extensions conditioned on occupancy milestones, and future-advance provisions to fund tenant improvements upon lease execution. The structure aligned lender and borrower incentives around the same leasing milestones and provided clear exit criteria for the bridge to permanent financing transition.
The Outcome
The bridge loan closed within 40 days, allowing the sponsor to begin executing signed letters of intent into binding leases with the certainty of committed capital in place. Having funded bridge financing in hand meaningfully accelerated tenant decision-making, as prospective tenants gained confidence that the landlord had the resources to fund tenant improvement commitments on schedule. The property achieved the first extension milestone ahead of schedule and subsequently reached target occupancy within the bridge term. The successful lease-up positioned the asset for permanent financing at a substantially higher value than the bridge loan origination basis, delivering strong equity returns to the sponsor.