The Deal
Commercial Lending Solutions arranged a $50M bridge loan for a high-rise office tower in Chicago, IL. The property required a period of renovation, lease-up, or repositioning before it would qualify for permanent financing at stabilized values. The sponsor was an experienced commercial real estate operator with a specific business plan targeting the property's highest and best use given current market demand. The bridge loan needed to cover both the acquisition or refinance and provide a portion of the capital required to execute the repositioning plan.
The Challenge
Office sector hesitancy among lenders was most pronounced for transitional assets, where current occupancy or cash flow did not support conventional underwriting. Many debt fund lenders who would normally finance bridge office deals had reduced their office allocations or exited the sector entirely due to headline risk from high-profile distressed urban office properties. The borrower needed a lender who could evaluate the specific submarket dynamics, the tenant demand profile, and the sponsor's execution track record rather than applying a blanket restriction based on property type alone.
The Solution
Trevor Damyan at Commercial Lending Solutions identified a debt fund lender with active bridge office exposure in supply-constrained submarkets and a credit process that evaluated deals on their individual merits. The loan was structured at 60% of the as-is appraised value with an 18-month initial term and two 6-month extension options conditioned on meeting leasing milestones. The rate reflected the bridge nature of the financing and the repositioning risk, and future-advance provisions were included to fund approved capital improvements and tenant improvement allowances as work was completed and verified.
The Outcome
The bridge financing closed within 45 days of application, providing the sponsor with capital to begin executing the repositioning plan without delay. The milestone-based extension provisions aligned lender and borrower incentives around the same leasing objectives, creating a structured path to permanent financing upon stabilization. The future-advance feature preserved the borrower's equity by funding improvements only as costs were incurred, rather than requiring a large upfront equity contribution. The sponsor subsequently achieved stabilized occupancy within the bridge term and successfully refinanced into permanent fixed-rate financing at a materially higher property value than the bridge loan origination basis.