Bridge-to-Perm Financing

Bridge-to-Permanent Commercial Real Estate Loans

Bridge-to-perm loans combine a short-term acquisition or construction facility with a pre-committed permanent take-out under one lender, eliminating the refinance risk that comes with executing a separate take-out on a stabilized asset. Commercial Lending Solutions sources these structures from banks, debt funds with forward commitment programs, and agency lenders offering Forward Standby Commitments for multifamily.

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Key Features

Bridge-to-Perm Loans at a Glance

Loan Amount

$5M - $100M+

Term

Construction 24 to 36 mo plus Permanent 5 to 30 yr

Rates

Construction SOFR plus 250 to 400, Permanent locked at close

Ltv

Up to 75% LTC during construction, 70 to 75% LTV at conversion

Structure

Single Loan, Automatic Conversion at Stabilization

Recourse

Recourse During Construction, Non-Recourse at Conversion

Overview

Bridge-to-Permanent Loans for CRE Acquisition and Stabilization

Traditional value-add or ground-up commercial real estate execution requires a sponsor to close a bridge or construction loan, complete the business plan, then refinance into permanent financing through a separate process. This exposes the sponsor to interest-rate risk during the construction or stabilization period and the execution risk of finding a permanent lender willing to underwrite on day-one stabilized fundamentals. A bridge-to-perm structure removes both. The bridge or construction phase prices and underwrites with the permanent take-out already in place, often at a locked rate or rate cap, and converts automatically upon meeting pre-agreed stabilization tests (DSCR, occupancy, NOI). This product is most powerful for ground-up multifamily that will convert to agency, value-add commercial that will convert to bank or life company, and large industrial developments with credit tenant pre-leases.

Lender Sources

Regional Banks with Construction-to-Perm Platforms
Agency Forward Commitments (Fannie Mae, Freddie Mac)
Life Insurance Companies with Forward Commitment Programs
Debt Funds with Bridge-to-Agency Structures
National Banks

Ideal For

Ground-up multifamily projects targeting agency permanent take-out at stabilization
Industrial build-to-suit with credit-tenant pre-leases supporting life company conversion
Value-add multifamily repositioning eliminating refinance risk during business plan execution
Mixed-use development converting to bank permanent upon lease-up
Sponsors locking rate in a rising-rate environment to protect projected exit yields
Institutional developers requiring certainty of execution on long-cycle projects

Bridge-to-Permanent Commercial Real Estate Loans

Bridge-to-Perm Loans at a Glance

Bridge-to-Permanent Loans for CRE Acquisition and Stabilization

Lender Sources

Ideal For

Bridge-to-Perm Loans by City

Related Property Types

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Bridge-to-Perm Loans in San Luis Obispo: What Borrowers Need to Know

Bridge-to-Perm Loans FAQ

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