Loan Size Example

$10 Million Bridge Loan for Phoenix Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $10 million bridge loan for multifamily in Phoenix represents a mid-market value-add play in one of the West's strongest rental markets. In 2026, borrowers at this size typically pair specialty debt funds with bank balance sheet bridges, seeking 18 to 36 month terms to execute unit renovations, lease-up, or operational repositioning before exiting into agency financing. Phoenix's sustained population growth and limited new supply make bridge lending here particularly competitive, with lenders pricing aggressively at 9.00 percent all-in on SOFR-based floating structures. LTC ranges from 65 to 75 percent depending on lender appetite and the borrower's exit strategy confidence.

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Capital Stack

What a $10M Multifamily Bridge Capital Stack Looks Like

At $10 million, Phoenix multifamily bridges typically layer a single specialty debt fund or bank balance sheet bridge as the senior position, with sponsors contributing 25 to 35 percent equity. Capital structure decisions hinge on the borrower's stabilized NOI visibility, market submarket, and extension risk tolerance. A specialty bridge fund dominates when the sponsor is experienced and the value-add plan is clearly underwritten; a bank bridge appears when recourse comfort is higher or the exit timeline is tighter.

Capital Source	Rate / Cost	Size / LTV	Notes
Specialty bridge debt fund (non-recourse or light recourse)	SOFR + 325 to 375 basis points, 9.00 to 9.50 percent all-in	$7.0 to $7.5 million, 70 to 75 percent LTC	Floating rate, 24 to 36 month initial term with 6 to 12 month extension options. Funds pricing based on in-place NOI, stabilized exit cap rate visibility, and CapEx budget. Typical extension fees 50 to 75 basis points per period.
Bank balance sheet bridge (recourse or corporate guarantee)	Prime + 200 to 275 basis points, 8.50 to 9.25 percent all-in	$2.5 to $3.0 million, 60 to 70 percent LTC	Fixed or floating, 24 to 30 month term. Banks emphasize sponsor liquidity, net worth verification, and personal guarantee. Prepayment penalty structure (yield maintenance or par) drives refinance timing. Recourse to operating cash flow.
Sponsor equity	Preferred return 0 to 6 percent or waterfall promote structure	$2.5 to $3.0 million, 25 to 35 percent of total capitalization	Equity covers acquisition gap, value-add CapEx reserves, and debt service reserve accounts. Sponsor typically commits to 12 to 18 month operational hold before stabilization and agency exit. Equity at risk drives alignment on execution.
Mezzanine or preferred equity (opportunistic)	8 to 12 percent preferred return plus 15 to 25 percent promote	$0.5 to $1.0 million, embedded within sponsor equity stack or co-invested	Used when sponsor equity is shallow or when a co-investor wants preferred economics. Mezzanine sits behind senior debt and ahead of common equity. Extends refinance timeline and may limit agency exit flexibility.

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $10M Multifamily Bridge Deal

Typical sponsors closing $10 million Phoenix multifamily bridges have $50 to $150 million in net worth and 3 to 10 prior bridge transactions across Sun Belt markets. They own or manage 500 to 2,500 multifamily units regionally and have track records of lease-up execution, unit renovation delivery on time and on budget, and successful agency refinance exits within 18 to 30 months. Motivations include acquiring value-add deals off-market, recapitalizing for growth, or executing mid-cycle renovations to push rents and stabilized NOI upward.

From the CLS CRE Pipeline

A Real $10M Example

CLS CRE closed a $10.25 million bridge for a 180-unit multifamily asset in a central Phoenix submarket in 2024. The property was 73 percent occupied at origination with in-place NOI of $680,000; the sponsor planned 18 months of unit renovations to target 92 percent occupancy and $950,000 stabilized NOI. A specialty debt fund provided $7.2 million at 9.15 percent on SOFR-based floating with a 30 month initial term and 12 month extension option; the sponsor contributed $3.05 million equity. Unit renovation CapEx was budgeted at $285,000 per unit across 60 units over 14 months. The sponsor successfully stabilized the property, leased the rehabbed units at 12 to 18 percent rent premiums, and exited into agency financing at a 4.85 percent rate in month 26, paying off the bridge cleanly with no extension trigger.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$10M Bridge Loan Phoenix Multifamily FAQ

Bridge loans are short-term debt designed to fund value-add execution, lease-up, or repositioning over 24 to 36 months before exiting into agency or long-term financing. Phoenix bridges carry higher rates (8.5 to 9.5 percent versus 5.5 to 6.5 percent agency) to compensate lenders for execution risk, market timing risk, and the likelihood of extension. Bridge lenders underwrite to stabilized NOI and an exit cap rate, not current occupancy or rent rolls, making credit quality dependent on sponsor execution capability and market fundamentals.

Specialty bridge funds have permanent capital, faster decision timelines (7 to 14 days), and pricing flexibility to compete on risk-adjusted returns. Banks balance sheet bridge capacity is constrained by capital ratios and committee approvals, making them slower and less aggressive at mid-market sizes. Specialty funds also offer non-recourse or light-recourse structures that appeal to experienced sponsors seeking leverage without personal guarantee burden.

Lenders model agency refinance exits at 75 to 85 percent LTV based on stabilized NOI and a 4.75 to 5.25 percent agency rate assumption. They require proof of concept (operational metrics, lease rate growth, occupancy trajectory) at month 12 to 15 before confirming extension or refinance viability. If stabilized NOI misses or market rates spike, extension becomes the workaround, with lenders charging extension fees and potentially tightening terms or requesting additional reserves.

Lenders typically hold back 10 to 15 percent of total CapEx budget in a lender-controlled reserve account, disbursed only against invoices, lien waivers, and proof of completion. On a $400,000 to $600,000 CapEx budget, that means $40,000 to $90,000 in escrow. Reserve reduces sponsor optionality but protects lender collateral value; aggressive sponsors negotiate lower holdback percentages (5 to 8 percent) by providing third-party CapEx certifications or surety.

Approximately 30 to 40 percent of Phoenix multifamily bridges at this size request one 6 to 12 month extension, typically because lease-up or rent growth lagged plan by 2 to 4 months or because agency refinance rates spiked above underwriting assumptions. Extension fees run 50 to 75 basis points and lenders may require updated appraisals, rent rolls, and sponsor capital infusions if NOI underperformance is material. Clean exit within initial term signals strong execution and preserves sponsor relationship for future deals.

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$10 Million Bridge Loan for Phoenix Multifamily

What a $10M Multifamily Bridge Capital Stack Looks Like

Who Closes a $10M Multifamily Bridge Deal

A Real $10M Example

$10M Bridge Loan Phoenix Multifamily FAQ

Get a Quote on Your $10M Deal

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