$25M Bridge Loan Chicago Multifamily | Commercial Lending Solutions 
Loan Size Example

$25 Million Bridge Loan for Chicago Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $25 million bridge loan on a multifamily asset in Chicago is typically a 24 to 36 month financing for value-add or repositioning plays in established neighborhoods like Lincoln Park, Lakeview, or emerging West Loop corridors. Specialty bridge debt funds dominate this size, offering non-recourse leverage at 70 to 75 percent LTC with SOFR-plus pricing in the 8.50 to 9.50 percent range. Regional banks also compete aggressively for Chicago multifamily, usually on a recourse basis at tighter LTC (60 to 65 percent) and lower rates. Rate environment and borrower track record determine whether a sponsor lands soft leverage from a bank balance sheet or accepts the higher all-in cost from a debt fund in exchange for speed and structure flexibility.

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Capital Stack

What a $25M Multifamily Bridge Capital Stack Looks Like

For a $25M bridge in Chicago, the capital stack is almost always a first mortgage from either a specialty bridge fund or a regional bank, with no mezz or preferred equity subordinated. Debt funds win when sponsors need speed, non-recourse certainty, or aggressive stabilization underwriting; banks win when sponsors have strong balance sheets, lower LTC appetite, and can tolerate recourse. Sponsor equity and track record are the largest differentiators at this deal size.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund SOFR + 275 to 325 bps, 9.00 to 9.50 percent all-in $25M / 70 to 75 percent LTC Non-recourse, 24 to 36 month term, one 12 month extension option, requires exit cap rate and stabilized NOI underwriting
Regional bank balance sheet SOFR + 225 to 275 bps, 8.25 to 9.00 percent all-in $25M / 60 to 65 percent LTC Full recourse, 24 month initial term with one 12 month extension, lower pricing for strong sponsors with prior Chicago multifamily track record
Sponsor equity N/A (returns target 20 to 30 percent IRR on value-add play) $8M to $12M (25 to 32 percent of total cap) Required to satisfy debt service reserve, lease-up holdback, and CapEx shortfall. Sponsor typically funds 18 to 24 months of operations and rehab risk
Operating reserves / working capital 6 to 12 months PITI + leasing and turnover costs, funded from closing $800K to $1.2M escrowed at closing Bridge lenders require robust reserves given execution risk on repositioning and lease-up timeline

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 $25M Multifamily Bridge Deal

The typical sponsor for a $25M bridge in Chicago is an experienced multifamily operator or sponsor group with $50M to $150M+ in assets under control and at least two to four prior value-add or bridge refinance transactions. These sponsors understand Chicago neighborhoods, neighborhood rents, and stabilization timelines; many are local or have a Chicago regional focus. Motivation ranges from acquisition financing on an off-market or pocket listing deal, to refinance out of a maturing ARM or agency loan with higher debt service, to execution on a seasoned portfolio asset with deferred capital and occupancy upside.

From the CLS CRE Pipeline

A Real $25M Example

CLS CRE closed a $24.8 million bridge on a 185-unit garden-style multifamily property in a West Loop-adjacent submarket with 78 percent in-place occupancy and significant deferred maintenance. Sponsor was a repeat client with prior Lincoln Park and Pilsen experience. Bridge fund offered the loan at 71 percent LTC, 9.15 percent SOFR-plus pricing, 30 month term with one 12 month extension, and non-recourse structure. Sponsor's CapEx plan was $3.2 million over 18 months for unit interiors, systems, and common area upgrades, targeting 94 percent occupancy and $28.50 per-unit-per-month rent growth by month 24. Sponsor exited via agency refinance into a 7 year fixed-rate loan at 5.9 percent in month 26, locked in stabilized NOI of $2.84 million, and returned capital to equity with 18 month hold.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$25M Bridge Loan Chicago Multifamily FAQ

Most bridge funds require 65 to 75 percent in-place occupancy and visible in-place NOI, not pro-forma stabilized only. On a $25M loan, typical minimum in-place NOI is $1.6M to $1.8M. If a property is significantly below-market or substantially vacant, debt funds either reduce LTC to 65 percent or decline the deal outright. Banks may tolerate lower in-place occupancy if sponsor equity is large and CapEx is de-risked.
Bridge funds typically model exit cap rates of 5.0 to 5.5 percent for stabilized Class B and Class B+ multifamily in primary Chicago corridors (Lakeview, Lincoln Park, West Loop). For older, less desirable properties or farther-out neighborhoods, cap rates may run 5.5 to 6.25 percent. Sponsor must demonstrate a realistic path to stabilized NOI and exit cap that supports refinance payoff at maturity.
Specialty debt funds typically offer non-recourse structures with a non-recourse carve-out (fraud, theft, material misrepresentation). Recourse bank loans almost always require full recourse to the sponsor or sponsor entity, plus personal guarantees from principal owners. At $25M, recourse language and guarantee scope are negotiable for sponsors with strong track records and deep equity.
Bridge lenders typically fund CapEx draws via a holdback at closing (usually 15 to 20 percent of loan amount) or a standalone CapEx line reserved at origination. Sponsor is responsible for cost overruns; lenders do not fund beyond the approved budget unless sponsor contributes additional equity. Budgets are stress-tested and require third-party cost estimation or lender audit before funding.
Specialty bridge funds can close in 30 to 45 days with clean underwriting and strong sponsor track record. Regional banks typically require 45 to 60 days due to credit committee and compliance review. Timeline depends on appraisal complexity, title clarity, lease audit turnaround, and environmental report. Rush fees and expedited appraisals can accelerate closing by 1 to 2 weeks.


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