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

$25 Million Bridge Loan for Phoenix Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $25 million multifamily bridge loan in Phoenix represents the sweet spot for value-add plays across the metro's primary submarkets, where strong in-migration and job growth support stabilized rents. In 2026, borrowers are seeing rates in the 8.75 percent range on SOFR-based floating terms, with specialty debt funds and regional bank balance sheets competing aggressively for deals with 70 to 75 percent loan-to-cost on the debt fund side and 60 to 65 percent on bank structures. Phoenix's relatively tight multifamily market and consistent NOI growth trajectories have made this loan size a workhorse product for sponsors looking to acquire, reposition, and refinance into agency debt within 24 to 36 months. Capital sources remain abundant, though execution speed and exit certainty remain the primary decision drivers for lender selection.

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Capital Stack

What a $25M Multifamily Bridge Capital Stack Looks Like

The $25 million bridge stack in Phoenix typically layers one primary debt source with sponsor equity, since most deals at this size and leverage profile do not support junior mezz or preferred equity. Lenders at this size split between specialty debt funds favoring non-recourse structures on stabilized or near-stabilized assets, and regional banks comfortable with moderate recourse for sponsors with track records in the market or nationally. Sponsor balance sheet strength and the stability of the property's in-place operations drive the choice more than rate arbitrage.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund 8.50 to 9.00 percent (SOFR plus 300 to 350 basis points) $17.5M to $18.75M (70 to 75 percent LTC) Non-recourse or limited recourse, 24 to 36 month term, extension options common, strong exit-cap discipline, refinance at stabilization required
Regional bank balance sheet 8.25 to 8.75 percent (SOFR plus 275 to 325 basis points) $15M to $16.25M (60 to 65 percent LTC) Full recourse to sponsor, portfolio retention likely, faster approval for known sponsors, preference for properties with NOI visibility, 24 to 36 month term with 6 to 12 month extension options
Sponsor equity Target IRR 15 to 25 percent (equity return, not cost of capital) $6.25M to $7.5M (25 to 30 percent of total deal cost) Covers soft costs, CapEx contingency, working capital, and reserves; sponsor expertise and market presence reduce lender risk perception

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

Typical sponsors closing $25 million multifamily bridges in Phoenix range from established regional platforms with $50 million to $250 million AUM to national operators with strong Arizona presence and prior exits in the market. Most have closed three to ten multifamily deals over the prior five years, maintain $20 million to $75 million in net worth, and bring either operational expertise for value-add repositioning or strong institutional relationships for agency refinance placement. Common motivations include acquiring stabilized or lightly stabilized Class B and Class C properties in supply-constrained submarket corridors, funding 5 to 15 percent CapEx budgets for unit-level and common area upgrades, and refinancing into long-term agency debt once rents normalize and occupancy stabilizes above 92 to 95 percent.

From the CLS CRE Pipeline

A Real $25M Example

CLS closed a $24.8 million bridge facility for a 186-unit garden-style multifamily acquisition in central Phoenix targeting existing tenants in the $1,350 to $1,520 per month range with upside to $1,650 to $1,800 following moderate unit renovations and management optimization. The loan structured at 72 percent LTC with an 8.75 percent all-in SOFR-plus rate, 28 month initial term, and one 12-month extension option; the sponsor brought $9.2 million in equity and a $1.2 million CapEx reserve funded at close. Within 18 months, occupancy reached 96 percent, in-place NOI grew 22 percent through rent growth and expense control, and the sponsor successfully refinanced into a 10-year agency fixed-rate loan at 5.15 percent, capturing 360 basis points of rate benefit and deploying capital to a second acquisition.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$25M Bridge Loan Phoenix Multifamily FAQ

Most bridge lenders expect stabilization and agency refinance within 24 to 36 months, though strong sponsors with clear rent trajectories often execute exits in 18 to 24 months. Phoenix's active agency lending market and investor demand for core-plus multifamily make refinance execution straightforward once properties hit 92 to 95 percent occupancy and demonstrate 12-month trailing NOI visibility. Lenders typically build exit-cap assumptions of 4.50 to 5.25 percent to ensure equity returns support the acquisition premium and value-add CapEx.
Most deals allocate 5 to 15 percent of total transaction cost to renovations and capital reserves, which means CapEx budgets typically range from $1.5 million to $3.75 million at this deal size. The remaining capital funds the acquisition price, financing costs, soft costs, and working capital reserves. Lenders scrutinize CapEx scope closely because effective unit renovations directly drive rent growth and exit valuation.
Specialty debt funds typically offer non-recourse or carve-out recourse (covering fraud, environmental, and lease defaults), while regional banks usually require full recourse to the sponsor. At the $25 million size with experienced sponsors, recourse variations matter less than the sponsor's equity cushion and market expertise. Phoenix's strong multifamily fundamentals and sponsor familiarity reduce perceived lender risk, so recourse negotiation often yields to other structural priorities like extension optionality or exit cap flexibility.
Rate compression from higher SOFR and tighter spreads (currently 300 to 350 basis points versus 200 to 250 basis points two years ago) has reduced borrower IRR expectations and eliminated marginal deal economics for some sponsors. Lender competition for stabilized assets remains fierce, pushing some sponsors toward lease-up or value-add plays with higher execution risk. Supply growth in certain Phoenix submarket corridors also means sponsors must demonstrate rent growth conviction and tenant demand to justify loan amounts above 70 percent LTC.
Lenders use in-place NOI as the baseline for debt service coverage calculations and stabilized NOI (typically projected 12 to 24 months out) to size loan amounts and confirm exit value. Properties with visible in-place NOI and occupancy above 85 percent attract tighter rate pricing and higher leverage because refinance risk drops. Conversely, lease-up or heavily repositioned assets see rate penalties of 50 to 100 basis points and LTC caps 5 to 10 percentage points lower, so sponsor track record and property-level execution risk become the dominant approval drivers.


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