$3M Bridge Loan Denver Multifamily | Commercial Lending Solutions 
Loan Size Example

$3 Million Bridge Loan for Denver Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $3 million bridge loan for multifamily in Denver represents a core value-add opportunity in a market where institutional capital is actively competing for stabilized assets and sponsors are increasingly comfortable with floating-rate debt to accelerate repositioning timelines. At this loan size, borrowers typically target 18 to 36 month holds with clear refinance exits into agency debt or permanent financing, and lenders price aggressively at 9.25 percent or better depending on LTC and sponsor profile. Denver's multifamily fundamentals remain solid despite recent rate volatility, making this loan size attractive to both specialty bridge debt funds seeking portfolio diversification and regional banks with balance sheet capacity. The market supports LTC from 70 to 75 percent for debt fund capital, creating accessible leverage for experienced sponsors managing renovation or lease-up scenarios.

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Capital Stack

What a $3M Multifamily Bridge Capital Stack Looks Like

At the $3 million bridge level in Denver, specialty debt funds and regional bank balance sheet lenders compete directly on rate and structure, with the decision driven primarily by sponsor preference for non-recourse certainty versus bank relationship value and extension flexibility. Debt funds dominate this size due to efficient underwriting and comfort with floating-rate exposure; regional banks enter when sponsors value personal relationship continuity or expect to hold the bridge longer than 24 months.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund 9.25 percent, SOFR-plus-350 to SOFR-plus-425, indicative $2.1M to $2.25M (70 to 75 percent LTC) Non-recourse preferred, 24 to 30 month term, two 12-month extension options, monthly interest-only payments, rate locks available at origination
Regional bank balance sheet 8.75 to 9.25 percent, SOFR-plus-300 to SOFR-plus-400 $1.8M to $1.95M (60 to 65 percent LTC) Full recourse or limited recourse with guarantor net worth requirement, 36 month initial term, built-in extension flexibility, relationship-driven pricing, quarterly interest review
Mezzanine equity provider (optional) 15 to 18 percent preferred return plus carried interest $500K to $750K (10 to 15 percent of total capital) Structures second position behind senior bridge, common when stabilized exit NOI supports 1.2x DSCR on permanent debt
Sponsor equity contribution Not applicable $500K to $750K (15 to 25 percent of project cost) Demonstrates sponsor commitment and confidence in stabilization timeline; preferred by all lenders as buffer against cost overruns

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 $3M Multifamily Bridge Deal

The typical $3 million multifamily bridge borrower in Denver is an experienced mid-market operator with $50 million to $250 million in total AUM, a track record of 3 to 8 completed value-add transactions, and demonstrated expertise in renovation sequencing or lease-up strategies specific to the Denver submarket. These sponsors are motivated by refinance exits from previous bridge debt, acquisition opportunities where agency debt is not yet available, or tactical repositioning before market-wide refinance windows close. Net worth typically ranges from $10 million to $50 million, and lenders expect sponsors to be deeply involved in day-to-day operations or to have retained an experienced asset manager with Denver market tenure.

From the CLS CRE Pipeline

A Real $3M Example

CLS CRE closed a $3.2 million bridge facility for a 48-unit multifamily property in the Five Points neighborhood, structured at 72 percent LTC with a specialty debt fund. The borrower was renovating eight units per month while stabilizing occupancy from 62 percent to 88 percent, requiring a 28-month hold timeline and clear refinance trigger tied to 90 percent occupancy achievement. The loan priced at 9.25 percent floating with a 24 month initial term and two one-year extension options, allowing the sponsor flexibility to extend if market conditions delayed the permanent refinance window. At month 26, with stabilized NOI of $285K annually and occupancy achieved, the borrower successfully refinanced into a 10-year agency mortgage at 6.15 percent, paying off the bridge and locking permanent financing before rate seasonality shifted the market.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$3M Bridge Loan Denver Multifamily FAQ

From full application submission to funding, expect 20 to 30 days with a debt fund, compared to 30 to 45 days with a bank. Debt funds benefit from simpler credit processes and pre-built underwriting templates, but they require detailed renovation budgets, phase-by-phase lease-up projections, and verified sponsor financial statements upfront to move quickly. A regional bank may stretch the timeline if internal credit committee involvement is required, but often compensates with greater flexibility on extension terms.
Yes. Most debt funds will allow interest-only payments throughout the initial 24 month term and both extension periods, provided exit NOI supports permanent refinance at maturity. However, if a principal paydown is expected during extensions, lenders will require monthly principal curtailments tied to lease-up milestones or unit turnover, so clarifying the payoff path during underwriting is critical.
Debt funds offer non-recourse structures, faster closes, and higher LTC (70 to 75 percent), but charge higher rates (9.25 to 9.75 percent) and demand strict covenant compliance. Banks are recourse-based, price lower (8.75 to 9.25 percent), and offer longer terms with extension flexibility, but typically max out at 60 to 65 percent LTC and move slower due to credit approval layers.
Most debt funds allow one or two 12-month extension options built into the term sheet at a higher rate, typically 50 to 75 basis points above the initial rate. Banks are more flexible and may allow extensions at the original rate if the sponsor demonstrates progress toward the exit NOI target. Missing extensions triggers a default and potential lender takeover or forced sale, so sponsors should be conservative when projecting stabilization timelines.
Once the property stabilizes to the target occupancy and NOI outlined at origination (typically 90 percent occupied and NOI verified for 3 to 6 months), the sponsor engages an agency loan officer to apply for a 10-year or 12-year fixed-rate loan. Debt fund bridges almost always include a refinance contingency that allows payoff without penalty once NOI thresholds are met, and the agency lender typically funds within 30 to 45 days of final appraisal and closing preparation.


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