“The Greenwich Group continue to play an important role in the growth of Calvano Development.  We have transitioned from a small developer funding projects at a local level to working hundred million dollar projects with global institutional capital.  The Greenwich Group have demonstrated an ability to work across the capital markets (both equity and debt) by adding value to projects through their underwriting, advocacy, and capital relationships.  They have been a committed partner to the expansion of Calvano Development as demonstrated by the successful capitalization of our multiple projects and Ventures.”

Mark A. Calvano
Calvano | Development

Bridge Loans Galore!

by Kevin Roe | 05.21.2018


A Liquid, Capital Abundant Market

Bridge loans by their nature are intended to assist borrowers by providing debt capital for transitional assets during the value creation phase of a project, which is typically a cheaper alternative to using equity capital. Bridge financing has been on the rise and the outlook for this product type will continue to be positive in 2018. The supply pool for loans of all product types (Office, Multifamily, Retail, Industrial) has never been more liquid and abundant.  The market supply of Bridge Loans has increased for multiple reasons: 

Over the past several years, a high volume of CMBS loans originated prior to the Great Recession have matured; traditional lenders such as banks and life insurance companies have tightened their underwriting standards on construction loans; and permanent financing and HVCRE rules have added restrictions to traditional lenders. The above factors have contributed in requiring new, alternative financing options. 

Many groups have recently raised new funds to invest in this sector. Examples of transactions that are a good fit for these funds include: buildings going through renovation prior to starting a new leasing program, re-working the management of an asset to increase NOI and construction projects that have recently completed and are in the initial phases of lease up.  

One consistent comment we hear from the new Bridge Lending Platforms is the need to reluctantly stop fund raising efforts early due to reaching and exceeding the targeted amount of capital from investors.  Billion dollar funds simply cannot take on more investors for fear of not being able to deploy all the capital!

As a result of this large pool of lenders, spreads have narrowed significantly and proceed levels are being pushed out high into the capital stack with 85-90% LTC not out of the question.

Case Study 1

Recently Closed Value Add-Office Bridge Loan

Our firm recently closed on the funding of a bridge loan for the acquisition of a mid-sized, value add, 60% leased office building in Northern Virginia.  We received Non-Recourse term sheets from 8 lenders and successfully closed the loan within 5 weeks of going to market.  The loan was completed with a debt fund and structured as non-recourse, 3-year (2 1-year extensions), and 65% LTV (of stabilized value). The rate is a floating spread over LIBOR in the low 400s.  The loan included “good news money” for capital expenditures, leasing commissions, and tenant improvements.

Case Study 2

The Market for Bridge Loans for Newly Constructed Multi-Family Projects in Initial Lease-Up

We recently went out to market for a large bridge loan ($60 – $80 Million range).  This sized loan would have been too large for the bridge market in the past, but as the market has grown in recent years, lenders have become more flexible. A bridge loan made sense in this case due to higher interest rate construction loans which included a mezzanine loan.  Our marketing efforts resulted in 12 quotes from a variety of lenders in the L+200-300 range.

Because of our extensive experience in this area, Greenwich will continue to pursue Bridge Loan transactions on behalf of our clients and compete lenders to ensure execution certainty at the best possible terms.


Peter Witham
Managing Partner

Peter Witham is Managing Partner and Head of Capital Markets and Investment Banking in Washington, DC and California. His extensive experience extends over 25 years of commercial real estate experience in equity and debt financing, Investment sales, joint-venture structuring, asset management and consulting. He has extensive international experience in both the United States and United Kingdom.