When commercial bridge financing makes sense
Bridge debt exists to finance the gap between a sponsor's current asset and its stabilized future. The right bridge loan funds the renovation, the lease-up, the entitlement, or the operational turnaround that creates the value, and then steps aside for permanent debt or a sale.
Sponsors come to VS Capital Group when conventional bank or agency debt cannot underwrite the in-place cash flow, when speed is the binding constraint, or when the capital stack needs creative structuring to clear closing.
- Value-add multifamily, office, retail, and industrial acquisitions
- Lease-up and stabilization bridge for newly delivered assets
- Cash-out bridge against appreciated equity or recently completed business plans
- Discounted note purchases and loan-on-loan executions
- Distressed acquisitions, foreclosures, and judicial sales requiring rapid close
- Pre-development land and entitlement bridge
How VS Capital Group structures bridge debt
Bridge loans look standard until you read the fine print. Future funding facilities, interest reserves, earn-out provisions, extension options, prepayment lockouts, and minimum interest periods materially change what the loan actually costs the sponsor across the hold.
We negotiate every economic and structural term, proceeds, going-in leverage, stabilized leverage, future funding triggers, debt yield tests, recourse carve-outs, and exit fees, so the structure works for the business plan, not against it.
Typical terms our bridge lenders deliver
Terms vary by asset class, sponsor experience, and basis, but VS Capital Group regularly closes bridge debt with the following parameters across our 200+ lender network.
- Loan size: $2M to $300M+ on single assets and portfolios
- Term: 12 to 36 months with one to two 12-month extension options
- Leverage: 65% to 80% loan-to-cost, 60% to 75% loan-to-value on stabilized basis
- Pricing: SOFR + 275 to SOFR + 600 depending on asset class, leverage, and sponsor
- Interest-only throughout the term
- Non-recourse with standard bad-boy carve-outs (recourse available for stretch leverage)
Why borrowers choose VS Capital Group for bridge debt
Bridge financing is one of the most competitive corners of commercial real estate lending, and one of the most opaque. The same deal can clear at meaningfully different proceeds, pricing, and structure depending on which lender sees it and how it is presented.
VS Capital Group runs a disciplined, competitive process. We package the opportunity, deliver it to the lenders most likely to compete aggressively for that profile, and negotiate the term sheet on the sponsor's behalf, not the lender's.
Frequently asked questions
- What is a commercial real estate bridge loan?
- A commercial real estate bridge loan is short-term debt, typically 12 to 36 months, used to finance the acquisition, repositioning, lease-up, or transition of a commercial property until it qualifies for permanent debt or is sold. Bridge loans are interest-only, usually non-recourse, and underwritten primarily to the asset's projected stabilized value rather than current in-place cash flow.
- How fast can a bridge loan close?
- Bridge loans routinely close in 30 to 45 days. With a complete sponsor package and clean title and survey, VS Capital Group has placed bridge debt in as little as 18 days when the closing calendar demanded it.
- What is the typical interest rate on a bridge loan?
- Most bridge loans are floating-rate, priced over 30-day Term SOFR. Spreads typically range from 275 to 600 basis points depending on asset class, leverage, sponsor experience, and going-in cash flow. Required rate caps add to the total cost.
- How much leverage can I get on a bridge loan?
- Most bridge lenders cap proceeds at 65 to 75 percent of the as-stabilized value and 75 to 85 percent of the total project cost. Sponsors needing higher leverage typically layer in mezzanine debt or preferred equity behind the senior bridge loan.
- Are bridge loans non-recourse?
- Most institutional bridge loans are non-recourse with standard bad-boy carve-outs for fraud, voluntary bankruptcy, and similar misconduct. Some stretch-leverage and small-balance bridge programs require partial or full recourse; VS Capital Group will flag any recourse requirement up front and run a parallel non-recourse process whenever possible.