What are the most common terms of a commercial real estate bridge loan?
A commercial real estate bridge loan will usually have 80 percent loan-to-cost, 70 percent loan-to-value ratios, and often a portion of the loan will be held back until additional value has been achieved within the bridge loan project – such as reaching specific construction phase, or vacancy level, or certain improvements are finished. A commercial real estate bridge loan will be extended usually for periods ranging from 1 to 3 years, and extensions are usually possible if need is demonstrated. Typically, commercial real estate bridge loans will have rates based on a prime rate plus 2 or 3% margin; or on LIBOR with 3 to 4.5% margin. Prepayment penalties do not apply with a commercial real estate bridge loan and contractors are expected to have high level of expertise with commercial real estate properties. Commercial real estate bridge loan closing costs will be between $5000 and $10,000 for loans under $2,000,000; and could reach $20,000 and more for loans above $2,000,000. Amortizat
