Dekel Capital: Bridge Loan Update
For both recourse and non-recourse bridge loan programs, Dekel Capital’s Shlomi Ronen (here with wife Einat) is seeing lenders win big deals by stretching on loan proceeds and tightening pricing, as well as back-loading loan fees to minimize upfront capital requirements for sponsors. Shlomi tells us that, currently, recourse bridge loan programs are priced in the 3% to 4% range; non-recourse bridge loan programs are priced in the 4% to 5.5% range for middle market sized loans. He adds that leverage is typically 70% to 75% of project costs for bridge loans, and some debt funds stretching to 80% LTC. As well, Dekel is working with preferred equity funds that are layering leverage to 85% to 90% LTC, typically in prime locations. Dekel is currently raising bridge debt for a number of creative office conversions. Given the strong market demand by tenants for creative office in infill and transit-oriented locations, bridge lenders are not requiring pre-leasing prior to funding their loans on creative office redevelopment and new construction. For more information on our Bisnow sponsor, click here. `
