Bridge Loan Financing for Commercial Real Estate Transactions

Jonathan Aghravi

Bridge Loan Financing for Commercial Real Estate Transactions

Jonathan Aghravi serves as senior director for the Capital Advisory Division of Eastern Consolidated. In June 2014, Jonathan Aghravi placed a bridge loan valued at $18 million to enable the purchase of a Rockefeller Center proximate lot by City Center Properties.

Bridge Loan Financing for Commercial Real Estate Transactions

Bridge loans provide a way for real estate buyers to offer capital for purchase while working toward meeting conditions of purchase. Intended as short-term vehicles, they frequently offer the benefits of a quick application and approval process. This allows a company or investor to purchase a property when a longer-term loan is still undergoing the approval process.

Bridge Loan Financing for Commercial Real Estate Transactions

In many cases, bridge loans fall under the category of hard money lending. In this case, the value of the property itself provides the surety for the loan. The lending industry considers this type of transaction to be a nontraditional loan. Thus it frequently carries a higher interest rate due to the lower level of equity that the borrower offers. The borrower pays the higher rate in exchange for the earlier completion of a transaction..