Bridge loans are short-term (typically 2-5 year), floating-rate, full-recourse or partial-recourse debt designed to "bridge" an asset from one stabilized state to another — pre-stabilization to stabilized, pre-conversion to converted residential, raw land to construction-ready. For NYC commercial value-add deals where agency or CMBS execution isn't yet available, bridge debt is the workhorse.
When Bridge Makes Sense
The standard use cases: value-add multifamily acquisitions where renovation capex is needed before agency-eligible NOI, office-to-residential conversion projects in pre-CO state, ground-up construction takeouts, and rent-stabilized portfolios mid-lease-up. Bridge lenders include debt funds (Blackstone, KKR, BREIT), specialty REITs (Ladder, Apollo Commercial), and bank construction groups. Spreads typically run SOFR + 350-500 bps for senior bridge, with mezzanine or preferred equity stacking on top to 75-80% LTC.
Prepayment and Exit Flexibility
Most bridge loans have a 12-18 month lockout followed by yield maintenance or open prepayment. The exit assumption matters: if the value-add plan calls for refinancing into agency at year 3, the bridge needs to be open-prepay by year 2. NYC office-to-residential conversion bridges are typically structured to be open at construction completion / TCO, which is when the 467-m abatement starts generating modeled cash flow.
Conversion Bridge Examples
The $135M Vanbarton acquisition of 6 East 43rd Street (Skyline-brokered) is being financed with $300M from Brookfield as a construction-bridge facility through delivery of the 441 converted apartments. The 101 Greenwich Street acquisition by Quantum Pacific + Metro Loft ($105M, also Skyline-brokered) uses a similar structure. Bridge debt on these conversions covers acquisition, construction, and lease-up; the take-out is typically agency or CMBS once stabilized residential operations support the debt.
- Match bridge maturity to the business plan, not market timing — extension options cost real money.
- For value-add multifamily, model the agency takeout proceeds and rate at year 3 to confirm exit feasibility.
- Engage your bridge lender early — most are repeat sponsors of NYC deals and will iterate on structure.
- Skyline can introduce sponsors to active bridge lenders matched to the specific asset class and business plan.
Robert Khodadadian and Skyline Properties broker NYC commercial transactions where bridge financing is a critical execution variable. The firm has closed $976M+ across deals using every layer of the capital stack. Email info@skylineprp.com or call (212) 537-9239 for confidential financing introductions.