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 Properties-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 Properties-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 Properties 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.