Hunt Real Estate Capital, a leader in financing commercial real estate throughout the United States, announced today it closed $125 million in multifamily bridge financing through the first six months of the year. A strong start to the year, this level of financing is part of the over $1.2 billion in total lending arranged by the firm through the first six months of 2016.
A core part of the strategy at Hunt Real Estate Capital is to offer a wide breadth of financing options to clients and to be very flexible in their approach. Bridge loans are considered a strategic investment, and much more than a one-off transaction.
“We don’t do a bridge loan just for the sake of doing a bridge loan, at Hunt Real Estate Capital it’s not a one and done transaction,” commented Michael Becktel, Managing Director at Hunt Real Estate Capital. “We are using that product as a first lending vehicle with the hopes of adding the client to our portfolio long-term. Bridge loans drive our permanent business and in many cases we offer these loans because we want to strengthen a relationship with that client.”
Becktel explains, “With cap rates remaining low and more dollars continuing to flow into the commercial real estate space, investors and operators are increasingly pursuing value-add opportunities to find yield. Value-add plays are prime candidates for bridge financing. Why? Because bridge loans offer the ability to future-fund improvement dollars and the loan structure allows for flexibility in prepayment and other terms.”
This trend toward bridge financing is further bolstered by the wave of maturities coming due now. Many loans originated during the last boom cycle are coming due now and need new financing. Furthermore, many existing owners or buyers are drawn to the attractive leverage and flexibility found in the bridge space as they plan for longer-term new permanent financing.
The firm expects this pace of bridge loans to continue, and predicts that it will place about $250 million in bridge loans by the end of 2016. The firm targets light transitional, or agency timing, as bridge opportunities, with a focus on middle-market lending.
Hunt Real Estate Capital offers 80% LTC including improvements, highly flexible prepayment options, terms up to 5-years with extensions and competitive interest only spreads. Bridge loans placed by Hunt Real Estate Capital range from $5-$35 million.
“The demand for bridge financing is strong and I could see us doubling or even tripling this volume in 2017. The market is well positioned for lenders like Hunt Real Estate Capital who have a flexible capital base and the strong desire to develop deep, long-term relationships with clients,” concluded Becktel.