Cheapest Private Bridge Lender
I have heard that commercial private bridge loans have gotten cheaper recently as more lenders have entered the space. What companies/funds have you seen price in the 6-7.5% range on 6 month - 3 year bridge.
There's been immense spread compression in the bridge space. We're doing deals in the L + 375-450 range
What company do you work for?
Bridge money can price just about anywhere. The cheapest bridge money we have seen is about where overtimeRequired mentioned, L+350-450...however that low pricing is usually coming from sophisticated debt funds doing larger deals $30mm+(sometimes $50mm+) with experienced borrowers. As a general rule of thumb I would say you are pretty close to "average" bridge pricing with your 6-7.5% spread range.
IMO the largest gap in the bridge market is smaller loans (less than $15-20mm) at sub L+500/600 pricing. There are not very many shops offering that product, and the few that are tend to trip all over themselves getting too deep in the weeds and fumble before they get to the finish line. At least that is what we have found.
I'm curious at what point the lines begin to blur between bridge lenders focused on relatively smaller loans and hard money lenders. For example, Kennedy Funding bills itself as both.
Kennedy has a terrible reputation for taking fees and running.
I have a lot of experience with private/bridge debt in the $2mil to $10mil range. I also have some banks that do deals in the 6% range for bridge money or funky credit scenarios. Lots of options on smaller deals. In California there is private money in the 7 to 8% range for bridge debt on middle market deals under $10mil.
There's a few firms that do the small $5-50mm loans at the L + 350-450 range that exit via CLO.
RAIT, Prime, Benefit Street, Bancorp and Fortress have all been in the market the last year. More shops are trying to target this exit as well.
They mostly do transitional light bridge loans. Heavier lift bridge loans have gone to more hard money kind of rates. If you have a 2% debt yield going in, you are going to have to compensate the lender for that risk.
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