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Commercial Bridge Loans with Construction Loan Option

Financial Compound arranged an approximate $4 million fixed rate commercial bridge loan with construction loan option for a 40,000 square foot, 500 unit self storage facility in southern California.  The borrower intends to develop an additional 60,000 Sq. Ft. of new self storage space at the property, adding another 450 units.  This loan structure allows the borrower to eliminate interest rate risk, while at the same time preparing for the construction of additional improvements at the property.  Loan terms included an interest rate of 5.5%, fixed for 4 years with a 25 year amortization schedule, 1/2% lender fee.  Loan to value of 70%.  The loan includes a 1 year extension option for an additional 1/4% lender fee.  Prepayment penalty was structured as 1% in the first year and no penalty thereafter to maintain the borrower’s flexibility with respect to a refinace.  The transaction was also structured giving the lender the right of first refusal to perform the construction financing.

Typically a strong commercial mortgage broker like Financial Compound is able to structure and customize a transaction such as this to meet the borrower’s desires.  Financial Compound worked with numerous lenders in order to find one that wanted to structure the transaction in this way.