Rapid Growth in Commercial Mortgage Bridge Loan Market


Regardless of whether you are a savvy commercial real estate investor or have just entered the real estate market very recently, you would have probably heard that the market of commercial mortgage Bridge loan is rapidly growing and that’s great news for many people!

Finding the right amount of money at the right time is crucial for long-term success in the world of the commercial real estate and loans have come to the rescue of many investors at both good and bad times!

While banks and other traditional lending Institutions were the only players in the market a couple of decades ago, a lot of investors made huge losses in real estate by making the wrong choices or by failing to meet the stringent loan repayment policies set by traditional banks.

This was the time when the private money lending Institutions and the private lenders came into picture helping such investors raise money and get back to the game of real estate by arranging funds at much cheaper rates and many flexible lending policies as compared to the traditional banks.

As time passed by, these private lending Institutions or private money lenders became huge competition for traditional banks and became the easiest Go-To option for many commercial real estate investors gradually.

Various forms of loans and loan programs were introduced by these private lending Institutions. People belonging to different classes of the society started entering the real estate world which was, until then, only confined to the Savvy commercial investors with big pockets.

Commercial hard money loans became more common than never before when the private lenders entered the lending markets in the United States.

Of the many different types of loan programs made available by such private lending Institutions, commercial mortgage Bridge loans are one of the earliest and the fastest growing type of loan helping thousands of real estate investors to finance their short-term commercial real estate funding needs.

The real estate investors who needed commercial mortgage Bridge loans in the year of 2017 got very lucky as they were able to get the best of the best deals leveraging maximum profits!

The market trend of the commercial mortgage Bridge loan saw an upward swing in the year of 2017 and it does not seem like it’s going to go down anytime in the near future.

Thus, the real estate investors are now more focused on using the commercial mortgage Bridge loans to finance their real estate funding.

The biggest reason behind the booming market for commercial mortgage Bridge loans is the traditional banks and conventional lending institutions that are constantly tightening their loan eligibility requirements and loan repayment policies which are forcing many commercial real estate investors to seek the help of other private lending institutions with flexible lending policies.

This simple demand and supply problem paved the way for many private money lenders to come forward and lend commercial mortgage Bridge loans.

Being one of the leading private lending Institutions in the States, Private Capital Investors catered to many such real estate investors in the year of 2017 providing them the valuable and timely suggestions concerning the commercial mortgage bridge loans.

At desperate times, when the conventional and traditional banks cannot help, commercial real estate investors reach out for private money lenders and here we are helping them with short-term financing through providing commercial mortgage loans at the best rates.

When commercial real estate investors need Bridge loan, we provide them one!

Here are some of the reasons that led to the Rapid growth in the commercial mortgage Bridge loan market and reasons why the trend would remain the same in the coming years. Read on!

1) Creative forms of loan financing

Since the time banks and other traditional lending Institutions started tightening their lending policies and increasing the loan eligibility requirements for commercial real estate investors, many of the private money lenders and private money lending institutions have striven to come up with various creative forms of loan financing to make it easy for the investors to stay in the market.

The out-of-the-box loan financing programs started by various private lending institutions paved the way for an upward swing in commerce mortgage bridge loan market.

While traditional banks and conventional lending Institutions are busy in coming up with ways of satisfying their respective regulators, the private lending institutions have made it an opportunity to grab most of the market by providing exciting loan financing deals to the investors and gaining the market confidence.


2) Bridge loans act as a quick exit strategy

In many cases as and when the debt taken by investors from traditional banks becomes due, the investors fall short of cash to repay the loan.

This leaves investors in a fix because falling in short of cash and defaulting on the loan repayment on time not only lowers their credit score but also attracts various penalties and fees.

This is a big out of pocket expenditure which can otherwise be avoided if the investor manages to repay the loan.

This is exactly where commercial bridge loans come into the picture where they help as a quick exit strategy enabling real estate investors to arrange for repayment of their existing loan by raising a commercial mortgage bridge loan.

Many investors often raise their primary loan from banks or traditional lending institutions owing to the various benefits they provide, and then, raise a commercial mortgage bridge loan from private money lenders as a secondary loan to pay off the primary loan.

This is one the smartest ways of dealing with circumstances where there is an insufficiency of funds to meet the existing liability.

Because a bad dent in the credit score owing to the default in repayment of the loan is not the price any investor would be willing to pay!

Such circumstances where an investor faces insufficiency of funds to repay an existing loan have been existing since the time real estate market started and it’s still prevalent today.

This was and continues to be one of biggest reasons for rapid growth in the commercial mortgage bridge loan market.


3) Repositioning of the retail markets

The whole shift from shopping at malls and shops to shopping online has laid a significant impact on the retail markets.

The retail shopkeepers are struggling to survive in the market while also facing the cutthroat competition from their online competitors. The large retail spaces are a major overhead to such retailers and most of them are considering relocation of their retail outlets.

Relocation of outlets is again a huge expenditure requiring initial capital investment on the land, building and making repairs and renovations to the existing properties.

While the sale of the old retail outlet is yet to be closed, taking a leap forward in investing in the new office space is quite challenging and can get quite risky as well!

This is exactly where commercial mortgage bridge loans come into the picture. Bridge loans are the perfect form of financing when the sale deed is yet to be closed but at the same time, the investor doesn’t wish to waste time which is in fact, delay in future cash inflows. Bridge loans are the perfect fit for such situations.

The year 2017 left many retailers in such places where relocating the outlet was the only next best option and thus, many retailers sought the help of private lending institutions for commercial mortgage bridge loans.

This again led to an increase in the commercial mortgage bridge loans market in the States.


4) Residential properties on rent

With the generation of the millennial entering the real estate market, it has gotten harder for the residential property owners to find the right tenants who’re willing to pay the prices set.

The owners of the older looking buildings have the new challenge of upgrading their properties that suit the style of the new millennial generation.

Including facilities like Wi-Fi connections, trendy interiors have become a must and raising funds to meet such expenses is the greater challenge! The easiest resort and the best fix for such circumstances are raising a bridge loan.

Bridge loan helps meet the immediate financing need of meeting expenses related to repairs and renovations. Once the property is ready for renting out and once the tenants move in, investors can easily pay off the bridge loans hassle free!

This has also been one of the major reasons behind the boom in the commercial mortgage bridge loan markets in the last year.

They were some of the major reasons that led to the boom in the commercial mortgage bridge loans market in the year of 2017.

The real estate research agencies have declared that they expect this trend to remain same in the year of 2018 and a few years to come.

Regardless of whether or not the trends are going to remain the same, commercial mortgage bridge loans are less likely to be washed off from the real estate market because of the increasing number of situations or circumstances where availing bridge loans alone is the best form of financing!

Want to learn more? Get in touch with us today.

Similar Blog

What is Smart Building & Its Future in Commercial Real Estate

What is Smart Building & Its Future in Commercial Real Estate

If you’ve ever worked in an office, you’ve probably complained about the temperature at some point. Controlling the thermostat in large commercial buildings is tricky and is often a constant struggle. That’s because different building sections are affected by sunlight...

Want to learn more? Get in touch with us today.

Our experienced team is ready to assist with your financing needs.

2101 Cedar Springs Road Suite 1050 Dallas, TX 75201