As the name implies, bridge loans fulfill a vital need for active developers by giving life to a new project in the months before lenders feel confident enough to make available a construction loan, or a repositioning loan in the case of an existing project. But real estate bridge loans have other uses, both tactical and strategic, that make them indispensable in today’s New York marketplace.For new development projects, bridge loans provide financing for property assemblages, site acquisition, and development expenses.

Just as important, bridge loans offer an opportunity to refine the developer’s property repositioning or acquisition plan in the case of an existing project. During the development–or repositioning–planning stage, the developer’s financial advisor has the time to arrange senior construction and mezzanine loan financing. For example, in recent months our firm has arranged highly competitive financing for projects under the 80/20 Bond Financing Program, and other projects under the recent Liberty Bond Program for downtown Manhattan.

New York marketplace requires developers to move extremely rapidly to acquire control of desirable locations. Bridge loans have other strategic uses for developers. By enabling construction to commence before a formal construction loan is in place, a developer may time construction to avoid a heavy winter schedule with the attendant extra costs, or plan the completion of construction to coincide with the primary rental and sales months beginning in the spring and continuing into the summer season.

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