How much renovation budget can a bridge loan cover?

Most bridge lenders will fund 100% of the renovation budget as part of the loan, held in a controlled reserve and disbursed as work is completed. Total loan (acquisition + renovation) typically can't exceed 75-80% of the after-renovation value (ARV).

What properties work best for value-add bridge loans?

Properties with below-market rents, deferred maintenance, vacancy that can be leased, or operational inefficiency. The best value-add deals are in strong markets where the post-renovation rents are provable from comparable properties. Hotels pre-PIP, retail with re-tenanting upside, and multifamily with interior renovations are the most common.

How do I exit the bridge loan into permanent financing?

Once the renovation is complete and the property has 6-12 months of stabilized operating history, refinance into CMBS (typically 6.75%–9%, with the strongest stabilized deals reaching 6.25%), bank balance sheet (5.5-7%), or life company (5-6.5%) permanent debt. The permanent loan pays off the bridge, and you lock in long-term fixed-rate financing at the new, higher property value.

What are the risks of a value-add bridge loan?

Renovation cost overruns, longer-than-expected lease-up, market downturn reducing achievable rents, and interest rate risk on the permanent exit. Mitigate with conservative underwriting, adequate contingency reserves (10-15% of renovation budget), and pre-negotiated bridge extensions.

Published: March 31, 2026·Last updated: May 16, 2026·By Ed Freeman, Capital Advisor. PeerSense

What is the best financing for commercial real estate at 65-80% (of total cost) LTV?

Value-add bridge loans fund the acquisition plus renovation budget at 65-80% of total cost. Rates range from 8-12% for 24-36 month terms with interest-only payments. The strategy: buy below replacement cost, execute the business plan, stabilize NOI, and refinance into permanent CMBS or bank debt at 6-8%, locking in the value you created at a fraction of the bridge rate.

Published by PeerSense Capital Advisory · Written by Ed Freeman, Founder

Prime: 6.75% 10-Yr Treasury: 4.25% Est. Bridge Loan Range: 8% - 12%as of Mar 19, 2026

Commercial Real Estate

Value-Add Acquisition Bridge Loan, Buy, Renovate, Stabilize, Refinance

Bridge financing for commercial value-add acquisitions. 65-80% LTV, 8-12% rates, close in 2-4 weeks. Renovate, stabilize NOI, exit into CMBS or bank permanent debt.

Minimum 30-35% equity required. Experienced value-add investors with a proven track record of executing renovation business plans.

Discuss Your Commercial Real Estate Deal Call (317) 452-6990

KEY TERMS

Deal Parameters at a Glance

LTV Target

65-80% (of total cost)

Est. Rate Range

8% - 12%

Term

24-36 months

Recourse

Full or limited recourse

DSCR

No minimum at acquisition (project to 1.25x+ at stabilization)

Closing Speed

14-28 days

Min Loan Size

$1M

Loan Products

Bridge Loan

Indicative only, as of August 1, 2026. Not a quote, commitment or offer of credit. Final pricing, leverage and terms are determined by the lender at underwriting, after full transaction materials are reviewed. PeerSense does not lend and does not set pricing. What these terms mean.

FIT ASSESSMENT

When Is This the Right Fit?

Use this when acquiring a commercial property below replacement cost that needs renovation, repositioning, or lease-up before it qualifies for permanent financing. Common scenarios: 60% occupied office or retail that can reach 85%+, hotel pre-PIP, industrial conversion, or multifamily with below-market rents. The bridge funds the purchase, you execute the plan, then refinance at stabilization.

Want the full program overview, current rate sheet, and underwriting matrix? See the Bridge Loans guide →

ADVANTAGES

Key Benefits

Finance acquisition + renovation in a single loan

Interest-only payments during renovation preserve cash for the business plan

No seasoning requirement, close on the acquisition immediately

Flexible draw structure for renovation budget

Exit into CMBS at 6-8% once stabilized, massive interest savings

ALTERNATIVES

Strategic Alternatives

CMBS Permanent Financing

If the property is already stabilized (85%+ occupancy, 1.25x DSCR)

Learn more

Bridge-to-Permanent

Structure the permanent exit from day one

Learn more

Mezzanine Financing

If you need additional leverage above the bridge loan's senior tranche

Learn more

Frequently Asked Questions

Value-add means acquiring a property below its potential value and executing improvements (renovation, re-tenanting, operational changes) to increase NOI. The difference between acquisition price and post-renovation value is the value created, and it's the core strategy behind bridge-to-permanent financing.

See Related Rates by Program

PeerSense covers the full commercial capital stack. Indicative levels that lenders in our network have been pricing across these programs, as of August 1, 2026.

SBA 7(a) & 504

5.50–11.75%

Up to $5M acquisition / real estate / equipment, 10% down

See current rates

CMBS Conduit

5.60–7.10%

10-yr non-recourse fixed, $5M–$500M+, fully assumable

See current rates

DSCR Investor

5.95–8.50%

30-yr fixed rental, qualifies on property cash flow

See current rates

Equipment Financing

5.50–12.00%

Loan, lease, SBA 504, vendor, captive. Section 179 eligible

See current rates

Hotel Financing

5.85–11.75%

CMBS + SBA 504 + bridge + PIP across all flags

See current rates

Private Credit

7.80–18.00%

Non-bank flexibility, unitranche, recap, transitional

See current rates

Invoice Factoring + ABL

0.5–3.5% / 30d

B2B receivables, trucking / staffing / construction / govt

See current rates

No-Doc CRE

7.50–11.50%

Limited-doc commercial, asset-based underwriting

See current rates

Foreign National

7.50–11.00%

Non-US borrower CRE + bridge, no SSN required

See current rates

Connect with PeerSense, Direct Capital Advisory

PeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With a curated network of lender relationships and live market rate intelligence, we match your commercial real estate deal with the right capital source, right now.

Scan Your Deal (30 sec)Tell Us About Your Deal Call (317) 452-6990

Fee at closing only · Complimentary initial consultation

Published by PeerSense Capital Advisory · Written by Ed Freeman, Founder. Updated March 2026.

Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.