Bridger Restarts CMBS Loan Originations
Bridger Commercial Funding will resume making new loans into the commercial real estate (CRE) space for the purpose of funding commercial mortgage-backed securities (CMBS). However, terms are tight, even though the new program is underwritten by Federal Reserve's Term Asset-Backed Securities Loan Facility (TALF). The new platform, called STAR, is designed to allow triple-A CMBS investors to access bailout financing, as long as portfolios are deemed diverse enough to be hedged from occupancy risks (the minimum rate is 85%). According to the loan parameters, transactions must be "higher-quality stabilized properties in strong markets, that require refinancing or acquisition debt." Property types include multifamily, office, retail, industrial, manufactured housing communities and self storage, with an amoritization rate between 25 to 30 years. Loan amounts can generally range from $2m to $10m (though the max caps at $20m) over three to five years, fixed somewhere between 7.9% to 8.5%, with a two-year lockout on prepayments. "Recent activity in the CMBS market is signaling that the credit logjam plaguing commercial real estate lending for the past two years is starting to break," said Bridger executive vice president Peter Grabell in a statement. "CMBS bond yields have fallen throughout the year, to the point where newly originated CMBS loans are becoming a viable financing option once again for borrowers." Since 1998, Bridger provided more than $5bn in capital markets-based commercial real estate financing for banks and related clients. To expand its capital markets capabilities in support of the new CMBS program, Bridger has added the former Whitegate Advisors team to the Bridger platform. Edward Dale, Julian Vulliez and David Weiss will work out of the firm's New York office. Write to Jacob Gaffney. The author holds no relevant investments.