What to Assemble for an Industrial Bridge-Loan Request: Underwriting Checklist
For an industrial bridge-loan request involving a warehouse acquisition, refinance, or lease-up, a broker should assemble a comprehensive package featuring property details (rent roll, T12, lease terms, clear heights), sponsor financials (PFS, 680+ FICO, track record), a detailed CapEx/lease-up business plan, and a verified exit strategy. High-yield style bridge underwriting standards target 65%–75% LTV, 75%–85% LTC, 1.0x minimum in-place DSCR (or capitalized interest reserves), and net worth equal to 100% of the loan amount.
Underwriting Standards Checklist: High Yield Style Bridge
- Minimum Guarantor FICO: 680 (primary guarantors holding 20% or greater equity)
- Net Worth Requirement: Equal to or greater than 100% of the total loan amount (excluding primary residences)
- Liquidity Requirement: 5% to 10% of loan amount, or 6 to 12 months of PITI debt service reserves
- Sponsor Track Record: 3 to 5+ years of direct experience operating or repositioning similar commercial assets
- Maximum Loan-to-Value (LTV): 65% to 75% as-is value (up to 80% for primary-market assets)
- Maximum Loan-to-Cost (LTC): 75% to 85% of total project costs (purchase price plus 100% of capital expenditure)
- Minimum Debt Service Coverage Ratio (DSCR): 1.0x in-place (or capitalized interest reserves for vacant/lease-up assets)
- Primary Exit Strategies: Conventional bank refinance, agency debt placement, SBA 504 conversion, or asset sale
Key Takeaways: CRE Bridge Loan Submission
- Submission Completeness: Clean, complete broker packages streamline underwriting speed and secure firm term sheets within 48 to 72 hours.
- Industrial Property Specifics: Highlight clear height, loading dock count, truck turn radius, WALT, and tenant credit profiles alongside financial submissions.
- Leverage & Liquidity: Expect LTV caps between 65% and 80%, with post-closing liquidity covenants enforced quarterly.
- Custom Loan Structuring: Explore custom loan structures that ease deal pressure when managing short closing windows or heavy tenant transitions.
What Should a Broker Assemble for an Industrial Bridge-Loan Request?
When presenting an industrial warehouse acquisition, refinance, or lease-up opportunity to private debt funds and institutional bridge lenders, brokers must provide a complete submission file. Because bridge capital moves fast to solve urgent capital needs, incomplete submissions delay underwriting decisions and increase execution risk. Review our guide on bridge financing essentials for deeper timing strategies.
Complete Submission Checklist for Industrial Bridge Requests
- Sponsor Financial Package: Personal Financial Statements (PFS) dated within 60 days for all 20%+ owners, past 2–3 years of tax returns, and verification of unencumbered liquid reserves.
- Commercial Property Financials: Year-to-date income statements, complete Trailing 12-Month (T12) operating history, and certified rent rolls showing tenant names, lease end dates, options, and renewal terms.
- Industrial Property Physical Profile: Asset overview including building square footage, clear ceiling heights (e.g., 24’–36′), dock-high and drive-in door counts, truck court depth, power capacity (amps/volts), and Phase I Environmental Site Assessment (ESA) reports.
- Lease-Up & Renovation Plan: Itemized capital expenditure (CapEx) budget, timeline for physical improvements, market rent roll comparables, and leasing execution schedule.
- Purchase Contract or Debt Payoff Statement: Executed Purchase and Sale Agreement (PSA) including closing deadines, or payoff demand statements from current lenders for refinances.
- Defined Exit Strategy Matrix: Detailed analysis showing how the asset will refinance into permanent debt (such as via our Wholesale SBA 504 Lending Desk for Mortgage Brokers), qualify for bank debt, or achieve an asset sale.
Core Borrower Eligibility and Balance Sheet Metrics
Our underwriting matrix evaluates borrower financial capacity alongside property quality. While private bridge debt offers greater structuring flexibility than traditional banks, baseline financial thresholds remain firm across high-yield and institutional private bridge platforms.
Sponsor Financial Evaluation Criteria
- Net Worth Test: Principal guarantors must demonstrate aggregate net worth equal to at least 100% of the loan requested. A $10,000,000 industrial warehouse bridge loan requires $10,000,000 in combined guarantor net worth.
- Liquidity Test: Guarantors must hold liquid assets (cash, marketable securities) equal to 5%–10% of the loan amount, or 6 to 12 months of principal, interest, taxes, and insurance (PITI) post-closing.
- Guarantor Credit: Primary guarantors must show a minimum 680 FICO score. Lower scores require compensating factors such as additional equity or cash reserves.
Property Collateral, Valuation, and Leverage Caps
Property collateral represents the primary security for short-term bridge financing. In value-add or lease-up scenarios, underwriting measures both current as-is market value and prospective as-stabilized value. Understanding how DSCR loans fuel income-producing property growth helps frame long-term valuation objectives.
Industrial Warehouse Bridge Worked Example
Consider an industrial warehouse acquisition and lease-up project evaluated under standard 80% LTC and 70% As-Is LTV constraints:
| Metric | Value / Amount | Underwriting Rule |
|---|---|---|
| Purchase Price | $8,000,000 | Agreed Acquisition Price |
| CapEx & Tenant Improvements | $2,000,000 | Approved Capital Budget |
| Total Project Cost | $10,000,000 | Acquisition + CapEx |
| Maximum Loan at 80% LTC | $8,000,000 | 80% of Total Project Cost |
| Required Borrower Equity | $2,000,000 | 20% Minimum Cash Equity |
| Projected Stabilized Value | $13,500,000 | Post-Lease-Up Appraisal |
Institutional CRE Bridge Loans vs. High-Yield Hard Money
Commercial real estate investors must distinguish between institutional bridge loans and expensive hard money options. Industry insights from commercial real estate research organizations like NAIOP highlight the importance of matching loan terms with project timelines.
| Feature | Institutional Bridge Loan | High-Yield Hard Money |
|---|---|---|
| Interest Rates | SOFR + 3.50% to 6.00% (8.0%–10.5%) | 11.00% to 15.00% Fixed |
| Origination Fees | 1.0% – 2.0% | 2.0% – 4.0% + Exit Fees |
| Term Length | 12 – 36 Months + Extensions | 6 – 18 Months |
| Due Diligence | Full MAI Appraisal, Phase I ESA, PCA | Internal Desktop Review / BPO |
Validating Your Exit Strategy
A bridge loan requires a validated exit strategy. During underwriting, we test three main exit routes against changing economic conditions:
- Conventional or Agency Refinance: Testing stabilized NOI against market debt yields (9.0%+ target) and minimum 1.25x DSCR requirements. For owner-occupied industrial buildings, conversion via U.S. Small Business Administration (SBA) debt programs provides long-term fixed-rate stability.
- Property Sale: Reviewing localized cap rates and industrial transaction volumes to confirm net sale proceeds exceed loan balances.
- Extension Covenants: Ensuring loan agreements include 12-month extension options backed by clear debt yield performance targets (e.g., 8.5%+ in-place).
Submit Your Industrial Bridge Loan Request Today
Are you a commercial mortgage broker or sponsor preparing an industrial warehouse acquisition, refinance, or lease-up request? Contact our underwriting team today to submit your deal package, receive preliminary feedback within 24 hours, and secure flexible institutional bridge capital tailored to your timeline.