A commercial bridge loan buys you time: time to lease vacant suites, renovate a tired strip center or reposition a building before it qualifies for long-term debt. In Texas, the exit plan has to account for a property tax bill that rises as the value rises.
In short: LendingStreet makes short-term, interest-only commercial bridge loans on Texas investment property for acquisition, lease-up, renovation or repositioning, with custom terms up to $5M+. Underwriting looks at today's income and the realistic exit, either a permanent commercial or DSCR loan or a sale. Our investor loans are business-purpose loans on non-owner-occupied property, made to LLCs and other entities.
Bridge loans fit properties that will be worth more and earn more once a specific plan is finished, but do not yet qualify for a permanent loan on in-place income. Typical Texas examples include a neighborhood retail center with vacant bays, a flex or light industrial building with a tenant moving out, a 9+ unit apartment building with units offline for renovation, or a mixed-use building needing new storefront tenants.
If the property is already stabilized with strong NOI, a permanent commercial DSCR loan is usually simpler. If the property has 1 to 8 residential units, see the residential bridge and DSCR pages for your metro instead.
Commercial bridge loans are short-term and interest-only, so the monthly payment covers interest without paying down principal. That keeps carrying costs lower while the business plan is underway. Terms are set per deal, and leverage depends on property type, balance, the in-place income and the strength of the plan.
A full commercial valuation is required. The appraisal may report both an as-is value and an as-stabilized value, and both matter: the as-is value supports the initial loan, and the as-stabilized value tests whether the exit works.
Each bridge scenario lives or dies on a different assumption. Lenders focus on that assumption first.
| Deal type | Common Texas setting | What the exit depends on |
|---|---|---|
| Retail lease-up | Neighborhood centers in metro suburbs and smaller cities | Signed leases, tenant improvement costs, time to rent commencement |
| Flex or light industrial | Suburban corridors around Dallas-Fort Worth, Houston, Austin and San Antonio | Replacing a departing tenant at market rent |
| Apartment renovation | Older garden-style complexes | Renovated rent premiums, turnover pace, concessions |
| Mixed-use repositioning | Historic downtowns and urban districts | Storefront leasing and residential rent upgrades |
| Office repositioning | Smaller office buildings | Lease-up pace and tenant improvement budget |
This example is illustrative and not a quote. All figures are assumptions for a hypothetical neighborhood retail center bought for $1,800,000 with two vacant bays. The investor plans tenant improvements and leasing costs paid from their own reserves.
The bridge loan is $1,260,000, or 70% of the purchase price. In-place NOI from the occupied bays is $145,000. Estimated annual interest-only debt service is about $119,700, so the in-place DSCR is about 1.21x and the property carries itself during lease-up.
If the vacant bays lease as planned, NOI is assumed to rise to $190,000 and the as-stabilized value to $2,500,000. A permanent loan at 70% of that value would be $1,750,000, enough to repay the bridge. Its estimated annual debt service of about $148,424 gives a DSCR of about 1.28x on the stabilized NOI.
| Stage | NOI | Loan | Estimated annual debt service | DSCR |
|---|---|---|---|---|
| Bridge (in-place, interest-only) | $145,000 | $1,260,000 | $119,700 | 1.21x |
| Permanent exit (stabilized) | $190,000 | $1,750,000 | $148,424 | 1.28x |
A Texas bridge plan should assume property taxes will rise with value. The county appraisal district may raise the appraised value after the sale and again after the property stabilizes, and local taxing units set the rates. Owners can protest each year, but a sound exit does not depend on winning.
Insurance is the other moving line. Hail and wind affect pricing statewide, and Gulf Coast properties around Houston and Corpus Christi may need windstorm and flood coverage. If renovations include a new roof, ask how that changes the premium before you build the stabilized pro forma.
In the five large metros, bridge deals often involve infill and repositioning. In Dallas and Fort Worth that can mean older retail and flex buildings in established suburbs or near districts like Deep Ellum and the Near Southside. In Houston, where the city has no traditional zoning, land use is shaped by deed restrictions and city development rules, so check them before planning a change of use. In Austin and San Antonio, older buildings near growing corridors such as East Austin or the Pearl area can be repositioning candidates.
In smaller Texas cities such as Waco, Lubbock, El Paso, McAllen, Midland-Odessa and College Station, bridge deals tend to be smaller and the tenant pool shallower. Lenders look harder at how long similar space has taken to lease locally, and at whether the exit loan size still works if lease-up takes longer than planned.
Texas does not make sale prices public record, so appraisers depend on their own data and information from market participants. For a bridge loan, the as-stabilized value also depends on leasing assumptions, which appraisers check against market rents. Signed letters of intent and leasing activity strengthen the story.
Bridge underwriting weighs the sponsor heavily. Lenders want to see that you have completed similar projects, that you have cash for renovations, leasing costs and a cushion for delays, and that the budget and timeline are realistic.
Commercial bridge loans close faster than many permanent commercial loans but still take longer than residential bridge loans, because they need a full appraisal, lease review and often environmental and property-condition reports. Build that into your contract dates.
Call (877) 298-1001 or use the form below to get a quote. Share the business plan up front so the exit can be tested before you are committed.
Acquisition, lease-up, renovation or repositioning of commercial or 9+ unit apartment property that does not yet qualify for a permanent loan on in-place income.
Yes. They are short-term and interest-only, which keeps payments lower while the business plan is completed.
Yes. A full commercial valuation is required, often with both as-is and as-stabilized values.
A refinance into a permanent commercial or DSCR loan, or a sale. The exit is tested using realistic rents, taxes and insurance.
Yes. The property must be cash-flow positive, even if in-place income is below the stabilized target.
Taxes usually rise with value. Plan for a higher appraised value after purchase and after stabilization, and treat any successful protest as upside.
Structures vary by deal. Many investors pay for tenant improvements or renovations from reserves; ask about your specific plan when you request a quote.
That is why sponsors keep reserves and lenders test the exit with cushion. Talk to us early if leasing slows, and plan carrying costs for delays when you build the budget.
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