Why office bridge financing is harder to place
Many banks, life companies, and CMBS lenders cut back on office after hybrid work reduced space demand and pushed vacancy higher in many submarkets. Credit committees also watch office concentrations closely, so a bank that would quote a stabilized building may still pass on a transitional building. The result is a smaller lender pool with sharper opinions about buildings, submarkets, and sponsors.
Capital for office is still available. Debt funds, private credit lenders, some regional banks with existing relationships, and opportunistic family offices continue to lend when the basis is right and the business plan is credible. The work is finding the lenders whose current appetite includes the specific building class, size, and market, which is what the Capital Partners lender database tracks.
How lenders underwrite rollover and vacancy
Office lenders start with the lease expiration schedule. They map every expiration through the loan term, flag tenants with termination or contraction options, and ask which tenants have signaled they will renew, downsize, or leave. A well-occupied building with heavy rollover during the loan term can underwrite worse than a partially vacant building with long leases in place.
For vacant space, lenders apply their own downtime, free rent, and market rent assumptions instead of the sponsor's pro forma. Expect them to test the plan against recent comparable leases in the submarket, including concessions, and to size the loan so it still works if lease-up takes longer than projected.
- Rent roll with lease dates, options, and in-place rent against market
- Tenant estoppels and financial information for major tenants
- Leasing activity, including proposals out, LOIs, and tour history
- Trailing operating statements and the current budget
- Parking ratio, building systems, and deferred maintenance
TI, leasing commission, and capital reserves
Tenant improvements and leasing commissions are the largest cash need in most office business plans, and lenders treat them as part of the loan structure. Many office bridge loans fund these costs through a future funding facility or a lender-held reserve, released as leases are signed and work is completed. Lenders will ask for a TI and LC budget by suite and compare it to what landlords in the submarket are actually giving.
Capital reserves cover the base building: lobbies, elevators, roofs, HVAC, and code items. If the plan depends on amenity space, spec suites, or a lobby renovation to compete for tenants, the budget and schedule need to hold up, because the lender is underwriting that spend as the reason tenants will sign. Use the loan sizing calculator to see how a funded reserve changes initial proceeds.
Sponsor equity and loan structure
Office lenders expect meaningful sponsor cash in the deal, and they look at basis as closely as appraised value. A sponsor who bought well below replacement cost has a stronger case than a sponsor refinancing at a peak-era valuation. Lenders also weigh the sponsor's office leasing record, relationships with local tenant brokers, and liquidity to carry the asset if leasing stalls.
Where senior proceeds fall short, the gap can be filled with mezzanine debt or preferred equity, though those providers bring the same caution about office. Common senior terms include interest reserves, cash management triggered by tenant departures, and extension options tied to occupancy or debt yield tests.
Planning the exit to permanent debt or sale
Every office bridge lender asks how the loan gets repaid. The usual answer is a refinance into permanent debt once the building is leased and new tenants are paying rent, or a sale to a buyer who values the stabilized income. Lenders want to see the exit work at their assumptions, including a permanent lender's likely view of office at maturity.
Capital Partners' office record includes a $4.6M fixed-term refinance of a multi-tenant office building in Westlake Village, the kind of permanent takeout an office bridge plan is built to reach. When your plan is ready, submit the deal with the rent roll and business plan for a principal's review.
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Common questions
Are lenders still making office bridge loans?
Yes, though the pool is narrower than for most property types. Debt funds, private credit lenders, some regional banks, and family offices still lend on office when the basis, sponsor, and leasing plan are credible. Capital Partners tracks which lenders are currently active in office by market and loan size.
Will an office bridge lender fund tenant improvements and leasing commissions?
Often, yes. Many office bridge loans include future funding or a lender-held reserve for TI, leasing commissions, and capital work, released as leases are signed and work is completed. The lender sizes that facility against a suite-by-suite budget.
How do lenders treat a large tenant with an upcoming lease expiration?
Most lenders underwrite the risk that the tenant leaves unless there is evidence otherwise, such as a signed renewal or a letter of intent. Expect questions about the tenant's space needs, termination rights, and the cost to re-lease the space. Some lenders require a cash sweep or reserve tied to that expiration.
Can an office bridge loan finance a conversion to another use?
Some lenders finance office conversions, but the underwriting shifts toward construction risk, entitlements, and the value of the finished use. Those requests go to a different set of lenders than a lease-up plan. Share the conversion plan, budget, and approval status so a principal can route it correctly.
What loan sizes does Capital Partners arrange for office properties?
Capital Partners arranges commercial real estate debt and equity from $1M to $100M nationwide, including office bridge, permanent, and refinance loans. Every request is reviewed by a principal and matched against lender criteria tracked by property type, structure, loan size, and geography.
Can a broker get a bridge loan for a half-vacant office building?
Yes, though the lender pool is small and proceeds are sized on as-is value with a funded budget for tenant improvements and leasing commissions. Capital Partners arranges office bridge loans from $1M to $100M and weighs submarket leasing demand, building quality, and the sponsor's leasing plan to find lenders still active in office.
Who lends on an office building when the bank will not extend the loan?
Private lenders and debt funds provide bridge capital when a bank will not extend, often paired with new equity or preferred equity to reduce the loan balance. A principal reviews the rent roll, the existing loan terms, and the size of the gap before approaching lenders.