15.7-Acre Land Bridge Loan
Deal Summary
The Situation
A developer identified a 15.7-acre land parcel in a high-growth corridor that was ideal for a planned commercial and residential development. The site sat at the intersection of major transportation infrastructure and a rapidly expanding residential population, making it attractive for a mixed-use development with retail, multifamily, and commercial components. The seller had received multiple offers and required a fast close with minimal contingencies, putting a premium on the buyer's ability to execute quickly. The developer needed acquisition capital to secure the site while entitlements, environmental assessments, and site planning were completed over the following 12 to 18 months.
The Challenge
Raw land is one of the hardest asset types to finance. The parcel had no improvements, no income, and no entitlements in place. Most conventional lenders will not touch unentitled land at any price, and those that do typically require 40% to 50% equity and impose restrictive covenants that limit the developer's flexibility. The developer needed both leverage and speed to secure the parcel before competing buyers with all-cash offers. Adding to the complexity, the site's size and zoning requirements meant the entitlement process would involve multiple municipal reviews, traffic studies, and environmental clearances before any vertical construction could begin.
The Structure
CapitalAx sourced a private lender willing to underwrite the land based on the developer's track record, the site's location fundamentals, and the strength of the planned development program. The $9,500,000 bridge loan provided the full acquisition capital needed to close on the seller's timeline. The loan was structured with a term that aligned to the entitlement and pre-development timeline, interest-only payments to minimize carrying costs during the planning phase, and extension options if municipal approvals required additional time. The private lender's willingness to lend at a higher loan-to-value than conventional sources gave the developer the leverage needed to preserve capital for soft costs, engineering, and architectural planning.
The Solution
CapitalAx packaged the deal with comparable land sales in the corridor, a development feasibility study prepared by a third-party firm, traffic and demographic data supporting the demand thesis, and the developer's prior project portfolio showing successful execution on similar large-scale developments. The presentation gave the private lender a clear picture of the site's development potential and the borrower's ability to take it from raw land to a permitted, shovel-ready project. The lender issued a term sheet within a week, and CapitalAx coordinated the closing with the seller's counsel to meet the compressed timeline.
The Outcome
The developer acquired the site ahead of competition, locking in a purchase price that reflected pre-entitlement land value while the surrounding area continued to appreciate. Entitlements were secured on schedule, and the developer moved into the pre-development phase with construction financing discussions already underway with institutional lenders. The bridge loan's flexible structure allowed the developer to hold the land through the planning process without the cash flow burden of amortizing debt, and the extension options provided a safety net in case municipal timelines shifted.