With the resilience of the multifamily sector of the commercial real estate industry, alternative financing options have emerged more aggressively than ever, serving more specialized needs, including critical interim financing. Due to recent cap rate compression and pent up funds flow demand in the multifamily space, most multifamily deals trading with significant cash flow constraints with the agencies, namely Fannie Mae and Freddie Mac. As a result, they cannot seem to compete on terms since pricing has become aligned with how aggressive the private debt funds have gotten in recent months and how aggressively priced multifamily deals have become overall.

This is no mere coincidence.

Given these realities, there has been an increase in bridge lending transactions. With more lenders accelerating their bridge lending operations in Q1 and Q2 2021. Across the country, we're seeing this financial tool become a critical piece of most business plans, providing accretive leverage while allowing the borrower maximum flexibility to make improvements and then transition into permanent financing or sell to move onto the next asset.

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