The Challenge
Refinancing Without Disrupting Stabilization
The borrower approached Encore Finance to refinance a newly constructed BFR community that had been funded through an existing line of credit. While construction was largely complete, the property was still in the lease-up phase, with occupancy at approximately 84%.
The core challenge was timing. Moving into permanent financing too early would limit flexibility and potentially undervalue the asset before rents and occupancy fully stabilized. At the same time, the borrower needed to refinance the existing credit facility with a structure that aligned with the project’s execution timeline.
What the borrower required was short-term financing that could bridge the gap between completion and stabilization, without introducing unnecessary pressure or execution risk.
The Solution
A Flexible Bridge Refinance Aligned With Performance
Encore Finance structured a 36-month bridge loan through its Aggregation Facility to refinance the existing line of credit and support the remaining lease-up period.
The $12.98 million facility was secured by the 69-unit BFR community and sized at a 67% loan-to-value ratio, based on in-place performance rather than future assumptions. This structure provided the borrower with sufficient proceeds and runway to complete stabilization while maintaining financial flexibility.
By aligning the loan structure with the asset’s current stage, the borrower was able to continue executing their business plan without being forced into permanent financing before the property reached optimal performance.
The Outcome
Preserving Flexibility While Maximizing Long-Term Value
Encore Finance’s Aggregation Facility delivered a financing solution aligned with the borrower’s execution timeline and operational strategy. The flexible bridge structure allowed the borrower to complete lease-up and improve cash flow without being forced into permanent financing before the asset was fully stabilized.
By sizing the facility to in-place performance, the borrower preserved liquidity, reduced execution risk, and retained control over the timing of their permanent financing decision. In a growing BFR market, this approach helped maximize asset value while keeping capital moving efficiently.
This transaction illustrates how thoughtfully structured bridge financing can serve as a strategic tool for BFR investors navigating the transition from completion to stabilization.
