Commercial Real Estate Gap Financing Indicative Term Sheet

Commercial Real Estate Gap Financing Indicative Termsheet

Commercial Real Estate Gap Financing Indicative Termsheet

Financely structures, underwrites, and places gap capital for acquisitions, refinances, development, and rescue situations. Instruments include preferred equity, mezzanine debt, stretch senior, and interim bridge-to-perm. Where senior proceeds fall short, we close the gap alongside a clear plan to stabilization or exit. Third party bank and counsel costs are for the client’s account.

Key Parameters

Borrower & Asset Types
  • SPV PropCo with ring-fenced security package
  • Multifamily, industrial, logistics, select retail, office by exception, hospitality case by case
  • Stabilized, transitional, or development with credible budget and timeline
Facility Size, Tenor, Leverage
  • Ticket: USD 5M to USD 150M per asset or portfolio
  • Tenor: 18 to 48 months typical, extensions by performance tests
  • LTV and LTC: sized to DSCR and Debt Yield at stabilization
Instruments
  • Preferred equity with distribution priority and hard covenants
  • Mezzanine loan with pledge over HoldCo or PropCo equity
  • Stretch senior or A/B structure with blended rate
  • Bridge-to-perm with earn-out on leasing or NOI milestones
Use Of Proceeds
  • Acquisition shortfall, refinance at maturity, rescue capital
  • Capex, TI and LC, construction overruns, interest reserve
  • Closing costs, taxes, fees, and approved working capital

Jurisdictions & Governing Law

Documentation is typically governed by New York law or English law. Local mortgages and security follow the law of the asset location. Execution focus includes:
  • United States: state law mortgages or deeds of trust, UCC filings, assignment of leases and rents, opinion letters
  • United Kingdom: English law facility documents, legal charges over real property, share charges, debentures
  • EU: local law mortgages and notarial formalities, registration taxes, step-in rights sized with counsel
  • UAE and GCC: onshore or free zone structures with local perfection and pledge registrations
  • Africa selected markets: local counsel for land title, FX, enforcement, and charge registrations
  • Sanctions, AML, tax, FX, and land ownership rules apply in full

Security Package & Tests

  • First ranking mortgage or deed of trust, assignment of leases and rents, account control
  • Share pledge over PropCo or HoldCo, negative pledge on junior liens unless agreed in intercreditor
  • Debt Yield, DSCR, and LTV tests with cure rights and cash traps at agreed triggers
  • Reporting: monthly draw requests, quarterly covenant compliance, annual audited financials

Underwriting & Execution Process

1

Intake & Screening

Sponsor track record, asset summary, business plan, budget and timeline, initial KYC and conflicts checks

2

Indicative Terms

Gap sizing, instrument selection, leverage guardrails, covenants, milestones, and timeline

3

Due Diligence

Appraisal, environmental, engineer or QS, title, leases, model audit, legal diligence, draft LMA or NY-style documents

4

Structuring & Approvals

Credit papers, IC approvals, intercreditor terms, CP checklist, funds flow and reserves

5

Closing & Funding

CPs satisfied, mortgages perfected, reserves funded, drawdown at completion

Fees & Economics

Fee Basis Range / Example Payable
Engagement Retainer Fixed cash retainer to fund underwriting work USD 25k to USD 95k depending on scope and speed On mandate signing, non refundable
Underwriting Fee Flat or % of committed gap capital 0.50% to 1.25% or a fixed amount At indicative term acceptance or at close as agreed
Success Fee % of debt placed and equity or pref arranged 1.5% to 3.0% of funded amounts Deducted from proceeds at closing
Third Party Costs Appraisal, environmental, engineer or QS, legal, title At cost with estimates before commissioning As incurred or via expense deposit

Note: OID, prepayment fees, and earn-out mechanics are lender specific. Details appear in lender term sheets and intercreditor agreements.

Where Gap Capital Fits

  • Senior proceeds capped by DSCR or Debt Yield and purchase price remains short
  • Bridge takeout delayed, rate cap costs or lender re-trade creates a shortfall
  • Leasing plan and capex need pref support to reach stabilization
  • Construction budget overrun and contingency fully used

FAQ

Do you lend your own balance sheet

No. We act as arranger and underwriter. Funding comes from lenders and credit funds we onboard to the deal.

Why is there an upfront retainer

Underwriting and documentation require 100 to 200 plus hours of work. The retainer funds this work and locks the delivery schedule.

Can fees be netted from proceeds

Success fees are deducted at closing. The engagement retainer is not netted and is non refundable.

How do you size the gap

We size to DSCR and Debt Yield at stabilization, not just LTV. If the business plan does not cover service and exit risk, we will pass.

Prepayment

Make whole or soft call may apply on debt. Pref equity may have a minimum hold and redemption premium. All terms are lender specific.

Markets you avoid

Any asset that fails title, zoning, sanctions, AML, or enforcement standards, or where FX and tax rules block clean cash flow and exit.

Request Your Term Sheet

Share asset details, current senior terms, business plan, capex, and requested gap amount. After screening we send an indicative term sheet with structure, covenants, and fees.

Request Your Term Sheet

This is a non binding, indicative term sheet for discussion. All facilities are subject to due diligence, full KYC and AML screening, lender credit approval, legal documentation, and jurisdictional requirements including security perfection, taxes, FX, and sanctions compliance. Financely acts as arranger and underwriter and does not guarantee funding.

Get Started With Us

Submit Your Deal & Receive a Proposal Within 1-3 Working Days

Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

Express Application Submit Your Deal
Request a Proposal
Request a Proposal / Submit a Deal

Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.

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Secure financing for business or real estate acquisitions. We ease transaction hurdles by reviewing cash flow, synergy opportunities, and exit plans. Complete the form for a customized proposal that supports your strategic investment objectives.

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Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

Still Have Questions? Schedule a Consultation

If you still have questions after visiting our FAQ and Procedure pages, we invite you to book a paid consultation for personalized guidance. A $250 USD fee applies per session.