Bob FraserCFO & Macro Strategist | Data-Driven Investing Expert | Speaker & Author

Bridge lenders have disappeared | Bob Fraser of Aspen Funds

Name: Bridge lenders have disappeared | Bob Fraser of Aspen Funds
Uploaded: 2022-11-26T15:00:18+00:00
Duration: 51 s
Channel: Bob Fraser
Description: In this brief commentary, Bob Fraser of Aspen Funds warns that bridge lenders—once the primary source for high‑leverage real‑estate transactions, often…

26 Nov 2022 · 1 min

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In this brief commentary, Bob Fraser of Aspen Funds warns that bridge lenders—once the primary source for high‑leverage real‑estate transactions, often providing up to 80% loan‑to‑value financing—have largely vanished. He explains that this disappearance will dramatically reduce the pool of available capital for purchases, potentially choking deal flow. Fraser likens the existing bridge‑debt structure to a bridge that never reaches its destination, describing it as a “death” or “swan dive” and emphasizing that such financing is fundamentally unsustainable. Having sounded this alarm for two years, he predicts that the collapse of bridge financing will become a massive, systemic problem for the market.

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bridge lenders have disappeared, right? Well, you know, pretty much. And so it's, you know, that's been the main way people are doing the high leverage deals, you know, because they'll go up to 80% LTVs in some cases and they're gone. So we're going to see that, you know, really massively affect, you know, the availability, available capital massively affects purchasing. But as I said, I think it's a bug looking for a windshield. All this, all the bridge debt financing that we had, and I've been sounding this alarm for 2 years. The bridge debt was, you know, it really is a bridge. And, you know, if something is a bridge that doesn't go anywhere, it's not actually a bridge, right? It's a death, it's a swan dive. Yeah. Right. You gotta have something bridge to. And so I think bridge is a huge problem and I think it's going to be a huge, huge, huge problem.