By K2 Capital | June 3, 2025 | Land acquisition financing, pre-development lending, retail and industrial development capital
Early stage development capital is hard to come by. During the period between land acquisition and construction closing, a project typically has no income and may still be working through zoning, entitlement, or site preparation. Banks generally will not lend at this stage, even when the long-term project is strong and construction financing is lined up once approvals are in place.
We work with a capital partner that provides bridge financing during that early development window. Their approach is practical: instead of underwriting future projections or speculative value, they focus on the developer’s basis in the land and the current collateral value. That lets them move quickly on deals that most lenders avoid.
Recent Example
A developer was assembling several retail sites throughout the Southeast for future grocery-anchored shopping centers. Each project required acquiring the land, completing entitlement work, and preparing the site for construction financing.
Rather than tying up equity across multiple land purchases at once, the developer used short-term bridge financing secured by the properties. The lender provided capital at approximately 50% of the purchase price, allowing the developer to control the land while preserving equity for additional projects in the pipeline.
Once entitlement was completed and construction financing was secured, the bridge loan was repaid through the bank construction loan.
How It Works
The financing is structured as a short-term first lien bridge loan. Pricing typically ranges from 10.5% to 14.5% depending on risk profile, with execution timelines of approximately three weeks once diligence is complete.
Target assets include retail development land, industrial development sites, and select commercial land opportunities, primarily in Sun Belt markets including Texas, the Southeast, and parts of the Mountain West.
For developers running multiple projects, this capital becomes a scaling tool. Instead of fully equitying each land acquisition, the bridge financing lets them control more sites while keeping capital available for the next deal.
| Loan Size | $5,000,000 to $20,000,000 |
|---|---|
| Leverage | Up to 60% of purchase price |
| Structure | Short-term first lien bridge loan |
| Pricing | Approximately 10.5% to 14.5% depending on risk profile |
| Target Assets | Retail development land, industrial development sites, select commercial land opportunities |
| Geography | Primarily Sun Belt markets including Texas, the Southeast, and parts of the Mountain West |
| Closing Timeline | Approximately three weeks once diligence is complete |
| Exit Strategy | Bank construction financing following entitlement or project stabilization |
If this sounds like a fit for your situation, submit a request with some additional context. We will review it and determine whether this capital partner aligns with your situation.