$22,000,000 Bridge Loan | Industrial Distribution | El Paso, TX
Cross-border logistics facilities along the U.S.-Mexico trade corridor are among the most operationally complex assets in the industrial sector right now. When a sponsor came to us needing bridge financing for a distribution facility in El Paso's Upper Valley industrial zone, the demand story was easy to tell. Getting a lender comfortable enough to close was a different matter entirely.
The Deal
The sponsor controlled a cross dock industrial facility in El Paso positioned directly within the freight ecosystem feeding the Zaragoza International Bridge, one of the highest-volume commercial crossings on the southern border. The building was purpose-built for cross-border freight movement: a cross dock configuration, a deep trailer staging yard, and customs-adjacent infrastructure that made it operationally efficient for a single anchor tenant handling U.S.-Mexico freight flows at scale.
The ask was $22,000,000 in bridge financing. The facility was not yet stabilized, and the sponsor needed to close quickly. A conventional permanent loan was not on the table at this stage, but the sponsor needed enough runway to season occupancy, demonstrate trailing net operating income, and position the asset for a life company or conduit takeout. The goal was straightforward: get to the finish line without burning six months in a bank credit committee process.
The Challenge
El Paso's industrial market has gotten tight. Nearshoring activity across the Juarez maquiladora corridor has driven absorption and pushed vacancy down to levels that would make any lender pay attention. The macro story is compelling. The problem is that macro stories do not underwrite specific collateral, and this collateral came with a set of characteristics that conventional lenders were not equipped to process quickly.
Three things made this deal genuinely hard to place.
First, the tenant concentration. A single cross-border freight operator occupied the building. For a lender underwriting a standard industrial deal, one tenant is manageable. For a lender trying to model downside scenarios on a facility with customs-adjacent improvements and CBP-driven operating requirements, one tenant is a problem. If that lease goes dark, the replacement tenant pool narrows considerably. You are not re-leasing a generic warehouse. You are re-leasing a building that was built around a specific operational use case tied to international trade flows.
Second, the improvements themselves. The cross dock configuration and staging infrastructure are real assets to the right operator. To a conventional bank or life company trying to assess liquidation value, they read as functional obsolescence risk. Specialized improvements mean a smaller buyer pool, and a smaller buyer pool means more collateral haircut in a stress scenario.
Third, the regulatory and policy layer. Facilities operating in this corridor have to account for CBP requirements that do not translate cleanly into standard loan covenant packages. Trade policy exposure is real and lenders without direct experience in this asset class tend to treat that exposure as unquantifiable risk, which is a short way of saying they pass.
The Solution
We went to the debt fund market, specifically targeting funds with demonstrable experience in cross-border industrial and logistics assets. The right lender for this deal was not going to be a bank or a life company at this stage. It needed to be a capital source that had already done the work to understand how these facilities operate, how the tenant base behaves, and what the replacement demand looks like if occupancy slips.
The loan was sized at roughly 65 to 70 percent of cost, which gave the lender a defensible basis in a market where the collateral story is strong but liquidity is still thinner than gateway industrial markets. We structured in an interest reserve to cover carry during the lease-up period and built milestone provisions around occupancy thresholds, so the sponsor had a clear path to satisfy conditions without being exposed to arbitrary lender discretion at the wrong moment.
The term was structured to give the sponsor enough runway to season the tenancy and accumulate trailing NOI that a life company or conduit lender could underwrite on a permanent basis. Floating rate, consistent with where the bridge market priced this type of execution. The close happened in weeks, not months.
The Outcome
The sponsor closed on schedule with capital from a lender that actually understood what it was financing. The interest reserve took near-term cash flow pressure off the table. The milestone structure gave both sides a shared framework for the lease-up period. And the loan basis and term leave a clear path to permanent financing once the asset performs its way into a more conventional underwriting box.
El Paso's border logistics market is not going to get less complicated as nearshoring continues. Sponsors operating in this corridor need capital partners who have worked through what these assets actually look like from a credit perspective. Finding the right lender is the job. The loan amount is just the result.