CMBS vs bridge loans

A bridge loan is short-term, usually floating-rate debt for a property in transition (lease-up, renovation, repositioning), often with future funding for the business plan and easy prepayment. A CMBS loan is long-term, fixed-rate debt for a stabilized property, sized on in-place income. Many owners use both in sequence: bridge to stabilize, then refinance into CMBS.

Side by side

	CMBS (conduit) loan	Bridge loan
Property	Stabilized, with in-place income	Transitional: lease-up, renovation, repositioning, recent purchase
Sizing	In-place income: lowest of LTV, DSCR and debt yield	As-is value plus the business plan; often a share of total cost
Rate	Fixed	Floating over SOFR, usually with a required rate cap
Term	Usually 5 or 10 years	Short initial term with extension options
Future funding	None; reserves only	Often funds renovation, leasing costs and interest
Prepayment	Lockout, then defeasance or yield maintenance	Often open, or after a short minimum interest period
Recourse	Non-recourse with carve-outs	Usually non-recourse with carve-outs; completion or carry guarantees are common
Lender after closing	Servicers under a pooling and servicing agreement	Usually the lender itself (debt fund, mortgage REIT, bank)
Cost	Lower rate, higher closing and exit costs	Higher rate and fees, cheaper to exit

What bridge lending looks like, from a lender’s own filing

Blackstone Mortgage Trust, a large bridge lender, describes its business in its annual report for 2025 (Form 10-K, filed February 11, 2026):

• The portfolio is mainly senior, floating-rate first mortgages; 97% of its loans by principal balance earned a floating rate, primarily indexed to SOFR.
• Its loan agreements “generally require our borrowers to purchase interest rate caps”.
• At year-end, 60% of its loans were open to repayment without penalty and 40% were subject to yield maintenance or other prepayment restrictions.
• It describes the typical transitional borrower as one buying or rehabilitating a property it sees as undervalued, with short-term capital.

That profile is the mirror image of a conduit loan: fixed rate, locked prepayment, no future funding, sized on today’s income.

When each fits

Use a bridge loan when:

• Occupancy or rents are below market and the income will not support permanent debt yet.
• The plan needs capital: unit renovations, tenant improvements, a hotel property improvement plan.
• You may sell or refinance within a couple of years and need cheap prepayment.
• You are buying a property with a short or messy operating history.

Use a CMBS loan when:

• The property is stabilized and the trailing operating history shows it.
• You want a fixed rate and non-recourse terms for five or ten years.
• You plan to hold to maturity, or sell to a buyer who can assume the loan.
• You want the most proceeds against in-place income. Recent leverage by property type: CMBS loan requirements.

The bridge-to-CMBS path

1. Bridge at acquisition or repositioning. The bridge funds part of the purchase and the business plan, with a rate cap and extension options.
2. Execute the plan. Lease up, renovate, raise rents. Keep clean monthly operating statements and a current rent roll; the CMBS lender will underwrite them.
3. Stabilize and season. CMBS lenders underwrite actual collections, so they want trailing months at the new level of income, not a projection.
4. Size the takeout early. Run the stabilized numbers through the CMBS loan calculator before the bridge’s initial maturity, so you know whether the takeout covers the bridge balance or needs equity.
5. Refinance into CMBS before the bridge’s extension tests or maturity force your hand. The process: how to get a CMBS loan, and the refinance specifics: CMBS refinance.

The risk in the path is timing. If rates rise or the plan runs long, the stabilized property may not size to the bridge balance, and extension tests (coverage or debt yield hurdles to extend) may not be met. Plan for the shortfall case: CMBS refinance lists the options.

Going the other way: CMBS loan, then a bridge

Owners with a maturing CMBS loan that will not refinance at full size sometimes take a bridge loan to pay it off, buying time to lease up or sell. That avoids a maturity default and the special servicer, at the cost of a higher floating rate and a second refinance later. Test the gap with the CMBS refinance calculator and read what to do when a CMBS loan is maturing.

Costs to compare

Cost	CMBS	Bridge
Rate	Fixed coupon	SOFR plus a spread, capped by the rate cap you buy
Upfront fees	Lender legal, reports, any origination fee	Origination fee, rate cap premium, lender legal
Exit	Defeasance or yield maintenance before the open period	Exit fee or minimum interest, if any
Ongoing	Reserves	Reserves, interest reserve, extension fees

Model the full cost of both over your hold in the loan offer comparison tool. Other comparisons: CMBS vs bank loans, CMBS vs agency loans, CMBS vs life company loans.