Debt funds and bridge lenders

A bridge loan is short, floating-rate, usually interest-only money for a property that isn’t stabilized yet: a lease-up, a renovation, a recapitalization, a building bought with vacancy. Debt funds and mortgage REITs are the main lenders. They cost more than permanent debt because they lend on the plan, not today’s income.

What bridge loans cost, from public filings

Private debt funds don’t publish pricing, but the public mortgage REITs that make the same loans report their books every quarter. From their 10-Q filings for the quarter ended June 30, 2026:

Lender	Loans	Weighted-average cash coupon	Other disclosed metrics
Blackstone Mortgage Trust	133 loans, $17.4 billion principal	+3.13% over benchmark	All-in yield +3.35%; weighted-average maximum remaining term 2.8 years with extensions
KKR Real Estate Finance Trust	48 loans, $4.5 billion principal	+3.0% (floating loans)	Weighted-average LTV 66%; weighted-average maximum remaining term 1.9 years
Granite Point Mortgage Trust	38 loans, $1.4 billion principal	SOFR + 3.59%	Stabilized LTV at origination 66.1%; all-in yield S + 3.91%

Read these as the range for a seasoned book, not a quote. They include loans made in earlier years at different spreads, and the “all-in yield” figures show what fees add: about 20 to 32 bps a year on these books.

This site applies the 3.00% to 3.59% range to 30-day average SOFR, which the New York Fed publishes free. Most bridge loans actually reset off one-month Term SOFR, a licensed CME benchmark that usually sits close to the 30-day average but isn’t the same number.

How bridge lenders size a loan

On value and the business plan. A bridge lender looks at what the property is worth today, what it should be worth once the plan works, and whether the income at the end supports a permanent loan big enough to take them out. KKR Real Estate Finance reports a weighted-average loan-to-value of 66% on its book, and Granite Point a weighted-average stabilized loan-to-value at origination of 66.1%. That’s why this site’s sizer starts bridge loans at 66%. Many also fund future costs on top of the first advance: Blackstone Mortgage Trust reported $1.1 billion of unfunded commitments, which it says go mainly to construction, capital improvements and leasing costs.

What it costs beyond the coupon

• Fees. Origination and exit fees are common, which is the gap between coupon and all-in yield above.
• A rate cap. Floating-rate lenders commonly require an interest rate cap so a jump in SOFR can’t wreck your coverage. Price it before you compare spreads.
• Extension tests. Initial terms are short, usually with extension options; on these seasoned books the weighted-average remaining term, extensions included, is under three years. Extensions usually come with conditions such as a debt yield or coverage test. Missing one is how good projects end up in a forced refinance.

CBRE says alternative lenders, mostly debt funds, closed 38% of the non-agency loans it originated or brokered in Q2 2026, the largest share of any lender group, up from 34% a year earlier. If your property already has stable income, a bank, life company or agency loan will almost always be cheaper.