Bridge vs permanent

The single most expensive mistake in real-asset debt is choosing the wrong facility for the stage of the asset. Bridge and permanent debt are both legitimate tools, but they solve different problems.

Use bridge debt when speed matters and there is a defined exit. That means acquisition financing where you need to close in 30–60 days, construction completion where permanent debt is not yet available, or a value-add strategy where you will stabilise and refinance within 12–18 months. Bridge is expensive — often 200–400 bps over permanent — but it buys you time.

Use permanent debt when the asset is stabilised and you want to lock in long-term cost. That means full occupancy, contractual cash flows, and a business plan that does not rely on a near-term refinance. Permanent debt is cheaper, longer, and usually carries prepayment penalties that make it costly to exit early.

The wrong choice in either direction is painful. Take permanent too early and you pay breakage or prepayment penalties when you refinance after value-add. Take bridge too late and you bleed margin every month while you hunt for permanent debt that should have been locked at completion. Match the facility to the asset stage, and model the all-in cost of each path before you sign.