When Your Loan Matures: A Bridge Loan for Commercial Real Estate Refinancing
A bridge loan in commercial real estate can pay off a maturing mortgage when the property can't yet qualify for the permanent loan you need. It is a short-term fix that buys time to raise income, finish work, or wait out a weak moment, then refinance into long-term debt.
It is not the only answer to a maturity, and it is not always the best one. Here is how to think about the choice.
Why so many owners face this now
The Mortgage Bankers Association's 2025 survey of loan maturity volumes found $875 billion of commercial mortgages scheduled to mature in 2026. The share coming due differs a lot by who holds the loan:
| Holder of the loan | Balance maturing in 2026 | Share of that holder's balance |
|---|---|---|
| Banks and other depositories | $396 billion | 21% |
| CMBS, CLOs and other ABS | $200 billion | 25% |
| Credit companies, warehouse and other lenders | $163 billion | 29% |
| Fannie Mae, Freddie Mac, FHA and Ginnie Mae | $39 billion | 4% |
Source: MBA. If your loan sits in one of the higher-share groups, you are in a crowded line of borrowers looking for new money at the same time.
Your three basic choices at maturity
When a loan comes due and the numbers don't support a clean refinance, most owners end up choosing among three paths.
1. Ask your current lender to extend or modify
This is often the cheapest path if it's available. Federal bank regulators have encouraged it. In a policy statement issued June 29, 2023, the FDIC, Federal Reserve, OCC and NCUA encouraged institutions to "work prudently and constructively with creditworthy borrowers during times of financial stress." That statement replaced the regulators' earlier 2009 guidance on commercial real estate workouts.
But encouragement is not a promise. The Federal Reserve's May 2026 Financial Stability Report said lenders' willingness to extend or modify maturing loans has helped limit forced sales so far, but "may be increasingly limited going forward," and flagged this as a particular concern in the non-agency CMBS market. A CMBS loan is run by a servicer bound by the deal documents, which usually leaves less room to bend than a bank has.
2. Take a bridge loan and refinance later
A bridge lender pays off the maturing loan and gives you a runway. The new loan is underwritten on where the property is headed, not only on today's income. When the property is stable, you refinance into permanent debt.
3. Sell
Sometimes the honest answer is that the equity is better used elsewhere, or that the plan to recover value is too long or too uncertain. Selling on your own schedule is usually better than selling on a lender's.
Extension, sale or commercial real estate bridge loan: comparing the options
| Question | Extension or modification | Bridge loan, then refinance | Sale |
|---|---|---|---|
| Who decides? | Your current lender or servicer | A new lender | The market |
| Typical cost | Often lowest, may need a paydown | Higher rate and fees | Transaction costs, taxes |
| Time bought | Whatever the lender agrees to | The bridge term plus any extensions | None needed |
| Keeps the property? | Yes | Yes | No |
| Biggest risk | The lender says no late in the process | The exit refinance doesn't work | Selling into a soft market |
Signs a bridge loan for commercial real estate makes sense
A bridge loan is worth a serious look when:
- The problem is temporary and fixable. Vacancy you can fill, deferred maintenance you can fund, a tenant rollover you can re-lease.
- You have a credible exit. You can show what a permanent lender would likely lend once the fix is done, and that amount covers the bridge.
- You have reserves. Bridge plans slip. You need cash to carry the property through delays and cost overruns.
- Your current lender won't extend, or will only extend on terms that are worse than a bridge.
It makes less sense when the property is already stable (just refinance), when the income problem is structural and has no fix, or when the only exit relies on a sale price the market hasn't shown.
The questions a bridge lender will ask
Expect to answer these, in writing, with numbers:
- What is the property earning today, and why?
- What exactly will change, and what will it cost?
- How long will that take, and what happens if it takes longer?
- What will the property earn once the plan is done?
- Who will refinance it then, and on what basis?
- How much of your own money is in the deal, and how much is in reserve?
Owners who show up with a clear answer to each tend to get better terms, or at least a faster, clearer no.
Start earlier than you think
The most common mistake with a maturing loan is waiting. A refinance, a bridge, or a negotiated extension all take time to line up: third-party reports, appraisals, lender review and legal work. Starting well before the maturity date gives you room to compare options, and gives you leverage with your current lender, who knows you have somewhere else to go.
Hypothetical example: an owner has a $15M loan maturing on a retail center that recently lost an anchor tenant. A permanent lender, looking only at current income, would lend well short of the payoff. The owner's choices are to ask for an extension, bring in a bridge lender who will underwrite the re-leasing plan, or sell. Starting early lets the owner test all three at once instead of taking whichever is left in the final weeks.
Where a broker fits
Northern Ridge Capital is a debt broker, not a lender. It works on loans from $5M to $30M and takes a property to the lenders whose programs match it, including bridge lenders. Its page on commercial bridge loan options explains how that works. Nobody can promise you an approval, a rate or a closing date, and that includes a broker.
FAQ
Can I use a bridge loan to pay off a maturing commercial mortgage?
Yes. Paying off a maturing loan is one of the most common uses. The bridge lender will want a clear plan for how its loan gets repaid, usually through a later refinance or sale.
Should I ask my current lender for an extension first?
Usually, yes, because it can be the lowest-cost path. Just don't make it your only plan. Explore a bridge or refinance at the same time in case the answer is no.
Is a CMBS loan harder to extend than a bank loan?
It often is. A CMBS loan is managed by a servicer who must follow the securitization documents, and the Federal Reserve has flagged extension capacity in non-agency CMBS as a particular concern.
How early should I start planning for a loan maturity?
Earlier than feels necessary. Lining up reports, appraisals and lender review takes time, and starting early keeps every option open.
A maturing loan is a deadline, not a verdict. Weigh the extension, the sale and the bridge loan for commercial real estate side by side, and pick the one whose exit you can actually defend.