Bridge replaces the senior loan entirely; mezzanine adds a junior layer behind the existing senior. Bridge fits when the senior is at-market or above and prepayment friction is manageable. Mezz fits when the senior is locked at favorable rate or has heavy prepayment friction worth preserving.
When does bridge dominate?
When the existing senior carries an at-market coupon and modest prepayment friction. Replace the senior with a single bridge loan that gives the sponsor 18 to 36 months of optionality at a known cost. Single-lender execution is faster and simpler than layering mezz behind a senior.
When does mezz dominate?
When the senior carries below-market rate (e.g. 2020 to 2022 vintage) that would cost millions in defeasance or yield maintenance to break. Mezz preserves that economic value and adds incremental proceeds at a higher marginal cost, but a lower blended cost across the full stack.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1