Bridge if the property is not yet stabilized, the business plan requires flexibility, or your hold horizon is 1 to 3 years. Permanent if the property is stabilized, your hold is 5+ years, and you want long-dated fixed-rate non-recourse debt with predictable cash flow.
What is the actual decision?
Three questions decide it. First, is the property stabilized today? If not, bridge. Second, is the business plan going to materially change the property in the next 18 months? If yes (rehab, re-tenanting, lease-up), bridge. Third, is the hold horizon less than 3 years? If yes, the prepayment cost on permanent debt usually makes bridge cheaper despite the higher headline rate.
If the answers are: stabilized, no business plan changes, 5+ year hold, go to permanent (agency, life co, CMBS, or bank perm).
Sources
- Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) · Board of Governors of the Federal Reserve System · 2026-Q1
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1