What is the commercial real estate financing stack for investors?

Acquisition and repositioning run on bridge or hard money at 8.99%–13.5% interest-only (LTC on cost). Stabilized non-owner-occupied income assets exit to DSCR at 5.75%–10.5% or bank/CMBS permanent debt once NOI and occupancy support the refi.

When should CRE investors use bridge instead of DSCR?

Bridge when occupancy is below stabilized thresholds, CapEx or TI is required before lease-up, close must happen in 30 days or less, or T-12 NOI does not exist — DSCR and bank perm need executed leases and trailing income.

Can DSCR finance commercial investment property?

Yes — on qualified non-owner-occupied commercial and mixed-use files where property cash flow (not personal W-2) supports the note at DSCR ≥1.0. Rates run 5.75%–10.5% on stabilized or near-stabilized collateral.

How does bridge-to-perm work on a value-add CRE deal?

Bridge funds purchase plus CapEx at LTC during 12–24 month reposition. Once occupancy hits program thresholds (often 80%+ with 1.25x DSCR on trailing NOI), refinance into DSCR, bank, CMBS, or SBA permanent debt sized on stabilized LTV.

Blog

CRE Financing Stack — Bridge vs DSCR for Investors

Published June 12, 2026 · Updated July 18, 2026

By Jason Taken · Principal, Jaken Finance Group

CRE financing stack for investors — bridge at 8.99%–13.5% IO for value-add, DSCR at 5.75%–10.5% for stabilized non-owner-occupied income. Jaken Finance Group.

Commercial real estate financing for investors is a stack, not a single product. Jaken Finance Group structures non-owner-occupied files on two legs: bridge at 8.99%–13.5% interest-only for acquisition, CapEx, and lease-up; DSCR at 5.75%–10.5% (or bank/CMBS permanent) once trailing NOI and occupancy support long-term debt. This guide maps the CRE capital stack, bridge vs DSCR decision points, and what underwriters expect at each phase.

CRE financing stack at a glance

Phase	Product	Rate band	Sizing basis
Distressed / vacant acquisition	Bridge / hard money	8.99%–13.5% IO	LTC on cost stack
TI / CapEx / lease-up	Same bridge note	IO + draw schedule	Milestone inspections
Stabilized income hold	DSCR or bank perm	5.75%–10.5%	LTV on NOI, DSCR ≥1.0
Owner-occupied business	SBA 504 / 7(a)	Program rates	Business cash flow + real estate

Hub: commercial property loans by asset class · Bridge loans for investors · DSCR hub.

Stabilized vs value-add — product path

Profile	Underwriting input	Typical debt	Timeline
Stabilized (85%+ occ, T-12 NOI)	Trailing income	Bank, CMBS, DSCR	Close and hold
Value-add (sub-70% occ, CapEx)	Business plan + pro forma	Bridge 8.99%–13.5% IO	12–24 mo reposition
Mixed-use with residential units	Rent roll + commercial NOI	Bridge in, DSCR on stabilized units	Phased exit
Heavy TI before first lease	Scope + LTC	Bridge on cost	Draw-managed CapEx

Banks and agency permanent lenders want T-12 NOI and occupancy proof — not pro forma alone. Value-add CRE fails that test at purchase; bridge funds the gap between acquisition price and financeable stabilized value.

See commercial rehab loans — value-add CRE financing for LTC vs LTV mechanics.

Bridge vs DSCR — investor decision matrix

Signal	Bridge 8.99%–13.5% IO	DSCR 5.75%–10.5%
Occupancy under 70%	Yes — underwrite to pro forma	No — needs stabilized rent roll
Close in 30 days	Yes	21–30+ days typical
CapEx / TI before lease-up	LTC on cost stack	Limited renovation appetite
Executed leases + T-12 NOI	Overpaying on IO rate	DSCR wins
Sponsor self-employed / entity-heavy	Asset-based bridge	DSCR on property cash flow
Non-owner-occupied investment	Jaken Finance Group bridge programs	Jaken Finance Group DSCR programs

DSCR vs hard money vs conventional · Navigating commercial real estate financing.

Bridge is temporary carry — each month at 8.99%–13.5% IO without NOI growth burns equity. The stack only works when your business plan shows stabilized DSCR ≥1.0 (or bank 1.25x) within bridge term.

LTC on the way in, LTV on the way out

Strip center acquisition + tenant improvements:

Line	Amount
Purchase	$1,150,000
TI / CapEx	$320,000
Total cost (LTC basis)	$1,470,000
Bridge at 65% LTC	$955,500 at 11% IO ≈ $8,759/mo
Stabilized value (18 mo)	$1,820,000
Refi at 70% LTV	$1,274,000 — pays bridge + returns equity
DSCR refi at 7.25%	PITIA sized on trailing NOI, not pro forma

Size bridge to cost; size permanent debt to stabilized value and NOI. Mixing LTC and LTV at origination causes surprise equity calls at refi.

Run DSCR calculator with investor tax, insurance, and CAM reconciliations — not seller operating statements alone.

Draw schedule — CapEx release on CRE bridge

Draw	Trigger	Typical % of holdback
Closing	Acquisition funded	Purchase tranche
Draw 1	Lease executed + TI start	25%–30%
Draw 2	Midpoint inspection	30%–40%
Draw 3	Substantial completion	Balance
Final	CO / tenant open	Retainage release

Similar to fix and flip draw process but scoped to TI, building systems, and common areas. Budget 15%–20% TI contingency on retail and office value-add — underruns fund reserve; overruns extend bridge at 8.99%–13.5% IO.

Asset-class exit paths

Asset class	Bridge use case	Permanent exit
Multifamily 5+	Value-add, lease-up	Agency, CMBS, DSCR
Retail strip	Vacancy fill + TI	CMBS, bank, DSCR
Industrial	Dock, clear height, roof	Bank, CMBS
Mixed-use	Residential unit rehab	DSCR on stabilized units
Self-storage	C&S conversion	Bank, DSCR
MHP / RV park	Pad fill, PIP	Agency MHC, DSCR, bank

Succeeding in commercial real estate financing · Accelerating CRE investment success.

Owner-occupied business real estate may exit via SBA — see bridge now, SBA later for the stack when the sponsor occupies part of the building.

DSCR on commercial investment property

DSCR qualifies non-owner-occupied files on property cash flow, not personal W-2. On stabilized or near-stabilized CRE:

DSCR tier	Typical availability	Rate impact
1.25+	Standard programs	Best 5.75%–10.5% tier
1.0–1.24	Most DSCR lenders	Mid-tier
0.75–0.99	Select programs only	Premium

Permanent DSCR at 5.75%–10.5% replaces bridge when:

Executed leases — not LOI or verbal
Trailing NOI — often 3–12 months depending on program
Occupancy — typically 80%+ for bank; some DSCR programs accept lower with premium
Seasoning — confirm clock from note vs CO date before bridge close

When bridge beats bank on CRE acquisition

Scenario	Why bridge wins
Distressed occupancy	Bank needs T-12; bridge underwrites pro forma
Auction / off-market speed	7–21 day close vs 45+ bank timeline
Heavy CapEx before first dollar of rent	LTC funds cost stack; bank caps rehab
Entity sponsor with complex returns	Collateral-first bridge vs full personal financials
Mixed collateral condition	Code violations, deferred maintenance banks decline

When occupancy is 85%+ with clean T-12, bank or DSCR permanent typically beats 8.99%–13.5% IO — do not overpay for bridge on stabilized stock.

Common value-add financing mistakes

Mistake	Consequence	Prevention
Refi too early	Permanent lender declines — needs T-12	Wait for 80%+ occ and 1.25x DSCR on trailing NOI
Under-budgeting TI	Bridge extension at 11%–13% IO	15%–20% CapEx contingency
Mixing LTC and LTV	Equity call at refi	Size bridge to cost; exit to stabilized value
Skipping debt-service reserve	Extension denied when lease-up slips	Budget 3–6 months PITIA in structure
No written exit before bridge close	Indefinite IO carry	Confirm DSCR/bank terms in writing at LOI

Checklist for evaluating hard money proposals applies to CRE bridge files the same way as residential value-add.

File package — CRE bridge submission

Document	Purpose
Purchase contract / LOI	Price and timeline
Rent roll + lease abstracts	Current and pro forma NOI
Scope / TI budget + bids	LTC and draw schedule
T-12 or operating history	Baseline vs pro forma
Entity docs	LLC, OA, good standing
Exit letter	DSCR, bank, or CMBS refi path at 5.75%–10.5%
Insurance quote	Landlord / commercial policy

Incomplete packages queue behind complete files. Jaken Finance Group finances non-owner-occupied investment property — not owner-occupied primary homes or pure operating businesses without real estate collateral.