Capital sourceMortgage REIT capital: balance-sheet bridge money for deals banks won't move on
Mortgage REITs lend their own balance-sheet capital as short-term, floating-rate bridge and transitional debt for value-add and time-sensitive CRE deals. They go higher on leverage and close faster than banks, at a premium price. North Bay Capital is a brokerage that sources and places this capital, then helps map the exit into permanent financing.
Mortgage REITs (also called debt REITs) are balance-sheet lenders that fund commercial real estate directly from their own capital, focused on bridge and transitional loans rather than stabilized permanent debt. Because they aren't deposit-funded or bound by bank regulatory limits, they can offer higher leverage, faster closings, and business-plan underwriting that banks and agencies won't touch — in exchange for higher pricing and floating-rate terms. North Bay Capital is a commercial mortgage brokerage; we source and place this capital on your behalf and structure the takeout, we are not the lender ourselves.
- Value-add multifamily and commercial acquisitions that need renovation, lease-up, or rent growth before they qualify for agency or bank debt
- Transitional assets with current vacancy, deferred maintenance, or below-market rents that a stabilized lender will pass on
- Time-sensitive closings, off-market or auction buys, broken-contract deals, and 1031 exchange windows banks can't hit
- Higher-leverage business plans where bank loan-to-cost falls short and you need 75-80% to make the deal pencil
- Non-recourse bridge requests where a borrower wants to avoid a full personal guarantee while executing a clear two-to-three-year plan
- Mortgage REIT money is priced at a premium to banks and life companies. On a clean, stabilized, low-leverage deal, a bank or agency execution will almost always beat it on rate and fees, so it is the wrong tool when you do not need speed or leverage.
- It is overwhelmingly floating-rate over SOFR. Your debt service moves with the index, and most lenders require a rate cap you pay for up front. If you cannot underwrite a higher-rate environment or the business plan slips, that exposure can erode returns.
- These are transitional, short-term loans (typically 1-3 years with extensions), not permanent debt. They only make sense with a credible exit, a sale or a refinance into a bank, agency, CMBS, or life-company loan once the property stabilizes. Going in without a mapped takeout is the most common way borrowers get squeezed.
Mortgage REIT capital — questions
What is a mortgage REIT and how is it different from a bank?
A mortgage REIT is a publicly or privately held entity that lends its own balance-sheet capital against commercial real estate, mostly for bridge and transitional deals. Unlike a bank, it is not deposit-funded or subject to the same regulatory leverage limits, so it can go higher on proceeds, move faster, and underwrite a business plan rather than just trailing cash flow. The trade-off is price: you pay more in rate and fees for that flexibility and speed.
How much leverage can a mortgage REIT provide?
More than a bank in most cases. We typically see up to 75-80% loan-to-cost on value-add and transitional deals, and many lenders will structure to roughly 70-75% loan-to-as-stabilized-value, often with future-funding for capital improvements and leasing. Higher-leverage structures with mezzanine or preferred equity behind them can push total proceeds further. Actual proceeds depend on the asset, the market, and how credible the business plan is.
Are mortgage REIT loans recourse or non-recourse?
Most are non-recourse with standard bad-boy carve-outs, which is a key reason sponsors choose this capital over bank debt that often wants a personal guarantee. Some lenders will offer better pricing or proceeds in exchange for a partial guarantee or a completion guarantee on heavy construction. We negotiate the recourse and carve-out language as part of placing the loan.
How fast can a mortgage REIT close?
Faster than a bank or agency execution, commonly 2 to 4 weeks from a complete package once terms are agreed, because the decision sits with one balance-sheet lender rather than a loan committee and a credit department. We keep your file lender-ready, diligence, model, and sponsor docs, so the timeline holds when speed is the whole point of using this capital.
Let's find the right capital for it.
Tell us about the asset and the business plan — we'll source and place the financing across our lender network.