What does it cost to hedge a floating-rate CRE loan?

What drives the price?

Implied SOFR volatility, the strike level (lower strikes are more expensive), the cap tenor (longer = more expensive), and the size of the cap. Banks that originate the loan typically also sell the cap; some sponsors source caps from third parties to verify fair pricing.

Are there alternatives?

Interest-rate swaps (lock to fixed) are an alternative on bank balance-sheet floating loans but rarely offered on bridge or CMBS floating debt. Sponsors can also accept the rate exposure (no hedge) where lender permits; this is rare on transitional deals where lender rate-cap requirement is non-negotiable.