Overview
Rate exposure is the single largest risk on most CRE loans. Engineering it deliberately, through caps, swaps, buy-downs, and timing, is the difference between a deal that survives a rate move and one that doesn't. This hub aggregates the rate-engineering playbook, the cap-pricing tool, sibling Q&As, and glossary.
Why this matters
Modern sponsor practice: a written rate-management policy that addresses cap RFP process, strike selection, ISDA infrastructure, and rate-lock timing. This hub walks through each component.
How to use this hub
Start with the rate-engineering playbook for the framework. Use the cap-pricing + buy-down estimator on specific deals. Drop into the Q&A library for cap RFP mechanics, swap breakage math, or ISDA basics. Reach the glossary for terminology.
Pillar guide
Sponsor-side tool
Sibling Q&As
How does a sponsor run an RFP for a rate cap on a CRE bridge loan?
Run a rate-cap RFP by simultaneously soliciting indicative quotes from three to five qualified hedge providers (banks, investment banks, specialty hedge advisors) on the same day with the same notional, strike, term, and reference index.
How should a sponsor pick the right strike on a CRE rate cap?
Set the cap strike at the SOFR level where the loan's debt yield falls to the lender's covenant floor, protecting the deal's covenant compliance, not just.
How is swap breakage cost calculated on a CRE loan?
Swap breakage cost is the present value of the rate differential between the swap's fixed rate and the current market swap rate over the swap's remaining term.
How does a forward-starting swap work for a CRE refinance?
A forward-starting swap locks the fixed rate today for a future-dated loan.
What ISDA basics should a CRE sponsor know before executing a rate cap or swap?
Sponsors executing caps or swaps need an ISDA Master Agreement, Schedule, and Credit Support Annex (sometimes).
Glossary
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