Hedge
Michael R. Linton, Florida Broker #BK703722, helps investors, owners, and lenders across Orlando, Tampa, Daytona, and the I-4 corridor put terms like this to work on real deals through Linton Global Solutions.
A hedge is a financial position taken to offset a specific risk. In commercial real estate it usually means protecting a floating-rate loan against rising interest rates with a rate cap or swap.
Floating-rate loans, often priced off SOFR, get more expensive when rates rise. A hedge sets a ceiling or fixes the rate, so a rate spike doesn't wipe out cash flow. Many bridge lenders require one.
Common Hedges
- Interest rate cap: an upfront payment buys protection if the index rises above a strike rate. You keep the benefit if rates fall.
- Interest rate swap: exchanges floating payments for fixed. No upfront cost, but breaking it can be expensive.
- Collar: a cap paired with a floor to reduce cost.
What to Watch
Caps expire, and replacement caps can cost far more when rates are high, so lenders often require escrows for them. Match the hedge term to the loan, and make sure the counterparty meets the lender's credit requirements.
A Hypothetical Wesley Chapel Example
A sponsor finances a value-add apartment deal in Wesley Chapel with a floating-rate bridge loan. In this example, the lender requires a two-year SOFR cap. When rates rise, the cap pays the difference above the strike, keeping debt service within budget. Hypothetical scenario.
From the Desk
A hedge isn't a bet on rates. It's insurance so your business plan survives the rate you didn't predict.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39+ years of experience closing commercial real estate transactions across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Hedge Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years of closed Florida CRE transactions with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Stress-Test the Debt
See how rate moves change coverage.
Frequently Asked Questions
What is a hedge in real estate?
A position that offsets a risk, usually rising interest rates.
Cap or swap?
A cap protects above a strike for an upfront cost; a swap fixes the rate.
Do lenders require hedges?
Often on floating-rate bridge and construction loans.
What happens when a cap expires?
It may need to be replaced, sometimes at a much higher cost.
What index are caps based on?
Typically SOFR for new U.S. loans.
Article Summary
A hedge protects against risk, mainly rising rates on floating debt. Caps and swaps are the common tools, and many lenders require them.
Key Takeaways
- ✓Offsets a specific risk.
- ✓Caps: ceiling for a fee.
- ✓Swaps: floating to fixed.
- ✓Often lender-required.
- ✓Plan for cap replacement cost.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
Ready to Talk About Your Hedge Deal?
Get a free consultation with Michael R. Linton — 39 years of CRE experience. Zero pressure.
Schedule a Free ConsultationWorks Cited
- Federal Reserve Bank of New York. "Secured Overnight Financing Rate (SOFR)." New York Fed, https://www.newyorkfed.org/markets/reference-rates/sofr. Accessed Oct 4, 2026.
- Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 4, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.