What is the typical exit cap rate range for logistics investments?

The typical exit cap rate range for logistics investments is widely understood to be between 3.75% and 5%. This range reflects the current market dynamics in the logistics sector, which has seen increased demand due to the growth of e-commerce and changing supply chain needs.

Investors often favor logistics properties for their strong fundamentals, such as long lease terms and high occupancy rates. Consequently, these properties are perceived as lower risk compared to other asset classes, justifying a lower cap rate. Cap rates are inversely related to property values; lower cap rates typically indicate a higher market valuation and investor confidence in the property type. The logistics sector, with its robust performance, often aligns with this valuation trend, resulting in the specified exit cap rate range.

While the other options reflect cap rate ranges that may apply to different real estate sectors, they do not accurately correspond to the current market conditions for logistics properties.