Real Estate Executive
You Bought at a 5.2% Cap Rate.
The Market is Now at 6.5%
Your $225M portfolio is now worth $173.5M on paper. The LP meeting is next week, and they're going to ask why their marks are down $51.5M. Your presentation needs to explain cap rate expansion—and your hold vs. sell strategy.
The Cap Rate Expansion Problem
Same NOI, dramatically different values
PURCHASE (2021)
5.2%
Cap Rate
$225M
Portfolio Value
+130 bps
Expansion
CURRENT (2025)
6.5%
Cap Rate
$173.5M
Portfolio Value
The Math That Erased $51.5M
$11.7M
Annual NOI (unchanged)
÷ 5.2%
2021 Cap = $225M
÷ 6.5%
2025 Cap = $180M
Your properties generate the same income. They're just worth 23% less.
Asset-by-Asset Impact
Where the value erosion hit hardest
| Property | Type | Purchase | Buy Cap | Now Cap | Current Value | Paper Loss |
|---|---|---|---|---|---|---|
| Gateway Office Tower | Office | $42M | 5.1% | 7.2% | $30M | -$12M |
| Riverside Retail Center | Retail | $28M | 5.4% | 6.8% | $22.4M | -$5.6M |
| Industrial Park West | Industrial | $65M | 4.8% | 5.9% | $52.9M | -$12.1M |
| Metro Apartments | Multifamily | $38M | 4.5% | 5.4% | $31.7M | -$6.3M |
| Tech Campus North | Office | $52M | 5.2% | 7.4% | $36.5M | -$15.5M |
| Portfolio Total | $225M | 5.2% | 6.5% | $173.5M | -$51.5M | |
Hold vs. Sell: The LP Question
What your presentation needs to answer
HOLD THESIS
Cap rate reversion (3yr)-80 bps
NOI growth projection+3.2%/yr
Projected 2028 value$198M
Unrealized gain+$24.5M
Wait for cap rate compression cycle
SELL THESIS
Crystallize current value$173.5M
Redeploy to 7.5% assets+$2.3M NOI
Avoid further expansion-Risk
Tax loss harvesting$12.8M
Cut losses and redeploy capital
CRE KPIs LPs Track
Weighted Cap Rate
6.5%
Target: <5.5%
DSCR
1.18x
Target: >1.25x
Occupancy
91.2%
Target: >95%
LTV
68%
Target: <65%
Cash-on-Cash
6.8%
Target: >8%
IRR (Projected)
11.2%
Target: >15%
Source: CBRE Cap Rate Survey Q4 2024, NCREIF Property Index
TRANSFORM YOUR OPERATIONS
Present the Full Picture to LPs
SlideStrike connects to your property management and accounting systems to show exactly where value shifted—and your strategy to recover it.
Asset-by-asset cap rate tracking with market comps
Hold vs. sell scenario modeling with IRR projections
LP-ready quarterly reporting with mark-to-market analysis
Market cycle positioning and reversion forecasts