Companion to: Real Estate Decoded Chapter 14 (Industrial / Logistics) - Workbook tab 04_Industrial
Inputs
Outputs
Annual base rent
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Effective income (after vacancy)
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Asking cap rate
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Market cap (product + WALT adjusted)
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Implied fair value
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Pricing vs. market
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How to read this tool: Industrial is now the largest institutional real-estate sector by AUM. Last-mile (Prologis, Rexford, Terreno class) trades sub-6%; big-box bulk runs 6-7%; manufacturing 7.5%+ given location and contamination risk. The tool adjusts for product type AND WALT.
What this tool is for
Industrial cap rates compressed materially 2018-2022 then widened modestly post-2022 rate cycle. The institutional buyer pool is concentrated: Prologis, Blackstone, Brookfield, GIC, Singapore-based Mapletree, and a handful of European pension allocators. This tool lets you price-check against that universe.
Benchmarks the practitioner watches
- Last-mile infill: 5.5-6.0% (institutional bid)
- Big-box bulk: 6.0-6.5%
- Manufacturing/heavy: 7.0-8.5%
- Flex / R&D: 6.5-7.5%
- WALT premium: 15+ yrs subtracts 25bps; sub-5 yrs adds 50bps
Common mistakes
- Treating cold-storage as same-cap as dry industrial - it's structurally premium
- Underwriting market rent without checking actual recent comps (CoStar)
- Ignoring functional obsolescence: 24' clear height in last-mile = institutional non-investable
- Missing the truck-court depth and trailer-stall economics for last-mile
Educational reference only. Not investment, tax, legal, or real-estate advice. Confirm market-specific cap rates, lender terms, and tax overlay with your own advisors before acting.