Carpathian Capital says exit cap rate assumption drives most private real estate IRR risk
Carpathian Capital Management flagged exit cap rates as the main driver of projected private real estate IRRs in sponsor models. Example model used USD 1 million NOI, a USD 17 million cost, USD 12 million interest-only debt at 6%, a five-year hold. An exit cap rate shift to 6% from 5.5% cut investor proceeds to USD 6.1