What is exit cap rate?

What is Exit Cap Rate?

In real estate investment, the exit cap rate refers to the projected capitalization rate at which an investor expects to sell a property in the future. It's an estimate of the potential selling price based on the property's anticipated net operating income (NOI) at the time of sale and the expected market conditions. The exit cap rate is crucial for calculating the potential return on investment and for strategic planning, as it affects the estimated profit or loss when the property is sold. It typically differs from the going-in cap rate due to changes in the market and property conditions over the investment period.