What is the typical loan-to-value (LTV) range for logistics assets?

The loan-to-value (LTV) ratio is a critical metric in real estate finance, indicating the proportion of a property's value that is financed through a loan. For logistics assets, the typical LTV range tends to be between 55-70%. This range reflects the assessment of risk versus the stability and income-generating potential of logistics properties, which often serve as essential components of supply chains for various industries.

Logistics assets are generally viewed as favorable investments due to their demand and the growing significance of e-commerce and efficient distribution networks. Lenders feel more comfortable extending credit in the 55-70% range because these properties tend to have reliable cash flows and long-term leases with tenants, reducing the perceived risk.

Higher LTV ratios, such as those in the 75-85% range, would generally apply to less stable or higher-risk assets, while lower ratios would indicate a more conservative lending approach, often reserved for more volatile markets or asset classes. The 50-60% range is also considered conservative but is less common for logistics properties that typically showcase stronger market fundamentals. Therefore, the range of 55-70% accurately reflects the balance lenders seek between risk and the financial viability of logistics assets.