Which asset class has a typical LTV ratio of 50-55%?

The asset class characterized by a typical loan-to-value (LTV) ratio of 50-55% is alternatives. In real estate finance, LTV ratio is an important metric used to assess the risk associated with a loan; it expresses the ratio of a loan to the value of the collateral securing that loan.

Alternative assets may include non-traditional real estate investments such as student housing, healthcare facilities, and self-storage units. These assets often carry higher risk compared to more conventional asset classes like logistics, office spaces, or data centers, which may allow for higher LTV ratios. This typically results in lenders requiring a lower LTV to protect against potential downturns in the market or variations in investment performance, hence the 50-55% LTV range.

In contrast, logistics and data centers may have varying LTV ratios depending on market conditions and demand, as they are increasingly viewed as essential assets in the current economy, which can allow for slightly higher leverage. Traditional office spaces often have similar financing structures to logistics but can vary significantly based on location and market conditions. These factors contribute to the understanding that alternatives typically see a lower LTV ratio as a standard practice in real estate finance.