Generally speaking, the cap rate for a specific commercial property will rise over the years as new competitive supply comes online, while the subject property ages physically.
This assumes the new supply is equally or better located, designed and amenitized and thus more attractive to tenants in the market than space in the subject property.
For office, industrial and retail properties, all other tenant credit profile and lease characteristics equal (which they never are), the new (or newer) supply will likely have leases in place that have more initial-term lease years remaining than the subject property (vs. option-term lease years, which may or may not be exercised, and whose exercise does not have a lot of advance visibility to the owner).
Remember, buyers of income-producing properties are buying cash flow streams, so on the margin (assuming all else equal), they will pay a higher purchase price for real estate cash flows in which there is a greater perceived level (longer term) of certainty, as well as for a physically newer asset, thus they will pay a lower cap rate.
So when we model the future sale of a property, it is realistic to assume that buyers would only be willing to pay a relatively lower cap rate as each year passes.
If the transaction modeled as such still returns an attractive IRR, then there is only upside should the market and asset class be particularly hot at the point of sale, and the property sale price ends up achieving an equal or lower cap rate than that at which it was acquired.
If the transaction IRR is attractive only if the exit cap rate is equal or lower than the purchase cap rate, you might want to pass on the purchase.