Core Investment
A low-risk real estate investment strategy focused on high-quality, stabilized assets in primary markets with creditworthy tenants and long-term leases. Core investments are typically financed with low leverage and target returns of 6-9% IRR. They provide stable income with minimal operational risk.
Related Terms
Value-Add
An investment strategy focused on acquiring underperforming properties and increasing their value through renovation, re-tenanting, operational improvements, or repositioning. Value-add deals typically require bridge financing and target returns of 13-18% IRR. The strategy involves more risk than core investments but offers higher potential returns.
Stabilized Property
A property that has achieved a consistent level of occupancy (typically 90%+) and is generating predictable cash flow from operations. Stabilized properties qualify for permanent financing with the most favorable terms. The transition from lease-up to stabilization is a key milestone in the investment lifecycle.
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