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.
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.
Permanent Financing
Long-term debt (5-30 years) secured by stabilized commercial real estate, underwritten primarily on current cash flow. Permanent loans offer lower rates than transitional financing and are available from life companies, banks, agencies, and CMBS lenders. They are the typical "take-out" financing after construction or bridge loans.
More Property & Investment Terms
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