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.
Related Terms
Bridge Loan
Short-term financing (typically 1-3 years) used to "bridge" the gap between acquisition/repositioning and permanent financing. Bridge loans are ideal for value-add strategies, lease-up, renovation, or properties that don't qualify for traditional permanent financing. They feature higher rates and more flexible terms than permanent loans.
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.
Opportunistic
A high-risk, high-return investment strategy involving ground-up development, major repositioning, or distressed acquisitions. Opportunistic investments target returns of 18%+ IRR and often involve significant construction or lease-up risk. They require specialized expertise and typically use higher leverage with more expensive capital.
More Property & Investment Terms
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