What is Core, Core Plus, Value Add and Opportunistic?
Real estate categorizes the general risk/reward of a property into four different asset profiles.
- Core: Lowest Risk/Lowest Reward - These properties require no renovations and are often positioned in prime markets with high occupancy.
- Core Plus: Lower Risk/Lower Reward - These properties might require some renovations, with below market rents, and some vacancy.
- Value Add: Medium-to-High Risk/Medium-to-High Reward - These properties entail renovations or re-tenanting to bring the property up to market.
- Opportunistic: Highest Risk/Highest Reward - These properties will require major renovations or a ground-up development.