Different investment opportunities exist for every investor’s needs and risk tolerance.
Core Real Estate Investments – Core is the safest investment play. These are assets that are fully stabilized in primary markets. They are newly constructed Class A properties in prime locations with high credit score tenants. Stability, predictable cash flow, low capital expenditure and low risk tolerance attract many investors to this type of investment.
Core Plus Real Estate Investments – Core Plus targets stabilized properties that are typically Class B in good locations. They are not as newly constructed as Core properties and sisk level tends to be low to moderate but returns tend to be greater than Core.
Value-Add Real Estate Investments – Value-Add investments have little to no cash flow on acquisition. They are higher-risk investments and their upside opportunities lie in forced appreciation by upgrading to Class B assets. These properties might have significant mismanagement and vacancy issues. The upside opportunities on these properties attract greater returns and investors with a higher risk tolerance.
Opportunistic Real Estate Investments – These investments involve assets that are either fully vacant or offer development opportunities. These investments could take several years of development before successful completion. For investors with high risk tolerance and proven long term strategies, this investment type offers the highest level of return.