Strategy
Overview
The US real estate market has followed this pattern since the 1800’s. The entire cycle lasts about 14 to 18 years from beginning to end unless we experience a unexpected global disruption like a sizeable geopolitical event or highly accelerated and restrictive monetary policy. As of June 2024, we believe we are somewhere between the end of Phase III and the early stages of Phase IV.
Real Estate Investment Options
There are basically four real estate investment options,
Core Strategy
Core real estate strategy is an investment approach targeting low-risk, stable, high-quality properties in prime locations, focused on generating reliable income with less emphasis on capital appreciation. It typically involves investing in properties with high occupancy rates, creditworthy tenants, and stable income. They are on the lowest end of the risk-return spectrum.
Core-Plus Strategy
A Core Plus investment approach selects superior assets akin to core properties, but with value-add potential through differentiated factors—like prime assets in emerging markets or those requiring modernization in established areas. Such assets are anticipated to sustain their value and exhibit resilience during economic downturns. They carry a higher risk-return profile relative to core investments.
Value-Add Strategy
A Value-Add investment strategy focuses on enhancing an asset’s cash flow primarily through renovations, complemented by improved operational management. Returns are propelled by the appreciation achieved through strategic upgrades. Typically, business plans for Value-Add properties entail divesting the asset once the value increase is realized. Positioned near the top of the risk-return spectrum, Value Add investments bear less risk than opportunistic strategies but the opportunity for substantial returns relative to Core or Core Plus.
Opportunistic Strategy
Opportunistic investment strategy encompasses new construction, comprehensive redevelopment, or transformation of use. Sitting at the apex of the risk-return scale, these investments have the potential for significant returns but come with an extended risk horizon.
Strategy Specifics
Our strategy contains elements that are proprietary in nature. We welcome the opportunity to delve into them in person. To explore the details of our approach, we invite you to schedule a consultation with us.