Definition
A property requiring operational or physical improvements to increase its income and value, typically involving renovations, better management, or repositioning. It's the investment thesis that assumes you're smarter than the previous owner—sometimes correctly.
Example Usage
This value-add opportunity just needs new flooring, fresh paint, and competent management to bump rents by $200 per unit—assuming the foundation issues are superficial.
Origin
Commercial real estate investment terminology from the 1980s-90s
Fun Fact
Value-add properties occupy the sweet spot between stabilized and opportunistic investments, offering higher returns than Class A properties but less risk than complete redevelopments—in theory.
Related Terms
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See “value-add” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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