I'm currently applying/interviewing for companies in the multifamily sector. Seems like the companies that do value add are a dime a dozen.
I would imagine that many of the OMs for these types of properties have Pro-formas with the "added value" already baked into the offering price. Was curious of what people were seeing out there.
| +101 | Is anybody just going to leave the industry? | 35 | 2h |
| +32 | CRE Recruiting for a Career - crazy? | 8 | 7h |
| +26 | Multifamily firms collpasing in Dallas whose next? | 8 | 2d |
| +22 | Exits from REPE | 11 | 1d |
| +19 | Arbor Realty Trust in 2026 | 10 | 5h |
| +18 | LOI Underwriting / Due Diligence | 1 | 6h |
| +15 | NYC Real Estate Job Market | 5 | 2d |
| +14 | Q3/Q4 CRE Job Market Optimism (or lack thereof) | 5 | 2d |
| +10 | Do REPE SA/VP/Dir expect base/bonus bump annually or is 'bump' inherent in carry? | 1 | 9h |
| +9 | Red Flag? Commissions-only acquisitions roles | 2 | 47s |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Depends. "Value add" is so generic that every firm is going to claim they do it. Otherwise how do you justify buying a property? By it's very definition, except in end-buyer cases like life insurance/mutual funds/whatever, any developer buying a property or portfolio is engaging in value add.
4 years ago there were tons of "value add" developers in NYC, specifically the Bronx, who were just going in and cutting expenses to the bone in the expectation of selling the property in a couple years with a higher NOI. Those people obviously aren't adding any value. If the firm you're looking at has a plan to capture value they'll be able to explain that pretty succinctly.
.
I work in the Value Add space and it is indeed overheated. Demand for this product and crazy pricing is causing returns on many deals to approach 13% deal level IRRs in good locations. At that point, you might as well target core plus deals.
Another challenge is that there is no physical value add left. Everything has been renovated. Buyers are now underwriting replacing stainless steel appliances with slate, or granite counters with quartz.
These are 70s deals and people are underwriting high rents with luxury interior finishes. It won't last. I'm currently trying to get out.
I agree with deals being overbid constantly. Tough to win deals that pencil with prudent underwriting. I don't agree that there's nothing left though for workforce value-add. Literally opportunities everywhere, just tough to get them at the right price.
Et nulla suscipit debitis quisquam. A voluptatem numquam voluptas earum eum. Itaque nam laudantium fuga dolor.
Mollitia ut voluptates quibusdam. Magnam autem maxime sapiente. Eaque ab pariatur et veritatis ad. Et voluptatem eum rerum veniam optio labore.
Consequatur sed facilis quod est corporis rerum. Excepturi est doloribus suscipit ea et. Qui maxime modi veniam illum sapiente similique.
Doloribus molestiae mollitia aut repellendus dignissimos cum fuga harum. Nulla ut consectetur magni ad fugiat. Asperiores velit assumenda nostrum voluptate qui id quaerat. Voluptatum inventore ullam sint. Quibusdam sint quisquam omnis unde. Ea est necessitatibus cupiditate voluptate omnis incidunt perferendis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...