Have heard this term thrown around recently by institutional groups with different buckets of capital for different risk strategies.
Curious how folks would define a "value-to-core" strategy. Would purchasing a new construction partially leased project in a core location, stabilizing, and holding at a core-type stabilized yield qualify?
Most funds (never say never) would purchase a value add asset for core yields. They will purchase a value add asset, stabilize it, and sell it with a yield that reflects the stabilization of the asset. If you purchased new construction, partially leased in a core location - I would qualify this as a value add play which can become core if it stabilizes.
Has anyone ever purchased a value-add/opp deal with no aspirations of it ending up core? "Build to core", "value to core"... of course they want it to stabilize so I don't get why these terms get thrown around so much.
Because it sounds cooler when you're out raising capital. You're right though
I've seen it used for Tier I markets only (develop to core)
Rent stabilized building on the Upper East Side with below market tenants--->legal war to evict/force tenants into favorable buyouts--->rennovate above $2,700 per month and convert to free market--->core. Not in the sense of being institutional grade core but in the sense of having a family office/some rich Chinese dude pay for "core."
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