Core Investments

Core investments in real estate refer to the least risky category of real estate investment, typically characterized by the following attributes:

Stability: Core properties are usually in developed and established markets, often in central locations of major cities. They are often fully leased to high-quality, creditworthy tenants which leads to stable cash flows.

Quality: These properties are often newer or have been recently renovated, and are in good condition requiring little to no immediate maintenance or improvements.

Low Leverage: Core investments typically involve lower levels of debt compared to other investment types. This lower leverage decreases risk but also means potentially lower returns.

Long-Term Hold: Investors in core properties generally plan to hold onto the property for a long time, often several years, and rely on the stable income stream from rent rather than quick capital appreciation.

Lower Returns: Because of their stability and lower risk, core investments generally offer lower returns compared to more risky real estate investments, such as value-add and opportunistic investments. The returns are primarily from income rather than capital appreciation.

Examples of core investments include high-quality office buildings, retail properties, and apartments in major markets that are leased to stable tenants. Core investments are generally favored by institutional investors, such as pension funds, who seek stable, predictable returns with low risk.