Core-plus properties are generally similar to core properties, but have a slightly higher degree of risk and potential for slightly higher returns than core properties.
Examples of this difference may include the potential to increase net operating income (NOI) in the in the short- to mid-term by leasing a small amount of vacant space or backfilling a maturing tenant lease with one at a higher rate.
Properties within the core-plus risk profile are considered more conservative investments than those in the value-add or opportunistic profiles and are generally constrained to the “major” property types of multifamily, office, industrial and retail, though there may be exceptions.
Like core properties, those in the core-plus profile are typically of newer vintage and in good physical condition. Core-plus properties often have longer-term expecting holding periods and the majority of total returns are expected to be derived from current income with a much smaller component of returns from appreciation.
