---
title: Value Add Property
description: Investment properties that need corrective action to fully realize their value. Read more about Value Add Properties and other real estate terms here.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Value Add Property](https://www.realized1031.com/glossary/value-add-property)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 20, 2022 5:00:00 AM

Investment properties that need corrective action to fully realize their value. Value-add is a term given to describe one of the four major risk profiles of commercial real estate investment properties.

Value-add properties have a higher degree of risk, and higher potential returns, than [core](https://www.realized1031.com/glossary/core-property) and [core-plus](https://www.realized1031.com/glossary/core-plus-property) risk profiles, but less risk and lower potential returns than properties in the [opportunistic](https://www.realized1031.com/glossary/opportunistic-property) category. Properties in this risk profile may be experiencing below market occupancy or rental rates and may require substantial capital improvements and/or marketing efforts in order to attract new prospects and retain existing tenants.

[Total returns](https://www.realized1031.com/glossary/total-return) from value-add properties are generally projected to be split between income and appreciation. However, the exact breakdown of returns depends on degree of value-add activity which ranges from “light” value-add (in which returns would be more heavily distributed to income than appreciation) to “heavy” or “deep” value-add (in which total returns would be more skewed toward appreciation than income). Target holding periods for value-add properties are often in the short- to mid-term.

[View full post](https://www.realized1031.com/glossary/value-add-property)

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