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Value-Add Strategy
A value-add strategy seeks to improve property performance through active management, such as leasing or repositioning. The label describes an approach, not a completed result.
A value-add strategy seeks to improve an investment property's performance through active management. INREV's value-added fund-style definition describes a mix of income and capital appreciation, with activities such as leasing, repositioning or redevelopment. The label describes the approach, rather than a completed improvement or a promised return.
For a PM company owner or operating leader, an illustrative application is separating the owner's proposed leasing or property-improvement plan from the tasks the management team is authorized to deliver. Record intended changes, assumptions, responsibilities and review points. Renovation underwriting evaluates a proposed project's costs and results; the strategy states the broader approach.
Source: INREV Global Definitions Database: Value-added (INREV Style).
Frequently Asked Questions
Does value-add mean renovation only?
No. INREV also identifies active leasing and repositioning. Describe the specific activities in the owner's plan rather than treating every maintenance task as a value-add project.
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