Where Do You Stand: Value-Add or Finished Product?
The marketplace is dividing into two distinct segments: value-add and finished product. This is what Institutional Property Advisors (IPA) broker Peter Von Der Ahe sees, and depending on whether you are a buyer or seller, which side of the dividing line you need to be. Peter says that both of those terms speak to the quality of the renovation and the overall asset, but more distinctly, they speak to the percentage of free-market tenants in those buildings. With the passage of 2015 rent regulations, Peter says that the business plan you would enact for a largely rent-stabilized building will be very different from the one you would create for a largely free-market building. He adds that every way you make decisions in the future will sync up with the way you view those two categories: the way you see risk, your opinion of political policies, and the returns you seek. Peter says that IPA is selling a fair amount of free market product, as well as the bread-and-butter buildings with more stabilization built into them. For more information on our Bisnow partner, click here.
