Core, Core Plus and Value-Add: Breaking down real estate investment strategies

Commercial real estate equity investments can be classified into three strategies:

  • Core — Generally lowest risk and target returns 

  • Core Plus — Generally low-to-moderate risk and target returns
  • Value-Add — Generally moderate-to-higher risk and target returns 

The properties backing these investments differ on the basis of property location, property conditions, management effectiveness and quality of tenants. 

Here is what investors need to know about each strategy. 


Core real estate investments are high-quality, low-risk assets that offer the most stable and consistent cash flow. These properties are typically fully leased buildings in high-quality locations and require very minimal, if any, upgrades. The property’s tenancy is also very stable, with residents generally choosing to renew leases consistently. Property owners often don’t have to worry about large scale renovations, which keeps the capital expenditure budget to extract value from the investment relatively low.

Core real estate investments often get compared to bond investments because they’re able to generate stable cash flow with very little asset management. Moreover, the majority of the expected return is generated through cash flow from the property rather than price appreciation. Given the lower risk profile however, core properties tend to generate lower returns than Core Plus and Value-Add opportunistic strategies, which are discussed below. 

Core Plus

Core Plus properties aren’t as stabilized as core real estate, but they’re also not in need of a total overhaul. They generally have a greater amount of untapped potential in comparison to Core properties. For example, owners can often increase cash flow through light renovations, improving management efficiencies and managing quality of tenants. The business plan to extract maximum value from these types of properties is more extensive than Core properties but can also result in higher appreciation of the asset over time. Given the additional effort and risk involved with getting these properties to their optimal form, investors can often expect higher potential returns from Core Plus properties than from Core investments. 


The third type of real estate investment strategy is with Value-Add opportunistic properties, which generally provide the greatest returns but at the expense of additional risk associated with the cost of improvements. These are often buildings in need of more renovations but upon completion of these improvements, these properties are expected to be leased at higher rents and their valuations are likely to increase, which will be passed onto investors at the time of sale. While Value-Add properties carry more risk, Yieldstreet applies conservative underwriting assumptions to assess the quality of each offering and only seeks to acquire Value-Add properties in areas that have strong economic and employment fundamentals, and are supportive of property valuation increases.

How helpful is this content?

Share this article:

Join a community of 400,000+ members

  • Gain access to unique offerings previously reserved for the ultra-wealthy

  • Customize your portfolio for income, growth, or a balance of both

What investors are saying about Yieldstreet

Apr 2022

The due diligence, risk management, and product education materials are thorough, excellent, and easy to use and understand.

Manoj J
Member since 2019
Apr 2022

Excellent and unique selections that I can't find elsewhere.

Jonathan S
Member since 2019
Apr 2022

The platform delivers in a very concise manner. Easy to get a clear understanding at a glance from the web or mobile app.

Tim S
Member since 2021
The testimonials presented on this page have been provided by actual investors in Yieldstreet funds without compensation. Yieldstreet has selected the testimonials, and certain testimonials have been edited to remove personally identifiable information and for brevity. Testimonials were not selected based on objective or random criteria, but rather were selected based on Yieldstreet's understanding of its relationship with the providers of the testimonials. The uncompensated testimonials presented here may not be representative of other investors' experiences, and there can be no guarantee that investors will experience future performance or success consistent with the testimonials presented.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.8B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.