REIT - IRR

Real estate investments can generally be put into three classes: Core, Value-added, or
Opportunistic.

Core investments are safe, stabilized properties that generally produce steady
income streams and have low risk.
For core assets, investors generally seek an internal rate of
return (IRR) of between 8 percent and 12 percent.

Core-plus or value-added properties generally
require direct equity participation and operational expertise. This may include renovating or
repositioning a property to create a stable cash flow that generates property appreciation.

The IRR target for value-added properties is 12 percent to 16 percent. Opportunistic investments generally involve a major capital injection into a failing property and are furthest along in the risk spectrum
.
For opportunistic deals, the IRR goal is 20 percent or higher.