The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
Effective management is an effective value add for any sort of industrial real estate property. Not just active everyday management, but making physical, economic, or legal changes to the property to add value to the piece of real estate as a whole. In some instances, properties that are sold with little value add can turn out to be a value add in the long run which can yield better returns for your investment.
Richard Wilson: What are some ways that you can add value to an industrial real estate property as an investment firm?
Robert Borris: Well, here again, adding value really comes in effective management, making some kind of change – physical, economic, legal sometimes – are that’s where you really get some value added to properties. And that’s what you want to look for. You want to look for, there’s a term in the real estate business called “value add” where you can add something to the property. Sometimes properties are sold as not a value add, and they turn out to be value adds and that’s good actually, that can be very good.
Richard: Right, makes sense.