The term “core” refers to an investment risk class in the real estate industry. Core real estate has the lowest probability of default compared to the risk classes and is therefore very popular with risk-averse investors. Core properties are characterized by their first-class location as well as the quality of the tenant base, so they have a very high rental level with very good creditworthiness of the tenants. Due to the high purchase price of a property of the risk class Core, the return expectations for investors are at a comparatively low level at 4-6%, the value increase potential is relatively low in view of high purchase prices. Financing is generally provided at a low leverage ratio (leverage 40-60%). Investors pursue a long-term and low-risk investment strategy with core real estate – accordingly, the holding time of core properties is the highest in comparison with the risk classes.


The “Core Plus” risk class refers to an investment style in real estate that is characterized by moderate risk and relatively low return expectations. Core-plus properties are usually found in promising 1-B locations and therefore have development potential. With comparatively short contract terms for existing tenants, Core Plus investments enable a prospective increase in rental income due to upcoming new contracts with improved market conditions. However, tenants in Core Plus properties have a lower credit rating and thus a higher probability of default than tenants of core properties. With a moderate increase in value and a leverage ratio of 40-60%, investors have a return expectation of 6-8% for core-plus properties. The holding period of a property of this risk class is usually less than 10 years.

Value Added

The term “value added” refers to a risk class in real estate investment whose return expectations reach a high level with comparatively high risk of default. The term “Value Enhanced” also applies to properties of this risk class. Since these are B-layer edits and mostly medium-quality buildings, value-added investments offer the opportunity to achieve significant increases in value through renovation and realignment. With a leverage ratio of 60-70%, the leverage effect can generate returns of between 8-11%. The risk of investing in value-added real estate is significantly higher than in the core or core-plus segment with a low equity ratio and a comparatively high probability of default.


The risk class “Opportunistic” refers to a high-risk investment in real estate investment, but equally profitable if successful. An opportunistic strategy can relate to project developments, repositioning and existing real estate and thus sees itself as a countercyclical investment approach. With a typically very short, strategic holding period of 1-4 years, the investment is geared towards the high value-added potential, which is to be achieved by upgrading and increasing the rental level. With a leverage ratio of more than 75%, investments in opportunistic properties should achieve a very high return of more than 10 %– precisely because the risk to the investor is at a high level compared to that. The primary goal of the opportunistic strategy is to generate profit from the resale of real estate. However, in order to achieve these profits, extensive refurbishment work is required before the property can be repositioned on the market.