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They have usually been constructed over 20 years ago and require renovation at this point. An investor can either put money in through value-add projects to update the building or seek residential and mixed-use conversion options. Class A properties sell themselves, and Class B and C’s can be renovated to cater to a target market.
A liquid asset is one that can be sold immediately at marketvalue. If an owner had to sell a piece of real estate by the end of the day, chances are that it would be for a price far below marketvalue. The degree of illiquidity varies according to location, property type, and market cycle. Management Risk.
Breaking Down CRE by Class and Condition Beyond just the property type (office, retail, industrial, etc.), When investing in commercial real estate, understanding property classes helps gauge a buildings quality, risk profile, and renovation potential. These can be good value-add opportunities if upgraded to Class A standards.
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