What’s the most compelling real estate investment strategy today? Core, value-add or opportunistic? I believe that the most appropriate strategy available today is to seek out the fundamentally distressed asset that would otherwise be classified as core and restore it to that condition. Restore the core, in other words.

Investment managers have raised substantial sums of capital to buy deeply distressed assets, but those have yet to come to market in meaningful amounts. Alternatively, when stable, high-quality properties come to market, these “corest of core” assets draw an army of bidders and transact at prices that are reminiscent of 2006. Stabilized core is a rare and sought-after asset and offers a weak value proposition.

Core properties that are fundamentally stressed due to declines in occupancy and/or capital starvation are becoming more abundant. Expect these properties to come to market in increasing numbers as the CMBS and commercial bank mortgage portf