{"id":1354,"date":"2023-08-22T13:05:00","date_gmt":"2023-08-22T13:05:00","guid":{"rendered":"https:\/\/maag.codesupply.co\/gear\/?p=1354"},"modified":"2024-10-23T19:18:43","modified_gmt":"2024-10-23T19:18:43","slug":"creating-value-in-real-esate","status":"publish","type":"post","link":"https:\/\/valueaddclub.com\/?p=1354","title":{"rendered":"Creating Value in Real Esate"},"content":{"rendered":"\n

On June 1, 2015, I accidentally stepped into the world of commercial real estate. Real estate had always attracted me, but it wasn\u2019t until I became actively involved in the industry that I truly realized the depth of my passion.<\/p>\n\n\n\n

As a child, I would often sit in the backseat of my parents\u2019 car, paying close attention to the houses we passed by. My parents were avid viewers of \u201cEigen Huis & Tuin,\u201d a show that focused on home improvement. To me, real estate was synonymous with homes and nothing more.<\/p>\n\n\n\n

Initially, my motivation for entering the real estate sector was purely financial. However, after about a year, my focus shifted from making money to an obsessive desire to create beautiful and valuable products.<\/p>\n\n\n\n

\n

” the Value Add strategy is the best approach for long-term success ”<\/p>\nR.B<\/cite><\/blockquote>\n\n\n\n

Technological advancements are particularly impactful, reshaping how we manage our health, interact with our environments, and make travel and style decisions. This constant evolution encourages us to adapt and thrive in a world where change is the only constant. By integrating innovative tools and apps into our routines, we can enhance efficiency and enjoyment in every aspect of life.<\/p>\n\n\n\n

Discovering the Value Add Strategy<\/h2>\n\n\n\n


Through family connections, I met a developer specializing in office building redevelopment, particularly in the \u2018Value Add\u2019 strategy. His motto was \u201cmore for less,\u201d focusing on B-locations in A-cities and A-locations in B-cities.<\/p>\n\n\n\n

Why Value Add?<\/strong>
In my opinion, the Value Add strategy is the best approach for long-term success. You acquire an empty or under-occupied office building. Why? Because with targeted investments, you can redevelop it to attract new tenants. These investments should meet two goals;<\/h2>\n\n\n\n

<\/p>\n\n\n\n

    \n
  • Significantly improve the building, modern & sustainably driven<\/li>\n\n\n\n
  • Focus on reducing operating costs for the end user.<\/li>\n<\/ul>\n\n\n\n

    This approach increases the property\u2019s value through upgrades and enhancements. These investments are reflected in the property\u2019s appraisal for refinancing or sale. Technical and cosmetic upgrades attract brokers, leading to viewings, and ultimately to securing new tenants. The true value in an office building lies in the lease agreements, which provide returns for investors.<\/p>\n\n\n\n

    My Journey<\/h2>\n\n\n\n

    Over the past nine years, I\u2019ve redeveloped and managed multiple office buildings for various clients, generating strong returns and success for them. My dream and ambition have always been to do this on my own, as the real estate sector is highly competitive and often cutthroat. <\/p>\n\n\n\n

    I could have stayed with my first employer indefinitely, as our values aligned perfectly, and it was a positive work environment. However, there were no opportunities for growth or partnership\u2014it was all about individual success.

    I must add that I didn\u2019t work in a corporate environment but in a small, privately funded company. I\u2019ve never been a corporate person, and I have little affinity for that culture. In my view, working for a small, privately funded company allows you to learn more and stay grounded. In corporate real estate, you\u2019re often siloed into one specific area, whether it\u2019s commercial, technical, or financial.

    I\u2019ve gained knowledge in all areas, having been involved in every aspect of building operations. I can draft leases, initiate and manage renovations, and even handle invoice processing.<\/p>\n\n\n\n

    Becoming a Value Add Investor<\/h2>\n\n\n\n

    This broad experience has enabled me to manage the entire process on my own. While everyone advises you to build a team and delegate tasks, when you\u2019re just starting out, it\u2019s crucial to understand all aspects of a building and have the right suppliers on hand.

    In February 2020, I started my own venture with a 2,500 m\u00b2 office building, just before COVID-19 hit. I partnered with a financial backer, agreeing that he would provide the funds, and I would handle the work. By December 2021, I had sold the building to a office real estate investment fund achieving a 50% return over 18 months.

    Then, in May 2022, I acquired a 5,000 m\u00b2 building with a 10% occupancy rate, right in the middle of the Ukraine conflict initiated by Putin. This led to inflation in construction costs and rising interest rates. <\/p>\n\n\n\n

    By January 2024, the building was fully leased, but due to global uncertainties such as interest rates and the war in Israel, selling isn\u2019t an option at the moment. We always choose to sell and start again, as I love taking something from 0 to 100 and then starting fresh. Currently, we\u2019re generating a 12.5% cash-on-cash return.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    At the moment, the office building market is heavily impacted by COVID-19 and remote work trends. However, I remain confident that office buildings will continue to exist because people need social interaction, especially in work environments. Yes, efficiency can be improved, but the need for office space will never disappear<\/p>\n","protected":false},"excerpt":{"rendered":"

    From Chance to Choice: Building Value in Real Estate.<\/p>\n","protected":false},"author":1,"featured_media":3231,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,25,23,21,26],"class_list":["post-1354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment-strategies","tag-commercial","tag-information","tag-invesment","tag-real-estate","tag-strategy"],"yoast_head":"\nCreating Value in Real Estate<\/title>\n<meta name=\"description\" content=\"Discover how I turned my passion for commercial real estate into a thriving career using the Value Add strategy for office buildings. 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