Core Vs Value Add Calculator

Core and value-add strategies target different risk-return profiles.

Core return %

VA return %

VA success probability %

VA downside return %

VA expected return %

0.12%

VA advantage over core

0.04%

VA downside risk

0.04%

How the math works

VA expected = upside × success prob + downside × failure prob. Advantage = VA − core.

16% × 70% + 4% × 30% = 12.4% VA expected vs 8% core = +4.4% advantage. Downside -4% risk.

How to Use

Enter core return %.
Enter VA return %.
Enter VA success probability %.
Read expected values.

Frequently Asked Questions

Core profile?

Stabilized institutional assets. Class A/B+ quality. Major markets. Professional tenants. Long-term leases. 6-9% total return, 4-6% cash, 5-9% IRR typical. Low leverage (50-60% LTV). Capital preservation focus.

Value-add profile?

Leasing risk, CapEx risk, or transition risk. Class B upgrade opportunities. Partial vacancy or rent below market. 12-18% target IRR. 2-4 year hold typically. Higher leverage (65-75% LTV). Active management required.

Portfolio blending?

60-70% core + 20-30% value-add + 0-10% opportunistic balances risk/return. Core provides stability and cash yield. Value-add drives outperformance. Blend aligns with LP risk tolerance and return expectations.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.