Value-Add, NOI Growth the New Focus

NEWPORT BEACH, CA-Real estate, once focused on buying properties that will quickly resell for a profit or buying them for the sake of amassing large portfolios, now has a new focus in order to be successful: NOI growth and adding value to assets. Speakers at yesterday’s ULI Orange County/Inland Empire capital-markets event, “The Money Chase” described how the environment for acquisition and yield is changing.

“It’s going to be all about revenue, not cap-rate compression, when buying properties going forward,” said keynote speaker Randy Anderson, head of research for CBRE. “Growth is the most important portion. You don’t want to buy when cap rates are high, but when NOI growth is possible.”