IRVINE, CA—Lastweek, spoke with BillShopoff, chairman, president and CEO of ShopoffRealty Investments, about where he sees thevalue-add market today and in the future. Here, inPart 2 of our interview, Shopoff talks about the strategiesnecessary for success with value-add assets and some importantadvice he has for investors in this space.

| What strategies do you expect to bemost popular in the value-add market? Development?Lease-up?


Shopoff: We see numerous variations,including adaptive re-use, development and themore typical value-add that involves an infusion ofcapital to reposition an asset in the marketplace,coupled with a focused leasing strategy. We havebeen involved in a few corporate dispositionswhere large companies are disposing of non-essential real estate.These afford the opportunity to acquire a larger infill footprintto create a significant value-add project.

| Are there specific property types youthink will be more popular in 2015 than others?


Shopoff: Infillcommercial locations that are ready for urban-typeredevelopment will be strong. Density is popular.Younger workers want to live in an urban environment and have ashorter commute with greater amenities that are available inthriving urban centers. This will continue to be a trend that weintend to capitalize on into 2015 and beyond.

| Anything else you'd like to tell ourreaders?


Shopoff: We have been involved invalue-driven real estate acquisitions and operations for more than20 years. I think this business exists in good times and bad,although the selection is better at some times than others. With adisciplined approach, solid market knowledge and an experiencedteam, you can not only create great returns in this space, but youcan also create projects that are contributing to theircommunities. That is a large part of what our team strives toaccomplish with each project we undertake. For investors, it isvery important to do your due diligence—firms with significantexperience can demonstrate a track record and ability to achievesuccess in the space. Success in value-add investment is achallenge and requires real expertise. For those firms that lackthese essential elements, the likelihood of success will belimited, while those who possess these skills will find this to bea rewarding niche in the industry.

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.