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Value-add, often called opportunistic, investments are a way tobreathe new life into existing real estate. By redeveloping,repurposing or performing adaptive re-use on properties that havebecome tired and/or obsolete, developers can create brand-new,desirable assets in supply-constrained markets that are craving newinventory and also generate greater profits for their investors.The practice has become a way for every type of investor from REITsto high-net-worth individuals to achieve the yields they seek inheated markets that have become overrun with domestic and foreigncapital, which has forced prices up and compressed cap yields. It'salso become nearly the only type of development seen in marketswhere developable land is scarce and expensive, such as most ofSouthern California. When core assets are out of reach or simplydon't make sense, value-add plays are a smart alternative for yieldacross all property categories—so much so that many commercial realestate investment and development firms are focusing primarily onthese opportunistic ventures over core assets.