Institutional LPs allocate to commercial real estate across four canonical risk buckets: core, core-plus, value-add, and opportunistic. Each bucket has a different target return, typical leverage, typical hold, and source of value creation. Understanding which bucket a NYC deal sits in is essential to attracting the right capital and pricing the equity correctly.
Core
Core NYC commercial real estate is fully-stabilized, trophy-grade, credit-tenanted assets in primary submarkets — think Park Avenue Class A office, top-tier Manhattan multifamily, trophy 5th Avenue or SoHo retail. Hold periods are 10-15 years. Leverage is 40-55% LTV. Target IRRs run 6-9% with the bulk of return from current yield, not appreciation. Sources of value: rent escalations, OpEx discipline, minor capex.
Core-Plus
Core-plus is high-quality NYC commercial real estate with one or two minor enhancements — a partial lease-up, a modest renovation, or a single non-credit tenant in an otherwise strong rent roll. Hold periods are 5-10 years. Leverage is 55-65% LTV. Target IRRs run 9-12% with most of the return from current yield plus modest cap appreciation.
Value-Add
Value-add NYC commercial real estate has a clear, time-bound business plan — vacancy lease-up, capex repositioning, tenant remerchandising, rent-stabilized to free-market trade-out, or modest expansion. Hold periods are 3-7 years. Leverage is 60-75% LTC including any acquisition + capex. Target IRRs run 13-18% with most of the return from the business plan execution, less from current yield.
Opportunistic
Opportunistic NYC commercial real estate involves significant execution risk — ground-up development, major redevelopment, office-to-residential conversion under 467-m, distressed acquisitions, or land assemblage plays. Hold periods are 4-8 years. Leverage can reach 75-85% LTC with mezz/pref layers. Target IRRs run 18-25% with all return from execution; current yield is typically zero or negative through stabilization.
- 6 East 43rd Street ($135M Vanbarton conversion, Skyline-brokered) is opportunistic — conversion + lease-up.
- 101 Greenwich Street ($105M Quantum Pacific + Metro Loft, Skyline-brokered) is opportunistic same template.
- 530 West 25th Street ($72M Chelsea office sale to Feil) is closer to core-plus — modest reposition in West Chelsea.
- 236 Fifth Avenue ($65M ground lease assignment, Kaufman, Skyline-brokered) is core — long-duration credit cash flow.
Robert Khodadadian and Skyline Properties broker NYC commercial real estate across every risk bucket. The firm's active mandates span core ground leases through opportunistic conversion plays. Email info@skylineprp.com for confidential advisory matched to your investment strategy.