Summary

As investors position for the next leg of the cycle, several dynamics reinforce the strategic role of core-plus investment, pointing to its ability to enhance returns, diversify portfolios, and capture relative value opportunities:

• Cyclical Turning Point – After nine quarters of declines, valuations stabilized in late-2024, with both private and public markets flat year-to-date through mid-2025. Transaction activity and financing conditions show early signs of improvement.
• The “Plus” Premium – Since 2013, non-stabilized properties in ODCE funds have delivered 10.4% annualized returns, versus 6.7% for stabilized assets, outperforming in 11 of 12 years.
• Portfolio Impact – Modest allocations to non-core properties have historically improved risk-adjusted returns, with Sharpe ratios rising even as volatility increased slightly. While allocations to non-stabilized assets reduce current yield, they enhance long-run portfolio efficiency and provide diversification across return drivers.
• Investor Implication – Core-plus offers an additive tool to capture incremental yield and relative value opportunities as the cycle turns upward.