Not All “Below Market” Deals Have Upside

Below-market rents often look like opportunity.

The assumption is simple: raise rents, increase value.

But that gap usually exists for a reason.

It can reflect:

• weaker tenant profiles

• functional limitations

• location constraints

• lease structures that don’t support increases

If the rent hasn’t already moved toward market, something is holding it in place.

And that constraint doesn’t always go away with a new owner.

The discipline isn’t in identifying the gap.

It’s in understanding why the gap exists—and whether it can actually close.