In commercial real estate, underperformance isn't a death sentence, it's a diagnosis. The right strategy can transform a struggling property into a strong, stabilized investment. Here are three proven steps I use when repositioning distressed or underutilized assets:

🔎 1. Underwrite Like It's Day One Again
Reassess every assumption. Rent roll, OPEX, local comps, and capital needs. Many assets underperform because they were purchased using outdated projections or over optimistic forecasts. A clean re-underwriting process helps you realign the business plan with market realities.

📊 2. Reposition with Precision
Not all value-add is physical. Sometimes it's leasing to a stronger tenant mix, upgrading operations, or pursuing new zoning overlays. Whether it's a medical office conversion, affordable housing reposition, or a short-term rental model, the right pivot creates long-term upside.

🔁 3. Manage the Asset Like a Business
Real estate is a business. Monthly reporting, aggressive collections, vendor performance reviews, and NOI-driven decision making should become standard. Professional asset management can make or break turnaround success, especially in today's rate and cost environment.

I've seen assets go from stagnant to stabilized with double-digit IRRs, by applying these fundamentals. The key is acting early, auditing honestly, and executing with discipline.

💡 Bonus Tip: Know When to Exit
Sometimes the most strategic move isn't a turnaround, it's a timely disposition. If the capital required to stabilize the asset outweighs the return, or if market conditions offer a favorable exit, divesting and reallocating to a better-performing vehicle may preserve and even accelerate your ROI. Asset management is just as much about stewardship as it is about strategy.