You acquire an underperforming building at the right basis, make only the improvements that materially affect performance, HVAC/energy systems, tenant spaces, infrastructure, resilience, or even a change in use, then increase occupancy, rents, and NOI. The article specifically emphasizes targeted improvements that produce measurable long-term value instead of redevelopment simply for redevelopment’s sake. Why I would choose this exit: once the higher NOI is proven, you refinance against the new stabilized value, pull some or potentially most of your original capital back out, and keep ownership of the improved cash-flowing asset. You retain future appreciation and cash flow rather than giving away the upside you created. In simple terms: Buy: $5M underperforming asset Improve: $1M renovation/repositioning Increase NOI: $300K → $500K Value at 7% cap: ≈ $7.14M Refinance: ~$5.0M at 70% LTV Result: Recover a substantial amount of invested capital while still owning the building. I would keep sale after stabilization as Exit #2. If institutional/core buyers are paying aggressively for stabilized, modernized assets, you can sell into that market and realize the forced appreciation.