That would be SoCal, according to Irvine-based Lotus Real Estate Partners managing partner Brian Walker. With limited new supply coming on line, now’s the time to acquire older product that can be repositioned and brought up to modern standards, he says. Recently Lotus and Dallas investor TriGate Capital formed a JV to do exactly that, with about $60M to spend on office and industrial value-adds in LA and OC and IE over the next few years. Lotus will be the operating partner for the JV.

The trick is to find good bones hiding in sometime dowdy exteriors. (It's an expression; if you find literal bones in your building please contact the proper authorities.) Recently the JV acquired the 83k SF 4031 Via Oro Ave, an office property, from a private owner, and plans about $1.6M in upgrades. It’s in the right location, Brian says, but is in need of improvements to capitalize on the continued demand for distinctive properties.