Old Buildings, New Money: A $1 Billion Gamble on the East Coast

In a market where building new apartments is hard and expensive, one developer has chosen to buy old ones instead. Bozzuto Group teamed up with Invesco to put a billion dollars into existing multifamily homes on the East Coast.

These buildings have lost value but can be refreshed and made competitive with newer properties that offer fancy amenities. The plan is to buy low, fix up, and let the market’s fundamentals bring the price back up.

The move comes at a time when many new units are still under construction, creating a temporary glut in supply. While this oversupply is seen as a short‑term problem, it also offers opportunities for those willing to invest in older assets.

Older buildings can be purchased for 10‑20% less than the cost of building anew, and buying them skips many regulatory hurdles that slow down new construction. This speed to market is a key advantage for Bozzuto, which has a history of developing from the ground up.

Experts expect the excess supply to shrink in the next few years as demand from renters and buyers pushes up prices. Even though current rents may stay flat, the sector is attracting investors who are cautiously optimistic about future growth.

Bozzuto sees potential distress in some properties due to high leverage or shifting from construction loans to permanent ones, but believes any issues will be brief and offer buying chances. The strategy is to buy along the East Coast, perhaps all the way to Chicago, focus on properties that can be “value added,” and let rents rise over time. The ultimate goal is to strengthen the market so that new development can thrive as well.