A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. In a world where it’s difficult to develop new commercial real estate — from the costs of capital and materials to jurisdictional requirements, among other hurdles — one major developer is making a big bet that older is better. Bozzuto Group is partnering with Invesco in a $1 billion venture to buy existing multifamily assets on the East Coast. The focus is on properties that have lost significant value but can be renovated and repackaged to compete with newer, high-amenity buildings. The strategy is “to capitalize on recovering market fundamentals” by focusing on assets that have the capacity to gain value, said Greg Kraus, managing director and head of U.S. transactions at Invesco Real Estate, in a news release. The new fund launches against a backdrop of oversupply in the market. Multifamily saw a huge construction boom in the last five years, thanks to lower interest rates at the start of the pandemic and demographic drivers. Much of that supply is still making its way through the pipeline, now in a higher interest rate environment. Toby Bozzuto, CEO of Bozzuto Group, called the oversupply a “temporary phenomenon.” “Where supply is currently the problem, supply is also the solution in the future for affordability,” he told Property Play . “So it’s a very interesting dynamic, because what we’re doing now is absorbing the overhang of the units i …
