Why Buy Decades-Old Apts. Now?

Polger: “Our current investment thesis is that as a direct result of this dichotomy, there is much more room for measurable rent growth with the older properties, especially after they are improved and modern amenities are added.”

SAN DIEGO—There is a significant difference between what a new apartment project costs to build or buy today and the pricing on 1970s and 1980s vintage projects, which can typically be acquired for well below replacement costs, Pathfinder Partners LLC‘s senior managing director Lorne Polger tells GlobeSt.com. As we recently reported, the San Diego-based firm specializing in opportunistic real estate investments has acquired two Phoenix-area multifamily communities totaling 300 units for a combined total of $34.1 million. Polger said the acquisitions, both build in the 1980s, represent value-add opportunities, with room for rent growth.

We spoke exclusively with Polger about the apartment-building boom of the ’70s and ’80s, the appeal of those value-add multifamily properties and what to look for when acquiring these types of communities.

GlobeSt.com: A number of multifamily properties were built in the ’70s and ’80s. Why are these an attractive investment now?