Avanath Capital Investing in Multifamily

 IRVINE, CA—Avanath Capital Management closed eight affordable housing acquisitions totaling more than 1,700 units in 2014, making the firm one of the largest purchasers of affordable assets in the calendar year.

The eight assets (details are below) were purchased through Avanath Affordable Housing II, LLC, a fund with $200 million of equity commitments.

“In the current economic environment, the affordable housing sector continues to be one of the few segments of the real estate investment industry with attractive economics, boasting excellent and sustainable risk-adjusted returns with high barriers to entry and strong downside protection,” said John Williams, president and CIO of Avanath.

Avanath plans to redevelop and/or reposition the acquired properties, a strategy that will benefit the surrounding communities, according to Williams.

“In addition to the financial benefits, ancillary social benefits can be achieved by investing in real estate in low- to moderate-income neighborhoods and other underserved areas,” explains Williams. 

Avanath specializes in the acquisition and operation of affordable and workforce housing assets nationwide, with a focus on supply-constrained markets.

Daryl Carter, chairman and CEO of Avanath will serve as this year's chairman of the National Multi Housing Council.

“In 2015, we intend to continue Avanath's strategy of identifying and acquiring high-quality affordable assets in major employment markets,” explains Carter.

Specific investment strategies include the acquisition of existing Low Income Housing Tax Credit (LIHTC) portfolios and individual developments located in urban markets throughout the U.S.  In 2015, Avanath plans to investing an additional $100 million of equity capital in the acquisition of affordable/workforce housing through the same fund.

At the close of investing Fund II, the firm will have approximately 40 multifamily properties totaling more than 7,000 units under management and ownership.

California Acquisitions

Avanath acquired Castelar, a 101-unit multifamily property located in the Chinatown submarket of downtown Los Angeles for a total consideration of $11.35 million. The building was 98 percent occupied at the time of purchase. The company plans to implement improvements to the clubhouse, landscape, tile work, and installation of LED lighting in the parking garage. The property is located at 625 North Hill Street.

Natomas Park, a 212-unit property located in the Natomas area of Sacramento, was acquired for $27 million. The property was built in 2003 under the LIHTC program and was 97.2% occupied at the time of purchase. Avanath has established a renovation plan, which includes new flooring for the clubhouse gym and proposed xeriscape improvements to minimize water waste. The property is located at 1850 Club Center Drive.

Northpointe is a 528-unit multifamily property situated on a 23-acre site in Long Beach. The company acquired the property, which is 97.5% occupied, for a total consideration of $80.6 million. The complex was built in 1967 under the LIHTC program and was substantially renovated in 2002. 

A renovation plan has been established for exterior paint of all buildings in the community, resurfacing parking lots, roof repairs, and installation of washers and dryers in select units. In addition, a local non-profit, COR, will provide various social services to the residents, including after-school programs and financial literacy classes. Northpointe is located at 5441 N. Paramount Blvd.

Woodside Senior Apartments, a 144-unit property located in Ontario, California for $13 million. The property was 98% occupied at the time of purchase and Avanath plans to immediately implement interior and exterior improvements. The property is located at 408 West G. Street in Ontario, California. 

Florida Acquisitions

Ospreys Landing isa 176-unit multifamily property located in Naples that sold for $12.9 million.  The property was built in 1995 under the LIHTC program and is currently 95% occupied. 

A renovation plan has been established for replacement of entry doors, installation of monument signs, pool fencing, and doorway LED lighting. The property is located at 100 Ospreys Landing.

Avanath acquired the Cypress Club, a 228-unit multifamily property located in Orlando, Florida, for $16 million.  The property was built in 1997 under the LIHTC program, and was 97% occupied at the time of purchase. Avanath plans to immediately begin improvements to the property, including the installation of LED lighting and new signage. The property is located at 700 Egret Landing Place.

Maryland Acquisition

Fields of Germantown, a 143-unit multifamily, acquired for $17.5 million located in Germantown, Maryland. The property was built in 2001 under the LIHTC program, and was 97.9% occupied at the time of purchase. Avanath has established plans for various immediate repairs identified during due diligence and for the installation of LED lighting throughout the common areas. The property is located at 12912 Falling Water Circle.

New York Acquisition

Eagle View Court is a 150-unit senior multifamily community located in Middle Island. It was acuired for $18.4 million.  The property was built in 1998 under the LIHTC program, and was 97% occupied at the time of purchase. A renovation plan has been established for various immediate repairs identified during due diligence, including concrete sidewalk replacement and pool deck surfacing. The property is located at 175 Robin Drive in Middle Island.

Avanath Capital Management is a privately-held, vertically integrated investment firm managing real estate and real estate-related investments generating attractive risk-adjusted returns through current income and capital appreciation from its investments. The firm also provides property management services through its two affiliates, Avanath Property Management and McKinley- Avanath Property Management.