Avanath Nabs 553-Unit Affordable Portfolio

IRVINE, CA—GlobeSt.com has learned exclusively that locally based investment firm Avanath Capital Management has acquired a two-property, 553-unit affordable-housing portfolio in Orlando and Cary, NC, for $45.9 million in an off-market transaction. The portfolio was acquired through Avanath Affordable Housing II LLC, a fund with $200 million of equity commitments. Avanath tells GlobeSt.com that the seller was a California-based private investor.

Avanath specializes in the acquisition and operation of affordable and workforce-housing assets nationwide, with a focus on supply-constrained markets. According to John R. Williams, president and CIO of Avanath, “Undersupplied affordable-housing markets, particularly in high-growth cities, are experiencing even greater pressure as general multifamily rents continue to rise throughout the nation.”

Williams notes that the two markets in which these assets are located are demonstrating particularly strong demand based on job creation. “The Raleigh/Cary submarket of North Carolina was recently recognized by Forbes as second-highest in the nation in the creation of technology jobs, while Orlando continues to lead job growth among all Florida metro areas.”

Based on this increasing demand, he adds, “our investment strategy creates a win-win in these markets. We continue to increase the value of our national portfolio by investing in high-quality affordable/workforce assets in major employment markets. Simultaneously, we are able to generate deep financial and social benefits in the communities surrounding these properties by bringing renovated, higher-quality affordable housing to much-needed areas.”

Avanath is planning to implement a redevelopment and repositioning of each property, including the expenditure of approximately $7,000 per unit. Upgrades will include exterior paint, wood repair, new kitchen appliances and finishes, HVAC improvements and refreshed landscaping.

The repositioning also includes a name change for both communities, giving each its own identity. The Orlando community, located at 4708 Olive Branch Rd., was formerly known as “Oakwood” and has been renamed “Bella Cortina.” The property is centrally located within Orlando's tourist corridor, near Disney World and Universal Studios. The 304-unit property was 96% occupied at the time of purchase.

The Cary, NC, community, located at 200 Wrenn Dr., was formerly “Geneva Park” and is now named “Arbors at Cary.” The property is situated within the Research Triangle, which is anchored by Duke University and University of North Carolina at Chapel Hill. The 248-unit property was 95% occupied at the time of purchase.

As GlobeSt.com reported in January, presenting creative solutions to policymakers is key to helping solve the lack of affordable-housing problem nationwide, according to panelists at NMHC's Apartment Strategies Outlook Conference in Palm Springs. The need for solutions to this problem is growing stronger as the economy improves and our workforce continues to grow. Daryl Carter, CEO of Avanath Capital Management and moderator of the “Housing Our Workforce: What's Next?” panel, said the median renter in the US makes $36,000 per year, making affordable housing a number-one priority. “We must come up with solutions and strategies.”