Avanath Capital Expands Presence in NorCal With $182 Million Acquisition of Affordable Housing Multifamily Portfolio

SACRAMENTO, CA – Avanath Capital Management, LLC, a private real estate investment manager and Registered Investment Adviser, announces it has acquired in an off-market transaction, six affordable family and senior multifamily communities in the Sacramento, California, metropolitan area with an investment value of more than $181.6 million.

The acquisition expands Avanath’s presence in the Northern California market, a region where accessibility to affordable housing has become increasingly challenging, according to Daryl Carter, Founder, Chairman, and CEO of Avanath.

“Preserving affordability in markets where rental rates are historically high is the essence of our firm’s mission,” says Daryl Carter, Founder, Chairman, and CEO of Avanath. “As the Northern California region is a hub for technology and other high-paying industries, market-rate apartments have been driven out of reach for many lower-income families and seniors. Our goal is to provide housing that these renters can afford, particularly as inflation continues to rise.”

Acquiring this portfolio greatly deepens Avanath’s affordable investment and property management footprint in the Sacramento market, an area that has been hit especially hard with rent increases, notes John R. Williams, President and CIO at Avanath Capital Management.

“As we expand affordable housing options in cities where demand is robust and supply is lacking, we view Sacramento as an ideal investment target,” says Williams. “The average rental rate in Sacramento has increased by 12% over the past year, and the gap between market-rate and affordable rents in the area has widened considerably, increasing the potential for ongoing renter demand for high-quality budget-friendly apartments in this market.”

The multifamily portfolio Avanath has purchased consists of four family and two senior affordable communities totaling 1,032 units. The family properties include Anton Arcade, Norden Terrace, The Ridge, and Whitney Ranch, while the senior properties include Corsair Park Senior and Hurley Creek Senior. With this acquisition, Avanath now holds 12 total properties and manages 1,854 total units in the Sacramento metropolitan area.

“We see these communities as excellent additions to our holdings in Sacramento, allowing us to create a more powerful impact for lower-income families and older individuals in the area,” notes Williams. “With a larger Sacramento portfolio, we can also better develop economies of scale and more seamlessly manage our assets in this market.”

Constructed between 2008 and 2017, the properties were built utilizing the California Tax Credit Allocation Committee’s LIHTC and with bond financing via multiple agencies. Additionally, the assets benefit from the state of California’s Welfare Tax Exemption.

“With this portfolio, Avanath has identified six communities that have historically performed well, with a 98% occupancy rate,” notes Keith Harris, Executive Vice President of Acquisitions for Avanath. “Rental collections remained strong across these properties throughout the pandemic, and we expect that trend to continue moving forward.”

Each community in the portfolio features common amenities such as a leasing center, central clubhouse, business center, fitness center, pool, laundry facilities, carports, and garages. Avanath plans to implement sustainable and social service measures aligning with the firm’s ESG goals, such as energy-saving updates and resident impact programming. Through one of these programs, Avanath is providing residents free access to Wellbeats, an app featuring a variety of virtual fitness classes.

“Avanath understands that every acquisition presents us with opportunities to help improve the lives of our residents,” says Carter. “Social impact programs focused on health and wellness, including virtual fitness amenities such as Wellbeats, benefit people greatly and have been increasing in popularity since the pandemic began. We are excited to continue offering these amenities, which can be truly transformational for our residents.”

Anton Arcade is located at 2134 Butano Drive in Sacramento, California; Norden Terrace is located at 3685 Elkhorn Boulevard in North Highlands, California; Ridge is located at 8151 Civic Center Drive in Elk Grove, California; Whitney Ranch is located at 711 University Ave in Rocklin, California; Corsair Park Senior is located at 6920 Watt Avenue in North Highlands, California; Hurley Creek Senior is located at 4275 El Centro Road in Sacramento, California.

About Avanath Capital Management: Avanath Capital Management is a privately-held, vertically integrated investment firm managing real estate and real estate-related investments generating risk-adjusted returns through current income and capital appreciation from its investments. The firm is also a Registered Investment Adviser and provides property management services through Avanath Realty, Inc. Founded by Daryl J. Carter, the Avanath management team averages 25 years of experience and has successfully guided investment funds in defining growth opportunities. Avanath professionals have real estate operating expertise and long-standing relationships with strong local, regional and national sponsors that can access investment opportunities aligned with Avanath's initiatives. More information is available at www.avanath.com


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