Avanath Capital Management has acquired an affordable housing portfolio of three apartment buildings in Brooklyn, N.Y. The properties were acquired in joint partnership with New York-based Oak Tree Management.
“As rents continue to surge throughout the greater New York region, demand for affordable housing options in Brooklyn are stronger than ever,” said John Williams, president and chief investment officer of Avanath. “Located in the rapidly growing Bedford-Stuyvesant submarket, the three properties we acquired are positioned to capitalize on the continued demand from neighboring boroughs while catering to the ever-increasing need for affordable housing.”
The apartment buildings have 46 units and bring Avanath’s existing Brooklyn portfolio to a total of 195 units. The properties are located within three miles of Avanath’s four other affordable assets in Brooklyn, which are currently 100% occupied at rent levels that are half the cost of average rents in the Brooklyn submarket, according to Williams.
He noted that on a national basis, Avanath strategically targets areas such as Brooklyn, which are core urban, supply-constrained markets with strong growth fundamentals.
Last year, Avanath acquired its first Brooklyn affordable housing portfolio with Oak Tree.
The properties in the latest transaction have a mix of rent-stabilized and market-rate units.
Avanath, an institutional fund manager that specializes in affordable and workforce housing investments, acquired the properties from a private investor for $14.4 million.
The portfolio includes:
· 257 Quincy St.—Built in 1931 and 80% occupied at acquisition, this 21-unit apartment building is four blocks from the Bedford-Nostrand Avenue station and has convenient access to downtown Brooklyn, Williamsburg, and Long Island City. The new owners plan to perform a series of interior and exterior renovations to reposition the property and lease the remaining vacant units to maximize occupancy.
· 570 Jefferson Ave.—Located on the southeast corner of Jefferson and Lewis avenues, this nine-unit apartment building was constructed in 1910 and is situated within close proximity to transit options and bus stops. It was 100% occupied at acquisition. Avanath and Oak Tree have established a renovation plan to upgrade the interior and exterior of the property, as well as add a competitive amenity package.
· 308 Stuyvesant Ave.—Built in 1910, this 16-unit apartment building was 80% occupied at acquisition. The property has multiple transit options, including access to Utica Avenue Station and bus routes that lead directly to downtown Brooklyn, Ridgewood, and Manhattan. Avanath and Oak Tree plan to renovate the units and add amenities such as laundry rooms, repositioning the property to enhance the quality for residents.