Avanath Capital Management has completed the acquisition of Arbors at Cary, a 248-unit affordable housing community in Cary, North Carolina.
The firm plans to redevelop the apartment community under the Opportunity Zone program, according to Wesley Wilson, chief financial officer at Avanath.
“This is our first acquisition within the Opportunity Zone fund legislation,” says Wilson. “The goal of this investment is to improve low-income communities in designated Opportunity Zones and to defer and reduce current taxes and provide long-term tax-free investment gains for qualified investors. Our Opportunity Zone platform is designed to acquire quality affordable/workforce housing assets in strong growth markets that need expansion and/or renovation. Arbors at Cary is a prime example of this.”
Avanath, a multifamily owner and operator that focuses on market-rate and affordable housing, acquired the development for $19.2 million.
Laurel Street, a boutique private development company headquartered in Charlotte, North Carolina, and led by Dionne Nelson, will serve as the developer.
Built in 1967 and 1971, Arbors at Cary consists of 23 garden-style residential buildings situated across 19 acres. The Raleigh/Durham region is one of the nation’s fastest-growing metropolitan areas. Its population has expanded by approximately 2% annually for more than a decade. The region is also positioned for continued strong job growth as numerous companies have relocated or expanded in the area, notes Avanath.
“We plan to redevelop the apartment community by upgrading the property’s electrical and plumbing systems, renovating all apartment units, and adding newly constructed community amenities,” says Wilson. “Some of the newly constructed community amenities will include a brand-new clubhouse and swimming pool. We’re excited about our continued partnership with PGIM Real Estate, in addition to having Laurel Street serve as our developer.”
PGIM Real Estate served as Avanath’s equity partner and lender on the deal. According to Luke Apicella, vice president at PGIM Real Estate’s Impact & Responsible Investment team, “We’re excited to work on a challenge that can be found across the country. When housing requires substantial renovations, there are often few options to make the improvements while still serving the current community. We think participating in federal and local initiatives are an effective way to turn properties and/or locations that have fallen out of favor into places that thrive. PGIM Real Estate made its first Opportunity Zone investment in 2018, and we look forward to seeing how this Opportunity Zone investment will benefit Arbors at Cary.”