Avanath Capital Management has acquired a two-property, 552-unit workforce housing portfolio for $45.9 million in an off-market transaction.
The properties are in Orlando, Fla., and Cary, N.C., two markets demonstrating particularly strong demand based on job creation, according to John R. Williams, Avanath president and CIO.
The firm specializes in the acquisition and operation of affordable and workforce housing assets nationwide, with a focus on supply-constrained markets.
“Undersupplied affordable housing markets, particularly in high-growth cities, are experiencing even greater pressure as general multifamily rents continue to rise throughout the nation,” says Williams.
Avanath's new properties are workforce housing assets that serve renters earning between 55% and 65% of the area median income, the largest renter segment in both locations, he says. Fannie Mae provided financing.
Avanath plans to redevelop and reposition each property, including the expenditure of approximately $7,000 per unit. A renovation plan for each property has been established, with upgrades including 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, which was known as Oakwood, 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 North Carolina community, formerly Geneva Park, 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.
The portfolio was acquired through Avanath Affordable Housing II, a fund with $200 million of equity commitments. 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, notes Williams.