Avanath Capital Management has acquired three affordable housing communities in Sacramento, Calif., for $56.5 million, nearly doubling its footprint in the market. The acquisition included 468 units, bringing its total number in the region to 1,034.
Built in 2005 and 2006 with low-income housing tax credits (LIHTCs), the three buildings provided family, senior, and mixed-income housing. The portfolio was 98.5% occupied at the time of the acquisition.
Avanath acquired the properties from an affordable housing developer in an off-market transaction. The buildings include the 152-unit Geneva Pointe in Elk Grove, the 172-unit mixed-income Lincoln Creek in Dixon, and the 144-unit Sierra Creek in Antelope.
“While still an affordable alternative to the Bay Area, Sacramento is now seeing rapid rent appreciation and not enough supply of quality affordable housing to meet current demand,” says John Williams, president and chief investment officer for Avanath. “This acquisition will allow us to preserve affordability in one of the fastest rent-growing markets in the country, while also amassing economies of scale by bringing our total Sacramento portfolio to over 1,000 affordable units.”
The three-property portfolio will undergo renovations, including upgraded exterior paint, LED lighting throughout, common area updates, and deferred maintenance.
Avanath is partnering with COR Community Development Corp. to provide social services at the properties, including after-school tutoring, fitness classes, and computer literacy training.
An institutional fund manager specializing in affordable and workforce housing investments, Avanath’s strategy is to acquire assets in supply-constrained markets with strong growth fundamentals. According to the latest AHF 50 survey by Affordable Housing Finance, the firm owned more than 6,500 affordable housing units as of Jan. 1.