Avanath Capital Management, a multifamily owner and operator focused on affordable and workforce housing, is looking to technology to address the nation’s housing shortage.
The Irvine, California–based company has partnered with Vessel Technologies, a mission-driven housing product company, to acquire, entitle, develop, and operate multifamily communities with the goal of addressing the affordability gap.
According to Avanath founder, chairman, and CEO Daryl J. Carter, Vessel provides solutions that allow for the development of sustainable communities at a fraction of the cost and time compared with traditional multifamily construction. Through the process, key components are completed through an industrial manufacturing process and delivered to the site.
Carter noted the design and construction process enables development at less than $200,000 per unit compared with costs for traditional construction that can run between $400,000 and $800,000 per unit. He added that Vessel’s efficiency of design, production, and assembly can cut the delivery timeline in half or a third compared with traditional developments.
“As we face a current shortage of 600,000 units and need to develop more than 4 million over the next 10 years, in addition to rising construction costs, it becomes abundantly clear that the industry must look beyond the status quo and consider outside-the-box, technology-driven solutions,” said Carter. “Vessel’s goal to revolutionize how apartments are constructed in order to dramatically increase the supply of housing—and deliver it at a price that the working class can comfortably afford—aligns with Avanath’s mission of providing as many Americans as possible with quality housing that helps them achieve their desired lifestyles, without leaving them cost burdened.”
Through the strategic partnership, Avanath has a goal of delivering over 5,000 new affordable and workforce housing units by 2030. The first phase will be the acquisitions of two communities with 166 total units that are under development in Connecticut. The partners will then identify development opportunities in markets across the United States and obtain necessary entitlements. These communities will be designed and constructed using Vessel’s process with the goal of building a pipeline of 10 more properties, to be managed by Avanath, by the end of 2025.
“Vessel’s revolutionary building technology was developed to address long-term undersupply in our broken housing market,” said Neil Rubler, founder and CEO of Vessel Technologies. “Avanath has targeted a number of markets throughout the country that are in dire need of new housing solutions, and we look forward to providing thousands of residents with exciting, sustainable, and attainable homes over the next few years and beyond.”
Avanath has launched a new division, Avanath Investment & Development (AvID), that coincides with the partnership and will be focused on development in core cities across the nation. Keith Harris, executive vice president of the firm’s investment group, will serve as president of the new division.
“As owners and operators of over 15,000 affordable and workforce housing units located in markets across the United States, we are uniquely positioned to draw upon our team’s knowledge and experience in local requirements, approvals, and compliance, and existing relationships with municipalities, government entities, and nonprofit organizations,” Harris explained. “This provides an advantage in not only identifying and securing development opportunities quickly, but in the eventual ongoing operations and management of the communities. This partnership provides clear scalability for Avanath as a whole and produces an end product that generates long-term, accretive returns to our investors.”
According to the partners, they also plan to work together to potentially locate new Vessel manufacturing facilities in some of AvID’s target markets. In addition, AvID is exploring other development opportunities aside from its partnership and is involved with a Detroit multifamily community slated to break ground later this year.
John R. Williams, Avanath’s chief investment and operating officer as well as president, also pointed to the partnership’s alignment in environmental, social, and governance (ESG) commitment as an additional benefit.
“We look forward to developing housing that delivers much-improved energy efficiency and reduced carbon output,” he said. “One of the most exciting and unique aspects of Vessel’s product is its onboard, proprietary operating system, vOS. It is linked to the property’s hardware, energy, and water systems, allowing residents to monitor and regulate their own utility usage.”
