Avanath Capital Management has become one of the first affordable housing owners to achieve the WELL Building Institute’s WELL Health-Safety Rating for Facility Operations and Management across its portfolio of more than 13,500 multifamily units. MFE caught up with founder, chairman, and CEO Daryl Carter to hear about the firm’s commitment to ESG principles and its residents.
MFE: Why is ESG important for the multifamily industry?
Carter: Environmental, social, and governance (ESG) is extremely important for several different reasons, especially within the multifamily industry. It is something that we at Avanath have put a major emphasis on since inception and is truly ingrained in our DNA as a company.
We incorporate a variety of sustainable features across our portfolio to reduce our carbon footprint and operating costs. Beyond the affordability component, we also incorporate a tremendous number of programs and social services that have a significant impact on residents and resident outcomes. We’ve found that by investing in residents through these social impact programs and services, we can improve resident lives, as well as reduce turnover and increase retention. From a governance standpoint, diversity and inclusion is also an extremely important component of who we are and what we do. Our team is extremely diverse at every level within the company including top leadership down to our on-site property teams. We believe that this spurs innovation within our firm by creating diversity of thought and allows us to better serve our residents, investors, and partners.
Overall, we believe that focusing on ESG is the right thing to do, but that it also translates to stronger performance. There has been this misconception that you have to sacrifice impact for profit. We’ve been able to demonstrate that you can have both, impact and strong returns, and we believe many others are beginning to realize this as well.
MFE: How is Avanath advancing its ESG commitments?
Carter: Avanath continues to be a leader in the ESG space and is continuing to push the envelope with our ESG initiatives.
We previously launched Amplify, our ESG platform with the goal to extend the success of Avanath’s authentic social commitments and programs to build a best-in-class environmental, social and governance program that serves as a model for the industry. We also believe that through our robust reporting on ESG metrics that we can set benchmarks for best practices for the industry.
Beyond this, we also recently added an ESG advisory council and are incorporating ESG in our due diligence processes for new acquisitions.
MFE: As part of the WELL rating, what are some of the key health and well-being benefits being delivered to residents?
Carter: We launched our Activate program in early 2019, which focuses on a variety of health and wellness programs and services for residents across our properties. As part of the program, we converted underutilized spaces within some of our senior communities and transformed them into state-of-the-art wellness facilities that include screening rooms complete with exam tables, medical supplies, medical exam equipment, and other necessary components that allow providers to administer health exams for senior residents. Residents are able to get free cholesterol checks, flu vaccines, health and wellness classes, and fitness classes, among many other programs.
During the pandemic, we also launched a partnership with Wellbeats to provide free online gym memberships to residents. This provided residents the opportunity to work out from inside their homes while community amenities were closed. We have continued this program and still offer this free service to residents throughout our portfolio even though community amenities have begun to reopen.
We also implemented policies and best practices regarding indoor air quality management, cleaning and sanitation procedures, emergency preparedness plans, and health services, all of which are designed to enhance the long-term health and safety of our residents and on-site employees.
MFE: What else is in the pipeline for Avanath in 2022?
Carter: In the first quarter of this year, we announced the closing of our open-ended fund with $536 million in equity commitments. This is our first open-ended fund and will be our sole investment vehicle moving forward. This new structure will allow us to continue to acquire affordable and workforce housing assets throughout the nation and deliver lifestyles within reach for our residents.
MFE: What industry concerns are keeping you up at night?
Carter: Rising inflation is naturally a concern and will continue to impact the nation. That said, we do not anticipate this to greatly impact our portfolio. In times like these, demand for affordable housing tends to increase as prices are rapidly rising and wages fail to keep up. This will drive more demand to the affordable housing sector from both residents and investors who view this asset class as a durable and stable investment.
MFE: Favorite activity in the spring?
Carter: I love to spend time with my two children, Ava and Nathan. I spend a lot of time playing basketball with my daughter and golf with my son. In fact, Avanath’s name comes from the combination both of their names (Ava+Nath).