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Monday, Sep 26, 2022

Avanath Strikes $400M of Deals in LA, Sacramento

Rental Firm Marks Record Investment in Calfornia

Apartment investor Avanath Capital Management LLC, one of the country’s largest owners and investors in rental properties for lower-to-middle-income workers, has spent nearly $400 million for a collection of California apartment communities over the past month. Most recently, the Irvine-based firm paid $220 million for two multifamily properties totaling 669 units in Los Angeles.

In August, in a move that significantly expands its Northern California presence, Avanath also paid $181.6 million for six apartment communities in the Sacramento region.

The company, which announced plans earlier this year to ramp up its pace of buying after closing its first open-ended fund totaling $536 million, now counts a portfolio topping 15,000 units.

Los Angeles

Calabasas-based Upside Investments sold the Santa Rosalia and Santo Tomas affordable apartments in the Baldwin Village neighborhood of LA to Avanath, which funded the deal in part through a $121 million loan from Fannie Mae.

The deal is Avanath’s largest to date in the Los Angeles County, and also marks the biggest single-asset sale in the region year-to-date, according to Northmarq, which advised the sale.

The two-story apartments at the Baldwin Hills complex were built in 1948. Santa Rosalia includes 326 units and Santo Tomas includes 343 units.

It was an off-market transaction.

Northern California

The additions to Avanath’s Northern California portfolio include four family-focused complexes and two senior affordable communities totaling 1,032 units.

Avanath now manages 12 properties including 1,854 total units in the Sacramento metropolitan area.

“Preserving affordability in markets where rental rates are historically high is the essence of our firm’s mission,” Avanath founder and CEO Daryl Carter said. “As the Northern California region is a hub for technology and other high-paying industries, market-rate apartments have been driven out of reach for many lower-income families and seniors. Our goal is to provide housing that these renters can afford, particularly as inflation continues to rise.”

The family-focused properties include Anton Arcade, Norden Terrace, The Ridge, and Whitney Ranch; the senior properties include Corsair Park Senior and Hurley Creek Senior. The communities count a 98% occupancy rate.

“The average rental rate in Sacramento has increased by 12% over the past year, and the gap between market-rate and affordable rents in the area has widened considerably, increasing the potential for ongoing renter demand for high-quality budget-friendly apartments in this market,” Avanath President and Chief Investment Officer John Williams said.

Orange County

Avanath also expanded its Orange County holdings this year, acquiring its fourth asset in the county in April.

It paid $11.1 million for the 44-unit Yorba Linda Palms, which serves residents at 30% to 50% of the area median income.

“Known for its historic charm, Yorba Linda is considered one of the most affluent cities in Orange County, which boasts the sixth highest area median income (AMI) in California and the highest AMI in Southern California at $119,000,” Carter said in a press release announcing the sale.

In addition to Yorba Linda, Avanath owns 382 units in Costa Mesa, Anaheim and Garden Grove.


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