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Avanath Pays $87.5M for Anaheim Senior Housing Project

Orange County has long served as a steady home base for apartment owner Avanath Capital Management LLC, though it had struggled to break into the local investment market.
 
That is, until this year.

 
The Irvine-based company, led by founder and Chief Executive Daryl Carter, has acquired two apartment projects in OC so far this year, totaling more than $100 million.


More buys are on the horizon.

 
“We are very bullish on the Orange County market,” Carter said. “There’s a great need for affordable housing here, and we will continue to be active in scouting investment opportunities here.”


The company has been bullish in general as of late, with a portfolio approaching 12,000 units; nearly 1,500 of those units have been added since the start of 2020.

Overlook at Anaheim Hills 

The company’s most recent OC acquisition was for a 261-unit senior apartment complex in Anaheim Hills. It spent a reported $87.5 million for the project.


Seattle-based Security Properties sold Overlook at Anaheim Hills for about $335,250 per unit. The latest sale marks a 68% premium over its last sale in 2015.

 
The deal is among the five priciest local apartment sales in the past six months, according to CoStar Group Inc. records.

 
It’s been a boom period for big-dollar rental transactions in OC. There’s been four deals topping the $100 million mark since December 2020; as with the Avanath buy, each of those transactions is geared toward providing more affordable housing to the area.


There weren’t any area apartment sales topping $100 million in the prior 12-month period, according to CoStar’s records.


The property at 145 S. Festival Drive is just south of the Riverside (91) Freeway, next to the Anaheim Hills Festival shopping center.


It was built in 2001, and has 130 rent-restricted affordable units.

 
“Overlook at Anaheim Hills is a senior community, which is a very attractive property as the aging Baby Boomer generation is continuing to downsize and look for quality housing options that are also affordably priced,” Carter said, adding that the Anaheim market in particular “has an exceedingly limited senior housing supply.”


Avanath is looking to invest about $4 million in upgrades, including renovations to common areas and adding a dog park.

 
The firm said it will also incorporate “sustainability initiatives to reduce the property’s carbon footprint and generate energy savings.”


The recent deal brings Avanath’s total investments since 2020 to nearly $230 million.
The company attributes its recent growth to burgeoning demand for affordable housing, a sector that makes up the bulk of Avanath’s portfolio.

 
Avanath, one of the country’s largest owners of affordable housing rental properties, raised $760 million in its fourth U.S. affordable housing fund which closed at the start of the year. It’s reported to be the company’s largest such fund to date.


Between recent funds and debt capital, Avanath said it has nearly $1 billion to deploy for future affordable investments.

 
The company is scouting out other opportunities in Orange County, and other existing markets across the United States, according to Carter.


“There’s an affordability crisis in the United States, and the pandemic has pushed more people into that income bracket, which is between 40% to 80% of the area median income,” Carter notes.

 
The senior affordable housing sector is particularly steady, Carter said, with strong occupancy rates and perfect rent collection rates throughout the pandemic.

 
Overlook is no different, with nearly 100% occupancy.

 
The Anaheim community is the second senior affordable housing project the firm has bought locally.

 
Its first acquisition was The Grove Senior Apartments, an 85-unit independent living community in Garden Grove.


The property, just north of the (22) Freeway along Garden Grove Boulevard, sold for $19.9 million, or about $234,000 per unit. 

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