SACRAMENTO, Calif. — Avanath Capital Management LLC, an institutional fund manager that specializes in affordable and workforce housing investments, has acquired a three-property affordable housing portfolio in Sacramento for $56.5 million.
The properties total 468 units and offer a mix of seniors housing, family housing and mixed-income housing. The acquisition nearly doubles Avanath’s footprint in Sacramento, which it cites as one of the hottest real estate markets in the country.
“The market has made a tremendous comeback since the Recession and leads the nation in highest annual effective rent growth, with rental increases exceeding 10.5 percent last year,” says John Williams, president and chief investment officer of Avanath. “This surge in market-rate rents is placing enormous pressure on renters and driving demand for affordable housing throughout the region.”
The properties include:
- Sierra Creek, a 144-unit property with all units reserved for seniors earning 50 to 60 percent of area median income (AMI). The property has a 200-person wait list and offers educational classes, transportation services and activities.
- Lincoln Creek, a 172-unit community with 95 affordable family units, 48 affordable seniors housing units and 29 market-rate units.
- Geneva Pointe, a 152-unit community reserved for families earning between 50 and 60 percent of AMI. There are no age restrictions on the property.
Built in 2005 and 2006 under the Low Income Housing Tax Credit program, the three-building portfolio was 98.5 percent occupied at the time of acquisition. Units average 922 square feet.
Planned renovations include upgrading exterior paint, installing LED lighting throughout the portfolio to optimize energy efficiency, revitalizing some common areas and addressing deferred maintenance items.
Avanath acquired the three properties from a repeat seller, an undisclosed affordable housing developer, in this off-market transaction.