Avanath Acquires 2 California Communities for $132M

The new ownership has plans for strategic improvements and programming for the 297-unit portfolio.

Bay Vista. Image courtesy of Avanath Capital Management

Avanath Capital Management has expanded its affordable housing presence in the Northern California market by acquiring two communities. The firm acquired the Novato Portfolio for $131.5 million from Shea Homes. Avanath’s acquisition was supported with financing from the firm’s Renaissance Fund and debt financing from CBRE and Fannie Mae.

The 297-unit affordable housing portfolio is made up of two rental communities located in Novato, Calif, near San Francisco and Sacramento. The communities are both more than 98 percent occupied and offer units that are reserved for those making between 30 percent and 60 percent of the area’s median income.

Bay Vista at Meadow Park was built in 2005 with 220 units in one-, two- and three-bedroom floorplans. The community is split between 15 two-story buildings and has a daycare center, swimming pool, spa, and picnic areas. While built earlier in 2003, Creekside at Meadow Park only offers 77 units in one-, two-, three- and four-bedroom floorplans in 26 two-story buildings. The community also has a daycare center and playground.

John Williams, president & CIO at Avanath, said in prepared remarks that the firm is planning to conduct strategic upgrades and implement new initiatives to improve both communities. Avanath is planning to install washer and dryer units since they are highly requested by residents, Williams added.

On top of the unit improvements, the firm is also looking to reduce the community’s greenhouse gas production and energy consumption. Avanath’s plans include installing LED lighting, electrical appliances and electric water heaters, but the firm is also considering adding electric vehicle charging stations.

Beyond the physical upgrades, Avanath is planning to add social programs for residents, like after-school programs, community forums, and arts and crafts classes. The company is also planning to keep most of the portfolio’s current property management staff on board.

Adding to the Northern California portfolio

For Avanath, the Novato Portfolio acquisitions represents the firm’s 17th and 18th communities in its Northern California portfolio. In total, Avanath currently manages more than 3,000 units in the Northern California market and owns more than 800 multifamily units in the Bay Area.

Prior to the Novato acquisitions, Avanath made a major acquisition of a six-community affordable housing portfolio nearby in the Sacramento metro area in August. The firm acquired the portfolio totalling 1,032 units for $181.6 million in an off-market transaction. In the same month, Avanath acquired Baldwin Village, a 669-unit workforce housing community in Los Angeles for $220 million.

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