Avanath Buys Sacramento-Area Portfolio for $182M

Avanath Capital Management has purchased a six-community affordable and senior housing portfolio totaling 1,032 units within the Sacramento, Calif., metro, in an off-market recapitalization, for a total of $181.6 million. According to Yardi Matrix data, Avanath Realty will also manage the properties. The company plans to upgrade each asset with sustainable and social service measures.

Avanath now owns the properties in a joint venture with Pacific Housing. Previously, all assets but one, Anton Arcade, were owned by a joint venture between Pacific Housing and St. Anton Capital. A partnership between Pacific Housing and Anton Development used to own Anton Arcade, according to public records and Yardi Matrix data.

A portfolio recapitalization

The affordable housing properties are Anton Arcade in Sacramento, Calif.; Norden Terrace in North Highlands, Calif.; The Ridge in Elk Grove, Calif.; and Whitney Ranch in Rocklin, Calif.; while the senior properties are Corsair Park Senior in North Highlands, Calif.; and Hurley Creek Senior in Sacramento, Calif.

According to public records and Yardi Matrix data, some of the properties traded or received acquisition financing as follows:

• CBRE Capital Markets facilitated the transaction of Norden Terrace with a $23.6 million Fannie Mae loan
• Whitney Ranch was recapitalized with a $27.7 million sale, which was funded by a $15.7 million acquisition loan originated by CBRE Capital Markets. The mortgage was later assigned to Fannie Mae.
• Hurley Creek was recapitalized with a $30 million sale, which was funded by a $15.7 million acquisition loan originated by CBRE Capital Markets.
• CBRE Capital Markets facilitated the transaction of Corsair Park Senior with a $10.3 million Fannie Mae loan.

Built between 2008 and 2017, the entire portfolio was developed using the California Tax Credit Allocation Committee’s LIHTC, as well as bond financing. All assets also benefit from the state of California’s Welfare Tax Exemption. The overall occupancy rate of the portfolio is 98 percent, said Keith Harris, executive vice president of acquisitions for Avanath, in prepared remarks.

More affordable options within the area

Each property features amenities such as a clubhouse, business center, fitness center and pool. Laundry facilities and parking are also available. Avanath is slated to implement energy-saving updates and resident impact programming. The company plans to provide residents free access to Wellbeats, an app featuring virtual fitness classes.

This portfolio purchase brings Avanath’s footprint in the Sacramento area to 12 properties and 1,854 units. Active in other markets as well, in May, the company purchased a two-asset, 601-unit affordable housing portfolio in Brooklyn, N.Y., for a combined total of $315 million. Greenland USA was the seller of the 303-unit 38 Sixth and the 298-unit 535 Carlton.