Avanath Pays $35M for Affordable Asset in Texas’ Capital
At the time of sale, the 280-unit property was 96.4 percent occupied, with historical occupancy averaging 98 percent over the last three years.
According to Austin’s Strategic Housing Blueprint, Texas’ capital will need 75,000 market rate units and 60,000 new housing units for low-income families to meet the city’s housing needs for the next decade. Recognizing the opportunity, Avanath Capital Management has acquired for a little over $35 million a 280-unit fully affordable community located 4 miles south of downtown Austin, Texas.
Blunn Creek is a 12-building property spread across 15.4 acres at 701 Woodward St., previously owned by Hunt Cos. ARA Newmark represented the seller in the deal. At the time of the transaction, the property was 96.4 percent occupied and 98.6 percent preleased, with historical occupancy averaging 98 percent over the last three years.
The community’s unit mix consists of one- to three-bedroom floorplans averaging 1,019 square feet. Interior amenities include washer and dryer connections, air conditioning, cable-ready connections, ceiling fans, private balconies/patios, outside storage and walk-in closets. Common-area amenities consist of a fitness center, a business center, a clubhouse, a playground, a swimming pool, package service and 585 surface parking spaces.
The property’s location provides easy access to Interstate 35 and is also only 4 miles from a commuter rail system, 1 mile south of the South Congress shopping district, 6 miles from Southpark Meadows and 7 miles from the recently upgraded Austin-Bergstrom International Airport.
Renovation planned, new management
Avanath plans a series of capital improvement to Blunn Creek, including replacing the HVAC units and roofing system, improving the drainage system at perimeter walls, upgrading in-unit kitchen range venting systems and installing LED lighting throughout the property. Landscape work is also part of the property’s upgrade, as well as hiring a full-time manager for the community. Blunn Creek will be the first property managed by Avanath Realty in Austin and the second managed by the company in Texas.
“Austin is an ideal market in which to invest affordable housing capital since it is one of the fastest-growing metropolitan areas in the U.S. and homeownership is prohibitive in this market for families with low incomes,” John Williams, president & CIO of Avanath Capital Management, said in prepared remarks. “It was ranked the No. 1 Best City to Live in the United States by U.S. News & World Report in 2018 and has experienced a 4.7 percent increase in employment since 2017, per U.S. Labor Statistics.” He added that unemployment in this metro was at 2.9 percent in 2018, compared to 3.6 percent for the U.S. overall and 3.8 percent for Texas.
“Currently, market-rate rentals in the Far South market are 46 percent higher than Blunn Creek’s net max rents,” Williams added.