Avanath Pays $25M for Affordable California Asset

Newmark provided a Fannie Mae acquisition loan for the 71-unit Bay Area community.
Acton Courtyard. Image courtesy of Newmark

Avanath Capital Management has acquired Acton Courtyard, a 71-unit fully affordable community in Berkeley, Calif. Equity Residential sold the property for $25.3 million, according to Yardi Matrix.

Newmark originated a $15.2 million Fannie Mae loan for the acquisition. The government-sponsored enterprise mortgage has a 10-year term with a fixed, 2.69 percent interest rate, Yardi Matrix data shows.

The new owner plans to implement a capital improvement program. Located at 1370 University Ave., Acton Courtyard has four studios, eight one-bedroom and 58 two-bedroom apartments, as well as a property manager’s unit. Floorplans range between 340 and 850 square feet.

The mixed-use property features 7,013 square feet of ground-floor retail space, home to various tenants as well as the Acton Courtyard leasing office.

Rent covenants

Panoramic Interests developed the five-story building in 2003 with tax-exempt financing provided by the City of Berkeley, through its Inclusionary Housing Program. While the funding has been repaid, restrictive covenants linked to the bonds are still in place.

Acton Courtyard has 50 units set aside for residents earning 120 percent of the area median income or below, with 15 reserved for 50 percent AMI, while the remaining five units are available for those earning 80 percent AMI.

The transit-oriented community is within walking distance of numerous shopping and dining options and provides convenient access to the surrounding Bay Area. Strawberry Creek Park, University of California Berkeley and downtown Berkeley are roughly within a mile of the property. The pet-friendly property features a rooftop deck, a courtyard as well as laundry facilities.

Acton Courtyard retained a 96 occupancy rate throughout the pandemic, according to prepared remarks from John Williams, President & CIO of Avanath Capital Management. Demand in Berkley is unmet and employment in the city is expected to increase by 36.3 percent over the next decade, he noted.

The company focuses on investment opportunities in markets where housing is underserved and affordability is low. 

The transaction marks Avanath’s second acquisition in the Oakland metro and its ninth in Northern California. In February, the company paid $19.9 million for an 85-unit affordable community in Garden Grove, Calif.