IllinoisMultifamily Avanath pays $55 million for affordable housing portfolio August 20, 2019 Share on Facebook Share on Twitter Share on LinkedIn Share via email Avanath Capital Management, a private real estate investment manager and Registered Investment Adviser, has purchased three affordable housing communities with a combined 317 units in Chicago and Maryland. The assets, which bring the company’s total holdings in Chicago to 1,063 units, were acquired for a total of $55.05 million. “We have been extremely active this year, rapidly expanding our AUM throughout many major markets across the nation,” said John Williams, president and CIO at Avanath. “We target markets where there is tremendous pent-up economic growth, exceptionally strong job and population growth and an increasing need for affordable housing. Both Chicago and the DC metro area meet these qualifications.” The two Chicago properties include the 156-unit Scotland Yard Apartments in the Buena Park neighborhood and the 59-unit Renaissance North Apartments in Old Town. Avanath acquired Scotland Yard Apartments, located at 4215-4261 N. Broadway, for $28.3 million. The transit-oriented apartment community consists of 18 studios, 125 one-bedroom units and 13 two-bedroom units. Built in two phases in 1915 and 1917, the property was completely renovated by the seller in 1982. According to Axiometrics, the submarket has experienced record high occupancy—averaging 94.6 percent from 2000 to 2017—with an average of approximately 162 units added per year. “Chicago’s North Side is a very popular and affluent neighborhood that is known for its vintage condo buildings, tree-lined streets and location near Lincoln Park, Wrigleyville and the Uptown Entertainment District,” said Ben Finley, national head of acquisitions at Avanath. “This was a rare opportunity to acquire a well-located asset in a neighborhood with an increasing need for affordability.” “Of this limited new development, almost none of these units are affordable,” Finley continued. “This lack of supply, coupled with the submarket’s high occupancy, is creating a deep need in the market for affordable housing, which will continue to drive demand to the property over time.” Avanath will execute a number of improvements to the property, including exterior tuckpointing, repairing metal framing on the catwalks and stairways, security camera upgrades, LED lighting and moving the office to a non-rentable unit to put the current office back online. Located at 551 W. North Avenue, Renaissance North is a 59-unit, mixed-income affordable housing community constructed in 2003. The firm’s first public housing deal, Avanath acquired the property for $15.45 million. One of the first developments built in conjunction with the Chicago Housing Authority, Renaissance North offers both market-rate and affordable units, including one-, two- and three-bedroom units, in addition to first floor retail space. According to Finley, this acquisition is a testament to the importance of public-private partnerships in preserving affordability in the region. Avanath plans to make a series of renovations to the property that include interior renovations on the market rate units, pressure washing, security camera upgrades, replacing common area hallway flooring and replacing drop ceilings in all hallways. “Our investment strategy is founded on preserving affordability for residents in some of the nation’s most cost-burdened areas while simultaneously creating value for our investors,” Williams said. “Through our proven asset management strategy, we will make capital improvements to these newly acquired properties that will enhance value for investors and keep rents low for residents.” Avanath’s asset management strategy includes value engineering renovations, incorporating sustainable features and improving operational efficiencies through its integrated property management and the firm’s niche focus on affordable housing.