Avanath Capital Management, LLC has acquired two affordable multifamily properties totaling 668 units in the Chicago metro through an institutional fund, Avanath Affordable Housing III, for a combined total of $72.2 million. The properties include the 582-unit Hinsdale Lake Terrace in Willowbrook, Illinois and the 86-unit Drexel Court in Chicago. Both are mid-1900s-era affordable housing properties in economically thriving submarkets.
“The Chicago market is precisely aligned with our investment thesis, through which we preserve affordability in the nation’s most cost-burdened regions, while simultaneously driving value for investors,” said John Williams, president and CIO of Avanath Capital Management. “Chicago has emerged as a hub of growth with rapid economic revitalization that is now spilling over into the city’s submarkets and South Side. With this sprawl comes rent increases, which put pressure on the local workforce and community, resulting in a dire need for more affordable housing options.”
By acquiring these two properties, Avanath is addressing this need while also amassing economies of scale to drive down operating costs for investors. “This acquisition increases our footprint in the region, bringing our portfolio in the Chicago metro to more than 840 units,” Williams said. “Drawing upon our national property management platform, we will be able to increase operational efficiencies and deliver a high quality of life to our residents throughout the region.”
Hinsdale Lake Terrace, which the firm acquired for $63 million, consists of large floorplans including three-bedroom townhomes. A series of capital improvements planned for the property include updating community spaces, unit upgrades and addressing any deferred maintenance. The property, located at 16W150 Honeysuckle Rose Lane in Willowbrook, features a business center, BBQ and picnic areas, a playground, basketball courts and a swimming pool.
The community also features a rare amenity—a 3,400 square-foot, on-site recreational center, which is currently occupied by The Community House, a nonprofit organization that provides academic tutoring and social support to at-risk youth.
“The partnership with The Community House was another reason we found this property so attractive,” said Williams. “Beyond affordability, our investment criteria always includes a holistic approach to the properties we acquire, through which we provide our residents with social programs that help them thrive. In this case, the existing partnership with The Community House allows us to provide these social services to residents without any added costs.”
Avanath Capital Management also acquired Drexel Court Apartments, located at 6140 S. Drexel Avenue, for $9.15 million. The six-story property is within walking distance to the CTA Cottage Grove Green Line station and the 63rd Street Metro Station, and also provides direct access to Lakeshore Drive and Interstate 90 and 94. Avanath plans to upgrade the community to feature more common area amenities and offerings.
“Currently, the property features a large management office and meeting area,” Williams said. “We plan to repurpose this space into a variety of community amenities that are better suited for renters such as a fitness center, media room and a health and wellness center.”