Avanath buys 669 labor unit property
Avanath Capital Management has acquired a 669-unit public housing community in Baldwin Hills for $230 million, or $343,796 per unit. Upside Investments sold the property.
The sale represents the largest single asset sale in Los Angeles County this year, according to Northmarq, which arranged the sale and secured $121 million in acquisition financing from Fannie Mae.
The buyer purchased the property, known as Baldwin Village, as a joint venture with the City of Los Angeles Housing Authority and Kaiser Permanente. They plan to bring in a few more institutional investors in the coming months.
Baldwin Village is made up of Santa Rosalia Apartment Homes – located at 4220 Santa Rosalia Drive – with 326 units and Santo Tomas Apartment Homes – located at 4318 Santo Tomas Drive – with 343 units.
The property, which is 98.5% occupancy, is made up of 61 two-story walk-up structures built in the 1940s and 1950s. It includes studios, one-bedroom, two-bedroom, and three-bedroom units.
Avanath plans to convert 70% of Baldwin Village units into workforce housing, serving residents earning between 60% and 80% of the area’s median income and allowing the company to provide affordable housing on the least affordable rental market in the nation, according to Daryl Carter, Founder, President and CEO of Avanath.
“With second quarter market rate apartment rents increasing 17.3% year-over-year in Los Angeles, we are honored and excited to partner with these public and private entities to strengthen the supply. of affordable housing in a rapidly improving and increasingly expensive community,” Carter said in a statement.
For the acquisition of Baldwin Village, Avanath worked with HACLA after the association created a solicitation for a partnership program last year in response to the shortage of affordable housing in Los Angeles. Through this collaboration, the community will be eligible for a California tax exemption for properties that serve renters at 80% of the area’s median income or less, Carter said.
“Avanath has long championed public-private partnerships as an excellent solution for providing quality affordable housing in markets with particularly high rental rates, where there is a lack of affordable housing for many low-income families and individuals. income,” Carter said.
Baldwin Village marks the company’s fifth acquisition in Los Angeles and the second market rate conversion to an affordable price without the use of tax credits, said John R. Williams, president and chief investment officer at Avanath Capital. Management.
“Partnering with a public agency on this purchase is a testament to Avanath’s reputation in the public sector and our ability to navigate programs primarily aimed at tax credit developers,” Williams said. “Through access to these programs, we are able to execute preservation strategies that enable our residents and the community to thrive over the long term.”
Avanath has identified an opportunity to modernize the community in a fiscally responsible manner on behalf of its residents, according to Keith Harris, executive vice president of acquisitions for Avanath.
“Working with HACLA allows us to assure low- and moderate-income tenants that rents will remain affordable while allowing us to make meaningful improvements to the property,” Harris said. “Completion of these renovations will make Baldwin Village indistinguishable from nearby market-rate apartment communities.”
Planned improvements to the property include updating interiors and flooring, updating the electrical infrastructure to support the addition of basic unit amenities.
Additionally, Avanath will implement its social programming strategy to enhance the resident experience, adding community engagement programs, financial literacy classes and health-focused services.