Avanath Capital Management has purchased a 117-unit affordable housing property in Oakland called Oak Village. The transaction included the acquisition of the 251-unit Silver Springs in Kent, a Seattle suburb. The investment firm prefers to reclaim and preserve existing properties rather than build affordable housing, resulting in quicker turnarounds. Bisnow spoke with Avanath president and chief investment officer John Williams to understand the company’s investment strategy.
Bisnow: What about Oak Village drew you to the property?
John Williams: Oak Village’s prime location in one of the most “unaffordable” submarkets in the nation attracted us to the property.
We continue to view Oakland as a prime target for affordable and workforce housing investments based on its major employment drivers, rising rents and explosive cost of living. It’s no secret that rents in the central Bay Area and its surrounding submarkets are rising to unprecedented heights. Oakland continues to experience double-digit rent increases every year, and has even surpassed San Francisco in annual rent growth. The need for affordable housing is greater than ever in this submarket, allowing us to capitalize on this unlimited demand and deliver attractive returns to our investors.
Oak Village’s proximity to major employment hubs and transit options also appealed to us. Specifically, this property provides convenient access to BART for residents to commute to jobs all over the Bay Area.
Bisnow: What are some elements of your property improvement plan?
John Williams: Our strategy is to implement improvements that will enhance the affordability and sustainability of the property. For example, we plan to install drought-tolerant landscaping to reduce utility costs, thereby keeping the asset both sustainable and affordable for tenants. By executing these landscaping upgrades, we will minimize the property’s water usage, which in turn will create value for the overall environment, the community at large and for our investors.
We intend to preserve the existing infrastructure to ensure that the property remains affordable for our residents.
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