SEATTLE, Wash. – Avanath Capital Management, an institutional fund manager that invests in affordable and workforce housing, has acquired two workforce housing assets including The Lodge at Peasley Canyon, a 339-unit property in Seattle, Washington, and Harbor Pointe, a 34-unit property in Ft Lauderdale, Florida, for a total of $84.8 million. Avanath purchased Harbor Pointe with joint-venture partner Oak Tree Residential.
“Each of these assets presents an opportunity to leverage market growth while also preserving much-needed workforce housing in cities that have experienced some of the highest rent increases in the nation,” says John Williams, President and Chief Investment Officer of Avanath.
A recent Axiometrics report ranked Seattle as the third highest market for annual effective rent growth in the United States, while a local news report cites continued year-over-year rent increases in Broward County, Florida.
“Amidst this rent growth, there is a severe shortage of quality workforce housing that caters to middle-income families in major urban cores throughout the nation,” continues Williams. “Our investment strategy is to capitalize on this underserved market sector by acquiring and repositioning well-located workforce housing assets in high-rent markets in order to generate attractive risk-adjusted returns, while also providing workers with high-quality housing they can afford.”
Since 2008, Avanath has acquired and managed more than 41 affordable and workforce housing properties totaling over 7,000 units across the nation, targeting assets near major employment hubs in supply-constrained markets.
The two workforce housing investments recently acquired by Avanath include:
The Lodge at Peasley Canyon
Avanath acquired The Lodge at Peasley Canyon, a 339-unit workforce housing community in Seattle, for $73.3 million.
“Seattle has recently emerged as one of the fastest-growing metros in the nation, making this a highly attractive market for multifamily investors,” says Williams. “The region is quickly gaining ascendancy as one of the premier tech hubs in the Pacific Northwest, with a demographic profile and rent growth similar to that of the Bay Area. Situated in this thriving tech corridor, The Lodge at Peasley Canyon is uniquely positioned to cater to middle-income tech support workers that are unable to afford new luxury apartments or other expensive options.”
Williams notes that Seattle is home to Fortune 500 companies such as Amazon, Starbucks, Microsoft, and Nordstrom, which has fueled a luxury apartment construction boom in recent years.
“While most of the new luxury apartments that have come online are focused on attracting highly paid tech workers, there is a deeper need for quality housing that appeals to a larger demographic in the region,” he says. “The Lodge at Peasley will serve as the highest quality option in the area for these workers, and will offer rents that are approximately half of the average rent for new luxury apartments in the area.”
Built in 2004, The Lodge at Peasley Canyon is a well-maintained community featuring premier amenities including a pool and spa, state-of-the-art fitness center, modern kitchens with maple cabinetry, and washers and dryers in most units. Avanath plans to renovate the property by enhancing the clubhouse and implementing light upgrades to the interior units, kitchens and bathrooms.
“In addition to these competitive features, the property’s prime location just minutes from the Seattle-Tacoma Airport, downtown Seattle, and a variety of mass transit options will attract continued resident demand, enabling us to generate strong risk-adjusted returns on behalf of our investors,” Williams confirms.
Avanath purchased the property from an institutional owner. The Lodge at Peasley Canyon is located at 32200 Military Road, South Federal Way in Seattle, Washington.
Avanath and Oak Tree Residential have acquired Harbor Pointe, a 34-unit workforce housing community in Fort Lauderdale, Florida, for a total consideration of $11.5 million.
“Harbor Pointe is an extremely well-appointed community that is also one of the most affordable apartment complexes on the ocean side of Fort Lauderdale. The property is well-positioned to attract workers in the hospitality and cruise industries,” says Williams, who notes that tourism is the market’s second largest industry, employing more than 180,000 people throughout the county.
According to the Sun Sentinel, Fort Lauderdale boasts one of the busiest cruise-line ports in the world, with 62 percent of all cruise ships in the U.S. leaving from Florida.
“Harbor Pointe’s central location near the port will enable many workers to live within walking distance to their jobs,” adds Williams. “Further, the community’s large units can easily accommodate cruise line workers who prefer to live with roommates when not on a ship.”
Constructed in 1976 and renovated in 2006, Harbor Pointe is currently 100 percent occupied and features marble floors, condo-quality finishes, and valuable boat slips. Comprised of 2-bedroom, 2-bathroom units, Harbor Pointe represents a high-quality, affordable alternative to more expensive options in the area, according to Williams.
Avanath plans to upgrade the on-site fitness center and add storage compartments for residents, adding additional value to the apartment community.
The firm purchased the property from a private seller. Harbor Pointe is located at 2201 Southeast 18th Street in Fort Lauderdale, Florida.
About Avanath Capital Management
Avanath Capital Management is a privately-held, vertically integrated investment firm managing real estate and real estate-related investments generating attractive risk-adjusted returns through current income and capital appreciation from its investments. The firm also provides property management services through its two affiliates, Avanath Property Management and McKinley- Avanath Property Management.
Founded by Daryl J. Carter, the Avanath management team averages 25 years of experience and has successfully guided investment funds in defining growth opportunities and delivering attractive returns. Avanath professionals have real estate operating expertise and long-standing relationships with strong local, regional and national sponsors that can access investment opportunities aligned with Avanath’s initiatives.