Avanath Capital Management, LLC, a private real estate investment manager, has acquired a multifamily portfolio encompassing four rent-stabilized apartment buildings in Brooklyn, New York in an off market transaction. The properties were acquired in joint partnership with Oak Tree Management for a total of $60 million.
The four-asset portfolio was purchased through Avanath Affordable Housing II, LLC, a fund with $200 million of equity commitments.
“Brooklyn is a market with unbridled investment potential,” says John Williams, President and CIO of Avanath Capital Management. “Based on high growth throughout the region, rising market rents, and strong employment hubs both in Brooklyn and the surrounding boroughs, this acquisition is positioned to deliver strong risk-adjusted returns for our investors.”
Williams explains, “Avanath’s ongoing strategy is to acquire well-located assets in locations with high barriers to entry that will continue to deliver long-term stabilized cash flow, while also providing affordable housing options to residents throughout the area.”
Avanath Capital Management worked closely with its JV partner, New York-based Oak Tree Management on the acquisition of this Brooklyn portfolio. Oak Tree was instrumental in providing a well-rounded local perspective on New York’s dynamic multifamily market, according to Williams.
Jere Lucey, a Principal at Oak Tree Management explains, “We were able to combine our local knowledge with Avanath’s extensive experience in acquiring and sourcing affordable housing projects in urban core markets.”
Lucey and business partner Rick Rosan launched Oak Tree Management in Brooklyn more than 30 years ago.
“We have known the Avanath team for 30 years,” Lucey continues. “When this opportunity presented itself, we knew they were the right partner.”
The four buildings in the portfolio acquired by the Avanath/Oak Tree partnership include:
- 50 Greene Avenue, Brooklyn, New York
This 39-unit rent-stabilized apartment building was built in 1932. Avanath Capital Management and Oak Tree Management plan to implement a series of unit upgrades over time during their ownership of the property.
- 597 Grand Avenue, Brooklyn, New York
This 52-unit rent-stabilized apartment building was built in 1900. Avanath and Oak Tree have established a renovation plan to update the interior of the property, including kitchen and bathroom renovations, as well as unit and appliance upgrades.
- 800 Bergen Street, Brooklyn, New York
A 32-unit rent-stabilized apartment building in the Crown Heights neighborhood of Brooklyn, this asset was built in 2001. Avanath and Oak Tree plan to implement unit upgrades over time during their ownership of the property, including upgraded countertops, appliances, and flooring.
- 471 Vanderbilt Avenue, Brooklyn, New York
This 26-unit rent-stabilized apartment building was built in 1930. A series of interior and exterior upgrades are planned during Avanath and Oak Tree’s ownership of the asset.
This portfolio acquisition represents one of the final investments in Avanath Capital Management’s Affordable Housing Fund II. Avanath Capital plans to raise additional funds in 2016, according to Williams.
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.