Avanath Capital Management LLC, an Irvine-based multifamily owner and operator that primarily focuses on affordable and workforce housing, has secured affordability restrictions on more than 500 existing units at two of the firm’s owned and managed multifamily communities, located in Long Beach, California and Kissimmee, Florida.
Wellington Woods (pictured left) is located at Wellington Woods Circle, Kissimmee, Florida. Seaport Village (pictured right) is located at 5601 Paramount Boulevard, Long Beach, California.
This was achieved through both conversion and preservation initiatives, according to John R. Williams, President and Chief Operating Officer at Avanath.
“As part of our ownership strategy, we continue to evaluate ways to enhance the long-term value of our portfolio and best serve our residents,” says Williams. “Leveraging our deep knowledge of affordability regulations in markets throughout the country, as well as relationships with local municipalities and state agencies, we were able to find solutions that involved affordable conversion and extension at these two communities. This aligns with Avanath’s mission of providing affordable and workforce housing in some of the highest cost-of-living metros throughout the country.”
Avanath executed an affordable conversion of units that were previously market-rate at 358-unit Seaport Village in Long Beach, California (Built in 1963). The firm also maintained the affordability of 100% of the 360 units at Wellington Woods in Kissimmee, Florida (Built in 1994) through replacing an expiring regulatory agreement.
“At Seaport Village, we utilized the California Municipal Finance Authority’s Charitable Housing Program to convert at least 40% of the community’s unregulated 358 units to affordable by restricting rents to those who earn up to 80% of area median income,” continues Williams. “With Wellington Woods, the regulatory agreement in place was set to expire. Weighing several options, we ultimately chose to extend its affordability restrictions for 10 years.”
Ken McMackin, Executive Vice President, Investments, explains that through creatively reviewing, revising, extending, and implementing affordability regulations, Avanath is also able to access additional benefits. For example, the affordable conversion of Seaport Village’s units creates a significant annual property tax savings, while the new agreement in place for Wellington Woods provides a tax abatement and access to lower financing rates.
“These conversion and preservation strategies are truly win-win-win scenarios and serve as examples of public-private partnerships that really work,” says McMackin. “Our residents are able to stay in place and not become cost-burdened, the local communities and cities benefit from satisfied and thriving residents, and our investors see a higher return on the properties and increasing the value of the assets.”
