Avanath secured a $13 million loan from Fannie Mae to finance the acquisition. The ten year-loan was structured with a loan-to-value of 67%.
“As rents continue to soar throughout major metropolitan areas such as N.Y.C., many renters are being priced out of urban cores and are migrating to the suburbs,” said John Williams, president and chief investment officer of Avanath. “This regional movement is driving tremendous demand for more affordable communities in commuting distance to expensive metros, making these assets ideal targets as strong long-term investments.”
Grand Pointe Park was 98% occupied at acquisition. Amenities include a clubhouse, swimming pool, fitness studio, basketball court, extra storage closets, and fully equipped kitchens, among others. Avanath plans to execute a rehabilitation plan that includes exterior upgrades to the clubhouse, pool deck, parking lots, and roof repairs.
Grand Pointe Park is near Poughkeepsie Station, providing train service to Grand Central Station in New York City in 90 minutes.
“The average rent at this community is under $1,500, which is less than half of the average rent in New York City for a comparable apartment,” said Williams. “By acquiring and repositioning this asset, we can provide quality housing that is much more affordable for the workforce in this region, while also achieving strong, risk-adjusted returns for our investors.”
In addition to providing access to employment opportunities in New York City, the property also offers close proximity to jobs in the local community.
The city’s growing chip manufacturing, technology, and healthcare sectors are driving employment throughout the region, which translates to enormous demand for quality workforce housing to support middle-class service workers. Major employers in the area include IBM, GlobalFoundries, and Health Quest, among others.
According to Williams, Grand Pointe Park will serve a diverse demographic ranging from middle-income families to seniors earning roughly 60% of the region’s AMI. The property offers a competitive unit mix, with 75% of floor plans consisting of two- and three-bedroom units to accommodate families.
“There is tremendous pressure on low and middle-income families when it comes to finding housing that is affordable,” said Williams. “This gap in the market presents an opportunity to fill a need while also capitalizing on unmet demand by investing in affordable housing with larger units. While many investors are focused on catering to the single millennial renter, there is an even deeper need for larger apartments to house families. This acquisition is well-aligned with our investment strategy of enhancing asset quality without sacrificing affordability, enabling us to generate attractive risk-adjusted returns to our investors while also positively impacting entire communities in need of high-quality workforce housing."
Since 2008, Avanath has invested in the acquisition and operation of 60 affordable and workforce housing assets totaling over 7,000 units across the U.S., targeting supply-constrained markets with strong economic growth and solid fundamentals. The firm’s mission is to generate both financial and social returns by investing in both property level renovations and social services that improve quality of life for its residents.
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 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.
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