Avanath Capital Management Purchases 669-Unit Apartment Building in Los Angeles for $220MM

Los Angeles, Avanath Capital Management, Housing Authority of the City of Los Angeles, Kaiser Permanente, Baldwin Village

LOS ANGELES, Calif. – Avanath Capital Management, LLC, a private real estate investment manager, announces it has acquired a 669-unit family workforce housing community located in Los Angeles, California for $220 million. The firm purchased the property, Baldwin Village, as a joint venture with the Housing Authority of the City of Los Angeles (HACLA) and Kaiser Permanente, and plans to involve a few additional institutional investors in the coming months Avanath plans to convert 70% of Baldwin Village’s units to affordable housing, serving residents earning between 60% and 80% of area median income (AMI) and allowing the firm to provide budget-friendly homes in the country’s least affordable rental market, according to Daryl Carter, Founder, Chairman, and CEO of Avanath.

“Avanath’s primary mission is to deliver attainable residences in areas of the U.S. where many people are challenged to find homes they can afford,” says Carter. “With Q2 market-rate apartment rents increasing 17.3% year-over-year in Los Angeles, we are honored and excited to partner with these public and private entities to bolster the supply of affordable housing in a rapidly improving and increasingly expensive community.”

For the acquisition of Baldwin Village, Avanath worked with HACLA after the Association created a solicitation for partnership program in 2021 in response to the shortage of affordable housing in the City of Los Angeles. Through this collaboration, the community will be eligible for a California tax exemption for properties that serve tenants at 80% of AMI or lower, notes Carter.

“Avanath has long championed public-private partnerships as an excellent solution for delivering quality affordable housing in markets experiencing especially high rental rates, where there is a lack of homes within reach of many lower-income families and individuals,” says Carter. “By partnering with HACLA and Kaiser Permanente, we are able to contribute to alleviating this issue in a metro with a critical lack of affordability in both the rental and for-sale home markets.”

Baldwin Village, which will be managed by Avanath’s property management group Avanath Communities, Inc., marks the firm’s fifth acquisition in Los Angeles and second market-rate-to-affordable conversion without the use of tax credit equity, notes John R. Williams, President and CIO at Avanath Capital Management.

“Partnering with a public agency on this purchase speaks to Avanath’s reputation within the public sector and our ability to navigate programs that are mainly geared towards tax-credit developers,” says Williams. “With access to these programs, we are able to execute preservation strategies that position our residents and the community to thrive for the long term.”

According to Doug Guthrie, CEO of HACLA: “Our collaboration with Avanath will go far in helping those most in need of affordable homes in Los Angeles. We couldn’t be more pleased to be joined in this effort by a firm like Avanath that understands the housing needs of the city and its residents so well and is committed to addressing those needs.”

In acquiring Baldwin Village with HACLA, Avanath has identified an opportunity to modernize the community in a fiscally responsible way on behalf of its residents, according to Keith Harris, Executive Vice President of Acquisitions for Avanath.

“Working with HACLA enables us to assure low- and moderate-income tenants that rents will be kept affordable while simultaneously allowing us to make significant enhancements to the property,” says Harris. “Conducting these renovations will make Baldwin Village indistinguishable from nearby market-rate apartment communities and dramatically elevate residents’ quality of life.”

Planned improvements at the property include updating interiors and flooring, updating electrical infrastructure to support the addition of basic unit amenities such as dishwashers, microwaves, and replacing furnaces and roofs. Upgrades will extend to the public infrastructure, including transformers and conduits owned by the utility company Los Angeles Department of Water and Power.

In addition, Avanath will implement its proven social programming strategy to improve the resident experience, including such services as community engagement programs, financial literacy classes, and health-oriented services.

Kaiser Permanente has deep experience making strategic impact investments that preserve and create affordable housing in order to improve the health outcomes of the 68 million people who live in the communities it serves.

The acquisition of Baldwin Village was financed in part by Fannie Mae.

Michele Evans, Executive Vice President and Head of Multifamily at Fannie Mae says: “We are pleased to work with Avanath on this workforce housing community and applaud their dedication to preserving and expanding the supply of affordable housing. The resident support services will help improve residents’ experiences and drive positive social outcomes.”

Built in the 1940s and 1950s, Baldwin Village is part of the Los Angeles-Long Beach-Glendale MSA. The transit-oriented property is ideally located near shopping and public transportation and is a 20-minute drive southwest of Downtown Los Angeles and a 24-minute drive northeast of Los Angeles International Airport.

The 98.5% occupied apartment community consists of 61 two-story walk-up structures totaling 324 one-bedroom units, 296 two-bedroom units, 31 three-bedroom units and 13 studios. Common amenities at the property include 358 surface parking spaces and 452 garage spaces, electric doors in some garages, and central laundry facilities.

Baldwin Village is located at 4220 Santa Rosalia Drive, Los Angeles, California.

About Avanath Capital Management

Avanath Capital Management is a privately-held, vertically integrated investment firm managing real estate and real estate-related investments generating risk-adjusted returns through current income and capital appreciation from its investments. The firm is also a Registered Investment Adviser and provides property management services through Avanath Realty, Inc.

Founded by Daryl J. Carter, the Avanath management team averages 25 years of experience and has successfully guided investment funds in defining growth opportunities. 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. More information is available at www.avanath.com.