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California-based apartment owner could invest $300M in FL over next 2 years

California-based apartment owner could invest $300M in FL over next 2 years
A view from the tennis courts of Bella Cortina Apartments, an Avanath property in Orlando near the Mall at Millenia. (Avanath)

Avanath Capital Management, a vertically integrated real estate investment firm focused on affordable multi-family housing, may have up to $300 million to invest in value-add Florida properties over the next two years, the company's founder and CEO told GrowthSpotter.

The Irvine, California-based company owns about 8,000 apartment units across 10 states, with four properties in Greater Orlando totaling 1,100 units. The investor is bullish on Florida as a whole, but sees Orlando as a focal point over the next 24 months.

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"Orlando is a key target market for us, with our strategy being to acquire and renovate. We like that there is such strong job growth tied to a variety of businesses," said Avanath's Daryl J. Carter. "We've focused on a few sub-markets so far; we own a large property in Kissimmee, two near the Mall at Millenia and one close to UCF. We'd love to own 2,000 to 3,000 units in Orlando, and we're actively looking for transactions there."

Daryl J. Carter, founder and CEO of Avanath Capital Management
Daryl J. Carter, founder and CEO of Avanath Capital Management

Avanath favors affordable housing tax credit properties where the company can maintain long-term affordability for tenants. The firm operates via an institutional fund model, with investors that are large pension funds, insurance companies and bank endowments.

Avanath's latest fund in development should be worth about $400 million, Carter said. Of that, at least one quarter, or $100 million, will be targeted for Florida acquisitions over the next 24 months. Further sourcing of loans should increase that Florida buying power to $300 million.

"We're targeting two major markets: the I-4 corridor between Tampa and Orlando, and the Naples area," Carter said. "Over the next two years I anticipate we spend another $300 million in Florida; an estimated 3,000 new units to be acquired."

Avanath favors properties within major job corridors, and those with access to transportation options. Tax credit properties and Class C assets with Class B potential fit the company's model of value-add rehab, Carter said.

"We like older 24 to 40-year-old properties because they typically have larger floor plans with three rooms or more," he said. "Larger units are in demand. While most (multi-family developers) are focused on the young single tech worker, we find the biggest demand in most of our markets is families with kids or grandparents that require a larger space."

With its portfolio weighted heavily in California, Avanath has a partnership with peer owner-operator McKinley to manage its Florida properties. Carter said further investment here could prompt the company to establish its own local management teams.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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