“This portfolio presented a rare opportunity to gain a substantial stake in one of the most dynamic markets in the nation,” says John Williams, president and chief investment officer of Avanath. “Brooklyn's explosive economic growth, population gains, and cultural renaissance are driving an influx of investment capital to this market, which consistently ranks as one of the most expensive places to live in the US.”

The deal is the third time Avanath and Oak Tree have partnered on multifamily property acquisitions in Kings County. In 2015, Avanath acquired a four-building Brooklyn affordable housing portfolio totaling 148 units with Oak Tree for $60 million. In 2016, Avanath partnered with Oak Tree again to purchase a three-building Brooklyn affordable housing portfolio totaling 46 units for $14.4 million.

Williams adds that most of the new housing developments that have come online in Brooklyn are luxury units and therefore its affordable priced apartment portfolio caters to a growing need. “Our strategy is to cater to this underserved demographic by preserving the dwindling supply of affordable housing through capital improvements that enhance quality without sacrificing affordability,” he says.

The specifics of the Avanath-Oak Tree's latest Brooklyn purchase include seven properties in Crown Heights (244 New York Ave., 585 Park Place, 874 Bergen St., 942 Bergen St., 95 Kingston Ave., 1400 Dean St. and 701 Saint Marks Ave.); one property in Prospect Heights (306 Prospect Place); seven properties in Bedford-Stuyvesant (927 Putnam Place, 931 Putnam Place, 267 Clifton Place, 276 Throop Ave., 299 Putnam Ave., 303 Putnam Ave. and 403 Macon St.) and two properties in Williamsburg (135 Devoe St. and 147 Grand St.).

This past March, Avanath Capital acquired a Hudson Valley, NY-based multifamily property—Grand Pointe Park—a 156-unit complex in Poughkeepsie, NY for $19.3 million.

NEW YORK CTIY—Institutional fund manager Avanath Capital Management, LLC of Irvine, CA has expanded its housing portfolio in the Northeast with the purchase of a 198-unit affordable rental housing portfolio in Brooklyn for $73 million from a private investor.

Avanath Capital acquired the portfolio of 17 apartment buildings in a joint venture partnership with New York-based Oak Tree Management. The properties are located in Prospect Heights, Crown Heights, Williamsburg, and Bedford-Stuyvesant and include 115 rent-stabilized units, 79 free-market units, and four commercial spaces. Average monthly rents in the newly acquired assets range from $1,700 to $2,500, which is approximately half the cost of rental comps in Brooklyn, which average $3,000 to $5,000 a month, the company states.

Peter Von Der Ahe, Joseph Koicim, and Shaun Riney of Institutional Property Advisors, a division of Marcus & Millichap, and DJ Johnston of Cushman & Wakefield represented the seller. Andrew Dansker of Marcus & Millichap arranged the financing for the buyer. The portfolio's four commercial spaces are currently leased by a mix of local tenants that include Sunday Routine, a local restaurant/bar; Fool's Gold Records, an independent hip-hop/electronic record label store and a day care center, among others.

The new ownership plans to undertake what it describes as “comprehensive renovations” as units turn over, including interior upgrades to the kitchens and bathrooms, remodeling of kitchen cabinets, and installation of new flooring, among other planned upgrades.

“This portfolio presented a rare opportunity to gain a substantial stake in one of the most dynamic markets in the nation,” says John Williams, president and chief investment officer of Avanath. “Brooklyn's explosive economic growth, population gains, and cultural renaissance are driving an influx of investment capital to this market, which consistently ranks as one of the most expensive places to live in the US.”

The deal is the third time Avanath and Oak Tree have partnered on multifamily property acquisitions in Kings County. In 2015, Avanath acquired a four-building Brooklyn affordable housing portfolio totaling 148 units with Oak Tree for $60 million. In 2016, Avanath partnered with Oak Tree again to purchase a three-building Brooklyn affordable housing portfolio totaling 46 units for $14.4 million.

Williams adds that most of the new housing developments that have come online in Brooklyn are luxury units and therefore its affordable priced apartment portfolio caters to a growing need. “Our strategy is to cater to this underserved demographic by preserving the dwindling supply of affordable housing through capital improvements that enhance quality without sacrificing affordability,” he says.

The specifics of the Avanath-Oak Tree's latest Brooklyn purchase include seven properties in Crown Heights (244 New York Ave., 585 Park Place, 874 Bergen St., 942 Bergen St., 95 Kingston Ave., 1400 Dean St. and 701 Saint Marks Ave.); one property in Prospect Heights (306 Prospect Place); seven properties in Bedford-Stuyvesant (927 Putnam Place, 931 Putnam Place, 267 Clifton Place, 276 Throop Ave., 299 Putnam Ave., 303 Putnam Ave. and 403 Macon St.) and two properties in Williamsburg (135 Devoe St. and 147 Grand St.).

This past March, Avanath Capital acquired a Hudson Valley, NY-based multifamily property—Grand Pointe Park—a 156-unit complex in Poughkeepsie, NY for $19.3 million.