Avanath and UBS Recapitalize $248 Million Affordable Housing Portfolio
MARCH 2019
Avanath Capital Management, LLC (“Avanath”), a private real estate investment manager focused on the preservation of affordable housing nationwide, has completed a strategic recapitalization of a portfolio of affordable multifamily assets formerly held by Avanath Affordable Housing I, LLC, Avanath’s inaugural fund (the “Elevate Portfolio”).
Interests in the Elevate Portfolio, which includes 2,085 units across 14 multifamily communities in high-barrier-to-entry markets nationwide, were sold to a group of institutional investors advised by UBS Asset Management (“UBS-AM”), Real Estate & Private Markets (“REPM”)'s Multi-Managers (“MM”) business, which offers indirect real asset global investment solutions for real estate, infrastructure and private equity.
Avanath will manage the assets and continue to provide high-quality housing options to an underserved segment of the population. The transaction, which represents a highly attractive entry point for UBS into the affordable housing segment, denotes a significant milestone for Avanath’s and REPM MM’s broader impact investing initiatives.
“The Elevate Portfolio provides REPM MM rare access to a fully stabilized and diversified portfolio of affordable housing assets offering our clients strong risk-adjusted total returns with highly durable cash flow," says David Kozlicki, Executive Director and Portfolio Manager at REPM.
The Elevate Portfolio, of which 65% is in highly desirable submarkets in California and Florida, was transferred to the new Avanath/UBS-AM vehicle at an aggregate value of approximately $248 million.
“This strategic recapitalization with REPM MM represents an opportunity to continue to make an impact in underserved markets throughout the U.S.,” says Daryl Carter, Founder, Chairman and Chief Executive Officer of Avanath. “Demand for affordable housing continues to outpace supply at a rapid pace. Together, we will continue to provide hardworking families high-quality, well-maintained, affordable rental housing across the nation.”
Accord Capital Partners LLC served as the exclusive financial advisor to Avanath in connection with this transaction.
ABOUT AVANATH CAPITAL MANAGEMENT
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 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 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.
ABOUT UBS
UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS's strategy is centered on our leading global wealth management business and our premier universal bank in Switzerland, enhanced by Asset Management and the Investment Bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook.
Headquartered in Zurich, Switzerland, UBS has offices in 52 countries, including all major financial centers, and employs approximately 60,000 people. UBS Group AG is the holding company of the UBS Group. Under Swiss company law, UBS Group AG is organized as an Aktiengesellschaft, a corporation that has issued shares of common stock to investors.
UBS Asset Management
Asset Management is a large-scale asset manager with a presence in 23 countries. It offers investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients around the world. It is a leading fund house in Europe, the largest mutual fund manager in Switzerland, the second largest fund of hedge funds manager and one of the largest real estate investment managers in the world.
ABOUT ACCORD CAPITAL PARTNERS LLC
With its headquarters in San Francisco and offices in Chicago, London and Hong Kong, Accord Group Holdings LLC (“Accord”) harnesses a powerful combination of capital markets, investment management and principal investment capabilities for a wide variety of participants in the real estate private equity industry globally. Through Accord Capital Partners LLC, its broker/dealer affiliate in the United States, Accord provides advisory and capital raising services to its clients.
