WEST SACRAMENTO, Calif. — Avanath Capital Management LLC has acquired Rivers Senior, a 120-unit affordable seniors housing community in West Sacramento, for $19 million.
Constructed in 2008, Rivers Senior was built utilizing the California Tax Credit Allocation Committee’s Low-Income Housing Tax Credits (LIHTCs) along with bond financing via multiple agencies. Additionally, the asset benefits from the State of California’s Welfare Tax Exemption.
The community features 96 one-bedroom and 24 two-bedroom units, 60 of which are reserved for residents earning up to 50 percent of area median income (AMI) and 59 units of which are reserved for residents at 60 percent of AMI.
The property consists of nine two-story buildings situated on 4.8 acres, located approximately 2.5 miles west of downtown Sacramento, the main employment center for the city of Sacramento.
“Housing affordability in many West Coast markets like Sacramento is notoriously low — especially for seniors, many of whom are living on fixed incomes,” says Daryl Carter, Avanath’s founder, chairman and CEO. “Sacramento is one of the fastest-growing markets in the country, as evidenced by 12 percent rent growth over the last 12 months and average home price increases of 8.12 percent per annum over the last five years. In fact, affordability is seen as Sacramento’s biggest housing-market challenge.”
The property, Avanath’s 19th acquisition in Northern California and its 13th in the greater Sacramento area, was purchased in an off-market transaction with the seller, from which Avanath has previously purchased numerous Sacramento-based multifamily assets.
“Opportunities to own a 98 percent-occupied senior community like Rivers Senior in a strong location are rare,” says John Williams, president and CIO at Avanath. ”We were able to complete this transaction and bring our total number of units under management in the greater Sacramento area to 1,974. This allows us to leverage economies of scale while expanding the availability of high-quality affordable apartment homes to the seniors who need it most.”
Avanath will manage the property internally and plans to implement several capital improvements at the property, including replacing the roofs and boilers. The firm will also incorporate ESG principles aligned with its mission, including upgrading the property with LED lighting and completing additional energy-saving projects.