Avenue Living Expands Core Trust with a New Acquisition in Georgia
Avenue Living is pleased to report its recent acquisition of The Palms Apartments in Columbus, Georgia, carrying on a tradition of offering affordable and high-quality multi-family homes to workforce housing residents in a new state.
“We believe in the steadiness of Columbus,” says Stephen Smith, Vice President of Capital Markets. “It has strong and stable market fundamentals backed by a diversified employment landscape. When we look to enter a new market, we base our decision on a wide variety of factors — stability through economic downturns is an important indicator for us. In addition to being an attractive asset in a healthy market, we were able to secure accretive debt terms on this transaction.”
This purchase signifies Avenue Living’s expansion into the southeastern United States, a market benefitting from inbound migration largely attributed to individuals and corporations choosing the area as a home base because of its affordability.
Located in the North Columbus submarket, The Palms Apartments are situated along major transportation routes with convenient access to top school districts, retail, services, and four of the largest employers in the metro area. The median household income in this area is also significantly higher than in other parts of Columbus.
The Class B garden-style apartment community has 386 units built between 1982 and 2002 and features two resort-style pools, a fully equipped fitness center, a lake surrounded by a walking trail, and barbeque areas, among other amenities. This acquisition represented an opportunity for Avenue Living to purchase a high-quality product at a price point that aligns with our affordability construct.
While the property is well constructed, the team has identified several areas for capital improvements. “The Palms is a vibrant community with significant value-add potential, and there’s demand for a more modern product in this node of the city,” says Bettina Oslanski, Senior Vice President of U.S. Asset Management. “It is rare to find an asset of this age that’s so well maintained and can be repositioned through a small number of pointed, high-impact enhancements.”
Avenue Living’s upgrade program will be comprised of a brand refresh, enhancements to amenity spaces, and unit renovations, including the installation of stainless-steel appliances, backsplash, granite countertops, hardware, and fixture upgrades.
The renovation investment will total $5.8 million USD and benefit from Fannie Mae’s ‘Moderate-Rehabilitation’ program, which provides a fixed-rate, interest-only loan with the option of repatriating funds spent on capital improvements in the near term. The Avenue Living team secured the interest rate early, which provided insulation from the capital market fluctuations seen over the last several months and de-risked the acquisition.
The Palms acquisition brings the total U.S. exposure of the Avenue Living Real Estate Core Trust to over 1,300 multi-family doors across five states. This expansion reinforces the defensibility of Avenue Living’s strategy by diversifying market, operational, and currency risks.
“We continue to see investor support for our cross-border diversification strategy,” says Gabriel Millard, Senior Vice President, Capital Markets – Equity & Research. “10 per cent of our Core Trust exposure is now in the United States, and we are excited to continue expanding our footprint across the North American heartland.”
This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them.