Jul
15

Why This Niche Appeals to Diverse Investors

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Williams: “Especially in high-cost cities and on the coast, there’s an almost unlimited demand for affordable workforce housing.”

IRVINE, CA—Avanath Capital’s Affordable Housing II Fund has attracted investor groups including statepension funds, banks, insurance companies, a foundation and a family office, president and CIO John Williams tells GlobeSt.com. Having recently closed the fund after completing a $200-million capital raise, we spoke exclusively with Williams about why the fund has such wide appeal and how the firm approaches its acquisitions.

GlobeSt.com: What does it take to create a fund with such broad investor appeal?

Williams: I think the niche strategy is appealing because it’s not a difficult concept to grasp, especially in high-cost cities and on the coast where there’s almost unlimited demand for affordable workforce housing. The market serves people who make between 50% and 80% of area median income. It’s a highly underserved market because, if you think about it, anything being developed today is reaching for that top .001% of folks making $150,000 to $350,000 a year—that’s what you need to make to afford those homes. In the broadest group of our renters, the average rents are about $1,000 per month, and about 60% to 70% of renters in the US can afford that. When we speak to new investors, we talk about the importance of reinvesting in the community and helping communities to be sustainable with workforce folks, but also investing in a product with basically unlimited demand…

Why This Niche Appeals to Diverse Investors

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