RED BANK, N.J. and NEW YORK -- Hovnanian Enterprises, Inc. and GTIS Partners announced that they have expanded their December 2010 joint venture to acquire five additional homebuilding communities. The venture intends to design, sell, and deliver homes in the communities, which contain 745 lots across three communities in Northern Virginia, one community in Maryland, and one community in Pennsylvania. Inclusive of the three properties acquired in December, two in California and one in Virginia, the joint venture now owns 1,168 lots in eight communities, and expects its gross home sellout to exceed $500 million.
Approximately $123 million of capital has been invested in the overall joint venture, with Hovnanian contributing 25% and GTIS Partners providing 75%. Hovnanian will manage the day-to-day operations of the venture. If certain financial targets are met, Hovnanian will receive a promoted share of the cash returns from the venture. Additional details related to the joint venture are not being disclosed.
"Expanding our partnership with GTIS Partners is an important step forward in an already successful relationship with two organizations that share a demand for excellence," stated Ara Hovnanian, Chairman of the Board of Directors, President and Chief Executive Officer of Hovnanian Enterprises, Inc. "Within the joint venture, and our earlier partnership with GTIS, we now expect to deliver over 2,700 homes in 19 communities. Our efforts to execute additional joint ventures with GTIS or with others do not end here, as we continue to seek opportunities to leverage our homebuilding expertise with financial partners' desires to invest in for-sale residential communities."
Tom Shapiro, President of GTIS Partners said, "We are pleased to upsize our investment with Hovnanian. They are a first class partner and homebuilder. All of these communities are located in specific submarkets in the U.S. where our underwriting validates a continued and sustained demand for new homes."
Added Robert Vahradian, Senior Managing Director and Head of US Investments for GTIS Partners, "The portfolio is now geographically represented in both Northern and Southern California, and in the greater Washington D.C. and Philadelphia areas. It is further weighted toward finished and partially finished lots. This investment provides our investors with an attractive risk-reward profile, with a concentration in markets that have consistently outperformed the overall country in terms of employment, home pricing, and absorption."
About Hovnanian Enterprises, Inc.
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.
For more information, visit: www.khov.com