RED BANK, N.J. & NEW YORK--(BUSINESS WIRE)--Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, and GTIS Partners LP, an international real estate private equity firm headquartered in New York City, announced today that they have entered into a joint venture agreement to acquire a portfolio of homebuilding communities.
The venture intends to design, construct and sell homes on the properties, which are located on approximately 2,340 lots across thirteen communities in Arizona, California, Florida, Illinois, Maryland, New Jersey, South Carolina and Virginia, and expects the proceeds from home sales to exceed $1.0 billion in revenues. The first tranche of the joint venture, consisting of eight communities, has closed.
Approximately $160 million of capital will be invested in the joint venture, with Hovnanian contributing 25% and GTIS Partners providing 75%. Hovnanian will manage the day-to-day operations of the venture.
“We are extremely pleased to announce another partnership with GTIS Partners,” commented Ara Hovnanian, Chairman of the Board of Directors, President and Chief Executive Officer of Hovnanian Enterprises, Inc. “Our two firms have developed a strong working relationship through our previous ventures and we look forward to continued success working together.”
Tom Shapiro, President of GTIS Partners said, “We are excited to enter into another joint venture with Hovnanian. Ara and his team have been first-class institutional partners and, to date, GTIS has invested with Hovnanian in a total of 21 communities comprised of approximately 3,400 homes and lots. We are thrilled about the prospects of this latest investment.”
Noted Robert Vahradian, Senior Managing Director and Head of US Investments for GTIS Partners. “The portfolio represents a diverse mix of geographies, product types and price points, and has a significant concentration of finished and partially-finished lots, with communities in some of the strongest residential sub-markets in the country.”
Ed McDowell, Managing Director at GTIS Partners commented, “This investment underscores our belief that, while the health of the U.S. housing market has improved along with the general economy, a persistent shortage of new home supply remains, and affordability levels should allow for continued strength in the housing market.”
ABOUT HOVANIAN 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, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The company's homes are marketed and sold under the trade names K. Hovnanian® Homes®, Brighton Homes®, and Parkwood Builders. As the developer of K. Hovnanian's® Four Seasons, the Company is also one of the nation's largest builders of active lifestyle communities.
Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company’s 2015 annual report, can be accessed through the “Investor Relations” section of the Hovnanian Enterprises’ website at http://www.khov.com. To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.
ABOUT GTIS PARTNERS
GTIS Partners is a global real estate investment firm headquartered in New York with offices in Los Angeles, San Francisco, Atlanta, São Paulo, Brazil, Paris, France, and Munich. GTIS Partners has 83 employees and currently has approximately $3.3 billion of assets under management. To date, the firm has committed capital to residential, retail, industrial, office, hotel and mixed-use projects in the U.S. and Brazil. In the U.S., GTIS has committed over $1.3 billion of equity and debt to 85 projects in 22 states. In Brazil, GTIS has invested in 90 assets comprised of approximately 13,000 residential units, 500,000 square meters of office and industrial space, and over 9,800 hotel rooms acquired, managed, or under development. By combining hands-on real estate expertise with a disciplined investment approach, GTIS Partners helps create value for its investors and partners. The firm pursues opportunistic real estate investments through direct equity investment and non-traditional lending activities and the firm relies on macro-research as well as the hands-on industry knowledge of its experienced investment and asset management teams. For further information, please visit www.gtispartners.com.
FORWARD-LOOKING STATEMENTS
All statements in this press release that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company’s goals and expectations with respect to its financial results for the current or future financial periods, including total revenues, Adjusted EBITDA and adjusted income before income taxes. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of the sustained homebuilding downturn; (2) adverse weather and other environmental conditions and natural disasters; (3) levels of indebtedness and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; (4) the Company's sources of liquidity; (5) changes in credit ratings; (6) changes in market conditions and seasonality of the Company’s business; (7) the availability and cost of suitable land and improved lots; (8) shortages in, and price fluctuations of, raw materials and labor; (9) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) operations through joint ventures with third parties; (13) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (14) product liability litigation, warranty claims and claims made by mortgage investors; (15) levels of competition; (16) availability and terms of financing to the Company; (17) successful identification and integration of acquisitions; (18) significant influence of the Company’s controlling stockholders; (19) availability of net operating loss carryforwards; (20) utility shortages and outages or rate fluctuations; (21) geopolitical risks, terrorist acts and other acts of war; (22) increases in cancellations of agreements of sale; (23) loss of key management personnel or failure to attract qualified personnel; (24) information technology failures and data security breaches; (25) legal claims brought against us and not resolved in our favor; and (26) certain risks, uncertainties and other factors described in detail in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
