Hovnanian Enterprises and GTIS Partners LP Announce Formation of Homebuilding Joint Venture

Red Bank-based Hovnanian Enterprises, Inc., a 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 percent and GTIS Partners providing 75 percent. 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.”

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