Hovnanian Enterprises and GTIS Partners have expanded their December 2010 joint venture with the acquisition of five additional home-building communities. The venture plans 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.
The venture now owns 1,168 lots in eight communities -- which includes the three properties acquired in December, two in California and one in Virginia -- and expects its gross home sellout to exceed $500 million.
About $123 million of capital has been invested, with Hovnanian contributing 25% and GTIS Partners providing 75%. Hovnanian will manage the day-to-day operation, and if certain financial targets are met, Hovnanian will receive a promoted share of the cash returns from the venture.
"Within the joint venture, and our earlier partnership with GTIS, we now expect to deliver more than 2,700 homes in 19 communities,” said Ara Hovnanian, chairman of the board of directors, president and CEO of Hovnanian Enterprises. “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 home-building expertise with financial partners' desires to invest in for-sale residential communities."