Hovnanian, GTIS Partners announce home-building joint venture
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."
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Building Industry Partners (BIP) forms new division
Building Industry Partners (BIP), a private equity investment and mergers & acquisitions advisory firm specializing in the middle-market U.S. building industry, has announced the formation of its Debt Advisory & Placement Practice, which will leverage its relationships with the lender community to advise building products companies in restructuring and/or refinancing existing loans, as well as sourcing and optimizing terms on new senior, mezzanine and/or other debt capital.
BIP added this service to its existing advisory practice because of ongoing feedback from building products company owners in the current market environment regarding their desire to take proactive steps to counter pressure from existing lenders and/or seek out loan financing on better terms. The goal of BIP’s practice is to arm middle-market companies with the market knowledge and technical expertise necessary to effectively renegotiate and/or restructure existing bank or other loans and to proactively source alternative debt financing.
“Without the proper expertise, borrowers often enter into loan agreements, which over-collateralize the debt, charge excessive fees and institute covenants that are easy to default on in the current market environment,” said Jason Fraler, who will head BIP’s Debt Advisory & Placement Practice. “Bad loans can put your business at risk, restrict future growth and unnecessarily put a principal’s personal wealth at risk. The placement process needs to be thorough, tapping a large number of the right lenders to maximize options and drive more competitive terms/pricing.”
Headquartered in Dallas, BIP provides equity capital to private companies, primarily with $25 million to $500 million in sales, for purposes of growing their businesses organically or through buy-and-build acquisition strategies. BIP also provides equity capital to proven executives and management teams to support them in building their own business via management buyout or acquisition of platform businesses. The firm was instrumental in the formation of U.S. LBM Holdings, one of the industry’s fastest growing lumberyard chains. The firm’s principals include Matt Ogden, Lonnie Schield and Jason Fraler.
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KB Home to build solar community in Calif.
Los Angeles-based home builder KB Home and Newhall Land have announced a land purchase agreement in the West Hills Village in Valencia, Calif. KB Home acquired 43 finished lots from Newhall Land and will begin construction on a new community in June.
The homes will be energy efficient and will include solar power systems. KB Home has also announced plans to open 10 communities in Southern California; all of the homes will be built with photovoltaic solar systems.
The new community will offer three new energy-efficient floor plans ranging from 2,941 sq. ft. to 3,646 sq. ft. with up to six bedrooms, four baths, and three-car tandem garages. Each home will be Built to Order, which allows home buyers to choose their home site and floor plan, which can be customized to fit their lifestyle and taste.
"We look forward to introducing area buyers to our Built to Order approach, and to offering some of the most energy-efficient homes on the market today, with solar power systems included in every home as a standard feature at this and many more of our new home communities throughout Southern California," said Steve Ruffner, president of KB Home’s Southern California division.
KB Home Sucks, just Google
KB Home Sucks, just Google it. You have no clue and don't own a KB Home. The media you don't have a clue either. My energy/green (NOT) efficient KB Home uses over 900% more energy than other builders, why? the non documented workers KB Home uses to install systems never have before. Wrong transformers, installed in the wrong place, causing first degree burns. The computer that controls the HVAC systems blow out due to voltage surges. The dampers to control the air flow were never hooked up to power? All the solar panels in the world can't keep up with KB Home and the hiring pool who does not have a clue of what they are doing. Just Google KB Home Sucks to see the horror stories of owning a KB Home. So many construction defects KB Home can't fix them, after awhile KB Home ignores you and gives up, your still stuck with their Lemon. Mezger their CEO is lazy and couldn't care less about their reputation. They are still under a FTC Consent order for over 30 years for shoddy construction and fake advertising. Hear my warning, do your homework before you sign any contract to any new homebuilder-lies and non disclosure, anything to sell you, then your stuck in a 30 year mortgage with no RIGHTS.