Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national
homebuilder, and Domain Real Estate Partners, LLC ("Domain"), the
residential investment affiliate of DW Partners, LP, announced
today a land banking arrangement for $125 million.
Domain and Hovnanian anticipate identifying land parcels
totaling $125 million in acquisition and development costs over the
next two months. Domain, an affiliate of DW Partners, will acquire
the portfolio of land parcels from Hovnanian and option finished
lots on a monthly takedown basis back to Hovnanian.
"We are very pleased to announce this exciting new partnership
with Domain," commented Ara Hovnanian, Chairman of the Board of
Directors, President and Chief Executive Officer of Hovnanian
Enterprises, Inc. "We intend to fill this land banking arrangement
with land parcels we currently own. This land banking
structure allows us to both enhance our returns on investment and
increase our liquidity position by accessing outside
capital. Simultaneously, we maintain control of the land
parcels by entering into an option agreement for finished lots on a
just-in-time basis."
David Warren, Chief Investment Officer and Chief Executive
Officer of DW Partners, said, "We are excited to partner with
Hovnanian through our Domain affiliate and we believe this is a
significant step forward toward a long and mutually beneficial
relationship. This investment builds on our longstanding
expertise in credit and residential real estate and gives limited
partners in our funds access to an exciting and growing area of the
capital markets."
David Valiaveedan, Managing Partner of Domain Real Estate
Partners, said, "Hovnanian is a great builder with a longstanding
track record of performance in the residential housing market. We
are extremely pleased to have them as one of our builder
partners."
ABOUT HOVNANIAN ENTERPRISES®:
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, Minnesota, New Jersey, North Carolina, 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
communities, the Company is also one of the nation's largest
builders of active adult homes.
Additional information on Hovnanian Enterprises, Inc., including
a summary investment profile and the Company's 2014 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 list please send an e-mail to
IR@khov.com or sign up at http://www.khov.com.
ABOUT DOMAIN REAL ESTATE PARTNERS LLC:
Domain Real Estate Partners LLC ("Domain") is affiliated with DW
Partners and is a national residential real estate investment firm.
Domain aims to provide flexible financing solutions to
homebuilders, land developers, and condominium developers who own
land entitled for residential development. The Domain
management team has significant development and construction
experience and understands the financing challenges facing land
owners. The firm seeks attractive risk adjusted returns and is
not limited by investment structure. Its investment
activities focus on land banking, joint venture equity and
mezzanine debt and it seeks to invest alongside proven management
teams experienced in their local market. Domain provides
clients timely transaction evaluations, efficient underwriting
timelines and streamlined documentation.
ABOUT DW PARTNERS, LP:
DW Partners, LP ("DW") is a global multi-strategy credit firm
managing over $6bn in assets. The partners at DW, all of whom
worked at Morgan Stanley together in the early 2000s, founded the
fundamental credit investing team at Brevan Howard in 2008 and spun
off to form DW in 2009. DW uses a multi-strategy approach to
investing across the spectrum of credit and structured finance
opportunities, with a 34 person investment team focusing
predominantly on credit instruments ranging from distressed and
performing corporate credit to real estate-related investments and
other asset backed investments, with a focus on risk management and
absolute return.
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" provision 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 periods, including total revenues and adjusted
pre-tax profit. 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; and (22) 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, 2014 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.
CONTACT: Hovnanian Enterprises, Inc.:
J. Larry Sorsby
Executive Vice President & CFO
Jeffrey T. O'Keefe
Vice President, Investor Relations
732-747-7800
Domain Real Estate Partners, LLC :
DW Partners, LP :
Taylor Ingraham/Scott Tagliarino
ASC Advisors LLC
(203) 299-1230
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