Hovnanian Enterprises And GTIS Partners Announce Formation Of Homebuilding Joint Venture

RED BANK, N.J. and NEW YORK, Dec. 22, 2010 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) and GTIS Partners announced today that they have entered into a joint venture agreement to acquire a portfolio of homebuilding projects. The venture intends to design, sell, and deliver homes on the properties, which are located on approximately 400 lots across two communities in California and one community in Virginia.

Approximately $75 million of capital will be invested in the joint venture, with Hovnanian contributing 26% and GTIS Partners providing 74%. Hovnanian will manage the day-to-day operations of the venture. If certain financial targets are met, Hovnanian will receive a promoted share of the cash returns from the venture. Additional details related to the joint venture are not being disclosed.

"We are extremely pleased to announce our second partnership with GTIS Partners," commented Ara Hovnanian, Chairman of the Board of Directors, President and Chief Executive Officer of Hovnanian Enterprises, Inc. "This joint venture further solidifies our relationship and is a great example of what fruit can come to bear when combining the respective strengths of both of our organizations. We are optimistic that we will be able to successfully execute additional partnerships in the future for similar large bulk purchases, which will allow us to better leverage our capital base."

Tom Shapiro, President of GTIS Partners said, "We are thrilled to do a follow on investment with Hovnanian. They have an outstanding team and have been great partners. Our first investment, which consisted of 154 finished homes and 1,422 lots in 11 communities, has greatly exceeded our projections." Added Robert Vahradian, Senior Managing Director and Head of US Investments for GTIS Partners, "The portfolio consists of communities in some of the healthiest residential sub-markets in the country, and in premier locations within those sub-markets. This investment underscores our belief that, despite a more challenging national housing market, there continues to be residential demand for the most desirable sub-markets and the opportunity to make strong opportunistic returns in the sector. We expect the gross home sellout for the joint venture to exceed $250 million."