Hovnanian Enterprises and GSO Capital Partners plan to identify land parcels for an additional $125 million in acquisition and development costs during the next 12 months.
Hovnanian Enterprises, Inc., a national home builder, and GSO Capital Partners, the credit arm of The Blackstone Group, a financial services company, announced an $125 million increase in their land banking arrangement.
The expansion brings the total arrangement since July 2012 to $250 million.
Hovnanian and GSO plan to identify land parcels for an additional $125 million in acquisition and development costs during the next 12 months. Funds managed by GSO will acquire a portfolio of land parcels and option finished lots back to Hovnanian on a quarterly takedown basis.
“The land banking structure allows us to effectively control land on a just-in-time basis,” said Ara Hovnanian, chairman and president-CEO of Hovnanian Enterprises, in a statement. “The increase in our land banking arrangement with GSO allows us to participate to an even greater extent in buying attractive land opportunities by leveraging outside capital. This frees up our cash position and enables us to make additional land investments.”