GTIS, Hovnanian expand homebuilding portfolio; will build 254 townhomes in West Windsor 

GTIS Partners, a global real estate investment firm, together with national homebuilder Hovnanian Enterprises, recently announced they expanded their partnership to develop, construct and sell homes in a new joint venture of eight additional for-sale homebuilding communities. To date, the partners have invested in approximately 70 homebuilding communities through multiple joint ventures.

One of the properties GTIS invested with Hovnanian as part of this transaction was in West Windsor, which will consist of 254 townhomes. In total, the eight newly added communities comprise 1,392 homes located across New Jersey, Florida, Delaware and South Carolina. In addition to being geographically diversified, these communities are diversified by product type, consisting of townhomes, condominiums and both market-rate and active adult single-family homes.

Approximately $115 million of capital will be invested in the joint venture, with Hovnanian contributing 30% of the capital requirement and GTIS Partners providing 70%, with total buildout costs projected at approximately $800 million. Hovnanian will manage the day-to-day operations of the venture.

Tom Shapiro, founder, president and chief investment officer of GTIS Partners, said: “We are very pleased to announce a further expansion of our existing relationship with Hovnanian. With this transaction, we have a partnership totaling $1 billion in equity across 15 joint ventures in high-growth markets across the United States, representing approximately $6 billion in total project costs across 12,600 homebuilding units. Hovnanian has proven to be a tremendous partner and we are thrilled to continue working with such a highly experienced homebuilder.”

Ara Hovnanian, chairman of the board, CEO and president of Hovnanian Enterprises, also commented: “This addition marks the expansion to over a decade’s worth of successful joint venture partnerships and a strong working relationship between our two firms across multiple business cycles. GTIS’ deep industry expertise and homebuilding investment experience has made them ideal institutional partners to collaborate with to grow our homebuilding portfolio.”

Ed McDowell, partner and head of U.S. acquisitions for GTIS Partners, added: “The addition to the portfolio represents a mix of product types, price points and a unique geographic diversity across eight communities in four states, many of which are follow-on investments to communities we are already invested in with Hovnanian. This dynamic, combined with the advanced development stage of several of the communities within the portfolio — many of which are already selling and delivering homes — provides excellent visibility into current home prices, absorption, buyer demand and construction and development costs, and reduces the risks typically associated with development to generate strong risk-adjusted return for both parties.”