The Red Bank, N.J., builder says it is increasing its land banking relationship with GSO Capital Partners by $150 million.
GSO and Hovnanian will identify land parcels for GSO to acquire and develop, according to chairman, president and chief executive Ara Hovnanian. GSO is a credit arm of the Blackstone Group.
"The increasing demand for new homes and a diminishing supply of finished lots provides us with an opportunity to further leverage our arrangement with GSO to acquire finished lots on a just-in-time basis,” Hovnanian said. “This “arrangement increases our liquidity and allows us to control an even larger quantity of land for future communities and deliveries, which will ultimately lead to future revenue growth."
GSO Capital Partners has financed $250 million in land acquisitions for Hovnanian since July 2012. The new deal announced Monday morning brings the total land banking arrangement up to $400 million.