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8-K - FORM 8-K - AV Homes, Inc. | g25027e8vk.htm |
Exhibit 99.1
AVATAR
For Immediate Release
AVATAR HOLDINGS ACQUIRES PROPERTIES FROM JEN PARTNERS
THAT SIGNIFICANTLY DIVERSIFY ITS
REAL ESTATE PORTFOLIO IN ARIZONA AND FLORIDA
THAT SIGNIFICANTLY DIVERSIFY ITS
REAL ESTATE PORTFOLIO IN ARIZONA AND FLORIDA
Properties Acquired Fall in the Sweet Spot of Avatars Active Adult Community Strategy
Transaction Further Strengthens Avatars Senior Management Team; Expands Board of Directors
Transaction Further Strengthens Avatars Senior Management Team; Expands Board of Directors
CORAL GABLES, Fla., October 25, 2010 Avatar Holdings Inc. (Avatar) [NASDAQ: AVTR], a leading
real estate company in Florida and Arizona, announced today that it acquired from JEN Partners LLC,
a New York-based real estate private equity fund, a portfolio of prime real estate assets in key
geographic retirement areas in Arizona and Florida for approximately $62 million in cash, stock and
notes, plus an earn-out of up to $8 million. Avatars Board of Directors unanimously approved the
transaction which closed today.
Among the prime assets and properties being acquired from JEN Partners include:
§ | Arizona properties: |
Joseph Carl Homes, LLC the Phoenix-based private home builder and the developer of CantaMia,
an active adult community, and single family homes.
CantaMiaa 1781 unit premier active adult community located in the Estrella Mountain Ranch
Master Plan Community in Goodyear, Arizona.
§ | Florida properties: |
Sharpe properties 445 acres located in Orange County, comprised of 839 partially developed
lots, a multi-family tract, and a two acre commercial site.
The purchase price consists of $30 million in cash, $20 million in restricted common stock subject
to a two-year lock up agreement, and $12 million of notes divided equally into two $6 million
notes, one with a 1-year maturity and the second with a 2-year maturity. In addition, the agreement
provides for up to $8 million in common stock, subject to the achievement of certain agreed upon
metrics related to the CantaMia project by December 31, 2014.
The newly-acquired properties will significantly expand Avatars existing base in the two markets
it specializes inArizona and Florida. It will also further expand Avatars position into the
highly-desirable active adult community (ages 55+) sector of the Arizona real estate market, and
bring to the company a number of proven real estate executives, including Joseph Carl Mulac III, a
former senior executive with Tousa , Inc. Mr. Mulac, founder and CEO of Joseph Carl Homes, joins
Avatar as Executive Vice President and President of its subsidiary, Avatar Properties Inc.
Additionally, as part of the agreement, two Managing Directors from JEN Partners, Reuben Leibowitz
and Allen Anderson, will join the Avatar Board of Directors. Prior to founding JEN Partners, Mr.
Leibowitz had spent 22 years at Warburg Pincus and was responsible for the firms real estate
effort. Mr. Anderson had been Chairman and CEO of Meridian Industrial Trust, a NYSE listed REIT
until its sale to Pro Logis in 1999. He joined JEN as a Senior Advisor in 2006 and became a
Managing Director of the firm in 2008. Mr. Leibowitz and Mr. Anderson each have more than 30 years
of experience in building and growing real estate companies and successfully managing through
various real estate market cycles. Through this transaction, JEN Partners will become a significant
shareholder of Avatar.
Gerald D. Kelfer, Avatars President and Chief Executive Officer said, Cumulatively, this
transaction will be transformative for Avatar as it significantly strengthens and expands our
footprint, particularly in Arizona, bolsters our management team, and deepens the experience of our
Board of Directors. As I prepare to retire from day-to-day management responsibilities, I do so
with the confidence that this transaction is in the best interests of the company and its
shareholders. Mr. Kelfer, age 65, announced his retirement earlier this month. He will remain Vice
Chairman of Avatars board of directors.
Mr. Leibowitz, a Managing Director of JEN Partners, added, From the outset, we were very excited
about the potential of this transaction and the prospects for Avatar, which is evidenced by the
significant equity stake JEN now holds in the company. We look forward to joining the Board and
making a meaningful contribution to the company.
Jon M. Donnell, who will become Avatars President and Chief Executive Officer, effective November
15th, added, This is an important transaction for Avatar. Many of the properties we
have just acquired from JEN are in the sweet spot of our strategy to build premium active adult
communities and consistent with our stated goal to capitalize on current market opportunities,
added Mr. Donnell. We are also very pleased that Carl Mulac is joining our company. He brings more
than 25 years of experience developing and growing homebuilding operations to Avatar. He will be a
solid addition to our senior management team.
Mr. Donnell brings to Avatar over 20 years of experience in homebuilding, land development, and
active adult communitiesthe Companys prime areas of focus. From 1995-2004, he held several
executive positions at Dominion Homes, Inc., a builder of single family homes, and was President
and Chief Operating Officer from 1999-2004. From 1984-1995, he held various senior-level financial
and operational positions at Del Webb Corporation, a premier builder of master-planned, active
adult communities. More recently, from 2007 to present, he Co-Founded and has been a Principal of
The Monticello Group, LLC a specialty real estate advisory firm based in Sarasota, Florida.
About Avatar Holdings
Avatar Holdings Inc. is engaged in real estate operations in Florida and Arizona. In addition to
the properties acquired in its JEN Partners transaction, Avatars principal operations are
conducted at Poinciana, Solivita and Bellalago in central Florida near Orlando; and Seasons at
Tradition in Port St.
Lucie, Florida and at Rio Rico, south of Tucson, AZ. Avatars common shares trades on NASDAQ under
the symbol AVTR.
###
Contact:
Juanita I. Kerrigan
Avatar Holdings Inc.
201 Alhambra Circle
Coral Gables, FL 33134
(305) 442-7000
Avatar Holdings Inc.
201 Alhambra Circle
Coral Gables, FL 33134
(305) 442-7000
Melisa Sheer or Jeffrey Taufield
Kekst and Company Incorporated
437 Madison Avenue
New York, NY 10022
(212) 521-4800
Kekst and Company Incorporated
437 Madison Avenue
New York, NY 10022
(212) 521-4800