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Leading national homebuilder Hovnanian Enterprises ($6.02 0.15%) and GSO Capital Partners, the credit firm of The Blackstone Group ($23.45 0.51%) increased land banking arrangements by another $125 million, to total of $250 million.
The additional land banking agreement is an opportunity for GSO to increase its investment in the residential real estate market.
"Hovnanian has been an excellent partner and given the tremendous growth opportunities in the residential market today, we are convinced that we have teamed up with a great company at the right time in the cycle," said founding member and partner Doug Ostrover.
"We are hopeful that this is just one more step in a long and mutually beneficial relationship with Hovnanian," he added.
GSO and Hovnanian expect to identify land parcels for $125 million in acquisition and development costs. GSO will obtain a portfolio of land parcels and option finished lots on a quarterly take down basis back to Hovnanian.
The increase in the land bank arrangement allows Hovnanian to buy more land by leveraging outside capital, said chairman of the board of directors, president and chief executive officer Ara Hovnanian.
"This frees up our cash position and enables us to make additional land investments," he said.
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