Hovnanian sells residential mixed-use project in Oceanside, Calif., to land brokerage firm Hoffman for US$30M

IRVINE, Calif. , October 24, 2008 (press release) – The Hoffman Company, a leading land brokerage firm based in Southern California, announced today that it has closed a $30 million real estate transaction in Oceanside that will allow Piazza d’Oro, a residential mixed-use project, to move forward and benefit both parties involved.

The property, located north of Highway 78 at Rancho Del Oro Road and Vista Way, was acquired by ConAm Group of Companies, a San Diego-based real estate management and investment firm specializing in multifamily housing. The seller was K. Hovnanian® Homes®, a national homebuilder that partially developed the 14.4-acre property, which includes 221 multifamily residential units with commercial office space and retail elements.

“This is a great property with substantial improvements in the ground,” said Justin Esayian of The Hoffman Company, who brokered the deal. “K. Hovnanian was going to market it as for-sale condos until the housing market shifted. Now it doesn’t make sense and they wanted to sell it, so this is a win-win situation.”

The property was particularly attractive to ConAm because it already is entitled and partially built. It consists of high-quality assets in a good location of a coastal community in San Diego County that will hold its long-term value in a tough market, Esayian said.

“Yes, the real estate market is uncertain right now, but this is a smart time to pick off the best properties at a price we haven’t seen in years,” Esayian said. “The guys at ConAm are local, they know the market and they have a long-term vision for this project. This is a bold play that is going to pay off for them both now and down the road.”

The original vision for the residential component was for-sale condominiums, he said, but ConAm intends to complete construction and market the units as apartment rentals, at least for the short term. The club house, office space and many units already are complete.

The sale is also a strategic move for K. Hovnanian, which was seeking to minimize its land exposure on this project and was motivated to sell because of the fiscal year-end tax break, Esayian said.

Most publicly traded home-building or development companies are taking a close look at the tax benefits of selling land now at a loss they can write off against the profits of the past two years, said Tom Dallape, co-principal of The Hoffman Company.

In the past 90 days, the land brokerage firm has closed seven real estate deals in Southern California in excess of $55 million; at least two of the largest ones were motivated by the potential for tax write-offs that extend back to 2006, which is the last year that homebuilders made a substantial profit.

“We expect to see more distressed land deals – especially those involving publicly traded builder and developers - between now and the end of 2008,” said Norm Scheel, co-principal of The Hoffman Company. “This is the last chance for them to take a loss that will count against their gains in 2006, which is the last year that anybody in real estate made a substantial profit.”

About The Hoffman Company
The Hoffman Company has been a leading land brokerage firm in Southern California for the past 30 years. Its brokers have closed more than 1,100 real estate transactions for a total $4 billion since the company’s inception in 1978 and have booked an average of more than $500 million annually over the past five years. The Hoffman Company represents land owners of all property types, including residential, multi-family, commercial and industrial sites. For more information, call 949-553-2020 or visit www.hoffmanland.com

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