Hovnanian Enterprises, parent of K. Hovnanian Homes, has sold an uncompleted 14.4-acre mixed use condominium development outside San Diego to a local developer, the ConAm Group of Companies, for $30 million.
The sale was announced Friday by the Hoffman Company, which brokered the deal. It includes the property as well as finished and partially-finished buildings in the Piazza d'Oro project in the city of Oceanside, California. It was originally intended to include 309 condominium apartments, 14 live/work units and roughly 30,000 square feet of office and retail space but has since been scaled back to 221 residential units.
Jeffrey O'Keefe, director of investor relations for Hovnanian, could not be reached for comment. The project was one of the three largest projects in 2005 for Hovnanian's San Diego division.
"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."
According to Esayian, the retail space has been partially completed, and 34 of the residential units, office space and the club house are done. He said he did not know how much Hovnanian had invested in the project, but he said, "they're (the buyer) getting it below replacement cost."
Calls to the San Diego County tax assessor's office seeking the taxable value of the property were not returned.
Hoffman postioned the deal as benefitting both parties, with ConAm getting a partially completed development for a bargain price and Hovnanian getting the benefits of a tax carryback on the property.
"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."
ConAm intends initially to market the residences as rental apartments.