GSO Capital buys 106.31 acres in Peoria for $16.5m

Vizzda – August 8, 2013 – GSO Capital purchased 106.31 acres of “The Meadows” in Peoria for $16.5m or $155,206 per acre from Communities Southwest. An additional aspect of the deal is that K Hovnanian Homes has optioned the land. GSO Capital has worked closely with K Hovnanian Homes, providing a $250m cash infusion in 2012 (LINK) and operating as a land banker for K Hov. Steve Benson of Rose Asset Management was GSO Capital’s contact for the deal, while president Mike Kern and executive vice president Luka Vignjevic handled the deal for Communities Southwest and Chad Fuller represented K Hovnanian Homes.

From the Communities Southwest website (LINK):

The Meadows is a planned 694 acre residential community located in Peoria, Arizona at the northwest corner of 91st Avenue and Deer Valley Road. This community is planned to include a variety of single family residential lots sizes with potential densities ranging from 3.6 dwelling units per acre down to 1.1 dwelling units per acre. Residents will enjoy a vast network of landscaped common areas, a 10-acre City Park, a centralized elementary school, and a community pool and recreation center all linked by a network of community paths and trails.

Communities Southwest acquired this land as 694.14 acres from the State of Arizona on April 11, 2007 for $61.1m or $88,022 per acre with $6.11m down, an administrative fee of $860k – this figure including a $500k broker fee – and $5.99 m debt with the State of Arizona; the note bears a 10.76% rate of interest, 25-year amortization schedule and matures on February 15, 2014, at which time the balloon payment of $51,367,845 is due in full.

Edward Moore
Director of Research