Avatar Buys Joseph Carl, CantaMia and Florida Lots

Avatar Holdings, Coral Gables (NASDAQ:AVTR) late Monday said it acquired a portfolio of real estate assets in Arizona and Florida, including Joseph Carl Homes, for approximately $62 million in cash, stock and notes, plus an earn-out of up to $8 million. The purchase was made from JEN Partners LLC, a New York-based real estate private equity fund. The assets include Joseph Carl Homes, LLC, the Phoenix-based private home builder and the developer of CantaMia, an active adult community and of single family homes. The deal also includes CantaMia, a 1781-unit community located in the Estrella Mountain Ranch Master Plan Community in Goodyear, Arizona. It also includes Sharpe properties in Florida, comprised of 445 acres located in Orange County with 839 partially developed lots, a multi-family tract, and a two-acre commercial site. The 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 properties significantly expand Avatar's existing footprint it its two primary markets of Arizona and Florida. It will also bring to the company several real executives, including Joseph Carl Mulac III, fouder of Joseph Carl Homes and a former senior executive with Tousa , Inc, who will join Avatar as evp and president of 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.

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