SCOTTSDALE, Ariz. (GLOBE NEWSWIRE) — AV Homes, Inc. (Nasdaq:AVHI), a developer and builder of active adult and conventional home communities in Arizona and Florida, today announced that TPG, a leading global private investment firm, has agreed to make a $135 million investment in the Company at a price of $14.65 per share, which represents a 9.6% premium to the 30-day trailing average closing price of AV Homes’ common stock. AV Homes will use the proceeds to accelerate the implementation of its strategic growth plan in its existing and new high-potential housing markets. In addition the Company has adopted a shareholder rights plan effective today designed to protect its net operating loss assets from the application of Section 382 of the Internal Revenue Code.

Since 2011, AV Homes has strategically re-engineered the Company to position it to benefit from the recovery of the homebuilding industry. It reduced overhead, launched initiatives to improve internal processes, invested in a new scalable IT platform, and developed a strategic plan to guide its growth.

Roger A. Cregg, AV Homes’ President and Chief Executive Officer, said the investment will allow the Company to pursue new investment opportunities in its core markets in line with the Company’s long-term strategy. “We’re delighted that a renowned global private investment firm such as TPG has confidence in our vision, and in our ability to execute that vision, as the housing industry continues its recovery. It’s an exciting time for AV Homes and I am confident that the implementation of our plans will drive growth and deliver long-term value to our shareholders,” Cregg said.

AV Homes currently operates in the Phoenix, Arizona and Central and South Florida markets. The Company’s primary operations are focused on the development of active adult communities designed for people 55+ through its Vitalia brand, and serving the housing needs of first-time and move-up homebuyers through its Joseph Carl Homes brand.

Kelvin Davis, senior partner at TPG, said AV Homes has established a strong platform for future growth. “AV Homes has assembled a strong management team with deep industry experience. The Company is well-positioned to participate in the on-going recovery of the housing market, with real estate assets located in two healthy and growing Sunbelt markets,” Davis said.

Key Investment Terms
The investment by TPG has been approved by AV Homes’ Board of Directors and it is anticipated that funding will take place by Thursday, June 20, 2013. The key terms of the investment are as follows:
• TPG will make a $135 million equity investment in AV Homes at $14.65 per share, a 9.6% premium to the 30-day trailing average closing price of AV Homes’ common stock.
• At the closing of the transaction, the Company will issue approximately 2.6 million shares, or approximately $37.5 million, of common stock, representing approximately 19.9% of the Company’s outstanding common stock, and approximately 0.7 million shares, with an initial liquidation value of $97.5 million, of newly created Series A Contingent Convertible Cumulative Redeemable Preferred Stock (the “Series A Convertible Preferred Stock”).
• TPG’s ownership in the Company will be approximately 41.9% on an as-converted basis at the closing of the transaction.
• The Series A Convertible Preferred Stock is convertible on a ten-for-one basis upon stockholder approval, in accordance with NASDAQ rules. AV Homes has agreed to hold a meeting of its stockholders within 90 days following the closing date for stockholders to vote on the conversion of the preferred stock into common stock. Two of the Company’s largest stockholders, ODAV LLC and JEN Partners, LLC, representing 24.2% of the outstanding common stock of the Company, have both disclosed to the Company their intention to vote in favor of the conversion.
• The Series A Convertible Preferred Stock will accrue increasing quarterly dividends beginning in six months, if the preferred shares remain outstanding.
• TPG will have two of eight Board seats at closing, increasing to four of ten Board seats upon receipt of stockholder approval. In addition, TPG will have the right to have two directors appointed to the compensation committee and a newly created finance committee, both of which will have five members, and will have the right to have one director appointed to each other Board committee. TPG’s Board and committee representation will decrease in the event its ownership percentage decreases below certain specified levels.
• TPG will have consent rights for certain major decisions of the Company as long as it maintains at least 10% ownership of the Company’s common stock on an as-converted basis and at least 25% of the common stock it will hold on an as-converted basis at closing of the transaction.

As noted above, TPG will acquire a 41.9% ownership interest in the Company following the transaction. Because of the Company’s net operating loss position, it has generated a significant net operating loss (NOL) carry forward for federal income tax purposes. The Company’s ability to use its NOLs can be negatively impacted if there is an “ownership change” as defined under Internal Revenue Code Section 382. In general, this would occur if certain ownership changes related to the Company’s stock that are held by 5% or greater stockholders exceeds 50% measured over a rolling three year period. Therefore, the Company has also adopted a shareholder rights plan effective today that is designed to protect the Company’s valuable NOLs from the application of Section 382, which can restrict the use of NOLs following a change of ownership. Under the plan, when a person or group has obtained beneficial ownership of 4.9% or more of the Company’s common stock, or an existing holder with greater than 4.9% ownership acquires more shares of the Company’s common stock, there would be a triggering event causing significant dilution in the economic interest and voting power of such person or group. The Company’s Board of Directors, acting through its newly formed Finance Committee, has the discretion to exempt an acquisition of common stock from the provisions of the rights plan. The details of the operation of the rights plan, and certain exemptions from the rights plan that the Board has approved with respect to TPG, can be found in the Company’s Current Report on Form 8-K, which the Company expects to file this week.

RETAIL SPACE – 1542 W ST. MARY’S ROAD, TUCSON
Dollar Tree Stores, Inc. leased 12,000 sq. ft. at St. Mary’s Plaza, 1542 West St. Mary’s Road. St. Mary’s Plaza is located at the southeast corner of St. Mary’s and Silverbell and is anchored by Safeway. This will be Dollar Tree’s 12th store in the Tucson region. David Hammack and Rick Borane of Volk Company Commercial Real Estate in Tucson represented the Landlord, Tucson St. Mary’s Plaza, LLC. Kurt Kalocin of SRS Real Estate Partners in Phoenix represented the tenant.

INDUSTRIAL SPACE – 1601 WEST GRANT ROAD, TUCSON
Intelliquick (“IQ”) Delivery, Inc. leased 9,000 sq. ft. at 1601 W. Grant Road in Tucson from Rich Rodgers Investment, Inc to relocate from its current location at 4650 S Coach Drive where it has been for eight years. With offices in Phoenix, Tucson and Las Vegas, as well as operations in New Mexico, Denver and Salt Lake City, IntelliQuick Delivery provides “High Touch – High Tech” same day delivery service, next day delivery service, scheduled local courier delivery service, cross docking, warehouse fulfillment and last mile services to all of the Southwest, the U.S. and internationally. IQ has more than 250 uniformed and credentialed local couriers for pick-up and local delivery. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR, handled this transaction.

INDUSTRIAL SPACE – 1668 S RESEARCH LOOP, TUCSON
B/E Aerospace renewed its lease of 7,432 sq. ft. at 1668 S. Research Loop in Tucson from Foothills Business Ventures, LLC. B/E Aerospace is a worldwide leading manufacturer of aircraft passenger cabin interior products for commercial and business jet aircraft and a leading global distributor of aerospace fasteners. Peter Douglas, SIOR, Principal and Commercial Specialist with Cushman & Wakefield | PICOR, represented the tenant in this transaction while Gary Emerson of GRE Partners in Tucson represented the landlord.

INDUSTRIAL SPACE – 2755 E GANLEY ROAD, TUCSON
Sonora Cabinets & Granite leased 5,000 sq. ft. at 2755 E. Ganley Road in Tucson from Tres Banditos, LLC. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR, handled this transaction.

RETAIL SPACE – MARANA MARKETPLACE, MARANA
AAA Roadside Assistance has leased a 3,750 sq. ft. space at Marana Marketplace, located on the SE corner of Orange Grove Rd. and River Rd. in Marana. The Premises will be used for automotive repair and maintenance and for the sales of parts and accessories for automobiles and light trucks. They are scheduled to open for business in September 2013. Andy Seleznov and Melissa Lal, represented the Landlord, Larsen Baker, while Tony Reed and Barri Herr of Long Realty Commercial, represented the Tenant.

INDUSTRIAL SPACE – 1637 W GRANT ROAD, TUCSON
Grupo Bebidas Del Sol, LLC leased 2,700 sq. ft. at 1637 W. Grant Road in Tucson from Rich Rodgers Investment, Inc. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR, handled this transaction.

OFFICE SPACE – 3131 E 2ND STREET, TUCSON
TERROS, Inc., a community-based behavioral health organization leased 2,100 sq. ft. at 3131 E. 2nd Street in Tucson from AGARE, LLC. TERROS helps people recover from substance abuse, mental illness and other behavioral health problems. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, represented the landlord while Murray Gares with Ensemble Real Estate Services in Phoenix represented the tenant.

INDUSTRIAL SPACE – 850 E OHIO, STE 23, TUCSON
Bondurant Property Management leased 1,390 sq. ft. at 850 E. Ohio, Suite 23 in Tucson from Rich Rodgers Investment, Inc. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, handled this transaction.

OFFICE SPACE – 2714 E 22ND STREET, STE 1, TUCSON
Pascual Pacheco leased 510 sq. ft. at 2714 E. 22nd Street, Suite 1 in Tucson from Rich Rodgers Investment, Inc. Brandon Rodgers, CCIM, Industrial Specialist with Cushman & Wakefield | PICOR Commercial Real Estate Services, handled this transaction.

David Hammack and Rick Borane of Volk Company Commercial Real Estate can be reached at (520) 326-3200. Kurt Kalocin of SRS Real Estate Partners is at (602) 682-6000. Brandon Rodgers, Peter Douglas of Picor are at (520) 748-7100. Gary Emerson of GRE Partners is at (520) 777-4949. Murray Gares with Ensemble Real Estate Services (602) 277-8558. Andy Seleznov and Melissa Lal with Larsen Baker (520) 296-0200.  Tony Reed and Barri Herr of Long Realty Commercial (520) 577-7400

To submit sales or leases email us at [email protected]

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ROC II AZ Mission Palms, an affiliate of Bridge Investment Group Partners, LLC (“Bridge”) of Murray, UT (John Pennington, Chief Compliance Officer) purchased the 360-unit apartment complex at 951 West Orange Grove in Tucson for[mepr-show rules=”58038″]$25.65 million ($71,250 per unit /$68.78 PSF) from JIK Mission Palms, an affiliate of JI Kislak, Inc. of Miami, FL that has owned the property since 2000. The investor assumed an FHA loan and put $400,000 down in the purchase.

The two-story 372,928 sq. ft. class-B complex has 92 masonry buildings on 28.7 acres. Built in 1978, the community consist of 33% one-bedrooms and 67% two-bedrooms floor plans. The one bedrooms are 754 sq. ft. and the two-bedrooms range in size from 1,140 sq. ft – 1,309 sq. ft.

Back in the 1930s and 1940s, Mission Palms was known as “Rancho Nezhone” or Beautiful Ranch in Navajo. Raw desert land was cleared and a ranch, orchard, greenhouse, barn, and a 300-stone wall in front of the property, which still stands today, were built. The property was a retreat for such celebrities as Liberace, singer and actress Kate Smith, Gen. John Pershing, and William Boyd (aka Hopalong Cassidy). After almost two decades as a guest ranch, the main house was converted to apartments, a dining room was built, and the property became a guest resort and supper club. In 1976, the monkeys and parrots were removed from the property, and the property became as it’s currently known, Mission Palms Apartments

The current property includes such amenities as two pools, tennis courts, a clubhouse, a putting green, a one-mile walking trail and as much citrus as one can manage to collect. In addition to year-round good weather, residents are also given a complimentary membership to a local gym.

Bridge, the new owner, is an investment advisory firm whose principals have a 22 year history of success in the multifamily and commercial office real estate sectors. It purchases real property and real estate backed loans at attractive valuations, build significant value through internal and affiliated operational expertise, and exit such investments once the improvements have been put in place.

This is the firm’s third multifamily investment in Tucson. Bridge also owns through affiliates, the Mirabella Apartments at 1345   S Kolb Road and San Marin Apartments at 5650   S Park Avenue in Tucson

The principals at Bridge possess extensive experience in all facets of real estate investment. This includes development, management, operations and financial engineering, and spans all major asset classes especially the multifamily apartment and commercial office sectors. Bridge owns, manages and operates, through privately held real estate investment vehicles, over 20,000 apartment units and over 1.5 million square feet of commercial office space, as well as select other real estate assets.

Art Wadlund of Hendricks Berkadia in Tucson negotiated the transaction for the seller.

Kislak can be contacted at (305) 364-4100. Pennington is at (801) 716-4553. Wadlund should be reached at (520) 299-7200.

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Login to view additional information for subscribers only. [ismember] The following income information was annualized from April 2013 year-to-date. Property sold with GPI of $3,400,835. It was 98 % occupied at time of sale and sold with rental loss of $383,891.  Miscellaneous income of $325,155 was reported, with total operating expenses of $1,534,480. Reserves were estimated at $300 per unit for total operating expenses of $1,642,480. Property sold with an NOI of $1,699,619 and a reported 6.63% cap rate. [/ismember]