Ares Management Invests $100 Million in City Ventures

City Ventures has received a $100 million investment from an affiliate of Ares Management LLC. Ares will have a majority stake in City Ventures, a California urban homebuilder. Imperial Capital Group, which has previously invested in City Ventures, will retain its stake.

PRESS RELEASE

City Ventures LLC, a leading California urban homebuilder, announced today that it has received a $100 million equity investment from an affiliate of Ares Management, LLC to expand its focus on urban infill opportunities in high-density coastal communities. The company will use the additional capital to continue aggressively identifying, purchasing and developing new-home projects in California’s most desirable supply-constrained areas.

“This equity investment will provide land sellers and city redevelopment agencies confidence in City Ventures’ ability to purchase and develop properties without the need for any third-party financing at a time when many homebuilders are pulling back,” said City Ventures CEO Mark Buckland. “Ares’ infusion supplies the capital we need to continue to leverage our competitive advantages of being an attractive source of liquidity for urban land sellers as well as a strong track record of delivering entitlement and development results.”

“Ares’ investment, along with our existing cash, will allow us to continue expanding our business in urban California markets,” said City Ventures Chairman Craig Atkins. “We are delighted to have such strong partners as Ares and Imperial Capital, whose expertise will be a resource as we continue our measured, yet aggressive, growth strategy in a volatile real estate market.”

As a result of the investment, Ares will become the majority shareholder in City Ventures. Imperial Capital Group, which has backed City Ventures since inception and served as the company’s financial advisor in the transaction, will retain its equity stake. Jason Reese, Chairman and CEO of Imperial Capital, will remain on the board of directors.

“We believe that this investment will enhance the ability of the very capable management team at City Ventures to accelerate the growth of its urban homebuilding strategy by providing additional capital and resources,” said Bennett Rosenthal, Senior Partner at Ares Management. “Its unique set of skills in the urban infill market makes the company a compelling investment opportunity.”

City Ventures has homebuilding divisions in Los Angeles, Orange County, San Diego and San Francisco, and holds more than 1,000 lots within 13 California coastal counties, currently estimated to yield approximately $1 billion in potential revenue.

Jason Reese said, “We are proud to be partners with and advisors to City Ventures, which has one of the most experienced management teams in the urban housing industry. We believe Ares is the ideal partner to assist the company in achieving its next level of growth.”