Piazza d'Oro is planned for 221 multifamily residential unitswith commercial office space and retail elements. The developmentsite is north of Highway 78 at Rancho Del Oro Road and Vista Way inOceanside.

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The buyer acquired a property "with substantial improvements inthe ground," Esayian points out. K. Hovnanian was going to marketthe project as for-sale condos until the housing marketshifted.

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The property was particularly attractive to ConAm because italready is entitled and partially built, Esayian explains. Itconsists of "high-quality assets in a good location of a coastalcommunity in San Diego County that will hold its long-term value ina tough market," the Hoffman Co. broker says.

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ConAm intends to complete construction and market the units asapartments, at least for the short term. The club house, officespace and many units already are complete.

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The sale is also a strategic move for K. Hovnanian, which wasseeking to minimize its land exposure on this project and wasmotivated to sell because of the fiscal year-end tax break, Esayiansays. Most publicly traded home-building or development companieslike Hovnanian are taking a close look at the tax benefits ofselling land now at a loss they can write off against the profitsof the past two years, notes Tom Dallape, co-principal of theHoffman Co.

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In the past 90 days, Hoffman has closed seven real estate dealsin Southern California in excess of $55 million; at least two ofthe largest ones were motivated by the potential for tax write-offsthat extend back to 2006, which is the last year that home buildersmade a substantial profit.

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Norm Scheel, co-principal of the Hoffman Co., says that the firmexpects to see more distressed land deals, especially thoseinvolving publicly traded builder and developers, between now andthe end of 2008. "This is the last chance for them to take a lossthat will count against their gains in 2006," Scheel says.

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