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ORLANDO-Guardian Equities Inc., a little-known, privately-held local investment group headed by prominent multifamily developer Alan Ginsburg is part of Tarragon Realty Investors Inc.’s New York-based family today.

In a deal aggregately valued at $61.58 million, Tarragon acquired Guardian and a controlling interest in nine affiliated investment and development partnerships from Guardian founder Ginsburg. Ginsburg becomes one of Tarragon’s largest preferred shareholders and will continue as a partner in future new Tarragon developments.

The cash and stock transaction allows Tarragon to consolidate about $31 million in land construction-in-progress on its balance sheet, along with about $25 million of pre-existing partnership debt guaranteed by the partnerships.

Ginsburg walks away from the table with $2.3 million in cash; $2.58 million in Tarragon’s 10% cumulative preferred stock valued at $13 per share; and gets an option to buy 50,000 shares of Tarragon common at $14 per share for a total $700,000. Ginsburg’s gross in the deal is valued at $5.58 million, according to a prepared statement from Tarragon.

Tied in with the deal is the relocation of two Guardian executives. Lou Shassian becomes managing director of Tarragon Development Corp. Anthony Martin will be vice president. Shassian and Martin will be based in here.

Tarragon president William S. Friedman calls the transaction with Guardian “an important step forward in Tarragon’s transformation into a developer of for-sale housing.” He says Guardian partnerships have projects under way which “we estimated will add over $35 million in sales to our For-Sale Division in the next two years.”

Friedman called Ginsburg and his affiliated companies “leaders in the field of affordable housing and multifamily project development.”

Ginsburg, a partner in two large Tarragon-built multifamily projects, says he is “pleased to know that the eight land development projects which I began at Guardian and the Venetian Bay condominium community in Orlando will be completed by Tarragon” and generate future benefits to shareholders.

Under the deal, Ginsburg and his affiliates will retain a minority, non-managing interest in the affiliated partnerships. The transaction is not expected to affect Tarragon’s financial statements until fourth quarter of fiscal 2003, the company’s statement says.

Tarragon controls 16,000 apartment units and 1.5 million sf of commercial space, aggregately valued at over $1 billion, with the bulk of the assets in Florida, Connecticut and Texas.

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