Business Editors

LOS ANGELES--(BUSINESS WIRE)--Dec. 3, 2002

KB Home (NYSE:KBH), one of the nation's largest homebuilders, announced today the sale of City Ranch to Anaverde LLC in an all-cash transaction. Formed by Empire Land -- a part of Ontario, Calif.-based Empire Companies

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Dec. 3, 2002

KB Home (NYSE:KBH), one of the nation's largest homebuilders, announced today the sale of City Ranch to Anaverde LLC in an all-cash transaction. Formed by Empire Land

-- a part of Ontario, Calif.-based Empire Companies -- and KB Home, Anaverde LLC has been launched to develop the long-planned City Ranch community in Palmdale, Calif.

Poised to be one of the largest master plan communities in Los Angeles County, City Ranch -- now named Anaverde -- is a mixed-use, 1,985-acre development that includes more than 1,000 acres of residential development, nearly 700 acres of open space and over 200 acres of commercial establishments, parks and schools.

"Anaverde will be the most desirable place to live in the Antelope Valley," said Chuck Colton, executive vice president Empire Land, which holds a controlling interest in the project. Anaverde represents Empire Land's first project outside the Inland Empire.

"With the availability of housing continuing to be a serious challenge in California, we're excited to be moving forward on this project," noted Albert Praw, senior vice president, asset management, KB Home. "By forging strong relationships with our joint venture partner, Empire Land, as well as other builders, we've made Anaverde a reality."

Acquired by KB Home in the late 1980s, the development is fully entitled with a specific plan, approved environmental impact reports and city-approved development agreement in place. The site is located at the southwestern edge of the City of Palmdale, approximately one and one-half miles to the west of Highway 14 between Elizabeth Lake Road (on the north) and the extension of Avenue S (on the south).

The development plan calls for approximately 5,000 dwelling units to be built of various sizes and prices to serve the housing needs of homebuyers. Empire Land will begin the first phase of development in the second quarter of 2003; this phase includes sites for nearly 1,400 single-family homes. The first lots are expected to be delivered to homebuilders in the fourth quarter of 2003. Homeowners will move into their new residences in the second quarter of 2004.

"We will prepare the lots for development and then sell them to large homebuilders," said Colton. Empire Land has already entered into a contract with KB Home, and is negotiating with several other public builders.

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Poised to be one of the largest master plan communities in Los Angeles County, City Ranch -- now named Anaverde -- is a mixed-use, 1,985-acre development that includes more than 1,000 acres of residential development, nearly 700 acres of open space and over 200 acres of commercial establishments, parks and schools.

"Anaverde will be the most desirable place to live in the Antelope Valley," said Chuck Colton, executive vice president Empire Land, which holds a controlling interest in the project. Anaverde represents Empire Land's first project outside the Inland Empire.

"With the availability of housing continuing to be a serious challenge in California, we're excited to be moving forward on this project," noted Albert Praw, senior vice president, asset management, KB Home. "By forging strong relationships with our joint venture partner, Empire Land, as well as other builders, we've made Anaverde a reality."

Acquired by KB Home in the late 1980s, the development is fully entitled with a specific plan, approved environmental impact reports and city-approved development agreement in place. The site is located at the southwestern edge of the City of Palmdale, approximately one and one-half miles to the west of Highway 14 between Elizabeth Lake Road (on the north) and the extension of Avenue S (on the south).

The development plan calls for approximately 5,000 dwelling units to be built of various sizes and prices to serve the housing needs of homebuyers. Empire Land will begin the first phase of development in the second quarter of 2003; this phase includes sites for nearly 1,400 single-family homes. The first lots are expected to be delivered to homebuilders in the fourth quarter of 2003. Homeowners will move into their new residences in the second quarter of 2004.

"We will prepare the lots for development and then sell them to large homebuilders," said Colton. Empire Land has already entered into a contract with KB Home, and is negotiating with several other public builders.

About Empire Companies

Empire Companies is the successor organization to Forecast Homes, which was founded more than 30 years ago by Mr. Jim Previti, Chairman and CEO. Empire Companies is a "vertically integrated" development organization that develops master planned communities throughout California and Arizona. Empire Land develops and sells improved single family lots to the major public homebuilders and Empire Capital provides financing for homebuilders as well. Empire Commercial develops the master plan community amenities including neighborhood shopping centers, elementary schools, and parks which are so important to the success of these communities. Jeffrey M. Gault, President and COO of Empire Companies, said, "Our focus is to provide an integrated and comprehensive approach to master plan community development that represents the highest quality of architectural and city planning standards." Empire is developing several other master plan communities in California in partnership with public homebuilders and anticipated inventory for 2003 will exceed 12,000 single family lots.

About KB Home

KB Home is one of America's largest homebuilders, with domestic operating divisions in some of the fastest-growing areas of the country including: West Coast -- California; Southwest -- Arizona, Nevada and New Mexico; and Central -- Colorado, Florida and Texas. Kaufman & Broad S.A., the Company's majority-owned subsidiary, is one of the largest homebuilders in France. In fiscal 2001, the Company delivered homes to 24,868 families in the United States and France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. Founded in 1957, KB Home is a Fortune 500 company listed on the New York Stock Exchange under the ticker symbol "KBH." For more information about any of KB Home's new home communities, call 888-KB-HOMES or visit the Company's Web site at kbhome.com.