Lennar Corp. Announces $5 Billion Spin-Off of Land Holdings

News Summary

Lennar Corp., the Miami-based home construction giant, plans to spin off its land holdings valued at $5 billion to create a new entity, Millrose Properties. The new company will act as a land bank and will be largely funded by Lennar’s cash and services. This strategic move opens new opportunities for shareholders and aims to qualify Millrose as a real estate investment trust (REIT). Meanwhile, South Florida is witnessing significant development initiatives, including affordable housing projects and substantial development deals.

Miami-Based Lennar Corp. Sets to Spin Off Land Holdings Valued at $5 Billion

Miami, the vibrant hub of Florida, is buzzing with exciting news as Lennar Corp., a key player in the home construction industry, has unveiled plans to spin off its land holdings, which are valued at an impressive $5 billion. This strategic move aims to create a new entity called Millrose Properties, which will serve as a land bank for Lennar.

What’s in Store for Millrose Properties?

Millrose Properties is designed to own a variety of properties while engaging in site work and holding exclusive homesite option contracts with Lennar and other potential builders. To get the ball rolling, this new company has filed a Form S-11 registration with the Securities and Exchange Commission, marking the beginning of its journey towards official launch, which is awaiting final approval from Lennar’s board.

As part of this plan, Lennar intends to distribute 80% of Millrose Properties’ shares to its existing Class A and B shareholders while retaining 20% for itself. This means that shareholders can look forward to becoming a part of this exciting new venture.

Financial Backing and Future Plans

Lennar is not just handing over properties but also providing Millrose Properties with its homesite option purchase platform, a wealth of developable homesites estimated between $5 billion to $6 billion, essential employee services, and a generous cash infusion of up to $1 billion. Out of this cash, Millrose Properties plans to allocate around $900 million to acquire Rausch Coleman Homes, a respected homebuilder based in Arkansas. Furthermore, Millrose Properties aims to qualify as a real estate investment trust (REIT), making it a noteworthy player in the real estate market.

Recent Development Projects in South Florida

Black Salmon has proposed a mixed-use tower in Edgewater, Miami, spanning a one-acre site. This development plans to include a five-story expansion for an existing church, alongside a striking 36-story tower that will boast 229 multifamily units, a touch of retail space totaling 4,416 square feet, and ample parking with 412 spaces.

In a significant move, the Public Health Trust has selected Related Urban Development Group for a major development project at the Jackson Health System’s main campus. This deal consists of a 99-year lease with estimated payments totaling around $1.05 billion. The project will feature two impressive apartment buildings—one standing at 25 stories and the other at 27 stories—as well as a hotel with 128 rooms and a large parking garage with 782 spaces. What’s more, half of the units will be set aside for affordable housing, addressing a crucial need in the area.

Community Housing Initiatives

80 affordable units, 9,000 square feet of retail, and providing 36 parking spaces. Additionally, Boynton Beach officials have green-lighted the rezoning of a former church site for workforce housing, paving the way for a three-story project that will offer 89 apartments along with 154 parking spaces.

Market Trends and Records in Home Sales

3.3% drop in single-family home sales and a substantial 19.6% decline in condo/townhouse sales in November. Despite these shifts in sales, the area continues to break records with the most expensive single-family home sale for 2024 documented at a staggering $150 million for a stunning property located at 10 Tarpon Isle in Palm Beach. In the same vein, the record for the most expensive condo sale is set at $43.94 million for a luxurious penthouse in the Four Seasons Residences at the Surf Club in Surfside.

The winds of change are certainly blowing through Miami and the greater South Florida area, with Lennar’s grand plans and ongoing development projects promising exciting times ahead for residents, investors, and the real estate landscape alike.