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Lennar (NYSE: LEN) has completed the taxable spin-off of Millrose Properties (NYSE: MRP), distributing approximately 80% of Millrose's stock to Lennar stockholders. Each Lennar stockholder received one share of Millrose Class A common stock for every two shares of Lennar stock held as of January 21, 2025.
Millrose received $5.5 billion in land assets and $1.0 billion in cash from Lennar, with a book value of equity of approximately $5.8 billion. The company will have access to a $1.3 billion revolving credit facility, expandable to $2.0 billion. Millrose intends to qualify as a REIT and will operate as a homesite option purchase platform, initially serving Lennar with plans to expand to other homebuilders.
This spin-off advances Lennar's strategy to become a pure-play, asset-light home manufacturer, continuing its transformation from 19% controlled homesites in 2013 to 82% by the end of 2024.
Millrose Properties (NYSE: MRP) has completed the acquisition of approximately 24,000 homesites from Rausch Coleman Homes for $900 million in cash. The transaction, funded using Millrose's cash on hand, was executed simultaneously with option agreements with Lennar on all acquired homesites. Following the closing, Millrose maintains approximately $1.3 billion in available funding capacity under its revolving credit facility.
Millrose operates as a Homesite Option Purchase Platform (HOPP'R), purchasing and developing residential land to sell finished homesites back to builders through option contracts. While Lennar is currently its sole customer, Millrose aims to expand its platform to other homebuilders. The company is externally managed by Kennedy Lewis Land and Residential Advisors , which has over $25 billion in assets under management.
Lennar (NYSE: LEN) has completed its acquisition of Rausch Coleman Homes, a residential homebuilder based in Fayetteville, Arkansas. The acquisition expands Lennar's presence into new markets across Arkansas, Oklahoma, Alabama, and Kansas/Missouri, while strengthening its existing footprint in Texas, Oklahoma, Alabama, and Florida.
Rausch Coleman delivered approximately 5,300 homes in 2024 with an average sales price of $230,000. The transaction structure involves Lennar acquiring the homebuilding operations, while Millrose Properties (NYSE: MRP), Lennar's recently spun-off subsidiary, acquired the land assets with Lennar maintaining options on the land. This structure aligns with Lennar's asset-light strategy and is expected to generate significant returns.
Lennar (NYSE: LEN) has announced the details of its previously disclosed taxable spin-off of Millrose Properties. The company will distribute one share of Millrose Class A or Class B common stock for every two shares of Lennar stock held by shareholders of record as of January 21, 2025. The distribution will occur before trading begins on February 7, 2025.
Millrose's Class A common stock will be listed on the NYSE under the symbol 'MRP', with 'when-issued' trading expected to begin around February 5, 2025 under 'MRP WI'. The key difference between Class A and Class B shares is voting rights: Class A shares carry one vote per share, while Class B shares carry ten votes. No trading market is expected for Class B shares.
Shareholders can elect to receive Class B shares instead of Class A shares during an election period from January 21 to February 3, 2025. The distribution will be taxable to Lennar stockholders.
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