Lennar Completes Spin-off of Millrose Properties

Core Viewpoint - Lennar Corporation has successfully completed the spin-off of Millrose Properties, creating an independent publicly traded company focused on homesite option purchase arrangements and land development, which aligns with Lennar's strategy to become a pure-play, asset-light home manufacturer [1][4][5]. Group 1: Spin-Off Details - The spin-off involved the distribution of approximately 80% of Millrose's stock to Lennar's stockholders, with each holder receiving one share of Millrose Class A or Class B common stock for every two shares of Lennar stock [1][2]. - Millrose now has 120,980,401 shares of Class A and 11,819,811 shares of Class B outstanding, with Lennar retaining 33,200,053 shares of Class A, representing about 20% of total shares [2][3]. - Millrose's book value of equity is approximately $5.8 billion post-spin-off, with$1.3 billion available under its revolving credit facility, potentially increasing to $2.0 billion with additional lender commitments [3]. Group 2: Strategic Implications - The spin-off accelerates Lennar's strategy of becoming a land-light manufacturer, enhancing its operational flexibility and shareholder value [4][11]. - Millrose aims to facilitate the creation of residential communities by leveraging financial expertise and industry relationships, with plans to execute accretive third-party deals [6][9]. - The transaction is expected to improve Lennar's return profile by reallocating cash flow from land acquisition towards capital allocation and shareholder distributions [13]. Group 3: Operational Focus - Millrose engages in land purchases and homesite option purchase arrangements, primarily for Lennar, with the potential to attract other homebuilders seeking asset-light strategies [9][10]. - The company operates with a model that allows for just-in-time delivery of finished homesites, reducing entitlement and development risk [10]. - Millrose is externally managed by Kennedy Lewis, which provides access to financial expertise and operational platforms to support its growth [5][6].