After a sharp post-spin rally, one investor’s trim raises a question about how Millrose fits into long-term housing capital strategies.Dallas-based Permian Investment Partners cut its position in Millrose Properties (MRP 0.88%) by about 1 million shares in the third quarter, contributing to an overall position value that fell by about $19.9 million, according to a November 14 SEC filing.What HappenedAccording to an SEC filing released November 14, Permian Investment Partners reduced its stake in Millrose Pr ...

Millrose’s latest numbers hint at a business model hitting its stride even as one institutional investor steps back.New York City-based Brave Warrior Advisors reduced its stake in Millrose Properties (MRP 0.32%) by nearly 2.5 million shares in the third quarter, a move that contributed an estimated $43.5 million position change from quarter to quarter.What HappenedAccording to a Securities and Exchange Commission (SEC) filing dated November 14, Brave Warrior Advisors sold a portion of its position in Millro ...

Core Insights - Newtyn Management has completely exited its stake in Millrose Properties, selling 807,135 shares valued at approximately $23 million, which was 3.5% of its holdings at the end of Q2 [2][3][6] - Millrose Properties' shares have increased by 47.5% since their spin-off in February, with current pricing at $31.71 [4] - The company has a market capitalization of $5.3 billion, with a revenue of $411 million and a net income of $191.8 million [5] Company Overview - Millrose Properties operates a Homesite Option Purchase Platform (HOPP'R), which aids residential land banking and provides capital-efficient access to land for homebuilders [8] - The company focuses on recurring revenue and capital efficiency, positioning itself as a differentiated partner in the residential REIT sector [9] - Millrose generated $852 million in net homesite sale proceeds in Q3, with $766 million from Lennar, and redeployed $858 million into land acquisitions [11] Financial Performance - The company has completed $2 billion in senior notes offerings, enhancing liquidity to $1.6 billion and eliminating near-term maturities [11] - Millrose's invested capital outside of Lennar has reached $1.8 billion, with an attractive 11.3% weighted-average yield [11] - The company is transitioning into a more mature capital-recycling engine, demonstrating strong liquidity and high-yielding assets [12]

Core Insights - Millrose Properties reported Q2 2025 results with AFFO per share of $0.69, slightly below analyst estimates of $0.71, while revenue reached $149.0 million, exceeding expectations [1][4] - The company declared its first full quarterly dividend of $0.69 per share, aligning with its new REIT-aligned payout policy [7][12] - Millrose is focusing on diversifying its client base beyond its primary partner, Lennar, to reduce reliance on a single account [3][6] Financial Performance - The net income attributable to common shareholders was $112.8 million (GAAP) with revenue of $149.0 million [4] - The Recycled Capital Model generated $797 million in net cash proceeds from homesite sales, with $768 million recycled from sales to Lennar [5] - Total third-party invested capital increased to $1.1 billion as of Q2 2025, up from $349.6 million in Q1 2025 [6] Strategic Initiatives - Millrose's Homesite Option Purchase Platform (HOPP'R) provides homebuilders with access to recycled funding for land purchases, aiming for stable returns [2][8] - The company has expanded partnerships with New Home Company and Taylor Morrison, facilitating significant land and construction financing deals [10] - Management raised guidance for AFFO to a quarterly run-rate of $0.70 to $0.73 per share for year-end 2025, indicating growth in client deals outside the Lennar program [11] Market Position and Outlook - The total portfolio yield increased to 8.9%, up from 8.7% in Q1 2025, reflecting improved performance in third-party segments [6][10] - Financial leverage remains conservative with total liquidity at $1.4 billion and a debt-to-capitalization ratio of 15% [7] - The company aims to qualify for REIT status by year-end 2025, consistent with its strategy to return profits to shareholders [11][12]