Lennar Corporation operates as a homebuilder in the United States.
The company is an originator of residential and commercial mortgage loans, a provider of title insurance and closing services, and a developer of multifamily rental properties. In addition, the company is a sponsor and manager of funds and joint ventures engaged in development and ownership of multifamily rental properties and a sponsor and manager of a fund engaged in ownership of single-family rental properties. The company al...
Lennar Corporation operates as a homebuilder in the United States.
The company is an originator of residential and commercial mortgage loans, a provider of title insurance and closing services, and a developer of multifamily rental properties. In addition, the company is a sponsor and manager of funds and joint ventures engaged in development and ownership of multifamily rental properties and a sponsor and manager of a fund engaged in ownership of single-family rental properties. The company also has investments in companies that are engaged in applying technology to improve the homebuilding industry and real estate related aspects of the financial services industry.
As of November 30, 2024, the company’s reportable Homebuilding segments and all Other Homebuilding operations not required to be reported separately have divisions located in:
East: Alabama, Florida, New Jersey and Pennsylvania.
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee, and Virginia.
Texas: Texas.
West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington.
Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC (‘FivePoint’).
The company’s other reportable segments are Financial Services, Multifamily and Lennar Other.
Homebuilding Operations
The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly through entities in which the company has investments. New home deliveries, including deliveries from unconsolidated entities, were 80,210 in fiscal 2024. The company primarily sells homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers.
The company operates primarily under the Lennar brand name. The company’s homebuilding mission is focused on the profitable development of residential communities. Key elements of the company’s strategy include:
Everything’s Included Approach - The company is focused on distinguishing its products, including through the company’s Everything’s Included approach, which maximizes the company’s purchasing power, enables the company to include luxury features as standard items in its homes and simplifies the company’s homebuilding operations.
Innovative Homebuilding - The company is constantly innovating the homes the company builds to create products that better meet its customers' needs and desires. The company’s Next Gen home provides what can be a home within a home to accommodate children or parents or can be an office from which to work remotely.
Core Plans - The company is integrating standardized, highly efficient, value engineered Plan series across all divisions at different price points.
Flexible Operating Structure - The company’s local operating structure gives the company the flexibility to make operating decisions based on local homebuilding conditions and customer preferences, while the company’s centralized management structure provides strategic oversight for the company’s homebuilding operations.
Digital Marketing - The company is increasingly advertising homes through digital channels, which is significantly increasing the cost effectiveness of the company’s marketing efforts.
Technology Focused - The company partners with and/or invest in technology companies that are looking to improve the homebuilding and financial services industries to increase efficiencies and create a better customer experience.
Land light strategy - The company is focused on reducing its years' supply of owned homesites and increasing the percentage of land the company controls through options or agreements, including agreements with strategic land banks and joint ventures, rather than ownership. In connection with this strategy, the company expects to spin off a significant portion of the company’s land assets to Millrose.
Diversified Program of Property Acquisition
The company generally acquires, or obtains options to acquire, land for development and for the construction of homes that the company sells to homebuyers. Land purchases are subject to specified underwriting criteria and are made through the company’s diversified program of property acquisition, which may consist of:
Acquiring land through option contracts, which generally enables the company to control portions of properties owned by land banks and other third parties or entities in which the company has investments until the company has determined whether to exercise the options;
Acquiring land directly from individual land owners/developers, or other homebuilders;
Acquiring local or regional homebuilders that own, or have options to purchase, land in strategic markets;
Acquiring access to land through joint ventures or partnerships, which among other benefits, limits the amount of the company’s capital invested in land while helping to ensure the company’s access to potential future homesites and allowing the company to participate in strategic ventures;
Investing in regional developers in exchange for preferential land purchase opportunities; and
Acquiring land in conjunction with the company’s Multifamily business.
For the last several years, the company has been reducing its reliance on land the company owns and increasing its access to land through options and joint ventures, most significantly through the company’s use of land banks which is a critical part of the company’s operating strategy. At November 30, 2024, 82% of the company’s total homesites were controlled through options with land banks, land sellers and joint ventures.
Construction and Development
The company is involved in all phases of planning and building in the company’s residential communities, including land acquisition, site planning, preparation and improvement of land and design, construction and marketing of homes. The company uses independent subcontractors for most aspects of land development and home construction. At November 30, 2024, the company was actively building and marketing homes in 1,447 communities, including 11 communities being constructed by unconsolidated entities. At November 30, 2024, the company had about 2,900 completed unsold homes.
The company generally supervises and controls the development of land and the design and building of the company’s residential communities with a relatively small labor force. The company hires subcontractors for site improvements and virtually all of the work involved in the construction of homes.
Marketing
The company offers a diversified line of homes for first-time, move-up, active adult, luxury and multi-generational homebuyers in a variety of locations ranging from urban infill communities to suburban golf course communities. The company’s Everything’s Included marketing program enables the company to differentiate its homes from those of the company’s competitors by including luxury items as standard features at competitive prices, while reducing construction and overhead costs through a simplified construction process, product standardization and volume purchasing. In addition, the company includes built in wireless capability, home automation and solar power in many of the homes the company sells, which enhances the company’s brand and improves its ability to generate traffic and sales.
The company sells its homes from models that the company has designed and constructed. The company employs new home consultants who are paid salaries, commissions or both to conduct on-site sales of the company’s homes. The company also sells homes through independent realtors. The company has made it possible for potential homebuyers to take virtual tours of model homes.
The company’s marketing strategy has increasingly involved advertising through digital channels including real estate listing sites, paid search, display advertising, social media and e-mail marketing, all of which drive traffic to the company’s website, www.lennar.com. This has allowed the company to attract more qualified and knowledgeable homebuyers. However, the company also continues to advertise through more traditional media on a limited basis, including newspapers, other local and regional publications, radio and on billboards where appropriate. The company tailors its marketing strategy and message based on the community being advertised and the customers being targeted, such as advertising the company’s active adult communities in areas where prospective active adult homebuyers live or will potentially want to purchase.
Homebuilding Investments in Unconsolidated Entities
The company creates and participates in joint ventures that acquire and develop land for the company’s homebuilding operations, for sale to third parties or for use in the ventures' own homebuilding operations. Through these joint ventures, the company reduces the amount the company invests in potential future homesites, thereby reducing risks associated with land acquisitions and improving the return on the company’s investments, and, in some instances, the company obtains access to land to which the company could not otherwise have obtained access or could not have obtained access on as favorable terms. As of November 30, 2024, the company had equity investments in 51 active homebuilding and land unconsolidated entities, in which the company was participating.
Financial Services Operations
Residential Mortgage Financing
The company offers conforming conventional, FHA-insured and VA-guaranteed residential mortgage loan products and other residential mortgage products primarily to buyers of the company’s homes through its financial services subsidiary, Lennar Mortgage, from locations in most of the states in which the company has homebuilding operations. In fiscal year 2024, the company’s financial services subsidiaries provided loans to 84% of the company’s homebuyers who obtained mortgage financing in areas where the company offered services. Because of the availability of mortgage loans from the company’s financial services subsidiaries, as well as from independent mortgage lenders, almost all creditworthy potential purchasers of the company’s homes have access to financing.
During fiscal year 2024, the company originated approximately 54,600 residential mortgage loans. Substantially all of the residential mortgage loans the company originates are sold within a short period in the secondary mortgage market, a majority of them on a servicing-released, non-recourse basis. During fiscal year 2024, the company also locked interest rates on approximately 54,200 residential mortgage loans.
The company finances its mortgage loan activities with borrowings under the company’s financial services warehouse facilities or funds from the company’s operating activities. At November 30, 2024, Financial Services had six warehouse residential facilities maturing at various dates through fiscal 2027. The company expects the facilities to be renewed or replaced with other facilities when they mature. If they are not renewed or replaced, the company would have to find other sources of funding for the company’s mortgage originations, which might include the company’s own funds.
The company has been using new technology to automate portions of the company’s mortgage loan origination process. This new technology has made the mortgage financing process easier for homebuyers and improved the customer experience. This new technology has also enabled the company to increase the number of digital closings, with digital document signing and, where legally permitted, digital notarization.
Title, Insurance and Closing Services
The company is licensed to provide title insurance, and closing services for residential and/or commercial transactions in 41 states to the company’s homebuyers and others. During fiscal 2024, the company provided closing services with regard to approximately 82,400 real estate transactions in 25 states.
Commercial Mortgage Origination
The company’s LMF Commercial subsidiary originates and sells into securitizations first mortgage loans, which are secured by income producing commercial properties. LMF Commercial also originates floating rate loans secured by commercial real estate properties, many of which are in transition, undergoing lease-up, sell-out, renovation or repositioning. In order to finance LMF Commercial lending activities, as of November 30, 2024, LMF Commercial had two warehouse repurchase financing agreements maturing at various dates from 2025 through fiscal 2026.
Lennar Other
Strategic Technology Investments
The company strategically invests in companies involved in technology initiatives that, among other things, help the company enhance the homebuying or home ownership experience, reduce the company’s SG&A expenses and help the company stay at the forefront of homebuilding innovation. Six of the companies in which the company has strategic investments are publicly traded. They are:
Blend Labs, Inc. (‘Blend’), a digital lending platform developer simplifying and fast tracking the consumer finance process;
Hippo Holdings, Inc. (‘Hippo’), a company that provides an efficient means of obtaining home insurance;
Opendoor Technologies, Inc. (‘Opendoor’), a company that uses technology to significantly streamline the homebuying and selling process;
SmartRent, Inc. (‘SmartRent’), an enterprise smart home automation company;
Sonder Holdings, Inc. (‘Sonder’), a company that manages short-term rentals, such as rental hotels; and
Sunnova Energy International, Inc. (‘Sunnova’), a national residential solar company, to which during 2021, the company sold its solar power business in return for equity.
Multifamily Operations
The company’s Multifamily business has been engaged in the development of multifamily communities since 2011. Initially, the Multifamily business almost exclusively participated in shorter-duration joint ventures that built multifamily communities with the intention of selling them soon after they were built, and in most cases after they were substantially occupied. However, the Multifamily business now manages, and owns interests in, longer-duration funds that build multifamily communities with the intention of retaining them as rental income-generating assets. At November 30, 2024, Multifamily had interests in, and was managing, three funds and 23 joint ventures.
As of November 30, 2024, the Multifamily business has capitalized and developed 123 multifamily residential communities with approximately 37,100 rental units across 20 states throughout the United States. The communities developed by the Multifamily business include a diversified mix of conventional garden, mid-rise and high-rise multifamily properties in urban and suburban locations near major employment centers. Most communities offer residents a mix of studio, one, two, and three-bedroom homes.
As of November 30, 2024, funds and ventures managed by Multifamily had a pipeline of 57 potential future developments, which were owned, under contract or subject to letters of intent.
Multifamily has co-investments in all the funds and ventures it manages, and receives returns on these investments. In addition, it has carried interests in the funds or ventures it manages, and receives distributions with regard to those carried interests.
Lennar Multifamily Venture Fund I (‘LMV I’) is a long-term multifamily development investment vehicle involved in the development, construction and property management of class-A multifamily assets. As of November 30, 2023, there were 38 rental operation projects in LMV I. During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of the individual rental operation projects of LMV I as the fund has come to the end of its contractual life. During the year ended November 30, 2024, 33 LMV I rental operation projects were sold to various third-party buyers.
Single-Family Home Rentals
In December 2020, Lennar formed the Upward America Venture, LLC (‘Upward America’), which (a) acquires communities of single-family rental properties (including townhomes, duplexes and condominium buildings developed or acquired for rental purposes), and (b) leases and manages homes in those communities. Lennar subsidiaries are the manager and the general partner of Upward America.
As owner of the general partner of Upward America, Lennar has the right to receive, in addition to distributions regarding its own commitments, distributions based on the amounts by which returns to limited partners exceed specified amounts (i.e., carried interests). As the manager of Upward America, Lennar receives management and acquisition fees. Lennar subsidiaries may also receive fees for property management, leasing, construction management and other services that they render through subcontractors. In April 2024, Upward America entered into a joint venture agreement and property management agreement with Invitation Homes. In addition, Lennar engaged Invitation Homes to provide certain asset management services for the Upward America Venture.
At November 30, 2024, Upward America had purchased 4,697 homes in 103 communities across 19 metropolitan statistical areas and disposed of 92 homes. The Limited Partnership Agreement of Upward America gives Upward America the right to purchase from Lennar for their appraised value all homes or communities that are purpose built by Lennar for single-family home rental. Upward America also is free to purchase homes from homebuilders other than Lennar or to purchase previously occupied homes. Initially all the homes purchased by Upward America were purchased from Lennar, but subsequently, Upward America began purchasing homes from multiple homebuilders. At November 30, 2024, approximately 6% of the homes owned by Upward America were built by homebuilders other than Lennar.
Five Point Holdings, LLC
The company owns an indirect approximately 40% interest in FivePoint, which is a publicly traded developer of three large master planned mixed-use developments in California (Newhall Ranch, Great Park Neighborhoods, and San Francisco Shipyard/Candlestick Point). The company sometimes purchases properties from FivePoint for use in the company’s homebuilding operations.
Rialto Fund Investments
Until November 30, 2018, the company had a group of subsidiaries, including Rialto Capital Management, LLC (‘Rialto’), that primarily managed real estate related investment funds and other real estate related investment vehicles. The company sold the Rialto Management Group on November 30, 2018. However, the company retained the right to share in carried interest distributions from some of the funds and other investment vehicles Rialto manages. The company also retained limited partner investments in several Rialto funds and investment vehicles as of November 30, 2024.
Seasonality
The company historically has experienced variability in quarterly results. The company’s homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in the company’s second and third fiscal quarters (year ended November 2024) and increased deliveries in the second half of the company’s fiscal year. In addition, the company is working towards moving to a more even flow production where the company starts, sells, and delivers a similar number of homes each quarter.
Regulation
In order to make it possible for some of the company’s homebuyers to obtain FHA-insured or VA-guaranteed mortgages, the company must construct the homes they buy in compliance with regulations promulgated by those agencies.
The company is also subject to regulations promulgated by the Federal Consumer Financial Protection Bureau regarding residential mortgage loans.
History
Lennar Corporation was founded in 1954. The company was incorporated in 1991.
