Lennar Announces Final Close of $2.2 Billion Lennar Multifamily Venture

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Oct 05, 2016, 06:50 ET

MIAMI, Oct. 5, 2016 /PRNewswire/ -- Lennar Corporation (NYSE: LEN and LEN.B) announced today that LMC, its wholly owned subsidiary, received an additional $250 million commitment to its Lennar Multifamily Venture ("LMV"), which completes the fund raising for this long term multifamily development investment vehicle. With commitments totaling $2.2 billion LMV is well capitalized to develop and own Class A multifamily communities in 25 target markets throughout the United States.

Lennar launched LMC in 2011, and since that time the company has been among the nation's most active developers. LMC currently has approximately 13,300 apartment homes in 45 communities operating or under construction and including these communities, a total development pipeline that exceeds $7 billion and over 23,000 apartments. The company builds high-rise, mid-rise, and garden apartment communities.

LMV's ownership includes six prominent institutional investors, comprised of foreign pensions, sovereign wealth funds, and insurance companies. Lennar also has a $504 million commitment to the venture.

Rick Beckwitt, President of Lennar Corporation, said, "The success of the LMV capital raise demonstrates the confidence venture investors have placed in LMC and our new build to core strategy that will allow us to maintain an ownership interest in a portfolio of income producing communities going forward. We continue to see growing demand in housing, both in our core homebuilding business as well as our multifamily platform. This venture is a key building block for one of our growing ancillary businesses."

"As the multifamily development cycle has started to mature, we feel this is the right time to pivot to a strategy that is less reliant on merchant building, or 'build to sell' and focuses on 'build to own' ," added Todd Farrell, President of LMC. "We have assembled a strong partnership with like-minded, patient capital investors and look forward to building out a geographically diversified, conservatively leveraged portfolio of Class A multifamily communities."

"LMV positions us to move quickly on development opportunities, which gives us a significant competitive advantage. We are extremely appreciative of the world-class investors who have committed capital to this venture and believe the vehicle gives LMC a best-in-class ability to execute in the multifamily space," said John Gray, Head of Investments at LMC.

Currently, the venture has approximately 9,100 apartment homes under development in 31 communities for a total development cost of $3.1 billion. With the combined equity commitments and 50% leverage, LMV has approximately $1.3 billion in dry powder to invest in future opportunities.

Macquarie Capital acted as a financial advisor and placement agent for LMC.

Note Regarding Forward-Looking Statements: Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements regarding LMC's development pipeline. These statements may include opinions formed based upon general observations and industry experience, but that are not supported by specific investigation or analysis. These forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results and events to differ materially from those contemplated by the forward-looking statements, including the possibility of decreased demand for multifamily rental properties; the possible inability of LMV to successfully sell its rental properties; increases in operating costs, including costs related to construction materials, labor, insurance and real estate taxes, and their effects on LMV's ability to manage its cost structure; possible difficulty obtaining debt financing to supplement LMV participants' equity investments; the willingness of the participants in LMV to honor their commitments; and other risks detailed in Lennar Corporation's filings with the SEC, including the "Risk Factors" section of Lennar Corporation's Annual Report on Form 10-K for the fiscal year ended November 30, 2015. It is not possible for management to predict all possible risks or to assess the impact of such risks on us or on LMV. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Information about Lennar

Lennar Corporation, founded in 1954, is one of the nation's largest builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. Lennar's Rialto segment is a vertically integrated asset management platform focused on investing throughout the commercial real estate capital structure. Lennar's Multifamily segment is a nationwide developer of high-quality multifamily rental properties. Previous press releases and further information about the Company may be obtained at the "Investor Relations" section of the Company's website, www.lennar.com.

About Macquarie and Macquarie Capital

Macquarie is a global provider of banking, financial, advisory, investment and funds management services. Founded in 1969, Macquarie operates in more than 65 office locations in 28 countries, employs more than 14,000 people and has assets under management totaling US$366 billion at 31 March 2016.

Macquarie Capital includes Macquarie's corporate advisory, capital markets and principal investing capabilities, with expertise spanning a variety of industry sectors including telecommunications, media, entertainment, gaming, financial institutions, industrials, energy, resources, real estate, infrastructure, utilities and renewables. The real estate team comprises over 70 executives globally and has raised in excess of US $57 billion of equity for a large number of real estate ventures. Macquarie Capital combines its deep real estate expertise with capital and has invested in a number of real estate operating companies supporting these groups to expand their platforms.

To learn more about Macquarie, visit www.macquarie.com.

SOURCE Lennar Corporation