Lennar Corp. (NYSE: LEN and LEN.B) said Wednesday that LMC, its wholly owned subsidiary, received an additional $250 million commitment to its Lennar Multifamily Venture ("LMV"), which completes the fund raising for the long-term multifamily development investment vehicle. Commitments total $2.2 billion, which the company will use to develop and own Class A multifamily communities in 25 target markets throughout the United States.
Lennar launched LMC in 2011. LMC currently has approximately 13,300 apartment homes in 45 communities operating or under construction and, including these communities, a development pipeline that exceeds $7 billion and more than 23,000 high-rise, mid-rise and garden apartments.
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, Lennar president, 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 home building 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."
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 to invest in future opportunities.
Macquarie Capital acted as a financial advisor and placement agent for LMC.