4. Lennar Corp.
Miami, Florida
CEO: Stuart Miller
2008 closings: 15,735
Percent change: -53
Previous rank: 2
Lennar started early to record impairments and price its land holdings to market, selling a portfolio of land to a Morgan Stanley land venture in 2007. Since the peak, it has aggressively cut its land-holding inventory from $8.6 billion in 2006 to $4.1 billion through the third quarter of last year. Even so, the builder controls a 14-year supply of land. Lennar also has an above-average exposure to joint ventures, which it is trying to reduce. Executives are focused on rebuilding the company’s operating profitability, improving its gross margins, and right-sizing the business. They have attacked the company’s direct construction costs, achieving a 15 percent reduction per square foot, while scaling back dramatically the number of floor plans the company builds and SKUs it keeps. Even so, Lennar recorded a bigger decrease in closings than any other top 10 builder last year. Going forward, the company plans to separate its land and home building businesses by creating separate land funds.
"Our view of housing going forward is that a home builder does not need a land supply locked and loaded," says CEO Stuart Miller, announcing in November that the Lennar of the future will be a builder of homes, not a developer of land.