Lennar Corp. (NYSE:LEN) said Wednesday it had completed a reorganization of its Five Point Communities Inc. into Five Point Holdings, LLC, the largest developer of mixed-use communities in coastal California. The new entity, plans for which were announced last July, was planning an an initial public offering, which still may occur at some point in the future. The reorganization allows the consolidation to proceed without the company going public.
Lennar formerly held equity positions in each of the four communities and the management company. Under this strategic combination of communities, Lennar has become the largest investor in FivePoint.
FivePoint will own interests in and manage (1) The San Francisco Shipyard, (2) Candlestick Point in San Francisco, (3) Newhall Ranch in Los Angeles County and (4) Great Park Neighborhoods in Irvine. Existing management will remain in place, led by chairman and CEO Emile Haddad.
Combined, the mixed-use communities will include approximately 40,000 residential homes and 20 million square feet of commercial space. Forecasting firm Beacon Economics anticipates will generate approximately 288,000 jobs during construction, approximately $21 billion in wages and approximately $54 billion in economic activity for the California economy. The four communities also will include approximately 15,000 acres of public parks and accessible open space and 10 new primary and secondary schools.
"FivePoint Holdings is a strategic combination of world-class real estate assets that have been in planning and development for more than a decade," Haddad said.
Stuart Miller, Lennar CEO, said, "Today's announcement marks the next step in FivePoint's strategic evolution. FivePoint has already proven itself as a leader in the management and development of large master- planned communities. With its tremendous asset base and leading management team, I am confident in FivePoint's ability to maximize the long-term value of these unique assets."
In addition to the communities in which FivePoint will own interests, it will manage other strategic, long-term, master-planned communities owned by Lennar in California, including Treasure Island.
In addition to Lennar, FivePoint's largest investors include Castlelake, L.P., Anchorage Capital LLC, Emile Haddad, Third Avenue Management LLC, Och-Ziff Capital Management Group and Marathon Asset Management LP.