MIAMI, Jan. 2 /PRNewswire-FirstCall/ -- Lennar Corporation (NYSE: LEN
and LEN.B), one of the nation's largest homebuilders, and LNR Property
Corporation ("LNR"), one of the nation's leading real estate, finance,
management and development companies, announced today that they have
reached an agreement to admit a new partner into their existing strategic
joint venture, LandSource Communities Development LLC ("LandSource"). The
new partner is MW Housing Partners, which is co-managed by MacFarlane
Partners and includes the California Public Employees' Retirement System
("CalPERS").
As of July 1, 2006, LandSource had assets with a book value of
approximately $1.3 billion, with its primary investment being The Newhall
Land and Farming Company ("Newhall"), which owns 15,000 acres of land in
the rapidly growing Santa Clarita Valley, approximately 30 miles north of
downtown Los Angeles. With 23,000 residential homesites, Newhall owns some
of the last remaining large, undeveloped, but entitled, land in the greater
Los Angeles area. It also owns 700 acres of commercial land and other
property in the Santa Clarita Valley. Under the terms of the agreement, the
LandSource assets are valued at approximately $2.6 billion, with a
potential increase adjustment to that value of over $600 million.
The agreement also provides for a new non-recourse debt facility. In
exchange for a 62% interest in LandSource, the MW Housing venture will
contribute cash and property with a combined value of approximately $900
million. The property, which is part of an existing land bank relationship
between MW Housing Partners and Lennar, is being contributed based on
today's fair market value. Lennar will continue to have options to purchase
those homesites at the market price at the time of the exercise.
Commenting on the transaction, Stuart Miller, President and CEO of
Lennar, and Jeffrey Krasnoff, President and CEO of LNR, issued a joint
statement, "We are very pleased to expand our partnership to include
MacFarlane Partners and CalPERS, which will add their strong financial
resources and expertise in creating one of the nation's premier land
companies. LandSource has created value through the continued development
of Newhall and growing its land portfolio in targeted high growth markets.
Today's announcement is a validation of this value creation, as we combine
our respective residential and commercial expertise with the collective
expertise and capital resources of our new partner. LandSource, building on
the unique talent of our Newhall team in mixed use development, will become
a new strategic platform for opportunistic land acquisition and value
creation."
"We are excited to be investing in such prime property in Los Angeles,
a market that we have favored for its long-term growth prospects," said
Victor B. MacFarlane, founder and managing principal of MacFarlane
Partners. "This is a once-in-a-lifetime opportunity that few pension
managers and investors have the resources and the capabilities to
participate in thanks in large part to the flexibility and vision of our
long time partner, CalPERS."
The transaction will result in a distribution of approximately $660
million each to Lennar and LNR. As part of the transaction, LandSource will
grant options to Lennar to purchase property contributed by the MW Housing
venture. Both Lennar and LNR will retain options and rights of first offer
to purchase property currently owned by LandSource. While the MW Housing
venture will have a 62% financial interest in LandSource, it will have 50%
voting control of the entity. Lennar and LNR will continue to jointly serve
as the administrative member of LandSource and will be responsible for its
day-to-day operational management. LandSource will also enter into
agreements with each of the members under which the members will be
compensated for management services.
The transaction is subject to completion of financing, certain closing
conditions, regulatory approvals and adjustments and is expected to close
in February 2007.
Lennar Corporation, founded in 1954, is one of the nation's leading
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 primarily mortgage
financing, title insurance and closing services for both buyers of the
Company's homes and others. Previous press releases and further information
about the Company may be obtained at the "Investor Relations" section of
the Company's website, http://www.lennar.com.
LNR Property Corporation has been engaged in the development, ownership
and management of commercial properties and land since 1969. Until October
of 1997, LNR operated as a division of Lennar Corporation at which time it
was spun off to become a separate public company. In February 2005, LNR was
acquired by entities controlled by affiliates of Cerberus Capital
Management, L.P. LNR manages real estate properties, loans and securities
for its own account and for others exceeding $5 billion and is responsible
for the special servicing of over $200 billion of real estate loans which
collateralize commercial mortgage backed securities in the United States
and Europe.
Through MW Housing, MacFarlane Partners has invested in single-family
housing land and development projects since 1995 on behalf of its venture
with CalPERS, the nation's largest public pension fund, with more than $220
billion in assets. Based in San Francisco, MacFarlane Partners is one of
the leading real estate investment management firms in the United States,
with $11.7 billion in real estate assets under management.
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. You can identify forward-looking statements by the fact
that these statements do not relate strictly to historical or current
matters. Rather, forward-looking statements relate to anticipated or
expected events, activities, trends or results. Because forward-looking
statements relate to matters that have not yet occurred, these statements
are inherently subject to risks and uncertainties. Many factors could cause
Lennar's actual activities or results to differ materially from the
activities and results anticipated in forward-looking statements. These
factors include those described under the caption "Risk Factors Relating to
Our Business" in Item 1A of Lennar's Annual Report on Form 10-K/A for its
fiscal year ended November 30, 2005. Lennar does not undertake any
obligation to update forward-looking statements.
SOURCE Lennar Corporation
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Related links:
http://www.lennar.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20040604/LENLOGO
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/507038.html /
CONTACT:
Marshall Ames, Investor Relations, Lennar
Corporation, +1-305-485-2092; or Jeffrey Krasnoff, President and
CEO, LNR Property Corporation, +1-305-695-5417
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