Lennar Corporation: The Making of a Real Estate Giant

Source: Lennar

Lennar Corporation is home construction and real estate company based in Fontainebleau, Florida, with a Miami postal address. In 2017, the company became the most prominent home construction company in the United States after purchasing CalAtlantic Homes. The company is ranked 154th on the Fortune 500 as of 2019. The company operates in 21 states and owns Rialto Capital Management, the sponsor of six private equity funds that invest in real estate and an originator of commercial mortgage loans for securitization. The company also developed and retains ownership interests in 53 apartment communities. The name Lennar is a portmanteau of two of the company’s founders, Leonard Miller and Arnold Rosen. 

The company started as F&R builders founded in 1954 by Gene Fischer alongside real estate developer Arnold P. Rosen. In 1956, Leonard Miller, a 23-year-old entrepreneur who owned 42 lots in Miami-Dade County, Florida, invested $10,000 and partnered with the company. By 1969, the company’s equity base amounted to $1 million, and in 1971, Miller and Rosen changed the name to Lennar Corporation. That year the firm went public via an initial public offering of $8.7 million. It was listed on the New York Stock Exchange in 1972.

As soon as Lennar Corporation went public, the attention of the owners and investors was shifted to expansion and growth, aimed at becoming the largest real estate company in the world. To further enhance this, the company acquired Mastercraft Homes, based in Phoenix, Arizona, for approximately $2 million in 1977 and the Womack Development Company. That same year Rosen retired, although he stayed on with the company as a director. In 1989, Lennar originated its “Everything’s Included” program, which placed extra options on built homes as a part of the lump sum charged for the property in its entirety. In 1997, Stuart Miller, the son of co-founder Leonard Miller, also took over the company. Leonard Miller died in 2002. In 2005, the company was added to the S&P 500.

Considering the company’s size, like other major corporations globally, it is impossible to separate Lennar from a few controversies here and there. A notable controversy was experienced after Hurricane Andrew in1992 when the company faced several lawsuits from homeowners alleging careless building quality. 

In 2012, the company’s home orders returned to their pre-2008 levels. That year the company began a new program called “Lennar Next Gen,” which focused on building homes for multi-generation households. The following year, in 2013, Lennar Commercial Investors was founded for Lennar to enter the commercial real estate market. In 2015, the average Lennar house was estimated to cost $358,000. In February 2018, the company acquired CalAtlantic Homes. The $9.3 billion mergers made the company become the largest homebuilder in the US. Through the acquisition, Lennar Corporation will be controlling over 250,000 homesites nationwide.

In May 2018, Lennar announced that it would include Amazon’s Alexa in all 35,000 new homes built this year. As of 2014, 7.27% of Lennar was owned by the Vanguard Group (with Vanguard Windsor Inv also owning 2.53% and Vanguard Mid Cap Index owning 1.51%). Wellington Management Group owned 7.14%. ETFs iShares US Home Construction owned 2.25%.

Learn more about Lennar Corporation and Lennar Homes by visiting their website.





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