Lennar Diversifies Into Distressed Assets

Lennar Corp. may list its occupation as home builder, but its recently announced investment in government-possessed distressed real estate assets unveils what many would say is the company’s true vocation: land wrangler. It’s not a new job for the Miami-based builder. During the last big downturn, Lennar found profit in working out distressed land deals through the Resolution Trust Co. So Wednesday’s announcement that Lennar subsidiary Rialto has formed a public-private partnership with the Federal Deposit Insurance Corp. (FDIC) to buy and then manage $3.05 million in distressed real estate loans signals a return to those roots. In fact, Lennar CEO Stuart Miller has been talking about doing just that since the downturn began. Lennar created Rialto and put Jeff Krasnoff, former CEO of related LNR Property Corp., in charge more than two years ago.

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