Lennar Buys More Distressed Loans and Land

As the business of building homes stays stuck in neutral, Lennar Corp. continues to invest in its other business: mining distressed land and loans for profit. The Miami-based public builder announced Friday that it has bought roughly $740 million worth of repossessed real estate and loans that have gone sideways in separate transactions with three large financial institutions. (Lennar did not name the institutions.) Lennar also didn't say what it paid for the grab bag of loans and land that got caught in the housing crash, mentioning only that it purchased the assets through its Rialto subsidiary with a combination of cash and senior unsecured financing from one of the selling financial institutions. Most of the assets are 397 non-performing loans with a total balance of approximately $529 million that were made for residential and commercial land buys, as well as for development and construction costs. The rest consists of 306 real estate assets with an appraised value of roughly $211 million. The assets include land, lots, and single-family and multifamily residential communities at varying stages of completion. The assets are in 17 states, primarily in the mid-Atlantic and Southeast. The combined portfolio is 65% residential and 35% commercial.

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