Lennar, the nation's largest homebuilder based on revenue, bought about 75 acres northwest of Fort Lauderdale, Florida, as it works to form a new real estate investment trust for its land holdings.
The Miami-based company paid $52.5 million for the site at 15990 Loxahatchee Road in Parkland, Florida, according to CoStar data. The seller was Tuttle Land Investments.
A spokeswoman for Lennar declined to comment on the company's plans for its new Broward County, Florida, site. Tuttle representatives did not return a phone call.
While homebuilder confidence has sagged much of the year due to elevated mortgage rates, Lennar and other large publicly held builders have remained mostly upbeat. The builders have been offering incentives, such as mortgage rate-buy-downs, to boost sales. In a buy-down, builders lower the mortgage rates for buyers.
In addition, the Federal Reserve announced last week its intention to cut interest rates by half a percentage point, a move expected to bolster the housing market.
Also last week, Lennar reported net earnings of $1.2 billion for the quarter ended Aug. 31, up 5% from the same quarter of 2023. Sales during the quarter increased 16% to 21,516 homes, and new orders rose 5% to 20,587.
New REIT creation
Lennar, founded in 1954, targets first-time, move-up and 55-and-over buyers. Its $32.4 billion in revenue was the highest of any homebuilder last year, according to Builder Magazine, and it ranked second in sales at 73,087 in 2023 to D.R. Horton.
During a conference call with analysts, Lennar said it plans to spin off its land division into a real estate investment trust but offered few specifics.
"While I can't go into specifics until the S-11 filing, the REIT structure provides permanent capital, which is a significant advantage," Executive Chairman and Co-CEO Stuart Miller said, according to a transcript of the call.
Miller said in a statement that incentives have driven demand the past two years, but he expects a "more broad-based demand cycle" in the coming months.
"Lower rates and controlled inflation will likely boost confidence," he said.
As for the city where Lennar made its latest land purchase, Parkland was established in 1963 and became one of the bedroom communities that helped fuel South Florida's explosive growth in the 1980s and '90s. But the region is running out of land for new housing, with development limited by the Atlantic Ocean to the east and the Everglades to the west.