On the company’s quarterly conference call last week, Lennar Corp. Executive Chairman and Co-CEO Stuart Miller confirmed that the firm is exploring the sale of its apartment portfolio.

Lennar’s recent decision to market its roughly 11,000-unit rental housing portfolio was driven by limited partners, Miller said on the Miami-based home builder’s call.

“The timing is one where it's kind of a suboptimal time to be thinking about a sale, although who knows where interest rates go,” Miller said. “That could change quickly.”

Miller said a potential sale “is an episodic kind of program where it'll happen or it won't.” His comments came on the heels of a Bloomberg Law report last week that said the home builder was working with commercial real estate services firm Jones Lang LaSalle to sell its apartment portfolio, operated through its Quarterra subsidiary. 

Lennar is open to splitting up the portfolio, which could be worth $4.5 billion, into smaller pools, according to Bloomberg Law.

A potential sale wouldn’t be material to Lennar’s balance sheet or income statement because any profit will be discounted. “In terms of the cash infusion, it would simply be additive to our cash position and maybe can inspire us to do more stock buybacks,” Miller said.

Spinoff postponed

Lennar has been weighing what to do with its apartment holdings for some time.

In July 2022, the builder rebranded its vertically integrated multifamily apartment builder, developer and asset manager LMC as Quarterra Multifamily. At the time, Lennar reiterated that the business would be spun off later in 2022. 

The rebranding was the first step in positioning Quarterra as an independent, New York Stock Exchange–listed alternative asset manager, president Todd Farrell said in a 2022 press release.

But then, in December of that year, the company announced that it had halted plans to spin Quarterra by the end of the year due to unfavorable market conditions, according to its 2022 fourth-quarter conference call.

”We believe that we have a very high-end public company waiting and almost ready to enter the public arena,” Miller said on that earnings call. “But we’re going to postpone for the time being and wait for the right timing.”

Lennar launched its multifamily subsidiary in 2011, and it quickly became one of the top apartment producers in the country. Currently, it’s the No. 7 developer with 5,224 units, according to the National Multifamily Housing Council.

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