Discussion in 'Stocks' started by Comanche, Jul 18, 2007.

  1. Does anyone know any details about these joint-venture deals that Lennar has with several hedge funds?

    Is Lennar in any way invested in subprime through these?
  2. In February 2007, our LandSource joint venture admitted MW Housing Partners as a new strategic partner. The transaction resulted in a cash distribution to us of $707.6 million. Our resulting ownership of LandSource was 16%. If LandSource reaches certain financial targets, we will have a disproportionate share of the entity's future positive net cash flow. As a result of the recapitalization, we recognized a pretax gain of $175.9 million in 2007 and could potentially recognize an additional $400 million in future years, in addition to profits from our continuing ownership interest.

    and this one a few years old, but explains what LandSource is-

    In November 2003, the Company and LNR Property Corporation ("LNR") each
    contributed its 50% interests in certain of its jointly-owned unconsolidated
    partnerships that had significant assets to a new limited liability company
    named LandSource Communities Development LLC ("LandSource"), in exchange for 50%
    interests in LandSource. In addition, in July 2003, the Company and LNR formed,
    and obtained 50% interests in, NWHL Investment, LLC ("NWHL"), which agreed to
    purchase, and in January 2004 completed the purchase of, The Newhall Land and
    Farming Company ("Newhall") for a total of approximately $1 billion. Newhall's
    primary business is developing two master-planned communities in Los Angeles
    County, California.

    LandSource was formed as a vehicle to obtain financing based on the value of the
    combined assets of the joint venture entities that the Company and LNR
    contributed to LandSource. The Company and LNR used LandSource's financing
    capacity, together with the financing value of Newhall's assets, to obtain
    improved financing for part of the purchase price of Newhall and for working
    capital to be used by the LandSource subsidiaries and Newhall. The Company and
    LNR may merge the joint venture entity that acquired Newhall with LandSource,
    and the Company and LNR may use LandSource for future joint ventures.

    The Company and LNR each contributed approximately $200 million to NWHL, and
    LandSource and NWHL jointly obtained $600 million of bank financing, of which
    $400 million was used in connection with the acquisition of Newhall (the
    remainder of the acquisition price was paid with proceeds of a sale of
    income-producing properties from Newhall to LNR for $217 million at the closing
    of the transaction). The Company agreed to purchase 687 homesites and obtained
    options to purchase 623 homesites from Newhall. The Company is not obligated
    with regard to the borrowings by LandSource and NWHL, except that the Company
    and LNR have made limited maintenance guarantees and have committed to complete
    any property development commitments in the event LandSource and NWHL default.
    The combined assets and liabilities of LandSource and NWHL at February 29, 2004
    were $1.3 billion and $722.5 million, respectively. The Company's combined
    investment in LandSource and NWHL was $285.2 million at February 29, 2004.