Lennar Shares Zoom Higher on $4 Billion Venture to Buy Homes to Rent By Investing.com

By Dhirendra Tripathi

Investing.com – Lennar (NYSE:LEN) zoomed to a record after saying it would set up a $4 billion venture to buy single-family homes to rent.

The business will initially be capitalized with a total equity commitment of $1.25 billion led by Centerbridge alongside Allianz (DE:ALVG) Real Estate and other institutional investors, the homebuilder said in a filing. Shares were up 11%. 

The platform, Upward America Venture, will acquire single family homes for rent in high growth markets across the U.S. Including leverage, the venture will be positioned to acquire over $4 billion of new single family homes and townhomes from Lennar and potentially other homebuilders.

Helping the stock’s momentum were its February quarterly earning announced Tuesday. The three-month earnings were $1 billion, more than two-and-half times of a year earlier. The company benefited from investments in technology and the liquidity-stoked boom in the economy that has sent homebuyers on a spree as inventory remains tight.

Lennar estimates second-quarter orders between 16,500 homes and 16,700 homes, above analysts’ estimates of 16,240 homes, helped in part by a shortage of previously owned houses on the market, according to a Reuters report Tuesday.