MIAMI, Oct. 1 /PRNewswire-FirstCall/ -- Lennar Corporation (NYSE: LEN and LEN.B) today announced that it completed the acquisitions of approximately $740 million of distressed real estate assets, in separate transactions, from three large financial institutions. The acquired assets include loans with a total unpaid principal balance of approximately $529 million and real estate properties ("REO") with an appraised value of approximately $211 million. The real estate assets in these transactions were purchased at a discount and paid for with a combination of cash and senior unsecured financing provided by one of the selling financial institutions.
The combined portfolio includes approximately 397 loans and 306 properties. The assets consist primarily of non-performing residential and commercial acquisition, development and construction loans and REO relating to land, lots, and single-family and multi-family residential communities at varying stages of completion. The acquired assets are located in 17 states, primarily in the Mid-Atlantic and Southeast regions of the United States. In the combined portfolio, 65% of the assets are residential and 35% are commercial. Lennar's Rialto Investments segment will be responsible for the oversight and day-to-day management and workout of the combined portfolio.
Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "Rialto is uniquely positioned to underwrite and purchase pools of distressed assets and generate earnings from the resolution of those assets, one asset at a time. It is a wholesale to retail process driven by a hard-working group of professionals who have time-tested loan and asset workout skills."
Mr. Miller continued, "These ground breaking transactions, sourced by Eric Feder, Head of Strategic Development for Lennar and Rialto, represent the first major purchases from the private sector. We worked hand-in-hand with three large financial institutions to help them maximize the value of their distressed assets, while creating an excellent investment opportunity for our shareholders. Our unique ability to underwrite both non-performing loans and REO made Lennar the perfect buyer for these assets. Our Rialto subsidiary is extremely well positioned to manage, work through and add value to the loan portfolio and our core homebuilding operation is poised to benefit from many of the residential REO assets. We are thrilled to have both parts of our Company work together in this transaction. We expect these transactions to be accretive to the Company's fiscal 2011 earnings."
Mr. Miller concluded, "We have now completed transactions with both the FDIC as well as leading financial institutions. We expect the investment opportunities in both of these sectors to continue to grow as the FDIC and the banks work through their distressed assets. Our Company is in a great position to invest capital and engage our asset management engine to add earnings through these opportunities."
Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. Lennar's Rialto Investments segment is focused on distressed real estate asset investments, asset management and workout strategies. Previous press releases and further information about the Company may be obtained at the "Investor Relations" section of the Company's website, www.lennar.com.
Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for our fiscal year ended November 30, 2009. We do not undertake any obligation to update forward-looking statements, except as required by Federal securities laws.
SOURCE Lennar Corporation