Millrose Properties buys Rausch Coleman land assets for $900 million

Millrose Properties Inc., a homesite purchase platform for residential homebuilders, acquired about 24,000 homesites from Fayetteville-based Rausch Coleman Homes on Monday (Feb. 10) for $900 million in cash.

Miami-based Lennar Corp. recently completed the spin-off of Millrose, and Lennar is its sole customer.

According to a news release, Lennar simultaneously carried out option agreements on all the acquired homesites. The $900 million deal was “net of option deposits funded by Lennar and other holdbacks.” Millrose has about $1.3 billion in its revolving credit facility following the deal.

This transaction follows a previously announced agreement between Lennar and Rausch Coleman, under which Lennar acquired Rausch Coleman’s homebuilding operations.

“Today, we successfully completed the previously announced acquisition of Rausch Coleman homesites, as detailed in the registration statement related to Millrose’s spin-off from Lennar,” said Darren Richman, CEO and president of Millrose. “With this milestone achieved, we are now focused on advancing our accretive growth strategy and expanding our counterparties across the industry.”

Both Lennar (NYSE: LEN) and Millrose (NYSE: MRP) are publicly-traded companies. Millrose purchases and develops residential land and sells finished homesites back to Lennar and other homebuilders. While Lennar is Millrose’s only customer, Millrose expects that its “first of its kind public vehicle will be attractive to other homebuilders seeking to implement an asset-light strategy and believes that becoming a capital source for other homebuilders will provide for accretive growth to the Millrose platform,” noted the press release.

Millrose is externally managed by Kennedy Lewis Land and Residential Advisors LLC (Kennedy Lewis), an affiliate of Kennedy Lewis Investment Management, an institutional alternative investment firm with over $25 billion in assets under management.