Lennar stock falls after Hunterbrook raises concerns

Investing.com -- Lennar shares fell 2.9% Friday, with the broader homebuilding sector also under pressure after September’s jobs report offered little relief on interest rates.

The stock’s decline accelerated after research firm Hunterbrook published a report raising questions about the homebuilder’s relationship with Millrose Properties, the land-bank company Lennar spun off in 2025.

Hunterbrook said it identified more than 700 home purchases by Millrose from Lennar across at least 51 counties in 15 states over roughly one month, representing an estimated $200 million in transactions. At least 356 of those purchases occurred during the final week of Lennar’s fiscal quarter, according to the report.

Hunterbrook noted that Lennar beat the low end of its home-delivery forecast by 340 homes, while missing the other four homebuilding targets it provided.

Millrose was created to hold about $5.5 billion of Lennar’s land and 87,000 homesites. In its initial SEC filings, Millrose said it would not have "any tenants or occupants" on its properties. However, on Aug. 27, the company amended its agreements to allow it to purchase completed homes from Lennar and rent them out.

Hunterbrook estimated that Millrose was paying about 13% more for homes than individual buyers in the same communities, after accounting for the roughly 12% in incentives Lennar has said individual buyers received on average. The firm also said Millrose paid about 5% more than Slate, another institutional buyer associated with KKR, in communities where both firms purchased homes.

Based on its analysis, Hunterbrook estimated that Millrose would generate an annual return of about 5% from the rental properties after property taxes, insurance and financing costs, below the 6.5% to 6.75% interest rates on its recent bond offering.

Lennar CEO Stuart Miller holds about 43% of Millrose’s voting power. Millrose generated 72% of its revenue from Lennar in the latest quarter and has no employees, relying on an outside manager selected by Lennar, according to Hunterbrook.

Lennar had not responded to a request for comment at the time of publication. Hunterbrook’s claims have not been independently verified.

Hunterbrook Capital disclosed that it was short both Millrose and Lennar shares when it published the report.

Original Article

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