Lennar to Sell Rialto to Stone Point Capital for $340 Million

Miami-based Lennar Corporation announced last week that it will sell its investment and asset management division, Rialto, to private equity firm Stone Point Capital. This move may be part of Lennar’s strategy to focus solely on homebuilding.

Rialto was created by Lennar after the recession to purchase distressed assets, but buying opportunities have been scarce as real estate prices have risen.

The company had communicated it was looking to sell off the division for months, which the Wall Street Journal reported in October. In the third quarter Rialto reported $49.5 million in revenue, less than one percent of Lennar’s total revenue.

Lennar said it will still retain one segment of Rialto — its Rialto Mortgage Finance business, which it expects to incorporate into its Financial Services business at the beginning of the 2019 fiscal year. Lennar will also retain interests in various Rialto funds, as well as investments in other legacy Rialto assets.

 Lennar reported earnings of $453.2 million in the third quarter or $1.37 per share. The homebuilding industry has struggled amongst rising supply and labor costs, which are placing pressure on its margins. Lennar, reported strong profitability, and earlier this year acquired CalAtlantic to become the largest homebuilder in the country, in a deal worth $9.3 billion.

By Katya Demina

Stuart Miller Steps Down As CEO Of Lennar, America's Largest Home Builder, To Become Executive Chairman

Lennar has undergone a major shake-up at the management level as longtime CEO Stuart Miller has stepped down as CEO, to be replaced by Rick Beckwitt, and will resume his role with the company as Executive Chairman. Lennar, a publicly traded company as LEN (NYSE), is the United State's largest home builder and is headquartered in Miami. The announcement was made Thursday April 12, 2018. In his new role as Executive Chairman Miller will continue to be involved in the company's strategic direction and operations. 

Other shake-ups include Jon Jaffe, current Chief Operating Officer, has been elected to be Lennar's new President and will continue to serve his role as COO. Chief Financial Officer Bruce Gross will assume a new role as CEO of Lennar Financial Services, and Treasurer Diane Bessette will transition to the role of CFO.

Lennar was co-founded by Miller's father, Leonard, in the 1950's. Miller, 60, has worked for Lennar for over 35 years and served as CEO for over 21 years.

Incoming CEO Rick Beckwitt has worked for Lennar for over 12 years and became President in 2011. He helped guide the company through the financial crisis which wiped out many in the real estate sector and has overseen major deals including the acquisition of CalAtlantic.

Lennar currently has over 250,000 homesites and 1,300 communities and is spread across 21 states and 49 different markets. In February 2018 Lennar acquired CalAtlantic in a $9.3 billion deal.