Lennar’s multifamily segment posted a loss of $12 million in the fiscal fourth quarter. Just a year ago, the segment posted $15 million in gains. For the full fiscal 2023, the national home builder’s multifamily segment recorded losses above $50 million.
During the company’s fourth quarter earnings call last week, chief financial officer Diane Bessette shared that the home builder expects a loss of about $25 million for the multifamily segment of the business in the first quarter of 2024.
Earlier this week, media outlets reported that Lennar has hired JLL to sell a portfolio of 11,000 luxury apartments under Quarterra, its multifamily arm, for an estimated $4.5 billion.
Lennar first launched its apartment development business in 2011. In July 2022, Lennar’s multifamily subsidiary rebranded as Quarterra Multifamily. At the time of the rebranding, it was announced Quarterra was to separate from Lennar and launch as an NYSE-listed, alternative asset manager.
However, in the fourth quarter of 2022, Lennar executive chairman Stuart Miller shared during the company’s earnings call that the previously announced separation of Quarterra Multifamily as its own public company would not occur in 2022 as intended.
“We believe that we have a very high-end public company waiting and almost ready to enter the public arena,” Miller said on the fourth quarter 2022 earnings call. “While I remain confident and enthusiastic that Quarterra will be spun and Lennar will become a ‘pure play’ home builder as promised, it will not happen by year-end.”
In spring 2023, Will Chapman, president of investments at Quarterra, shared with Multifamily Executive that “the Quarterra spinoff was put on hold due to financial market complications, and we're waiting for more favorable conditions before bringing Quarterra to the market.”
However, he added that despite current market conditions, Quarterra was still extremely bullish on U.S. housing fundamentals, believing “there is an opportunity to deliver into a void, when many of our competitors are pulling back this year. We intend to forge forward with new starts in 2023.” In addition to luxury units, the firm has been active in creating attainable housing for middle-income renters. Its first Emblem communities to address this need welcomed residents in 2022.
Quarterra is ranked as one of the top multifamily developers and builders in the nation. It ranked No. 7 on the National Multifamily Housing Council's 2023 Top Developers list, starting 5,224 units in 2022—almost double the number of starts in 2021. It also came in at No. 13 on the NMHC's 2023 Top Builders list, starting 4,340 units in 2022.
