LMC today announced the final closing of Lennar Multifamily Venture II (LMV II). LMV II is a $1.3 billion equity fund targeting investments in Class A multifamily communities in the 25 top U.S. metropolitan markets.
LMV II follows on the heels of the successful Lennar Multifamily Venture (LMV) fund and features many of the same investors. LMV II's ownership includes eight prominent institutional investors, a group that consists of foreign pensions, sovereign wealth funds, banks and insurance companies. Lennar Corporation also has a $381 million commitment to the venture. Like its predecessor, LMV II will aim to provide superior risk-adjusted returns through a "build-to-core" strategy. LMV II will develop and acquire apartment communities and hold them to generate cash flow for the duration of the fund’s eight-year life.
The new fund focuses on the top growth and gateway markets in the United States, which are characterized by strong long-term demand fundamentals and constrained supply. It will also capitalize on LMC's deep construction expertise to build multifamily communities at an attractive cost basis, and will benefit from LMC's fully integrated development management, property management and asset management platforms. With target leverage of 50 percent, LMV II will provide LMC with capital to develop and acquire $2.6 billion in multifamily assets across the United States.
"The creation of LMV II represents a tremendously important milestone for our multifamily business," said Rick Beckwitt, CEO of Lennar Corporation. "The new fund empowers us to accelerate the growth of our highly successful LMC platform and maintain a long-term ownership position in income-producing communities. Having the ability to add significant value through the development process and to then continue to own a portfolio of income-producing properties is such a powerful combination for LMC."
Todd Farrell, President of LMC, said, “The creation of LMV II is validation of the success of its predecessor and a vote of confidence in the company. We could not be more excited about the closing of LMV II and the opportunity to substantially grow our portfolio of what we believe to be the premier communities in the best markets in the country. We are honored that so many of the investors in LMV have chosen to increase their investment with us. This increased partnership is something that we deeply appreciate and will work relentlessly to validate."
John Gray, President of LMC Investments, added, "LMV II gives LMC a material competitive advantage over our peers when it comes to acquiring land, achieving scale and developing high-quality assets. We take great pride in the investor base of LMV II on the heels of strong performance in the first LMV vehicle and aim to continue our track record of delivering outsized returns for long-term partners and investors."
Macquarie Capital acted as financial advisor and placement agent for LMC.