If you’re not familiar with the Fountainbleau-based home construction company, Lennar, this recent headline from a real estate business news publication clearly establishes the company’s status as a builder of national importance: “Digging into Lennar and Elon Musk’s “Project Amazing”, a status which Fortune Magazine alerted us to in 2021 when it announced that the small Florida business had quietly become America’s largest homebuilder.
Making Billions in Home Closings
The company is not only significant to the Florida real estate industry, it has also made an impression on a national scale. Founded in 1954, Lennar has grown from humble beginnings to become the second largest homebuilder in the U.S. and the second largest homebuilder in Florida.
The homebuilder ranks second behind D.R. Horton, with 414 total permits and an average home value of $244,430. Lennar has 390 total permits and an average value of $307,467. Lennar had 53,376 home closings in the entire U.S. 2020 and recorded a record $2.5 billion in profits that year. They are active in 26 states, including Florida.
How it Happened: Business Formation
Lennar began life as F&R Builders, a company founded by Gene Fisher and real estate developer Arnold Rosen. In 1956, a young entrepreneur named Leonard Miller invested $10,000 in the fledgling company and replaced Fisher as Rosen’s partner.
By 1969, the company had reached an equity base of $1 million, and in 1971, Miller and Rosen changed the name to Lennar Corporation by combining parts of their first names. The company went public that same year and was listed on the New York Stock Exchange in 1972.
Since then, Lennar has experienced exceptional growth. They added a mortgage arm to their offerings and opened locations all over the U.S. To date, Lennar Corporation has constructed more than one million new homes for families all over the country. Over 53,000 of those homes were finished in 2020 alone.
As of last year, Lennar reported total assets of $33.207 billion with a total equity of $20.996 billion. Its financial services and mortgage arm reported $79 million in earnings in the first quarter of 2023, down from $91 million in the first quarter of 2022. Lennar employs over ten thousand people.
What Lennar Did Differently
What makes Lennar unique is that they build homes where people want to live, in desirable locations with good schools. The builder also includes upgraded designs, high-end features, and upgrades at no additional charge. They are also the first builder to offer homes specially designed for Wi-Fi with no dead spots, giving each family maximum connectivity for all their devices.
The company also prides itself on creating homes for every type of family need, from single-family ranch-style homes to townhomes and condominiums. They even offer low-maintenance homes for the active 55 and older set. Their company Quarterrals, founded in 2011, specializes in the creation of luxury rental apartment communities. With this diverse inventory, Lennar has properties to fit every lifestyle, need, family size, and budget.
It’s also Lennar’s mission to provide every resource a homebuyer needs, from applying for a mortgage to title insurance and closing services. They even offer home insurance.
Rolling with the Tide: Coping with COVID
Every company must be able to pivot and change with the times, especially in the real estate industry. When the pandemic hit, and a Seattle-based customer care representative died from COVID, Lennar implemented a virtual process for viewing and purchasing new homes while limiting physical contact. Virtual tours, digital closings, and a drive-thru where customers could get their documents notarized without leaving their vehicles made people safe and got new homes in the hands of happy buyers. Being able to innovate as the market shifts and changes helps Lennar weather almost any storm.
Leveraging for Future
According to their website, Lennar is focused on continued innovation as business moves forward, adapting to supply chain disruption and construction delays, and fluctuations in the real estate market. Their future plans include:
- Using a dynamic pricing model along with a specialized digital marketing platform to better match homes with buyers on a more constant basis.
- A restructuring of what the company pays and will pay for land and home lots so that development and sale prices realign with 2023 market conditions.
- A renewed focus on lowering corporate overhead and operating costs. And much more.
From its modest launch as a local builder, Lennar Corporation has grown to become a major national player in the residential real estate construction industry. With a footprint in 24 states Lennar is now Florida’s—and the country’s—second largest homebuilder. And, with an eye to the future, they appear leveraged and ready to do even greater things.
Contact Florida Bar Board-Certified Attorneys David E. Klein, Esq. and Guy Rabideau at Rabideauklein.com. They have the expertise and experience you need to ensure that your interests are protected throughout your real estate transactions in the Town of Palm Beach, across the Palm Beaches and throughout Florida. Contact Rabideau Klein today to discuss the legal implications of your Florida property transactions.