Lennar Corp. (NYSE:LEN) shares are trading lower Friday afternoon after investigative outlet Hunterbrook Media published a short report alleging the homebuilder met quarterly targets by selling hundreds of finished homes to its own spinoff, Millrose Properties Inc. (NYSE:MRP). Benzinga reached out to Lennar for comment on the allegations but did not immediately hear back from the company.
Here’s what investors need to know.
- Lennar stock is under selling pressure. Why is LEN stock trading lower?
Hunterbrook Accuses Lennar of Offloading Homes to Spinoff
According to the report, Millrose, spun off by Lennar in 2025 as an off-balance-sheet land bank, amended its agreements in late August to buy finished single-family homes and operate them as rental properties. Hunterbrook identified over 700 home purchases by Millrose totaling approximately $200 million across 15 states in roughly a month.
Notably, at least 356 of those purchases occurred in the final week of Lennar’s fiscal third quarter. Hunterbrook claims these transactions enabled Lennar to meet its quarterly delivery guidance, beating the lower bound by just 340 homes while missing its four other financial targets.
Financial Risk and Governance Concerns
Hunterbrook Capital, which holds short positions in both Lennar and Millrose, highlighted severe economic inefficiencies in the arrangement. The report estimates Millrose’s net rental yield at around 5%, failing to cover its borrowing costs of 6.5% to 6.75%.
Furthermore, property records indicate Millrose paid roughly 13% more than individual retail buyers after accounting for incentives. With Lennar CEO Stuart Miller holding 43% of Millrose’s voting power, accounting experts cited in the report questioned whether Millrose is acting against its independent financial interest to bolster Lennar.
LEN Shares Drop Friday Afternoon
LEN Price Action: Lennar shares were down 2.51% at $80.05 at the time of publication on Friday, according to Benzinga Pro data.
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