The Real Deal Miami

Lennar tries distressed asset approach

March 22, 2010 12:29PM

With new home sales remaining somewhat dormant, U.S. home builder Lennar is trying a new profit-making plan, according to Bloomberg news, by investing in distressed real estate assets and failed bank loans. Lennar’s strategy, which has included a $3.05 billion buy-up of delinquent loans that the Federal Deposit Insurance Corp seized, mirrors that of private equity firms, according to industry experts. John Burns, chairman of the eponymous real estate consulting firm, said that Lennar, the third-largest home builder in the country, has taken the road less travelled with this new approach. “Nobody else is doing what Lennar is doing — nobody,” Burns said. But the home builder said it’s optimistic that the plan will pan out — in a February company presentation, Lennar said its FDIC portfolio stands to add as much as $1.50 in long-term value to its shares.