Lennar Corp.’s multifamily arm closed a $1.3 billion fund that will invest in apartment projects in large U.S. cities.
LMC, a subsidiary of Miami-based Lennar Corp. announced the closing of the equity fund on Tuesday. It said eight institutional investors, including foreign pensions, sovereign wealth funds, banks and insurance companies invested in the fund. Lennar also contributed $381 million to the fund.
The company said the fund, known as LMV II, will develop and acquire apartment communities for the fund’s duration of eight years. LMV II will provide LMC with capital to develop and acquire $2.6 billion in multifamily assets across the United States, according to a release.
Lennar’s multifamily division makes up a small portion of the company’s business. In the first quarter of 2019, it made up just 2.5 percent of its total revenue.
After acquiring CalAtlantic in a deal worth $9.3 billion last year, Lennar became the largest homebuilder in the U.S. The company’s executive chairman Stuart Miller has previously suggested that he wanted to make Lennar a “pure-play” homebuilder to concentrate the company’s focus on building single-family homes.
The company likely still wants to take advantage of the growing number of renters in large U.S. cities, as homeownership in these cities becomes more unaffordable and out of reach for many young people.