Lennar Corp., the country’s second-largest homebuilder, sold its majority stake in its multifamily development division to San Francisco-based asset management firm TPG.
Lennar will hold onto a minority stake in Quarterra, and TPG Real Estate has agreed to invest $1 billion into the multifamily developer, and “potentially raise more capital for future growth,” the South Florida Business Journal reported. Lennar and TPG did not disclose the details of the deal.
Homebuilders are facing weak demand brought on by high interest rates and affordability concerns, and the multifamily market is flaccid across most of the country.
Miami-based Lennar reported $44 million in multifamily operating losses in the fourth quarter.
Quarterra had $50 million in operating losses for 2023. Oversaturated multifamily markets across the country, especially in the Sun Belt, along with decreasing rents and increased competition haven’t helped.
The firm reacted by selling some of its assets. Quarterra abandoned plans for a 25-story, 344-unit apartment building in Chicago’s South Loop in October, listing the entitled development site for sale. It sold a 224-unit apartment complex near Downtown Oakland for $61 million a year ago.
Lennar, led by CEO Stuart Miller, will remain involved in Quarterra. Brad Grewie will stay on as Quarterra’s CEO.
Since launching in 2011, Quarterra (previously LMC) has built more than 43,000 apartments throughout the U.S., and has another 13,000 planned. The developer recently completed its Hawkins project on Treasure Island, a 178-unit apartment community in San Francisco’s newest neighborhood.
TPG expanded its reach in commercial real estate when it acquired Angelo Gordon for $2.7 billion in 2023.
TPG Real Estate had $18 billion in assets under management as of April. It has invested in student housing in recent years, partnering with Cardinal Group to buy complexes in Oklahoma, North Carolina and Texas.
—Christopher Neely
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Lennar preps to open Hawkins apartments on SF’s Treasure Island
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