Millrose Properties (MRP) Registration Filing summary

Company overview and business model

• Provides operational and capital solutions for home builders and land developers via the HOPP'R platform, focusing on financing land acquisition and horizontal development.

• Emerges from a spin-off from Lennar, initially serving only Lennar but with plans to expand to other customers.

• Operates as a holding company with all operations conducted through subsidiaries, primarily Millrose Holdings, and is externally managed by Kennedy Lewis Land and Residential Advisors LLC (KL).

• Intends to elect REIT status for tax purposes starting in 2025, with Millrose Holdings as a taxable REIT subsidiary.

• Business model centers on a recycled capital structure, using proceeds from land sales to fund future acquisitions and development, aiming for a self-financing cycle.

Financial performance and metrics

• Pro forma revenues for the nine months ended September 30, 2024, were $348.1 million, with net income of $203.1 million; for the year ended December 31, 2023, revenues were $434.0 million and net income was $332.7 million.

• Total assets as of September 30, 2024, on a pro forma basis, were $6.65 billion, with total equity of $5.97 billion.

• Management fee expense is 1.25% of tangible assets, estimated at $77 million for the first year post-spin-off.

• Initial capitalization includes up to $1 billion in cash and $5.0–6.0 billion in land assets.

Use of proceeds and capital allocation

• No proceeds are raised in the distribution; all shares are distributed to Lennar shareholders.

• Capital is allocated to acquire and develop land assets, with a significant portion used to acquire Rausch Coleman Companies' land assets post-spin-off.

• Plans to negotiate a $1 billion revolving credit facility to support liquidity and future growth.

• Capital recycling is central, with proceeds from land sales and option payments funding new acquisitions.