Millrose Properties (MRP) Registration Filing summary

Company overview and business model

• Formed in March 2024, Millrose is being spun off from Lennar to become an independent, publicly traded REIT focused on providing land acquisition and horizontal development financing to homebuilders via its proprietary HOPP'R platform.

• The business model centers on a recycled capital structure, using proceeds from land sales to fund future acquisitions and development, initially serving Lennar and potentially other builders.

• Millrose will hold a diversified portfolio of over 100,000 homesites across 26 states, with assets valued at $6–7 billion, and will be externally managed by Kennedy Lewis Land and Residential Advisors LLC (KL).

• The company will operate as a holding company, with all operations conducted through Millrose Holdings and other subsidiaries.

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

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 pro forma assets as of September 30, 2024, were $6.65 billion, with equity of $5.97 billion.

• The company expects to generate recurring income from Monthly Option Payments (8.5% per annum on invested capital) and interest on a $4.7 billion promissory note at 7.5%.

• Management fee to KL is 1.25% of tangible assets, estimated at $77 million for the first year.

Use of proceeds and capital allocation

• Neither Millrose nor Lennar will receive proceeds from the distribution; Millrose will use recycled capital from land sales and option payments to fund future acquisitions and development.

• $900 million of contributed cash will be used to acquire additional homesites from Rausch Coleman Companies, expanding the real estate portfolio.

• Millrose is negotiating a $1 billion revolving credit facility to support liquidity and growth, subject to a 1:1 debt-to-equity cap unless Lennar consents.