It is never good news when a home-builder sells a big portion of its real estate. Lennar (LEN) sold 11,000 home sites for $525 million. A company controlled by Morgan Stanley (MS) will take control of the land. Lennar will be able to buy-back some of the properties.
The home-builder may get a tax break from the action. If can take the losses on the land to shelter past profits. But, that is hardly reason to dump valuable property. Lennar is doing it because of the balance sheets of the company and its peers are facing sale of assets to keep solvent.
"There is a lot of money out there right now trying to do deals like this," says John Burns, a home-building consultant based in Irvine, Calif., who consulted with Morgan Stanley on the sale told The Wall Street Journal.
Buy land, they ain’t making any more of it. Lennar doesn’t seem to be able to afford the advice.
Douglas A. McIntyre
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