Lennar closes multifamily fund on $2.2bn

The develop-to-core fund was closed almost $1bn over target.

Lennar Corporation’s subsidiary, LMC, has closed its multifamily development fund on $2.2 billion, well over its target, the Miami-based firm said Wednesday.

LMC launched the vehicle, Lennar Multifamily Venture (LMV), in the fourth quarter of 2014 with a $1.25 billion to $1.5 billion target, sources with knowledge of the fundraising process said. The firm held a first close in July 2015 on $1 billion. With capital from the vehicle, LMC will develop Class A multifamily communities in 25 target markets throughout the US, according to Wednesday’s statement.

Lennar formed LMC in 2011 to build high-rise, mid-rise and garden apartment communities. The firm now has 13,300 apartment homes in 45 communities operating or under construction.

The fund consisted of a $504 million commitment from Lennar, with the rest of the capital coming from six institutional investors, comprised of foreign pensions, sovereign wealth funds, and insurance companies. Sydney-based Macquarie Capital was the financial advisor and placement agent for LMC.

LMC’s latest announced transaction was the September acquisition of a development site in Oakland, California, according to real estate data provider Real Capital Analytics. The group bought the 0.5-acre site for $18.5 million with plans to develop a 254-unit apartment tower that includes ground floor retail and four floors of above ground parking.

For its part, Macquarie has worked with numerous real estate funds and helped them raise billions for apartment buildings and similar structures over the past three years, a person with the firm said.

“Macquarie Capital has been very active in the multifamily space, having arranged over $4.2 billion of equity for US multifamily since 2013 for groups like Lennar and Greystar Real Estate Partners,” Eric Wurtzebach, a senior managing director at Macquarie, told PERE.

In February, Macquarie also invested in private real estate company Stonehenge NYC, which owns a $3 billion multifamily portfolio in Manhattan.