Lennar spins on buy low, sell high
TEXT OF STORY
Renita Jablonski: Homebuilder Lennar reported earnings last night. Its loss widened but sales were a little higher than what analysts expected. And the company is offering what could be another sign of improvement. As Jennifer Collins reports, it’s a spin on buy low, sell high.
Jennifer Collins: Lennar made a smart move at the height of the real-estate boom. It sold most of its stake in a 15,000-acre tract of land north of Los Angeles — the kind of prime real estate that could’ve easily become a suburban village. Then, the housing market collapsed, and the land holding company filed for bankruptcy.
Today, Lennar’s looking to make another smart move: Buy much of the land back for a bargain.
Marlee Lauffer represents the holding company, and says the details need to be worked out:
Marlee Lauffer: But we certainly see this as a positive development in our Chapter 11 case.
The deal could eventually give a boost Lennar. The company lost more than a billion dollars last year.
Greg Doyle is a market researcher with Hanley Wood:
Greg Doyle: We are at or very close to a bottom on this — at least close enough to the bottom where I think having the discussion about getting back into the market is a valid strategy.
He says most of the large homebuilders he advises are already laying the groundwork to buy cheap plots of land on the market.
I’m Jennifer Collins for Marketplace.
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