REALTOR Magazine
Homebuilding giant Lennar is reportedly looking to sell its real estate lending arm, Rialto Capital, as builders continue to face a stagnant housing market, The Wall Street Journal reports.
Lennar has declined to comment publicly on the recent news reports, but in an investor call last week and in April it did confirm it was considering selling Rialto as part of the company’s strategy of spinning off or selling its subsidiaries. The sale could provide the builder with extra capital to invest in its core business: residential homebuilding.
It was just last year when Lennar became the nation’s largest homebuilder by revenue after it acquired rival CalAtlantic Group. But since then, the market has softened. Builders have “had a tough time opening new communities because land has gotten pretty expensive,” says John Burns, a real estate consultant. They industry also blames labor shortages, tax laws, and rising lumber and land prices for slowdowns. Lennar and other builders have reported solid earnings in the most recent quarter, but the slowing housing market may also be weighing on investor sentiment.
