Lennar and Morgan Stanley Real Estate

Lennar Corporation , one of the nation's largest homebuilders, and Morgan Stanley Real Estate, an affiliate of Morgan Stanley & Co., Inc., announced today that they have formed a strategic land investment venture to acquire, develop, manage and sell residential real estate. Concurrent with its formation, the new investment venture acquired a diversified portfolio of land from Lennar.
The properties acquired by the new entity consist of approximately 11,000 homesites in 32 communities located throughout the country. The land portfolio includes a mix of raw land as well as partially and fully developed homesites in both active and future communities. The communities are located in California, Colorado, Florida, Illinois, Maryland, Massachusetts, Nevada and New Jersey.
Lennar acquired a 20% ownership interest and 50% voting rights in the investment venture. As of September 30, 2007, the acquired properties had a net book value of approximately $1.3 billion and the sales price was $525 million. Lennar will manage the land investment venture's operations and will receive fees for its services. It will also receive disproportionate distributions to the extent the investment venture exceeds financial targets. As a part of the transaction, Lennar entered into option agreements and rights of first offer providing Lennar the opportunity to purchase certain finished homesites at current market values at the time of exercise from the investment venture.