Cerberus Venture Takes Over LNR in Nearly $4B Deal

NEW YORK CITY-Newly formed Riley Property Holdings LLC, which is comprised of affiliates of locally based Cerberus Capital Management LP and its real estate affiliate Blackacre Institutional Capital Management LLC, will acquire LNR Property Corp. in a transaction valued at $3.8 billion. Riley Holdings will take possession of all LNR’s outstanding shares for $63.10 per share in cash. Jeffrey Krasnoff, CEO of LNR, will serve in the same capacity with Riley. The firms expect the merger will be complete by the end of this year or early in 2005.

Krasnoff says in a statement that the new capital structure would facilitate “many investment opportunities.” Cerberus officials issued no comment on the transaction other than the initial release.

LNR was formed in 1997 to separate Lennar Corp.’s real estate investment, finance and management business from its homebuilding business. Earlier this year, GlobeSt.com reported that an entity owned equally by LNR and Lennar acquired Los Angles County, CA-based Newhall Land and Farming Co. for $1 billion. The JV is planning to develop a large-scale commercial and residential project on a tract of land in California that it acquired in the deal. A few weeks ago, LNR expaned its European base when its wholly-owned subsidiary Lennar Partners Europe acquired European commercial real estate loan servicer Hatfield Philips International