The portfolio encompasses approximately 11,000 homesites in 32 Lennar communities located throughout the US, plus a mix of raw land and partially and fully developed homesites in active and future communities in California, Colorado, Florida, Illinois, Maryland, Massachusetts, Nevada and New Jersey. As of Sept. 30, the company says the properties had a net book value of $1.3 billion. Citigroup Global Markets Realty Corp. was sole lead arranger for non-recourse acquisition funding of the venture.

Lennar acquired a 20% ownership interest and 50% voting rights in the JV, which was formed to acquire, develop, manage and sell residential real estate. It will manage the venture's operations and receive fees for its services. Under the agreement, Lennar will also receive disproportionate distributions should the venture exceed financial targets. In addition, Lennar obtained option agreements and rights of first offer that provide it with the opportunity to purchase certain unspecified homesites from the venture at market prices at the time it exercises the options.

"The combined expertise and resources provided by the Lennar/Morgan Stanley team will allow us to maximize the value of this portfolio and provide a footprint to capitalize on inefficiencies in today's residential real estate market," says Stuart Miller, Lennar's president and CEO, in a statement. "This transaction provides us with increase liquidity and flexibility at an opportune time."