NEW: The Story Millrose Told Wall Street About Lennar Purchases Doesn’t Match The Evidence – HUNTERBROOK

Hunterbrook reporters walked through 75 homes that Millrose Properties had just bought from Lennar, expecting to find tenants already in place, as Millrose had told Goldman Sachs.

Not one appeared occupied; one Texas house had large spiderwebs spun across its front door. The investigation broadens into a larger finding: 95.3% of Millrose’s matched home purchases were listed as ordinary public rentals roughly a month after acquisition.

Ticker: MRP (Millrose Properties)
Research Firm: Hunterbrook Media
Report URL: https://hntrbrk.com/breaking-news/lennar-millrose-2?ref=shortreport.fyi
Position Disclosure: Not stated in the source report.

Thesis

Hunterbrook Media argues that Millrose’s rapid purchases of Lennar’s completed homes function as an economically questionable rental business that benefits Lennar, not the pre-leased rent-to-own program described to investors.

• Vacant "Pre-Leased" Homes: Millrose told Goldman Sachs it “buys the home with a signed lease already in place,” but Hunterbrook found none of 75 visited homes occupied, and 991 of 1,040 matched addresses (95.3%) were listed as available rentals on Evergreen as of October 6.
• Standard Leases, Not Rent-to-Own: Evergreen representatives offered 12- or 18-month leases on a Millrose-owned home and said rent-to-own was not available for it; more than 50 Evergreen listings carried 12-month minimums, and Lennar sales offices could not confirm an active rent-to-own program.
• Inventory Absorption for Lennar: Millrose purchased roughly $290 million of Lennar homes across 1,096 transactions in about a month, helping push Lennar’s deliveries above guidance, the only homebuilding target it met in the third quarter.
• Lennar’s Contractual Leverage: Lennar supplied 72% of Millrose’s revenue last quarter and can pause scheduled land purchases and halve associated payments for up to a year, a position Hunterbrook contrasts with penalties publicly disclosed by Angelo Gordon, another Lennar land bank.
• August Model Change: Millrose was created to hold land for future Lennar construction, not to own homes; an August 27 amendment to its Founders’ Rights Agreement, later filed with the SEC, authorized ownership of completed houses as rentals.
• Yields Below Borrowing Costs: Hunterbrook estimated rental income at 5.92% of purchase price after taxes and insurance, below the 6.5% to 6.75% rate on Millrose’s $1 billion senior notes issued October 6; only South Carolina and Alabama appeared to clear that cost.
• Falling-Market Exposure: Home values in ZIP codes where Millrose bought fell 9% over the past year versus a 1.3% national gain, with Texas, about 30% of estimated purchase value, down 4.2%; Goldman’s note confirms there is no builder put-back if a renter does not eventually buy.
• Lopsided Discount to Lennar: Millrose bought homes that had sat a median 86 days at a roughly 4% discount to list price, while individual buyers reportedly received incentives averaging 13%; Lennar CEO Stuart Miller is Millrose’s largest voting shareholder.

Catalysts

• Leasing and occupancy outcomes: Ongoing results at advertised rents would confirm or undercut the yield assumptions in the report.
• Lease structure disclosures: Any further disclosure on whether homes carry pre-signed leases or standard rentals would test the credibility of the rent-to-own pitch.
• Resale performance in weaker markets: Eventual resale outcomes for homes in Texas and Florida, where local values are falling, would determine whether the model loses money on exit.
• Lennar’s contractual option usage: Potential exercise of Lennar’s right to pause land purchases and halve payments to Millrose for up to one year would signal how Lennar treats Millrose when inventory support is less necessary.
• Additional completed-home transactions: Further purchases by Millrose from Lennar and related filings would show whether the current pace of buying continues or slows.

Company Response

The report states that neither Millrose nor Lennar responded to Hunterbrook’s repeated requests for comment, and that neither company has publicly addressed the findings. A Goldman Sachs analyst, asked whether Millrose had made the rent-to-own claims described in the bank’s September 30 client note, said “I can’t talk to that” and ended the call.

Notable Details

• One of the Texas homes Hunterbrook visited had large spiderwebs spun across its front entrance, among 39 Millrose-purchased properties checked in Princeton, Texas.
• A Lennar sales representative told Hunterbrook that staff had been informed a rent-to-own program might arrive by mid-2027, but had no further details.
• Lennar shares fell 6.7% on the first full trading day after Hunterbrook’s earlier report on Millrose, which Barron’s called Lennar’s sharpest one-day decline since March 2024; Millrose shares fell 8.5% the same day.
• Insurance on a $300,000 home in Florida, where Millrose bought heavily, reportedly averages $8,471 a year, a cost the report says drags rental yields there to an estimated 4.9% before financing costs.
• Of 1,040 Millrose home purchases matched to a street address, 60 could not be matched at all, and 471 of the identified transactions had no purchase price recorded in deed records.

"If the rent-to-own homes described to Goldman exist, Hunterbrook could not find them."

This is the report's own summation of the gap between Millrose's pitch to Goldman Sachs and the ordinary rental listings and leasing terms Hunterbrook documented.

FAQs

What is Millrose Properties (MRP)?

Millrose Properties is a land bank that Lennar spun off to hold sites for future home construction, allowing Lennar to access building land without owning it outright. The company has since expanded into buying completed Lennar homes for a rental program, a shift authorized by an August 27 amendment to its Founders’ Rights Agreement that was filed with the SEC.

What does Millrose Properties do, and why was it created?

Millrose’s original purpose, per the report, was land banking: holding parcels for future Lennar construction. Its move into owning finished homes as rentals is a departure the report frames against that original pitch, and Lennar remains Millrose’s dominant customer, accounting for 72% of its revenue in the most recently cited quarter.

Who is Hunterbrook Media and what does it allege about Millrose?

Hunterbrook Media is the investigative outlet that authored the report, built on property visits, deed records, rental listings, calls to leasing offices, and a Goldman Sachs meeting recap. It alleges that Millrose’s actual rental operations, found through site visits and listing data, are inconsistent with the pre-leased rent-to-own model the company described to Goldman Sachs.

What is the rent-to-own model Millrose pitched to investors?

According to Goldman Sachs’ September 30 recap of a meeting with Millrose management, Millrose said it buys homes with a signed lease already in place and that renters are often identified before purchase, eliminating lease-up risk. The note described tenants accumulating payments toward eventual ownership, with resale on the open market as a backup if a purchase does not occur.

What did Hunterbrook find when it visited Millrose-owned homes?

Reporters visited 75 Millrose-owned homes across Marion County, Florida (36 homes, visited September 29) and Princeton, Texas (39 homes, visited September 30), and found none appeared occupied. Separately, Hunterbrook matched 991 of 1,040 Millrose purchases with street addresses (95.3%) to active rental listings on Evergreen, Millrose’s property manager, as of October 6.

How did Lennar benefit from Millrose's home purchases?

Hunterbrook estimates Millrose bought roughly $290 million of Lennar homes across 1,096 transactions in about a month, and says these purchases helped push Lennar’s deliveries above guidance, the only homebuilding target the company met in its third quarter. The homes acquired had sat on the market a median 86 days before Millrose’s deed was recorded.

Are Millrose's rental yields enough to cover its debt costs?

Hunterbrook calculated gross annual rent at 8.44% of purchase price across nearly 1,000 homes, falling to an estimated 5.92% after property taxes and insurance. That is below the 6.5% to 6.75% interest rate on the $1 billion of senior notes Millrose issued on October 6, and the report found only South Carolina and Alabama appeared to clear that financing cost due to lower property taxes.

Has Millrose or Lennar responded to the allegations?

The report states that neither company responded to Hunterbrook’s repeated requests for comment, nor have they publicly addressed the findings. A Goldman Sachs analyst declined to confirm whether Millrose made the rent-to-own claims in its September 30 note, saying “I can’t talk to that” before ending the call.

Disclaimer: This summary is not primary research and does not constitute investment advice. It is a brief overview of a detailed equity research report authored by the firm, organization, or source referenced in this article or at https://hntrbrk.com/breaking-news/lennar-millrose-2, which contains extensive evidence, regulatory filings, and analysis; readers are encouraged to review the full report there for a comprehensive understanding. The content provided in this publication is not authored or originated by us — we act solely as a distributor and do not endorse, verify, or take responsibility for the accuracy, completeness, or reliability of the information presented. This publication is for informational purposes only and should not be construed as legal, business, investment, or tax advice. Always conduct independent due diligence and consult qualified professionals before making any decisions based on the information contained herein. We disclaim all liability for any loss or damage arising from reliance on third-party content, and the views expressed are solely those of the respective source and do not necessarily reflect our own.