Lennar Corporation

06/29/2026 | Press release | Distributed by Public on 06/29/2026 14:39

Quarterly Report for Quarter Ending May 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in our 2025 Form 10-K.
Outlook
Lennar's second quarter 2026 results represent strong operational execution against a macro backdrop that has grown more complicated throughout the quarter. While our margin remains under pressure as we continue to focus on bringing affordable housing to an affordability-constrained consumer base, underlying demand is real and growing and supply remains structurally short.
Mortgage interest rates remained stubbornly elevated in the mid-to-upper 6% range throughout the quarter, keeping affordability challenged for the majority of our buyers. Complicating the picture further, headline inflation rose to 4.2% year-over-year in May, the highest reading since early 2023, driven primarily by energy prices tied to supply disruptions from the Iran conflict. While core inflation decelerated on a monthly basis, higher energy costs impact every part of the American household budget and weigh on consumer confidence and the urgency to make major financial commitments. The Federal Reserve remains on hold, and near-term rate relief appears unlikely. Consumer psychology continues to be tested by concerns about long-term job security amid rapid advances in artificial intelligence. Traffic across our communities has been inconsistent; intent is high but urgency to close remains measured and deliberate rather than confident.
On an encouraging note, after three years of incentive levels that have been generally increasing, we saw a meaningful decline in our sales incentives on deliveries this quarter. While the overall market remains choppy and it is too early to declare a sustained trend, this may be a leading indicator of margin recovery. The federal government's engagement with the national housing crisis also continues to deepen, with housing affordability remaining a genuine focal point of both the administration and the legislature.
Our operating strategy has not changed. We remain focused on two strategic priorities: driving consistent, even-flow production and volume, and continuously refining our asset-light, land-light balance sheet model to generate strong and growing cash flow and returns. Using incentives, we price to market in order to maintain sales at a consistent level as the market adjusts. This has given us a competitive edge, and has enabled us to drive down construction costs per square foot and to reduce cycle time to a record low. Our land-light model enables us to be a significantly more efficient land buyer, land developer and land administrator at a meaningfully lower cost of capital. We are not waiting for conditions to normalize, we are building and executing in the market as it exists today, and we are currently expecting sequential margin improvement to continue as the year progresses.
For the third quarter of 2026, we expect new orders to be in the range of 21,000 to 22,000 homes, with continued focus on matching starts and sales pace. We anticipate third quarter deliveries to be in the range of 20,500 to 21,500 homes as we maintain even-flow production and convert inventory to cash. Our average sales price on those deliveries is expected to be between $375,000 and $380,000. We expect gross margins to be approximately 16%, and our SG&A percentage should be in the range of 8.8% to 9.0%. For the full year, we are adjusting our annual delivery guidance to 82,000 to 83,000 homes, reflecting current pressures on interest rates and continued macro uncertainty.
After over three years of navigating a rather difficult and complicated housing market, we believe that we are well-positioned for market conditions as they unfold. In the current market, incentives are declining, margins are starting to improve, and our sales and marketing machines are generating stronger leads, faster engagement, and better conversion. Our position is strong in the vast majority of our markets, which gives us the scale and operational discipline to position ourselves for improvements in the market rather than waiting for conditions to improve on their own. We are building towards that with clarity, discipline, and confidence.
(1) Results of Operations
Overview
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three and six months ended May 31, 2026 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.
Our second quarter net earnings attributable to Lennar in 2026 were $304.8 million, or $1.24 per diluted share, compared to our second quarter net earnings attributable to Lennar in 2025 of $477.4 million, or $1.81 per diluted share. Excluding pretax mark-to-market losses of $23.3 million and $29.4 million on technology investments, respectively, our second quarter net earnings attributable to Lennar in 2026 were $322.1 million, or $1.31 per diluted share, compared to $499.5 million or $1.90 per diluted share in the second quarter of 2025.
Financial information relating to our operations was as follows:
Three Months Ended May 31, 2026
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate Total
Revenues:
Sales of homes $ 7,595,039 - - - - 7,595,039
Sales of land 12,401 - - - - 12,401
Other revenues 8,874 236,939 63,564 23,055 - 332,432
Total revenues 7,616,314 236,939 63,564 23,055 - 7,939,872
Costs and expenses:
Costs of homes sold 6,412,619 - - - - 6,412,619
Costs of land sold 21,544 - - - - 21,544
Selling, general and administrative expenses 698,395 - - - - 698,395
Other costs and expenses - 135,836 72,788 43,726 - 252,350
Total costs and expenses 7,132,558 135,836 72,788 43,726 - 7,384,908
Equity in earnings from unconsolidated entities 2,670 - 27,233 4,184 - 34,087
Other income, net and other gains, net 2,945 - 316 795 - 4,056
Lennar Other losses from technology investments - - - (23,252) - (23,252)
Operating earnings (loss) $ 489,371 101,103 18,325 (38,944) - 569,855
Corporate general and administrative expenses - - - - 136,149 136,149
Charitable foundation contribution - - - - 20,519 20,519
Earnings (loss) before income taxes $ 489,371 101,103 18,325 (38,944) (156,668) 413,187
Three Months Ended May 31, 2025
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate Total
Revenues:
Sales of homes $ 7,788,275 - - - - 7,788,275
Sales of land 43,195 - - - - 43,195
Other revenues 12,392 298,098 230,305 5,237 - 546,032
Total revenues 7,843,862 298,098 230,305 5,237 - 8,377,502
Costs and expenses:
Costs of homes sold 6,402,532 - - - - 6,402,532
Costs of land sold 56,173 - - - - 56,173
Selling, general and administrative expenses 688,847 - - - - 688,847
Other costs and expenses - 140,818 254,677 30,025 - 425,520
Total costs and expenses 7,147,552 140,818 254,677 30,025 - 7,573,072
Equity in earnings (losses) from unconsolidated entities 17,716 - (5,269) (331) - 12,116
Other income, net and other gains, net 14,208 - 14,887 1,664 - 30,759
Lennar Other losses from technology investments - - - (29,440) - (29,440)
Operating earnings (loss) $ 728,234 157,280 (14,754) (52,895) - 817,865
Corporate general and administrative expenses - - - - 155,853 155,853
Charitable foundation contribution - - - - 20,131 20,131
Earnings (loss) before income taxes $ 728,234 157,280 (14,754) (52,895) (175,984) 641,881
Six Months Ended May 31, 2026
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate Total
Revenues:
Sales of homes $ 13,867,961 - - - - 13,867,961
Sales of land 27,559 - - - - 27,559
Other revenues 19,357 452,494 146,063 45,914 - 663,828
Total revenues 13,914,877 452,494 146,063 45,914 - 14,559,348
Costs and expenses:
Costs of homes sold 11,734,233 - - - - 11,734,233
Costs of land sold 52,855 - - - - 52,855
Selling, general and administrative expenses 1,315,890 - - - - 1,315,890
Other costs and expenses - 260,078 163,216 87,410 - 510,704
Total costs and expenses 13,102,978 260,078 163,216 87,410 - 13,613,682
Equity in earnings from unconsolidated entities 40,851 - 52,714 3,790 - 97,355
Other income, net and other gains, net 9,649 - 623 1,930 - 12,202
Lennar Other losses from technology investments - - - (8,414) - (8,414)
Operating earnings (loss) $ 862,399 192,416 36,184 (44,190) - 1,046,809
Corporate general and administrative expenses - - - - 293,787 293,787
Charitable foundation contribution - - - - 37,382 37,382
Earnings (loss) before income taxes $ 862,399 192,416 36,184 (44,190) (331,169) 715,640
Six Months Ended May 31, 2025
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate Total
Revenues:
Sales of homes $ 15,028,821 - - - - 15,028,821
Sales of land 78,521 - - - - 78,521
Other revenues 20,390 575,175 293,501 12,639 - 901,705
Total revenues 15,127,732 575,175 293,501 12,639 - 16,009,047
Homebuilding costs and expenses:
Costs of homes sold 12,290,676 - - - - 12,290,676
Costs of land sold 92,250 - - - - 92,250
Selling, general and administrative 1,304,586 - - - - 1,304,586
Other costs and expenses - 274,412 328,053 53,589 656,054
Total costs and expenses 13,687,512 274,412 328,053 53,589 - 14,343,566
Equity in earnings (losses) from unconsolidated entities 52,720 - (4,542) (2,827) - 45,351
Other income (expense), net and other gains (losses), net 44,567 - 24,317 (6,458) - 62,426
Lennar Other losses from technology investments - - - (91,943) - (91,943)
Operating earnings 1,537,507 300,763 (14,777) (142,178) - 1,681,315
Corporate general and administrative expenses - - - - 303,231 303,231
Charitable foundation contribution - - - - 37,965 37,965
Earnings (loss) before income taxes $ 1,537,507 300,763 (14,777) (142,178) (341,196) 1,340,119
Three Months Ended May 31, 2026 versus Three Months Ended May 31, 2025
Revenues from home sales decreased 2% in the second quarter of 2026 to $7.6 billion from $7.8 billion in the second quarter of 2025. Revenues were lower primarily due to a 5% decrease in the average sales price of homes delivered, partially offset by a 2% increase in the number of home deliveries. New home deliveries were 20,519 homes in the second quarter of 2026, compared to 20,131 homes in the second quarter of 2025. The average sales price of homes delivered was $371,000 in the second quarter of 2026, compared to $389,000 in the second quarter of 2025. The decrease in average sales price of homes delivered in the second quarter of 2026 compared to the same period last year was primarily due to continued weakness in the market.
Gross margins on home sales were $1.2 billion, or 15.6%, in the second quarter of 2026, compared to $1.4 billion, or 17.8%, in the second quarter of 2025. During the second quarter of 2026, gross margins decreased primarily due to lower revenue per square foot and higher land costs year over year, which were partially offset by a decrease in construction costs, reflecting our continued focus on cost-saving initiatives.
Selling, general and administrative expenses were $698.4 million in the second quarter of 2026, compared to $688.8 million in the second quarter of 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.2% in the second quarter of 2026, from 8.8% in the second quarter of 2025, primarily due to less leverage as a result of lower revenues and an increase in marketing and selling expenses.
During the second quarter of 2026, our homebuilding operating earnings included $9.4 million of interest income, compared to $13.8 million of interest income in the second quarter of 2025. The decrease in interest income was primarily due to lower cash balances year over year.
Operating earnings for the Financial Services segment were $100.2 million in the second quarter of 2026, compared to $156.6 million in the second quarter of 2025, both amounts are net of noncontrolling interest. The decrease in operating earnings was primarily due to lower profit per locked loan in the mortgage business.
Operating earnings for the Multifamily segment were $18.3 million in the second quarter of 2026, compared to an operating loss of $14.8 million in the second quarter of 2025. Operating loss for the Lennar Other segment was $38.9 million in the second quarter of 2026, compared to an operating loss of $52.9 million in the second quarter of 2025. The Lennar Other
operating loss for both second quarters of 2026 and 2025 was primarily driven by mark-to-market losses of $23.3 million and $29.4 million, respectively, on our technology investments.
In the second quarter of 2026 and 2025, we had tax provisions of $105.1 million and $160.1 million, which resulted in an overall effective income tax rate of 25.6% and 25.1%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.
Six Months Ended May 31, 2026 versus Six Months Ended May 31, 2025
Revenues from home sales decreased 8% in the six months ended May 31, 2026 to $13.9 billion from $15.0 billion in the six months ended May 31, 2025. Revenues were lower primarily due to a 6% decrease in the average sales price of homes delivered and a 2% decrease in the number of home deliveries. New home deliveries were 37,382 homes in the six months ended May 31, 2026, compared to 37,965 homes in the six months ended May 31, 2025. The average sales price of homes delivered was $373,000 in the six months ended May 31, 2026, compared to $398,000 in the six months ended May 31, 2025. The decrease in average sales price of homes delivered in the six months ended May 31, 2026 compared to the same period last year was primarily due to continued weakness in the market.
Gross margins on home sales were $2.1 billion, or 15.4%, in the six months ended May 31, 2026, compared to $2.7 billion, or 18.2%, in the six months ended May 31, 2025. During the six months ended May 31, 2026, gross margins decreased primarily due to lower revenue per square foot and higher land costs year over year, which were partially offset by a decrease in construction costs, reflecting our continued focus on cost-saving initiatives.
Selling, general and administrative expenses were $1.3 billion in the six months ended May 31, 2026, consistent with $1.3 billion in the six months ended May 31, 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.5% in the six months ended May 31, 2026, from 8.7% in the six months ended May 31, 2025, primarily due to less leverage as a result of lower revenues and an increase in marketing and selling expenses.
During the six months ended May 31, 2026, our homebuilding operating earnings included $29.3 million of interest income, compared to $37.0 million of interest income in the six months ended May 31, 2025. The decrease in interest income was primarily due to lower cash balances year over year.
Operating earnings for the Financial Services segment were $190.8 million in the six months ended May 31, 2026, compared to $299.5 million in the six months ended May 31, 2025, both amounts are net of noncontrolling interest. The decrease in operating earnings was primarily due to lower profit per locked loan in the mortgage business.
Operating earnings for the Multifamily segment were $36.2 million in the six months ended May 31, 2026, compared to an operating loss of $14.5 million in the six months ended May 31, 2025. Operating loss for the Lennar Other segment was $44.2 million in the six months ended May 31, 2026, compared to an operating loss of $142.2 million in the six months ended May 31, 2025. The Lennar Other operating loss for the six months ended May 31, 2026 was due to operating losses and mark-to-market losses of $8.4 million on our technology investments. The Lennar Other operating loss for the six months ended May 31, 2025 was primarily due to mark-to-market losses of $91.9 million on our technology investments.
In the six months ended May 31, 2026 and 2025, we had tax provisions of $174.2 million and $329.6 million, which resulted in an overall effective income tax rate of 24.6% and 24.8%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.
Homebuilding Segments
At May 31, 2026, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 2 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:
Selected Financial and Operational Data
Three Months Ended May 31, 2026
Gross Margins Operating Earnings
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin (Loss) % Net Margins (Losses) on Sales of Homes (1) Gross Margins (Losses) on Sales of Land Other Revenues Equity in Earnings (Losses) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Losses)
East $ 1,709,254 1,382,260 19.1 % 157,939 (4,178) 3,705 4,978 1,942 164,386
Central 1,662,594 1,407,144 15.4 % 76,968 (2,130) 1,076 (18) 2,276 78,172
South Central 1,463,140 1,210,579 17.3 % 117,472 (973) 560 (10) (2,712) 114,337
West 2,758,154 2,409,274 12.6 % 138,458 (1,862) 1,160 676 1,603 140,035
Other (2) 1,897 3,362 (77.2) % (6,812) - 2,373 (2,956) (164) (7,559)
Totals
$ 7,595,039 6,412,619 15.6 % 484,025 (9,143) 8,874 2,670 2,945 489,371
Three Months Ended May 31, 2025
Gross Margins Operating Earnings
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin (Loss) % Net Margins (Losses) on Sales of Homes (1) Gross Margins (Losses) on Sales of Land Other Revenues Equity in Earnings (Losses) from Unconsolidated Entities Other Income (Expense), net Operating Earnings
East $ 1,715,407 1,390,760 18.9 % 157,329 147 3,714 8,295 7,161 176,646
Central 1,743,304 1,417,197 18.7 % 160,279 (1,143) 1,963 (1) 1,099 162,197
South Central 1,505,750 1,241,884 17.5 % 137,955 (1,415) 1,058 (6) (903) 136,689
West 2,818,980 2,346,962 16.7 % 254,863 (10,567) 2,095 1,038 (2,005) 245,424
Other (2) 4,834 5,729 (18.5) % (13,530) - 3,562 8,390 8,856 7,278
Totals
$ 7,788,275 6,402,532 17.8 % 696,896 (12,978) 12,392 17,716 14,208 728,234
Six Months Ended May 31, 2026
Gross Margins Operating Earnings
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin (Loss) % Net Margins (Losses) on Sales of Homes (1) Gross Losses on Sales of Land Other Revenues Equity in Earnings (Losses) from Unconsolidated Entities Other Income (Expense), net Operating Earnings
East $ 3,221,332 2,621,112 18.6 % 268,391 (11,406) 8,574 15,661 (1,879) 279,341
Central 3,007,627 2,559,859 14.9 % 121,081 (4,993) 2,229 41 4,159 122,517
South Central 2,623,320 2,166,947 17.4 % 213,650 (3,318) 1,220 (25) (4,381) 207,146
West 5,009,901 4,376,796 12.6 % 231,513 (5,579) 2,362 1,588 (429) 229,455
Other (2) 5,781 9,519 (64.7) % (16,797) - 4,972 23,586 12,179 23,940
Totals
$ 13,867,961 11,734,233 15.4 % 817,838 (25,296) 19,357 40,851 9,649 862,399
Six Months Ended May 31, 2025
Gross Margins Operating Earnings
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin (Loss) % Net Margins (Losses) on Sales of Homes (1) Gross Margins (Losses) on Sales of Land Other Revenues Equity in Earnings (Losses) from Unconsolidated Entities Other Income (Expense), net Operating Earnings
East $ 3,370,667 2,693,780 20.1 % 347,383 (242) 6,449 14,933 32,477 401,000
Central 3,273,496 2,662,807 18.7 % 292,537 (2,583) 2,817 (4) 3,150 295,917
South Central 2,666,273 2,188,413 17.9 % 257,127 1,249 1,759 (8) (1,355) 258,772
West 5,707,665 4,733,641 17.1 % 554,488 (12,153) 3,343 1,010 (2,483) 544,205
Other (2) 10,720 12,035 (12.3) % (17,976) - 6,022 36,789 12,778 37,613
Totals
$ 15,028,821 12,290,676 18.2 % 1,433,559 (13,729) 20,390 52,720 44,567 1,537,507
(1)Net margins on sales of homes include selling, general and administrative expenses.
(2)Negative gross and net margins were due to period costs in Urban divisions that impact costs of homes sold without sufficient sales of homes revenue to offset those costs.
Summary of Homebuilding Data
Deliveries:
Three Months Ended May 31,
2026 2025 2026 2025 2026 2025
Homes
Dollar Value (In thousands)
Average Sales Price
East 4,761 4,742 $ 1,757,118 1,766,459 $ 369,000 373,000
Central 4,606 4,538 1,662,594 1,743,304 361,000 384,000
South Central 6,286 6,174 1,463,140 1,505,750 233,000 244,000
West 4,863 4,669 2,758,154 2,818,980 567,000 604,000
Other 3 8 1,897 4,834 632,000 604,000
Total 20,519 20,131 $ 7,642,903 7,839,327 $ 371,000 389,000
Of the total homes delivered listed above, 73 homes with a dollar value of $47.9 million and an average sales price of $656,000 represent homes from unconsolidated entities for the three months ended May 31, 2026, compared to 113 homes with a dollar value of $51.1 million and an average sales price of $452,000 for the three months ended May 31, 2025.
Six Months Ended May 31,
2026 2025 2026 2025 2026 2025
Homes
Dollar Value (In thousands)
Average Sales Price
East 8,911 9,126 $ 3,341,069 3,462,701 $ 375,000 379,000
Central 8,407 8,494 3,007,627 3,273,497 358,000 385,000
South Central 11,325 10,904 2,623,320 2,666,273 232,000 245,000
West 8,731 9,425 5,009,901 5,707,665 574,000 606,000
Other 8 16 5,780 10,720 723,000 670,000
Total 37,382 37,965 $ 13,987,697 15,120,856 $ 374,000 398,000
Of the total homes delivered listed above, 157 homes with a dollar value of $119.7 million and an average sales price of $763,000 represent homes from unconsolidated entities for the six months ended May 31, 2026, compared to 193 homes with a dollar value of $92.0 million and an average sales price of $477,000 for the six months ended May 31, 2025.
Sales Incentives (1):
Three Months Ended May 31, Six Months Ended May 31,
2026 2025 2026 2025 2026 2025 2026 2025
Average Sales Incentives Per
Home Delivered 		Sales Incentives
as a % of Revenue 		Average Sales Incentives Per
Home Delivered 		Sales Incentives
as a % of Revenue
East $ 57,500 74,800 13.6 % 16.8 % $ 65,800 71,300 15.2 % 15.9 %
Central 43,000 45,500 10.6 % 10.6 % 47,400 47,700 11.7 % 11.0 %
South Central 55,000 54,400 19.1 % 18.2 % 53,700 56,100 18.8 % 18.7 %
West 64,800 64,600 10.3 % 9.7 % 65,700 65,000 10.3 % 9.7 %
Other 88,400 101,700 12.3 % 14.4 % 94,100 99,500 11.5 % 12.9 %
Total $ 55,200 59,500 12.9 % 13.3 % $ 57,900 60,000 13.5 % 13.1 %
(1) Sales incentives relate to homes delivered during the period, excluding homes delivered by unconsolidated entities.
New Orders (2):
As of May 31, Three Months Ended May 31,
2026 2025 2026 2025 2026 2025 2026 2025
Active Communities Homes
Dollar Value (In thousands)
Average Sales Price
East 346 340 5,064 5,604 $ 1,929,424 1,978,078 $ 381,000 353,000
Central 462 443 5,218 5,266 1,896,583 1,987,955 363,000 378,000
South Central 433 391 6,293 6,626 1,475,500 1,607,319 234,000 243,000
West 441 441 5,173 5,098 2,906,234 2,997,528 562,000 588,000
Other 1 2 1 7 668 4,383 668,000 626,000
Total 1,683 1,617 21,749 22,601 $ 8,208,409 8,575,263 $ 377,000 379,000
Of the total new orders listed above, 57 homes with a dollar value of $30.9 million and an average sales price of $542,000 represent homes in five active communities from unconsolidated entities for the three months ended May 31, 2026, compared to 141 homes with a dollar value of $69.8 million and an average sales price of $495,000 in 10 active communities for the three months ended May 31, 2025.
Six Months Ended May 31,
2026 2025 2026 2025 2026 2025
Homes
Dollar Value (In thousands)
Average Sales Price
East 9,544 9,667 $ 3,641,071 3,539,940 $ 382,000 366,000
Central 9,810 9,816 3,532,795 3,788,150 360,000 386,000
South Central 11,298 11,547 2,639,114 2,780,180 234,000 241,000
West 9,604 9,909 5,529,034 5,886,178 576,000 594,000
Other 8 17 5,781 11,547 723,000 679,000
Total 40,264 40,956 $ 15,347,795 16,005,995 $ 381,000 391,000
Of the total new orders listed above, 128 homes with a dollar value of $62.1 million and an average sales price of $485,000 represent homes from unconsolidated entities for the six months ended May 31, 2026, compared to 242 homes with a dollar value of $129.7 million and an average sales price of $536,000 for the six months ended May 31, 2025.
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and six months ended May 31, 2026 and 2025.
We experienced cancellation rates in our Homebuilding segments and Homebuilding Other as follows:
Three Months Ended Six Months Ended
May 31, May 31,
2026 2025 2026 2025
East 15 % 14 % 14 % 15 %
Central 12 % 10 % 12 % 10 %
South Central 17 % 16 % 16 % 16 %
West 11 % 13 % 11 % 12 %
Other - % 13 % 20 % 19 %
Total 14 % 14 % 14 % 14 %
Backlog:
At May 31,
2026 2025 2026 2025 2026 2025
Homes
Dollar Value (In thousands)
Average Sales Price
East 5,455 3,900 $ 2,069,490 1,562,457 $ 379,000 401,000
Central 4,875 4,706 1,797,844 1,905,125 369,000 405,000
South Central 3,018 3,430 671,772 815,681 223,000 238,000
West 3,470 3,500 2,067,167 2,200,051 596,000 629,000
Other - 2 - 1,176 - 588,000
Total 16,818 15,538 $ 6,606,273 6,484,490 $ 393,000 417,000
Of the total homes in backlog listed above, 50 homes with a backlog dollar value of $28.4 million and an average sales price of $568,000 represent the backlog from unconsolidated entities at May 31, 2026, compared to 128 homes with a backlog dollar value of $101.4 million and an average sales price of $792,000 at May 31, 2025.
Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales contracts if they fail to qualify for financing or under certain other circumstances. Various state and federal laws and regulations may sometimes give purchasers a right to cancel contracts homes in backlog. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.
Three Months Ended May 31, 2026 versus Three Months Ended May 31, 2025
Homebuilding East: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, partially offset by an increase in the number of homes delivered in New Jersey. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered increased primarily due to a decrease in construction costs, partially offset by lower revenue per square foot and higher land costs year over year.
Homebuilding Central: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, except in Illinois, partially offset by an increase in the number of homes delivered in Alabama, Georgia, Illinois, and South Carolina. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Homebuilding South Central: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to decreases in the average sales price of homes delivered in Arkansas and Texas, partially offset by an increase in the number of homes delivered in all states of the segment. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered decreased slightly primarily due to lower revenue per square foot, partially offset by decreases in both construction costs and land costs year over year.
Homebuilding West: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in California, Oregon and Washington, partially offset by an increase in the number of homes delivered in Arizona, California, Idaho, and Oregon. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of deliveries per active community. During the second quarter of 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Six Months Ended May 31, 2026 versus Six Months Ended May 31, 2025
Homebuilding East: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to decreases in both the number of homes delivered and the average sales price of homes delivered in all states of the segment, except for an increase in the number of homes delivered in New Jersey. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Homebuilding Central: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to decreases in both the average sales price of homes delivered and number of homes delivered in all states of the segment, except for an increase in the number of homes delivered in Alabama, Illinois and South Carolina. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot and higher land costs year over year partially offset by a decrease in construction costs.
Homebuilding South Central: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, except in Oklahoma, partially offset by an increase in the number of homes delivered in all states of the segment,
except in Texas. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot, partially offset by decreases in both construction costs and land costs year over year.
Homebuilding West: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to a decrease in the average sales price of homes delivered in Arizona, California, Utah and Washington and a decrease in the number of homes delivered in all states of the segment, except in Idaho and Oregon. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Financial Services Segment
Our Financial Services reportable segment provides mortgage financing, title and closing services primarily for buyers of our homes. The segment also originates and sells into securitizations commercial mortgage loans through its LMF Commercial business. Our Financial Services segment sells substantially all of the residential loans it originates within a short period in the secondary mortgage market, the majority of which are sold on a servicing-released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements.
The following table sets forth selected financial and operational information related to the residential mortgage and title activities of our Financial Services segment:
Three Months Ended Six Months Ended
May 31, May 31,
(Dollars in thousands) 2026 2025 2026 2025
Dollar value of mortgages originated $ 5,066,000 4,877,000 9,014,000 9,320,000
Number of mortgages originated 14,600 13,600 25,900 25,900
Mortgage capture rate of Lennar homebuyers 83% 85% 83% 85%
Number of title and closing service transactions 22,200 21,000 40,800 39,200
At May 31, 2026 and November 30, 2025, the carrying value of Financial Services' commercial mortgage-backed securities was $129.3 million and $132.9 million, respectively. Details of these securities and related debt are disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Multifamily Segment
We have been actively involved, primarily through unconsolidated funds and joint ventures, in the development and construction of multifamily rental properties. Our Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.
The following table provides information related to our investment in the Multifamily segment:
Balance Sheets At
(In thousands) May 31, 2026 November 30, 2025
Multifamily investments in unconsolidated entities $ 491,325 506,573
Lennar's net investment in Multifamily 717,720 781,902
During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of its 38 rental operation projects of LMV I as the fund has come to the end of its contractual life. During the year ended November 30, 2025, 35 LMV I rental operation projects were sold to various third-party buyers. During the six months ended May 31, 2026, one additional LMV I rental operation project was sold to a third-party buyer.
Lennar Other Segment
Our Lennar Other segment includes strategic investments in various types of technology and other companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies as well as fund investments we retained subsequent to our sale of the Rialto investment and asset management platform. At May 31, 2026 and November 30, 2025, we had $800.4 million and $897.6 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $364.5 million and $368.0 million, respectively.
We have investments in publicly traded technology companies, which are held at market and the carrying value of which will therefore change depending on the value of our shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings as discussed in the Overview section earlier of our Management's Discussions and Analysis of Financial Condition and Results of Operations.
(2) Financial Condition and Capital Resources
At May 31, 2026, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.2 billion, compared to $3.8 billion at November 30, 2025 and $1.5 billion at May 31, 2025.
We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the "Credit Facility"). At May 31, 2026, we had $1.8 billion of homebuilding cash and cash equivalents and ended the second quarter of 2026 with total liquidity of $4.9 billion.
Operating Cash Flow Activities
During the six months ended May 31, 2026 and 2025, cash used in operating activities totaled $718 million and $1.4 billion, respectively. During the six months ended May 31, 2026, cash used in operating activities was impacted by (1) an increase in inventories due to land purchases and construction costs of $1.1 billion; (2) an increase in deposits and pre-acquisition costs on real estate of $555 million primarily as a result of option contracts with land banks, which included option maintenance fees paid to land banks; and (3) a decrease in accounts payable and other liabilities of $272 million. This was partially offset by (1) our net earnings; (2) a decrease in loans held-for-sale of $247 million primarily related to the sale of loans originated by our Financial Services segment; and (3) a decrease in receivables of $129 million.
During the six months ended May 31, 2025, cash used in operating activities was impacted by an increase in inventories due to land purchases, land development and construction costs of $1.6 billion, an increase in deposits and pre-acquisition costs on real estate of $782 million as we increased the percentage of controlled homesites primarily as a result of option contracts with Millrose Properties, Inc. ("Millrose"), and a decrease in accounts payable and other liabilities of $600 million. This was partially offset by our net earnings and a decrease in loans held-for-sale of $361 million primarily related to the sale of loans originated by our Financial Services segment.
Investing Cash Flow Activities
During the six months ended May 31, 2026 and 2025, cash provided by investing activities totaled $77 million and $183 million, respectively. During the six months ended May 31, 2026, our cash provided by investing activities was primarily due to distributions of capital from unconsolidated entities of $134 million, which primarily included (1) $105 million from Multifamily entities, (2) $23 million from Homebuilding unconsolidated entities, and (3) $6 million from our Lennar Other unconsolidated entities. This was partially offset by cash contributions of $59 million to unconsolidated entities, which included (1) $30 million to Homebuilding unconsolidated entities, (2) $2 million to Lennar Other unconsolidated entities and (3) $27 million to Multifamily unconsolidated entities.
During the six months ended May 31, 2025, our cash provided by investing activities was primarily due to $233 million received from the sale of an investment in a joint venture, $72 million proceeds from the sale of investments and distributions of capital from unconsolidated entities of $175 million, which primarily included (1) $32 million from Homebuilding unconsolidated entities, (2) $129 million from Multifamily entities and (3) $15 million from our Lennar Other unconsolidated entities and $115 million proceeds from the sale of loan receivables. This was partially offset by the $254 million acquisition of Rausch Coleman Homes, net of cash acquired, and cash contributions of $145 million to unconsolidated entities, which included (1) $124 million to Homebuilding unconsolidated entities, (2) $7 million to Lennar Other unconsolidated entities and (3) $14 million to Multifamily unconsolidated entities and $71 million of net additions of operating properties and equipment.
Financing Cash Flow Activities
During the six months ended May 31, 2026 and 2025, cash used in financing activities totaled $1.0 billion and $2.3
billion, respectively. During the six months ended May 31, 2026, cash used in financing activities was primarily due to (1) $737 million of repurchases of our common stock, which included $691 million of repurchases under our repurchase program and $46 million of repurchases related to our equity compensation plan; (2) $247 million of dividend payments; and (3) $155 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks. This was partially offset by $173 million of net borrowings under our Financial Services' warehouse facilities.
During the six months ended May 31, 2025, cash used in financing activities was primarily due to (1) $515 million of net repayments under our Financial Services' warehouse facilities; (2) redemption of $500 million aggregate principal amount of our 4.75% senior notes due May 2025; (3) $416 million net cash in connection with the Millrose spin-off; (4) $386 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks; (5) $1.3 billion of repurchases of our common stock, which included $1.2 billion of repurchases under our repurchase program and $65 million of repurchases related to our equity compensation plan; and (6) $265 million of dividend payments. The cash used in financing activities was partially offset by the receipt of proceeds of the sale of $700 million aggregate principal amount of our 5.20% senior notes due 2030 and $400 million of net borrowings under our unsecured revolving credit facility.
Debt to total capital ratios are financial measures commonly used in the homebuilding industry and are presented to assist in understanding the leverage of our homebuilding operations. Homebuilding debt to total capital and net Homebuilding debt to total capital are calculated as follows:
At
(Dollars in thousands) May 31, 2026 November 30, 2025 May 31, 2025
Homebuilding debt $ 4,047,487 4,084,686 2,791,987
Stockholders' equity 21,620,638 21,959,417 22,579,080
Total capital $ 25,668,125 26,044,103 25,371,067
Homebuilding debt to total capital 15.8 % 15.7 % 11.0 %
Homebuilding debt $ 4,047,487 4,084,686 2,791,987
Less: Homebuilding cash and cash equivalents 1,816,248 3,441,324 1,168,143
Net Homebuilding debt $ 2,231,239 643,362 1,623,844
Net Homebuilding debt to total capital (1) 9.4 % 2.8 % 6.7 %
(1)Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). We believe the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net homebuilding debt to total capital is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement our GAAP results.
At May 31, 2026, Homebuilding debt to total capital was consistent with November 30, 2025. At May 31, 2026, Homebuilding debt to total capital was higher compared to May 31, 2025, primarily as a result of a decrease in stockholders' equity due to the non-cash exchange of Millrose Class A common stock, stock repurchases, an increase in Homebuilding debt due to issuance of senior notes and outstanding borrowings under our unsecured delayed draw term loan facility (the "Delayed Draw Term Loan Facility"), partially offset by net earnings and debt paydowns.
We are continually exploring various types of transactions to manage our leverage and liquidity positions, take advantage of market opportunities and increase our revenues and earnings. These transactions may include the issuance of additional indebtedness, the repurchase of our outstanding indebtedness, the repurchase of our common stock, the acquisition of homebuilders and other companies, the purchase or sale of assets or lines of business, the issuance of common stock, strategic transactions to accelerate our land-light strategy or securities convertible into shares of common stock, and/or the pursuit of other financing alternatives. In connection with some of our non-homebuilding businesses, we are also considering other types of transactions such as sales, restructurings, and joint ventures as we continue to move towards being a pure play homebuilding company.
Our Homebuilding senior notes and other debts payable as well as letters of credit and surety bonds are summarized within Note 7 of the Notes to Condensed Consolidated Financial Statements. Our Homebuilding average debt outstanding and the average rates of interest was as follows:
Six Months Ended May 31,
(Dollars in thousands) 2026 2025
Homebuilding average debt outstanding $ 4,106,656 2,528,378
Average interest rate 4.9% 4.9%
Interest incurred $ 111,456 73,335
We have the Delayed Draw Term Loan Facility with committed borrowing availability of approximately $1.7 billion, which can be increased by an additional $500 million via an accordion feature. As of May 31, 2026, we had outstanding borrowings of $1.7 billion under the credit agreement governing its unsecured Delayed Draw Term Loan Facility. We may at any time prepay the loan, in whole or in part, without premium or penalty. The term loan's maturity date is three years from the initial effectiveness date of the credit agreement or May 2028, and at our discretion, it can be extended for an additional year until May 2029, subject to the satisfaction of certain conditions. Under the Delayed Draw Term Loan Facility, interest rates equal the adjusted term SOFR determined for the interest period plus the applicable margin.
The maximum available borrowings on our Credit Facility were as follows:
(In thousands) At May 31, 2026
Commitments - maturing in May 2027 $ 225,000
Commitments - maturing in November 2029 2,900,000
Total commitments $ 3,125,000
Accordion feature 375,000
Total maximum borrowings capacity $ 3,500,000
The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The Credit Facility also provides that up to $477.5 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in the Financial Condition and Capital Resources section in our 2025 Form 10-K. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.
Under the agreements governing our Credit Facility and Delayed Draw Term Loan Facility, we are required to maintain a minimum consolidated tangible net worth, a maximum leverage ratio and either a liquidity or an interest coverage ratio. These ratios are calculated per the Credit Facility and Delayed Draw Term Loan Facility agreements, which involve adjustments to GAAP financial measures. We believe we were in compliance with our debt covenants as of May 31, 2026. The following summarizes our debt covenant requirements and our actual levels or ratios with respect to those covenants as calculated per the Credit Facility and Delayed Draw Term Loan Facility agreements as of May 31, 2026:
(Dollars in thousands) Covenant Level Level Achieved as of May 31, 2026
Minimum net worth test $ 10,000,000 15,955,029
Maximum leverage ratio 60.0% 14.7%
Liquidity test 1.00 30.00
Financial Services Warehouse Facilities
Our Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to us and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial warehouse facilities finance LMF Commercial loan origination and securitization activities and are secured by up to 80% interests in the originated commercial loans financed. These facilities and the related borrowings and collateral are detailed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Changes in Capital Structure
In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. At May 31, 2026, we have a remaining authorization to repurchase $1.0 billion in value of our Class A or Class B common stock. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the six months ended May 31, 2026 and 2025 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
During the six months ended May 31, 2026, treasury shares increased by 7.6 million shares primarily due to our repurchase of 7.0 million shares of Class A and Class B common stock through our stock repurchase program. During the six months ended May 31, 2025, treasury shares increased by 10.6 million shares primarily due to our repurchase of 9.9 million shares of Class A and Class B common stock through our stock repurchase program.
On June 25, 2026, our Board of Directors declared a quarterly cash dividend of $0.50 per share on both our Class A and Class B common stock, payable on July 24, 2026 to holders of record at the close of business on July 10, 2026. On May 6, 2026, we paid a quarterly cash dividend of $0.50 per share for both of our Class A and Class B common stock to holders of record at the close of business on April 22, 2026. We approved and paid cash dividends of $0.50 per share for each of the four quarters of 2025 for both our Class A and Class B common stock.
Based on our current financial condition and credit relationships, we believe that our operations and borrowing resources will provide for our current and long-term capital requirements at our anticipated levels of activity.
Supplemental Financial Information
Our outstanding senior notes are guaranteed by certain of our wholly-owned subsidiaries, which are primarily homebuilding subsidiaries. These guarantees are full and unconditional. The guarantors of our senior notes are currently those subsidiaries that also guarantee Lennar Corporation's letter of credit facilities, Credit Facility and Delayed Draw Term Loan Facility, which are disclosed in Note 7 of the Notes to Condensed Consolidated Financial Statements. Under the indentures governing our senior notes, guarantees may be suspended or released under certain circumstances.
Supplemental information for the Obligors, which excludes non-guarantor subsidiaries and intercompany transactions, at May 31, 2026 is included in the following tables. Intercompany balances and transactions within the Obligors have been eliminated and amounts attributable to the Obligors' investment in consolidated subsidiaries that have not issued or guaranteed the senior notes have been excluded. Amounts due from and transactions with nonobligor subsidiaries and related parties are separately disclosed:
(In thousands) At May 31, 2026 At November 30, 2025
Due from non-guarantor subsidiaries $ 14,452,756 14,709,366
Equity method investments 1,129,567 1,213,485
Total assets 39,968,797 40,496,300
Total liabilities 8,857,475 9,243,409
Six Months Ended
(In thousands) May 31, 2026
Total revenues $ 13,025,813
Operating earnings 813,192
Earnings before income taxes 487,909
Net earnings attributable to Lennar 365,357
Off-Balance Sheet Arrangements
We regularly monitor the results of our Homebuilding unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. We also monitor the performance of homebuilding joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our investments. We believe that substantially all of the joint ventures were in compliance with their debt covenants at May 31, 2026.
Homebuilding: Investments in Unconsolidated Entities
As of May 31, 2026, we had equity investments in 48 active Homebuilding and land unconsolidated entities (of which 3 had recourse debt, 11 had non-recourse debt and 34 had no debt) compared to 50 active Homebuilding and land unconsolidated entities at November 30, 2025. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners' capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g., commercial or infill experience) of our partner. Each joint venture is governed by an executive committee consisting of members from the partners. Details regarding these investments, balances and debt are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
The following table summarizes the principal maturities of our Homebuilding unconsolidated entities ("JVs") debt as per current debt arrangements as of May 31, 2026. It does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.
Principal Maturities of Unconsolidated JVs by Period
(In thousands) Total JV Debt 2026 2027 2028 Thereafter Other
Bank debt without recourse to Lennar $ 1,160,077 59,742 453,250 151,945 495,140 -
Land seller and other debt without recourse to Lennar 44,877 - - - 44,877 -
Maximum recourse debt exposure to Lennar 8,150 8,150 - - - -
Debt issuance costs (14,203) - - - - (14,203)
Total $ 1,198,901 67,892 453,250 151,945 540,017 (14,203)
We own an approximately 40% interest in FivePoint Holdings, LLC., a NYSE listed company, and companies it manages, which own three large multi-use properties in California.
Multifamily: Investments in Unconsolidated Entities
At May 31, 2026, Multifamily had equity investments in 27 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 9 had no debt) compared to 25 active unconsolidated entities at November 30, 2025. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners' capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.
The Multifamily segment manages and has investments in LMV I, LMV II and Canada Pension Plan Investments (the "CPPIB Fund") and a new joint venture with an institutional investor (the "Institutional JV"), which are long-term multifamily development investment vehicles involved in the development, construction and ownership of class-A multifamily assets. The Multifamily segment expects the CPPIB Fund to have almost $1.0 billion in equity and Lennar's ownership percentage in the CPPIB Fund is 4%. The Multifamily segment expects the Institutional JV to acquire certain portfolio assets and invest additional capital to support pipeline opportunities. Details of each fund as of and during the six months ended May 31, 2026 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
In addition, in December 2025, we sold a majority interest in Quarterra Group, Inc. ("Quarterra"), a subsidiary of the Multifamily segment, to TPG Real Estate ("TPG"), thus retaining a noncontrolling interest. TPG's acquisition of Quarterra and its $1.0 billion strategic commitment, combined with Lennar's insights, will accelerate Quarterra's development pipeline and strengthen its platform for delivering thoughtfully designed rental communities in high-growth markets.
We regularly monitor the results of our Multifamily unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. We also monitor the performance of Multifamily joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our investment. We believe all of the joint ventures were in compliance with their debt covenants at May 31, 2026.
The following table summarizes the principal maturities of our Multifamily unconsolidated entities debt as per current debt arrangements as of May 31, 2026. It does not represent estimates of future cash payments that will be made to reduce debt balances.
Principal Maturities of Unconsolidated JVs by Period
(In thousands) Total JV Debt 2026 2027 2028 Thereafter Other
Debt without recourse to Lennar $ 2,335,263 666,058 875,387 416,482 377,336 -
Debt issuance costs (22,341) - - - - (22,341)
Total $ 2,312,922 666,058 875,387 416,482 377,336 (22,341)
Lennar Other: Investments in Unconsolidated Entities
As of May 31, 2026 and November 30, 2025, we had strategic technology investments in unconsolidated entities of $234.1 million and $235.0 million, respectively, accounted for under the equity method of accounting. Our strategic technology investments through our LENX business help to enhance the homebuying and home ownership experience, and help us stay at the forefront of homebuilding innovation. Details regarding these investments are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
As part of the sale of the Rialto investment and asset management platform, we retained the right to receive a portion of payments with regard to carried interests if certain funds meet specified performance thresholds. We periodically receive advance distributions related to the carried interests in order to cover income tax obligations resulting from allocations of taxable income to the carried interests. These distributions are not subject to clawbacks but reduce future carried interest payments to which we become entitled from the applicable funds and were recorded as equity in earnings (losses) in the condensed consolidated statement of operations. Our investment in the Rialto funds totaled $130.3 million and $133.0 million as of May 31, 2026 and November 30, 2025, respectively.
Option Contracts
We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have increased the percentage of our total homesites that we control through options rather than own.
As part of our focus on strategic relationships to further enhance our land-lighter strategy, at the end of fiscal year 2020 we entered into an arrangement with various land bank investor groups. Under the arrangement, in most instances when we want to acquire a property for use in our for-sale single-family home business, we will offer the investor group the opportunity to acquire the property and give us an option to purchase all or a portion of it back in the future, if it is mutually beneficial to both parties. To the extent the investor group does not elect to purchase properties we identify, we can utilize our other investor relationships to have other investor groups purchase the land or we can purchase it directly. The arrangement with the investor group, together with existing and other strategic partnerships, including the spin-off of Millrose in 2025, were significant steps in our strategy to migrate to a higher percentage of our homesites which we control but do not own, which we expect will result in greater cash flow and higher returns on assets and equity.
The table below indicates the number of homesites to which we had access through option contracts with third parties and unconsolidated JVs (i.e., controlled homesites) and homesites owned (excluding homes in inventory):
Years of
May 31, 2026 Controlled Homesites Owned Homesites Total Homesites Supply Owned (1)
East 110,893 1,670 112,563
Central 125,920 2,965 128,885
South Central 149,744 1,657 151,401
West 93,185 3,222 96,407
Other 4,649 1,561 6,210
Total homesites 484,391 11,075 495,466 0.1
% of total homesites 98% 2%
Years of
May 31, 2025 Controlled Homesites Owned Homesites Total Homesites Supply Owned (1)
East 118,389 1,412 119,801
Central 129,104 3,553 132,657
South Central 168,768 2,236 171,004
West 99,155 3,356 102,511
Other 4,649 1,561 6,210
Total homesites 520,065 12,118 532,183 0.1
% of total homesites 98% 2%
(1)Based on trailing twelve months of home deliveries.
Details on option contracts, transactions with land banks and related consolidated inventory not owned and exposure are included in Note 9 of the Notes to Condensed Consolidated Financial Statements.
Contractual Obligations and Commercial Commitments
Our contractual obligations and commercial commitments have not changed materially from those reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K, except for an increase of $177 million in borrowings under the Financial Services' warehouse repurchase facilities.
(3) Recently Adopted Accounting Pronouncements
See Note 1 of the Notes to Condensed Consolidated Financial Statements included under Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently adopted accounting pronouncements.
(4) Critical Accounting Policies
There have been no significant changes to our critical accounting policies during the six months ended May 31, 2026 as compared to those we disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K.
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