LNR Property Corporation is a diversified real estate, investment, finance and management company.

Strategy: We make solid, strategic investments in real estate and real estate related assets where we can utilize our management skills, financial expertise, workout experience and longstanding relationships to enhance the returns on those investments.

Due Diligence: We perform intensive, hands-on due diligence, on an asset-by-asset basis, to fully evaluate investment risks and opportunities. We closely study each asset, from vacancy rates and market characteristics to cash flow and underlying loan characteristics, before an investment decision is made. Through this exhaustive "from the ground up" due diligence, we are able to buy right, consistently making great investments.

Managing: We seek to only invest where our management team can take action on a day-to-day basis to ensure the highest level of performance.

Timing: We maintain the flexibility to either hold assets and generate recurring core income or sell into a market that will pay premium values for our assets.

Financial Strength: We always strive to maximize the strength and stability of our balance sheet. Our asset base is well diversified and our carrying values are significantly below estimated current market values. Our capital structure is well diversified and provides ample resources to purchase assets at the most opportune times.

History: Lennar Corporation (“Lennar”), one of the nation’s largest homebuilders, formed our Company in June 1997 to separate Lennar’s real estate investment, finance and management business from its homebuilding business. On October 31, 1997, Lennar distributed our stock to Lennar’s stockholders in a tax-free spin-off.

We have a history of real estate management dating back to 1969 when we began developing and managing commercial properties. Those properties were typically connected to large land parcels where our former parent, Lennar, was developing residential communities. We also gained significant experience early in our history as a number of financial institutions sought Lennar’s expertise to assist them with working out their troubled real estate loans and properties.

The experience and know-how that we developed as a part of Lennar’s operations formed the basis of our core competencies and provided us with the foundation for success in each of our markets as a stand-alone company. The decades of experience we gained in developing and managing income producing properties and working out under-performing assets has provided us with the expertise to identify and capitalize on opportunities and inefficiencies across the broad real estate marketplace.

It was also during those early years that we mastered the disciplines that enabled us to consistently utilize the real estate market cycles as our ally. Prudent investing and active management of both the right and left sides of the balance sheet have consistently placed us in an excellent position in both strong and weak market cycles. The Company’s goal is to sell assets when property performance and market prices are at their highest and recycle the proceeds to strengthen our balance sheet for those times when others are compelled to sell.

This approach became very evident in the late 1980’s when lax lending practices and tax incentives created a massive overbuilding of commercial real estate that led the U.S. into a prolonged recession in the early 1990’s. With our strong financial position and core competencies, we took advantage of the downturn to create significant financial rewards for ourselves and our partners. In fact, we developed a leading presence in investing in, and working out, portfolios of distressed assets (real estate properties and loans) offered for sale by banks, insurance companies and the government. Through a series of transactions, we evolved into a very skilled commercial real estate workout and management firm, purchasing and handling the workout activities for over $5 billion of these distressed commercial assets in the early to mid 1990's.

In late 1993, private sellers began to enter the capital markets to securitize performing commercial mortgage loans as a way to restructure their own portfolios. This was the start of the private commercial mortgage backed securities ("CMBS") market. We were one of the early pioneers as an issuer of CMBS with a number of transactions containing performing loan collateral from a few of our non-performing loan portfolios. In these transactions the most senior securities were sold to third parties, but the most junior securities were retained by us and our partners. We believed that we would be able to realize a much higher return by retaining the bonds rather than selling them. We were very comfortable with this decision because we possessed detailed knowledge of the underlying collateral from our portfolio activities and as “special servicer” were able to utilize our real estate and workout skills to maximize the value from those loans.

A few months after our first CMBS deal as an issuer, we pioneered the first private transactions where third parties were the sellers of the most junior securities along with the special servicing rights. This was the perfect opportunity to utilize pre-existing skills that we had developed in our distressed portfolio business combined with our experience as an issuer of CMBS. In these transactions we were given the opportunity to perform extensive due diligence on each of the underlying assets before investing. We were then able to constantly monitor the portfolio through our surveillance of the underlying collateral and by "shadow servicing" the work of the master servicers (responsible for collection of coupon payments). If any loans needed attention or went into default, we were able to deal with those issues directly with the borrowers under our rights as special servicer.

Entering the market in its infancy, we quickly established a leadership position by applying our due diligence expertise, our extensive market knowledge and our unique workout and real estate value add skills. Today, with an unmatched track record of success, we are arguably the market leader in unrated CMBS investing and special servicing.

In 1997, we entered Japan by investing in and managing several partnerships which acquired non-performing commercial loans, again leveraging the due diligence expertise and workout skills we gained in the U.S. We exited Japan in 2000, realizing a substantial return on our investment there.

In the mid 1990’s, as the U.S. real estate market began to strengthen, substantially fewer large real estate portfolios became available at what we viewed as attractive prices. At that time, we started to develop our high-yield real estate loan business. These activities were a natural extension of our loan workout and CMBS businesses. Initially loans were made on assets in unique situations typically on a first mortgage basis at high rates of interest, or were purchased at a discount to achieve a high yield. This expanded later into mezzanine lending opportunities, typically with real estate developers, and by 1999 into “B-Note” transactions. Working with a leading global financial institution and the rating agencies, we were a pioneer in the creation of what today is a well-accepted component of the financing market. B-Notes are structured junior loan participations in institutional quality short-to medium-term variable-rate real estate loans. Today, we work with a number of leading financial institutions in underwriting and structuring these loans. The senior participations are securitized in many cases by the financial institutions. We are generally designated as the special servicer for the junior loan participations and in many cases the securitizations, which allows us to provide asset management and resolution services with respect to these loans. As special servicer, we have the authority to deal directly with any borrower that fails to perform under certain terms of its mortgage loan, including the failure to make payments, and to manage any loan workouts and foreclosures.

In 2003, we entered the European commercial real estate market to take advantage of an opportunity to expand our franchise in an evolving market. The market opportunity is significant as the European Union real estate market is potentially as large as the U.S. real estate market.  In 2004, we acquired Hatfield Philips, a leading European commercial real estate loan servicer. In 2005, LNR successfully closed £360 million of capital commitments for a private equity fund formed for the purpose of making investments primarily in various forms of securitized debt backed by mortgages on commercial real estate properties located in the European Union and Switzerland.  In 2006, LNR successfully closed $1.125 billion of capital commitments for a real estate private equity fund focused primarily on vertical commercial and real estate development in the U.S. 

Over time, we have proven that we have been able to leverage our due diligence expertise, asset management capabilities and workout skills both geographically and across different product lines, resulting in new investment opportunities and continued growth in each of our business segments. 

In early 2005, LNR was taken private by Cerberus Capital Management, L.P. (and affiliates including Blackacre Institutional Capital Management, LLC), various entities controlled by Stuart Miller (the former Chairman of the Board of LNR), and members of LNR’s senior management. 

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