TPG Real Estate struck a deal to acquire a majority interest in Lennar’s multifamily business that includes a $1B capital commitment.
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San Francisco-based TPG took over operations of Quarterra, Lennar’s multifamily development platform, while the homebuilder kept a minority stake and will continue “to provide differentiated insights and synergies” to the platform, the firms announced Tuesday morning.
The size of each stake wasn’t disclosed, but the firms said the pair would work alongside Quarterra’s existing management to grow the business line. The new joint venture to recapitalize the multifamily development business is focused on Quarterra’s affordable and attainable housing division, branded under the Emblem banner.
“By combining TPG’s institutional capital and real estate expertise with Lennar’s deep building and community-development expertise, Quarterra will be able to accelerate its mission of creating attainable rental options that help more Americans step onto the path toward future homeownership,” Lennar CEO Stuart Miller said in a statement.
Quarterra CEO Brad Greiwe will stay at the top of the firm, which was launched in 2011 and has developed more than 43,000 apartments with 13,000 more under development. It owns 51 completed or under-construction projects, according to its website.
Lennar put a portfolio of 11,000 apartments operated by Quarterra up for sale in December 2023, when the company was focused on luxury multifamily. Private equity giant KKR struck a $2.1B deal six months later to buy 18 of the Quarterra properties, roughly half of the listed portfolio.
Lennar’s multifamily business lost the firm $44M in the fourth quarter — compared to it running at roughly breakeven a year prior — and $75M for the year, the company reported in mid-December. It posted $490M in net earnings for the fourth quarter across all business lines and $2.1B for the year, down from $3.9B in 2024.
The publicly traded homebuilder’s stock has sunk by more than 15% in the last year, but the Miami-based firm surged during the pandemic and is up by more than 50% in the last five years.
TPG, a private equity firm with roughly $286B in assets under management across all sectors, has been looking to bulk up its real estate portfolio since at least last year. CEO Jon Winkelried said during an August earnings call that the firm had roughly $14B in dry powder set aside to target real estate.
“We expect to lean into the growing number of interesting opportunities we are sourcing in our core areas of focus,” he said during the second-quarter earnings call.
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