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Wednesday, 04 April 2018

Lennar Formally Puts Rialto Capital Management on Sales Block

Lennar Corp., which owns Rialto Capital Management and its conduit-lending arm, has hired Wells Fargo Securities and Deutsche Bank Securities to look at strategic alternatives for the operation. However, the Miami homebuilder will keep the unit's conduit-lending arm.

Commercial Real Estate Direct Staff Report

Lennar Corp., which owns Rialto Capital Management and its conduit-lending arm, has hired Wells Fargo Securities and Deutsche Bank Securities to look at strategic alternatives for the operation.

The Miami homebuilder expects to spin off the unit within the next 12 months.

The move long has been expected. Lennar more than a year ago had indicated that it would eventually spin off Rialto and its multifamily development business in order to revert to a pure-play homebuilder. Rialto itself would be a pure-play investment manager, which raises and oversees funds that invest in a variety of real estate assets, including CMBS B-pieces - last year, it was the dominant buyer of B-pieces, with a 27.2 percent share of the conduit market.

It had launched Rialto with Jeffrey Krasnoff in 2008 to take advantage of investment opportunities stemming from the Great Financial Crisis, while opportunities in the homebuilding market were thinning. Krasnoff previously had...


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