Lennar Makes Deal for CalAtlantic as Home Builders Face Challenges
- 7 years ago
Lennar Makes Deal for CalAtlantic as Home Builders Face Challenges
“We all agree that more things should be handicapped accessible and new homes should be hurricane proof, but there is a cost associated.”
Right now, the home-building industry is dealing with a new cost: the impact of natural disasters, including Hurricanes Harvey
and Irma in the South and devastating wildfires in Northern California.
A decade after the big housing bust dealt a blow to many smaller home builders, the industry’s largest firms continue to grapple with higher regulatory expenses
that make building homes — especially starter homes — too costly, some housing-finance experts said.
By merging, Lennar and CalAtlantic hope their size will help them achieve “efficiencies in purchasing”
and gain “access to land, labor and overhead allocation,” Stuart Miller, Lennar’s chief executive, said in a news release.
Ralph McLaughlin, chief economist with Trulia, an online residential real estate listing firm, said
he hoped the merged companies would eventually use their heft to increase production of new homes
The Lennar Corporation said on Monday that it would merge with the CalAtlantic Group
to form America’s largest home builder in a stock-and-cash deal worth $5.7 billion.
The deal would create a behemoth with around 240,000 building plots in 21 states, a market value of about $18 billion
and combined revenue of $17 billion over the past 12 months.
“We all agree that more things should be handicapped accessible and new homes should be hurricane proof, but there is a cost associated.”
Right now, the home-building industry is dealing with a new cost: the impact of natural disasters, including Hurricanes Harvey
and Irma in the South and devastating wildfires in Northern California.
A decade after the big housing bust dealt a blow to many smaller home builders, the industry’s largest firms continue to grapple with higher regulatory expenses
that make building homes — especially starter homes — too costly, some housing-finance experts said.
By merging, Lennar and CalAtlantic hope their size will help them achieve “efficiencies in purchasing”
and gain “access to land, labor and overhead allocation,” Stuart Miller, Lennar’s chief executive, said in a news release.
Ralph McLaughlin, chief economist with Trulia, an online residential real estate listing firm, said
he hoped the merged companies would eventually use their heft to increase production of new homes
The Lennar Corporation said on Monday that it would merge with the CalAtlantic Group
to form America’s largest home builder in a stock-and-cash deal worth $5.7 billion.
The deal would create a behemoth with around 240,000 building plots in 21 states, a market value of about $18 billion
and combined revenue of $17 billion over the past 12 months.