Lennar Corporation (LEN - Analyst Report) has established its presence in Nashville, Tennessee with the acquisition of 40 homesites in the community of Tollgate Village. Lennar’s Nashville homebuilding operation will be headed by Andy Pfeifer, a veteran with years of experience in the homebuilding business in Nashville.
With this acquisition, Lennar now has homebuilding operations in 19 states and 46 markets across the nation. Lennar’s homebuilding operations are widely spread across Florida, Georgia, Maryland, New Jersey, North Carolina, South Carolina and Virginia in the east. Its homebuilding operations also cover Arizona, Colorado, California, Nevada, Illinois, Minnesota, Oregon and Washington. Other than Tennessee, Lennar recently penetrated into the homebuilding market in Atlanta, Seattle, Portland and Central Texas.
Lennar spent $500 million on land purchase in the first quarter of 2013, reported on Mar 20. The company purchased 9,400 home sites for $472 million and spent $120 million on land development in the quarter. Lennar expects to spend another $500 million on land development through 2013.
Lennar strategically focuses on acquiring new home sites that would boost both margins and earnings. The company focuses on higher-margin well-positioned communities. The company’s solid land position places it well to meet growing demand, thus giving it a competitive edge over peers. The company has enough land to meet requirements till 2014 and is now pursuing land opportunities for 2015 and beyond.
Lennar carries a Zacks Rank #1 (Strong Buy).
Other stocks in the homebuilding sector that are performing well and deserve a mention include D. R. Horton Inc. (DHI - Analyst Report) and Ryland Group Inc. (RYL - Snapshot Report), both carrying a Zacks Rank #1 (Strong Buy), and MDC Holdings Inc. (MDC - Snapshot Report) carrying a Zacks Rank #2 (Buy).