The portfolio encompasses approximately 11,000 homesites in 32Lennar communities located throughout the US, plus a mix of rawland and partially and fully developed homesites in active andfuture communities in California, Colorado, Florida, Illinois,Maryland, Massachusetts, Nevada and New Jersey. As of Sept. 30, thecompany says the properties had a net book value of $1.3 billion.Citigroup Global Markets Realty Corp. was sole lead arranger fornon-recourse acquisition funding of the venture.

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Lennar acquired a 20% ownership interest and 50% voting rightsin the JV, which was formed to acquire, develop, manage and sellresidential real estate. It will manage the venture's operationsand receive fees for its services. Under the agreement, Lennar willalso receive disproportionate distributions should the ventureexceed financial targets. In addition, Lennar obtained optionagreements and rights of first offer that provide it with theopportunity to purchase certain unspecified homesites from theventure at market prices at the time it exercises the options.

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"The combined expertise and resources provided by theLennar/Morgan Stanley team will allow us to maximize the value ofthis portfolio and provide a footprint to capitalize oninefficiencies in today's residential real estate market," saysStuart Miller, Lennar's president and CEO, in a statement. "Thistransaction provides us with increase liquidity and flexibility atan opportune time."

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A spokeswoman for Morgan Stanley tells GlobeSt.com, "we're notcommenting beyond what's in the press release." A Lennar spokesmanalso declined comment.

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Like other homebuilders, Lennar has suffered the blows of acrumbling housing market. Its revenues were down 44% in this year'sthird quarter; deliveries were down 41%, new orders dropped 48% andthe cancellation rate for the quarter was 32%. During athird-quarter conference call, Miller said the company's work forcehad been cut by 35% and he expected continued reductions.

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Shares of LEN gained 7.2% at the close of trading on the NYSE onNov. 30, the day the venture was announced. The stock's 52-weektrading range spans from $56.54 a share on this Feb. 2 to $14 ashare on this Nov. 27.

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