Lennar’s Miami spinoff said it would have no tenants. A shareholder suit says it bought hundreds of Lennar homes to rent

Leon and Sylvia Rubenstein sued Millrose Properties, its chief executive, Darren Richman, and its chief financial officer, Garett Rosenblum, on Friday, Oct. 9, in the U.S. District Court for the Southern District of Florida, on behalf of everyone who purchased or otherwise acquired Millrose securities from Feb. 7, 2025, the day it began trading on the New York Stock Exchange after its spinoff from Lennar, through Oct. 2, 2026 (CourtListener docket; complaint). The suit, under the federal securities laws, says Millrose misled investors about what kind of company it was (complaint).

The promise is in Millrose’s own annual report, as the complaint quotes it: “We do not, and will not, have any lease agreements with respect to the Transferred Assets and the Supplemental Transferred Assets, do not intend to enter into any lease agreements in the foreseeable future and do not, and will not, have any tenants or occupants on any of the properties in the Real Estate Portfolio” (complaint, quoting Millrose’s Form 10-K filed March 31, 2025). On Aug. 27, 2026, Millrose amended its agreements with three Lennar subsidiaries and with its outside manager, and the amendment added a defined term: “BTR Properties,” meaning “completed single family homes acquired by the Company” and “intended to be operated” as rental properties (Millrose Form 8-K and Exhibit 10.1).

The suit’s account of what came next is Hunterbrook Media’s, reproduced in the complaint. Hunterbrook reported Oct. 2 that it found more than 700 Millrose purchases of Lennar homes in at least 51 counties in 15 states, an estimated $200 million or more in about a month, at least 356 of them in the final week of Lennar’s fiscal quarter, and that the sales were the difference between Lennar meeting and missing its delivery forecast (Hunterbrook Media; complaint). Hunterbrook disclosed that its affiliate, Hunterbrook Capital, was short Millrose and Lennar and long a basket of comparable stocks when it published, and it repeats that disclosure on its Oct. 8 follow-up (Hunterbrook Media).

Millrose’s side is on the record secondhand. Hunterbrook quotes a Goldman Sachs recap dated Sept. 30 describing management’s account: “a small rent-to-own pilot for prospective buyers who cannot qualify for mortgages,” with builder discounts and eventual home sales expected to produce returns “comparable to or better than land banking”; Millrose said the initiative “originated inside Millrose, rather than with a builder,” that “no asset management fee was currently charged on these homes,” and that if tenants do not buy it would “sell the properties on the open market,” with “no right to return them to the builder” (Hunterbrook Media, Oct. 2, citing Goldman Sachs). The same recap, as Hunterbrook quotes it on Oct. 8, said “Millrose buys the home with a signed lease already in place” and “a renter is often identified before Millrose buys the home, eliminating lease-up risk”; Hunterbrook adds, “The recap does not say Millrose promised every house it owned already had a signed lease” (Hunterbrook Media, Oct. 8). Hunterbrook disputes the account: of 1,040 Millrose purchases it matched to street addresses, it says 991, or 95.3%, were listed for rent on the website of Evergreen, Millrose’s property manager, as of Oct. 6, and “multiple call center representatives said Evergreen did not offer rent-to-own” (Hunterbrook Media, Oct. 8). Hunterbrook says neither Millrose nor Lennar responded to its repeated requests for comment, and a Goldman analyst asked about the claims said, “I can’t talk to that” (Hunterbrook Media, Oct. 8).

Your stake: if you bought Millrose shares between Feb. 7, 2025 and Oct. 2, 2026, you are in the proposed class, and anyone who wants to lead the case must ask the court by Dec. 8 (complaint; Rosen Law Firm release). If you are buying a new home in a Lennar community, the house next door may be a Millrose rental: in Wesley Chapel, the complaint reproduces a Hunterbrook finding that a Lennar house Millrose’s subsidiary bought in August for $409,300 is now listed for rent at $2,825 a month (complaint).

The money

Lennar did hit its number. On June 11 it guided to about 20,500 to 21,500 deliveries in its third quarter; on Sept. 16 it reported 20,840 for the quarter ended Aug. 31, “within our guidance of 20,500 to 21,500,” with net earnings of $284 million against $591 million a year earlier and an average sales price of $372,000 that reflected about 12.0% in incentives (Lennar; Lennar Form 8-K). Hunterbrook says Lennar beat the bottom of that range by 340 homes (Hunterbrook Media). Miller cited demand from “single-family for rent” and “build-to-rent” buyers; the release mentions Millrose only for the tax effect of the spinoff (Lennar Form 8-K).

The deeds are where the homes show up. Hunterbrook reproduces Marion County records showing Lennar conveyed 93 Millwood Estates lots in Ocala to a Millrose subsidiary in August 2024; that Millrose sold nine of them back to Lennar Homes, LLC on July 17, 2026 for $445,106, about $49,500 a lot; and that on Aug. 28 Lennar sold the finished house on Lot 290, 3770 NE 32nd Ct., to Millrose’s subsidiary MRP Liberty, LLC for $224,743 (Hunterbrook Media). On Sept. 29 a Hunterbrook reporter visited 36 Millrose-owned addresses in four Marion County Lennar developments and, the next day, 39 in Princeton, Texas: “Not one of the 75 homes appeared occupied” (Hunterbrook Media, Oct. 2 and Oct. 8). In Pasco, deed records show MRP Liberty bought 9828 Feaster Drive in Wesley Chapel in August for $409,300, a house Lennar had listed in April at $490,990, according to Zillow; Hunterbrook estimates Millrose clears about $3,100 a year on it after taxes, insurance and financing, under 1% before dues, upkeep or vacancy (complaint, reproducing Hunterbrook).

The ties run both ways. The complaint says Miller holds 43% of Millrose’s voting power and, quoting Hunterbrook, that Lennar supplied 72% of Millrose’s revenue last quarter and pays it about $43 million a month to hold land (complaint). Analysts took note: KBW’s Jade Rahmani wrote that the report “raises questions regarding the composition of 3Q deliveries,” and BTIG’s Ryan Gilbert wrote that the roughly $200 million would be about 2% of Millrose’s second-quarter invested capital; spokespeople for both companies declined to comment on the points raised in the report (Dow Jones). Separately, Berkshire Hathaway reported buying 2,403,609 Lennar Class A and 15,028 Class B shares on Oct. 1 and 2, about $192.6 million at the reported prices (SEC Form 4), on top of the 26,034,436 Class A shares, 12.5% of the class, it reported owning as of Sept. 30 (Schedule 13G/A; IBTimes UK). Lennar itself no longer owns Millrose stock: it disposed of its remaining holdings in a November 2025 exchange offer (Lennar prospectus supplement). Its 10-Q puts its deposits and pre-acquisition costs on option contracts with Millrose at $1.3 billion as of Aug. 31, and says it “does not believe that the loss of the Company’s relationship with these Land Banks would have a material adverse effect” on its business; a text search of the 10-Q found no discussion of home sales to Millrose (Lennar Form 10-Q).

The rent math is Hunterbrook’s, and it is thin. Across the nearly 1,000 Millrose homes put up for rent, Hunterbrook says, gross rent comes to 8.44% of the price a year and, after taxes and insurance, “more like 5.92%,” below the 6.5% to 6.75% Millrose agreed to pay on the $1.0 billion of senior notes it sold Oct. 6; in Florida, it says, “the yield is 4.9% before financing costs” (Hunterbrook Media, Oct. 8; Millrose Form 8-K). Those are estimates of return, not reported profits. Millrose’s shares fell 8.5% after the first report, Courthouse News reports (Courthouse News Service).

How it works

A land bank holds lots for a builder: the builder pays it to hold them and buys them back as it builds, as Lennar pays Millrose about $43 million a month and bought back nine Ocala lots in July (complaint; Hunterbrook Media). Millrose was built to hold land, not houses, and told investors so. The Aug. 27 amendment opened a door to finished homes run as rentals, and the suit turns on whether investors were told what was walking through it (Millrose Exhibit 10.1; complaint). If a builder’s own land bank buys finished homes at quarter end, those homes count as deliveries for the builder and as rental inventory for the bank; Hunterbrook says that is what moved Lennar past its forecast floor, and both companies’ spokespeople declined to comment on the points raised in its report (Hunterbrook Media; Dow Jones).

What could still stop it

Everything in the suit is an allegation, and its core findings trace to one origin. The home counts, the $200 million, the 356 final-week purchases and the meet-or-miss claim come from Hunterbrook, whose investment arm profits if the shares fall; Dow Jones, The Real Deal, Courthouse News, Moneywise and the complaint repeat its report rather than confirming it independently; Moneywise notes, “None of the claims have been proven in court” (Hunterbrook Media; The Real Deal; Courthouse News Service; Moneywise via AOL). Millrose’s rent-to-own account reaches us only as Hunterbrook quotes a Goldman Sachs recap (Hunterbrook Media). Courthouse News says Millrose did not respond to its request for comment and that the suit seeks unspecified damages (Courthouse News Service). Plaintiff firms are soliciting a case against Lennar too: Block & Leviton says it is investigating whether Lennar misled investors about its deliveries and “may file an action”; no suit against Lennar is described as filed (Block & Leviton release). As of Oct. 18, the public docket feed shows only the Oct. 9 entries: the complaint, the summons and the judge assignment (CourtListener). The Real Deal reports the complaint reproduces the entire Hunterbrook article across eight of its 35 pages, and that Lennar, Millrose, the plaintiffs’ lawyers and Hunterbrook did not return its requests for comment (The Real Deal). Lennar and Miller are not defendants (docket). The company spells its finance chief’s name Garett; the complaint and docket spell it Garrett (Millrose Form 8-K; complaint).

Why it matters across Florida

Millrose is a Miami company, at 600 Brickell Avenue, and Hunterbrook counted its Lennar home purchases in at least 51 counties in 15 states (Millrose Form 8-K; Hunterbrook Media). The suit’s two Florida examples, Ocala and Wesley Chapel, are new-home subdivisions where, if Hunterbrook is right, a buyer’s neighbors may be renters whose landlord is the builder’s own spinoff (complaint; Hunterbrook Media).

What to watch

Motions to lead the case, due Dec. 8 (Rosen Law Firm release; Levi & Korsinsky release). Any answer from Millrose, Richman or Rosenblum; none was on the docket feed as of Oct. 18 (CourtListener). Any Lennar or Millrose statement on the purchases. Lennar’s fourth-quarter report, against its guidance of about 22,000 to 23,000 deliveries and a full-year target lowered to about 80,000 to 81,000 homes from 82,000 to 83,000 (Lennar Form 8-K).