Lennar remains financially stable during the Corona Virus period

Lennar remains financially stable during the Corona Virus period

Storey Lake Condominium, by Lennar.

The CEO of Lennar Corp, Stuart Miller, is taking steps to improve safety and health following the death of one of its employees from COVID-19. On March 2, customer service representative Pete Anderson died from coronavirus, formally known as COVID-19, in Seattle, Miller said.

Stuart Miller, Executive Chairman of Lennar

Stuart Miller

He was an impact player and affected positively the hearts and minds of your Seattle team. Our leadership team immediately took steps to make health and safety our priority. number one priority.



The company, based in Miami, is the largest residential construction company in the country and its new business practices due to the coronavirus can establish a standard for the industry. Lennar has hired Dr. Pascal Goldschmidt, former dean of the Miller School of Medicine at the University of Miami, as medical director. He will guide the efforts of the company on the safety, health, and hygiene of its employees, clients, and builders.

Miller said that Lennar has daily calls with the top leaders to discuss all aspects of the company and how they should fit together, both in security practices and in business.

To reduce personal contact, Lennar has changed much of the closing process on lineMiller said. The transfers of bonds, mortgages and title insurance are being done through digital platforms. When paperwork is needed, drive-thru appointments are scheduled. The new domestic orientation process is being conducted by videoconference.

Visits to sales centers are only with scheduled time and only one family can visit one home at a time. Similarly, Lennar accelerated its digital marketing efforts with a focus on lead generation and sales consultants on line.

Construction has not yet been halted in any of its markets across the country. Even in the confined cities, construction is considered a key industry and can continue. Lennar did not have an impact on the availability of construction labor or the supply of materials, Miller added. He also did not see a slowdown in domestic purchases.

Stuart Miller

People still are buying housespeople are still closing their houses and Lennar is still is building houses.

In the first two weeks of March, new applications rose 16%, closings continued on schedule and traffic at the residential sales centers was strong, Miller said. In recent days, traffic at their residential sales centers has slowed, but people visiting them are more interested about buying, he added.

"As the economy slows, we expect fewer sales," Miller said.

Lennar is holding the line on prices. Unlike the Great Recession, this slowdown was not caused by a financial crisis and housing construction, Miller pointed out. Instead, the domestic stock has been insufficiently supplied in most markets.

"Price is not the big issue," Miller said. "Our customers do not buy for the price. They buy financed and, with low interest rates, the prices are good."

However, Lennar has paused most of his land acquisitions. He is looking to hold off on closing on new land until the situation becomes clearer. Unlike in the Great Recession, Lennar does not have a large inventory of land in its inventory, which is part of its strategy to avoid the cost reduction, Miller said.

Lennar is also building fewer specific houses. The start of those constructions will follow the pace of salesMiller said. If Lennar is forced to stop all sales, Miller said it would reduce its capital and construction spending, but would look to maintain its employees.

"The last thing we will consider is laying off or thinking about reducing our workforce," Miller said. "We are dedicated to supporting our people. That is our greatest asset valuable at the moment."

Lennar reported revenues of US$398.5 million for the quarter ended February 19, compared to US$239.9 million in the same period last year. Its revenues grew 16%, to US$4.5 million, while housing deliveries jumped 17%The number of new applications was 10,321. New requests rose 18%going to 12,376 houses.

"Our first quarter results achieved and exceeded all expected metrics and were on track to expand our guidance for the year," Miller said. "In the context of today's widespread shutdowns, we are choosing to suspend guidance as the world redefines and finds its way forward."

The company noted that there was US$785 million in cash and US$300 million in loans available as of February 29.

"We are looking at an economic pause," Miller said. "There will be an end to that. How we recover from there will be the question."


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