Millrose Properties, Inc.

What they do

Millrose acquires and develops residential land and sells finished homesites to homebuilders under option contracts with predetermined costs and takedown schedules, charging recurring cash option fees. It also provides development loans secured by residential property on a smaller scale. The company operates one reportable segment in the United States and is managed by Kennedy Lewis Land and Residential Advisors LLC under a management agreement dated February 7, 2025.

Revenue drivers

• Lennar Master Program Agreement — The foundational relationship, with $6.4 billion of Lennar homesites under option contracts and approximately $6.0 billion of invested capital at June 30, 2026, at a weighted average yield of 8.5%. In Q2 2026 Millrose received $567 million in net cash proceeds from homesite sales to Lennar and redeployed $566 million.
• Other Agreements (non-Lennar builders and developers) — Invested capital net of realized homesite sales reached $2.8 billion at June 30, 2026, with $555 million funded in the quarter at a weighted average yield of 10.6%; homesites under option contracts and other related assets totaled $3.2 billion.
• Development loan income — Interest earned on development loans secured by residential property, a smaller revenue source alongside option fees; total Q2 2026 revenue of $196.9 million combined option fees and development loan income.

Recent performance

For Q2 2026 Millrose reported net income attributable to common shareholders of $125.9 million, or $0.76 per share, and AFFO of $127.6 million, or $0.77 per share. Total revenues were $196.9 million, reflecting the early repayment of approximately $284 million of development loans on the first day of the quarter, with proceeds redeployed during the quarter. Revenue has grown sequentially from $179.3 million in Q3 2025 to $189.5 million in Q4 2025, $194.9 million in Q1 2026 and $196.9 million in Q2 2026. Full-year 2025 revenue was $600.5 million with net income of $379.9 million and diluted EPS of $2.44, and 2025 operating cash flow was $3.67 billion. The company declared a sixth consecutive quarterly dividend increase, $0.77 per share, and the portfolio ended the quarter at 143,771 homesites across 877 communities in 30 states.

Strategy

Millrose is expanding beyond the Lennar relationship, ending Q2 2026 with 19 homebuilder and developer relationships and $2.8 billion of invested capital outside the Lennar Master Program Agreement, up about $117 million from the prior quarter. It redeployed $1.1 billion in land acquisitions and development funding during the quarter and generated $1.0 billion in net cash proceeds from homesite sales. The company entered a new land banking relationship with JPI, a wholly owned subsidiary of Sumitomo Forestry, marking its first expansion into multifamily assets. It also announced intent to provide land banking capital in support of Dream Finders Homes' proposed acquisition of Beazer Homes. The company intends to elect and qualify as a REIT for the taxable year ended December 31, 2025, distributing at least 90% of REIT taxable income, with taxable non-REIT activities conducted through taxable REIT subsidiaries.

Risks

• Counterparty concentration and performance — The Lennar Master Program Agreement remains foundational at roughly $6.0 billion of invested capital, and the company depends on counterparties timely exercising their purchase options and fully performing their obligations.
• REIT qualification and TRS taxation — Millrose intends to qualify as a REIT beginning with the taxable year ended December 31, 2025; failure to qualify would subject it to corporate income tax and disqualify it from re-electing REIT status for four years.
• External management reliance — The company is externally managed by Kennedy Lewis Land and Residential Advisors LLC, and its proprietary land banking and ERP technology platform was developed and is deployed by the Manager.
• Revolving credit facility maturity — The Revolving Credit Facility has a commitment of up to $1.335 billion and matures February 7, 2028, creating refinancing needs, while the $1.0 billion DDTL Credit Facility used for the New Home acquisition was scheduled to mature June 23, 2026.

Outlook

Management said the quarter highlighted the reliability of the Millrose model and that with a $9.7 billion portfolio in a vast and largely untapped addressable market, the company is in the early stages of defining the industry. It cited builders prioritizing capital efficiency and said Millrose continues to find new ways to deepen support for expanding builder partnerships. The company reported a quarterly AFFO run rate of $0.80 per share at the high end of guidance.