Bloomberg News

Third Avenue Real Estate Fund Manager Likes Lennar, Weyerhaeuser

June 14, 2011

June 14 (Bloomberg) -- Lennar Corp. and Weyerhaeuser Co. are attractive real estate stocks because of their diverse business lines, said Jason Wolf, a fund manager at Third Avenue Management LLC.

Lennar’s Rialto Investments unit, which manages and trades distressed property assets, acts as “a hedge” for the homebuilder against the housing slump, Wolf, co-manager of the Third Avenue Real Estate Value Fund, said today at a Bloomberg Link Money Managers Conference in Boston. Weyerhaeuser, the country’s second-biggest timberland owner, has increased revenue by expanding sales outside the U.S., he said.

Weyerhaeuser, based in Federal Way, Washington, was the fund’s 13th largest investment and Miami-based Lennar was the 16th biggest as of Jan. 31, according to Bloomberg data. The fund, with assets of about $1.89 billion, has a year-to-date return of 3.1 percent through yesterday, ranking it 23rd among its peers.

Lennar shares have gained about 13 percent in the last 12 months, the second-best performance in the 12-member Standard & Poor’s Supercomposite Homebuilding Index. Weyerhaeuser shares increased about 25 percent in the same period.

Third Avenue is increasing its international holdings, such as homebuilders in the U.K. and real estate investment trusts in Australia, Wolf said. Stocks and real estate are performing better in those countries than in the U.S., he said. His fund is avoiding U.S. REIT stocks, which he said have gained an average of about 125 percent since March 2009, growth that can’t be justified by fundamentals.

Third Avenue Management, a New York-based advisory firm for private and institutional clients, had $14 billion under management when Wolf was named as the real estate fund’s co- manager in September.

--Editors: Christine Maurus, Daniel Taub

To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net Kathleen M. Howley in New York at kmhowley@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.


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