(Updates share price in sixth paragraph.)
Sept. 28 (Bloomberg) -- Lennar Corp., the third-largest U.S. homebuilder by revenue, named Morgan Stanley veteran Jay Mantz president of its Rialto Investments unit as the company expands the distressed-investing business.
Mantz spent 18 years at Morgan Stanley, most recently as vice chairman of its real estate investing group, before leaving in January. He will oversee Rialto’s real estate management business, Miami-based Lennar said in a statement today.
The hiring “furthers Lennar’s strategy of growing our existing Rialto franchise, and in particularly expanding our access to capital and new investment opportunities to create value for our partners and shareholders,” Chief Executive Officer Stuart Miller said in the statement.
Lennar has been cutting costs and investing in distressed real estate through its Rialto unit to boost earnings as demand for new homes slumps. Rialto accounted for 49 percent of the homebuilder’s operating income in the second quarter, according to data compiled by Bloomberg.
Rialto may eventually be spun off as a separate company, Miller said at an investment conference in November, similar to Lennar’s previous distressed division, LNR Capital Corp. Lennar created LNR in 1991, during the previous real estate downturn. LNR accounted for about half of the homebuilder’s net income in the mid-1990s and was spun off in 1997.
Lennar fell 39 cents to $13.32 as of 4:15 p.m. in New York Stock Exchange Composite trading. The shares have declined 29 percent this year, compared with a 30 percent loss for the 12- member S&P Supercomposite Homebuilding Index.
Bill Landis, who joined Rialto in 2008 as chief investment officer, will now serve as its chief operating officer, Lennar said in the statement. Landis and Mantz will report to Rialto CEO Jeff Krasnoff.
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