Lennar (LEN) Buying Back Land At A Significant Discount

Lennar Corp. (NYSE: LEN) which sold out of one of the nation's largest land ventures near the top of the market, is close to a deal to pick up some of the parcels at a significant discount, according to the Wall Street Journal.

Lennar sold much of its interest in the venture, LandSource Communities Development LLC, in February '07 to CALPERS and collected about $707 million in cash. LandSource sought bankruptcy protection last June, essentially making Calpers' investment a losing bet.

Now Lennar is negotiating with LandSource creditors to create a new company that would buy much of the land out of bankruptcy.

The Wall Street Journal reported Lennar and several hundred creditors holding $1 billion of the venture's debt would contribute "substantial" equity to the new company.

It's not clear how the deal would value the land. But the price would be significantly below the land's value when a Calpers funded venture made its investment in 2007.

Despite the hardships Lennar has encountered in this economy, Lennar still has about $1 billion in cash and has been working to raise additional money to buy distressed land.