Land-banking adoption and scale: Millrose said adoption accelerated in 2025, delivering more than 31,000 homesites and $3.4 billion in takedown proceeds while managing roughly 142,000 homesites across 933 communities and holding about $2.4 billion of invested capital outside the Lennar program.
Solid financials and payout policy: Q4 net income was $122.2 million with AFFO of $0.76/share (normalized run-rate $0.77), full-year net income was $404.8 million, book value was $35.28, and the company paid a $0.75/share dividend while reiterating it will distribute 100% of AFFO.
2026 growth with leverage discipline: Management expects to grow invested capital by about $2 billion to ~$10.5 billion (over 40% outside Lennar), plans to fund roughly half via existing debt capacity, and targets a ~33% debt-to-capital ceiling while avoiding equity issuance below book value.
Millrose Properties (NYSE:MRP) outlined accelerating adoption of its homesite “land banking” model in its fourth-quarter and full-year 2025 earnings call, describing 2025 as a proving year for the company’s permanent-capital approach and setting expectations for additional growth in 2026.
Chief Executive Officer and President Darren Richman said Millrose was built to meet homebuilders’ push for balance-sheet efficiency in a market defined by persistent housing undersupply. Under its model, the company acquires and funds development under option agreements, and builders take down homesites on a predetermined schedule. Richman emphasized that Millrose’s income is generated through contractual monthly option payments that are owed regardless of market conditions, and that the company does not speculate on land appreciation, take entitlement risk, or participate in homebuilding margins.
Richman said 2025 was the company’s first year as a public company and described industry reception as exceeding expectations. He noted that the investment balance outside the foundational Lennar Master Program Agreement ended the year at approximately $2.4 billion, surpassing a previously discussed $2.2 billion “stretch target.”
During 2025, Millrose generated $3.4 billion of net homesite sale proceeds and delivered more than 31,000 homesites to builders nationwide, according to management. Richman added that these projects had an average home selling price about 20% below the national average for newly built single-family homes, which he framed as supportive of housing affordability.
Chief Operating Officer Robert Nitkin provided detail on the operational footprint supporting that volume. As of year-end, he said Millrose managed approximately 142,000 homesites across 933 communities in 30 states and served 15 counterparties, including nine ranked among the top 25 homebuilders in the country.
Nitkin said Millrose deployed $5.5 billion in new land acquisitions and development funding in 2025 and received $3.4 billion in takedown proceeds. He highlighted the operational intensity of processing homesite takedowns—over 31,000 closings during the year—each requiring title work, deed transfers, and state-specific closing requirements on schedules tied to builders’ construction timelines.
He also discussed the company’s technology platform for real-time lot selection and automated workflows, alongside a team structure spanning underwriting, servicing, and asset management. Nitkin said Millrose’s proprietary dataset and underwriting tools help it quickly assess opportunities and monitor local market dynamics.
On the contractual side, Nitkin said cross-termination “pooling” structures represented 96% of the portfolio by investment balance. He characterized pooling as a mechanism that raises the economic cost for a builder to walk away from an option contract without eliminating the builder’s optionality, and he said the company maintains real-time pooling analysis by geography, duration, and risk exposure to inform deal allocation.
Senior Market Risk Analyst Stephen Hensley said Millrose was seeing signs that the spring selling season could look “more like a normal, healthy market.” He cited affordability trends moving “in the right direction,” supported by rising incomes, moderating home prices, and lower interest rates.
Hensley said builders reduced starts in the second half of 2025 to align supply with demand and worked down standing inventory, while also lowering construction costs and improving cycle times. He added that a shift toward more to-be-built sales and fewer spec homes helped keep inventories in check.
Using Millrose’s internal MSA monitoring system, Hensley described “mixed but improving” conditions by market. He said inventory levels in Florida moderated through the back half of 2025, with months of supply below year-ago levels in most markets. He said Texas continued to work through elevated supply and affordability challenges and that normalization there was expected to be “a 2026 story.” He also flagged Las Vegas as a market the company was watching closely due to softer sales activity and rising supply pressure.
By contrast, Hensley pointed to strength across much of the Southeast, including Charlotte, and cited notable performance in Greenville, Columbia, Charleston, and Myrtle Beach, attributing demand to job growth, low supply, and affordability. He said the company’s geographic diversity—30 states and 933 communities—reduces dependence on any single market.
Chief Financial Officer Garett Rosenblum reported fourth-quarter net income of $122.2 million, or $0.74 per share, driven by $179.5 million in option fees and $10.0 million in development loan income. For the full year, the company reported net income of $404.8 million, or $2.44 per share.
Adjusted funds from operations (AFFO) for the fourth quarter came in at $0.76 per share, at the high end of the company’s previously provided run-rate guidance range of $0.74 to $0.76 per share. Management also referenced a normalized year-end run-rate of $0.77 per share, which Richman said was ahead of expectations.
Rosenblum said average yields on capital deployed in “other agreements” were approximately 11% against a cost of debt of 6.3%, describing the spread as a key driver of AFFO growth and dividend capacity. Book value per share at year-end was $35.28. For full-year context, Rosenblum cited interest expense of $91.8 million, income tax expense of $20.5 million, and management fee expense of $87.8 million, noting the management fee is calculated at a fixed rate of 1.25% of gross tangible assets.
On the balance sheet, Rosenblum said Millrose ended the year with total assets of approximately $9.3 billion and total debt of $2.1 billion, implying a debt-to-capitalization ratio of about 26% versus a stated maximum of 33%. Total liquidity at year-end was approximately $1.3 billion.
The company paid a fourth-quarter dividend of $124.5 million, or $0.75 per share. Rosenblum said that equated to an 8.4% annualized yield on equity and was roughly 80 basis points higher than the first-quarter dividend. He also reiterated Millrose’s stated commitment to distribute 100% of AFFO to shareholders.
Looking ahead, Richman said Millrose entered 2026 with a pipeline supporting a base-case expectation to grow invested capital outside the Lennar Master Program Agreement by an additional $2 billion, bringing total invested capital to approximately $10.5 billion, with more than 40% outside the Lennar relationship.
Management discussed how it expects to fund growth while maintaining a conservative posture. Richman said the company targets 33% debt-to-cap and will not issue equity below book value. He said Millrose could fund approximately half of the expected $2 billion increase—about $1 billion—through existing debt capacity, with an expectation to deploy that $1 billion by around mid-year and exit the second quarter of 2026 with a quarterly AFFO per share run rate of $0.78 to $0.80.
In the Q&A, Richman said the company intends to adhere to its leverage target in the “ordinary course,” though he acknowledged there could be circumstances where leverage might move briefly beyond 33% with “line of sight” to bring it back down. He framed leverage discipline as important given the company cycles through about a third of its balance sheet annually.
On funding alternatives, Richman said issuing preferred equity or other equity-like instruments is not the company’s preference, with management aiming to keep the capital structure “as clean as possible,” though he said such options could be considered.
Management also addressed visibility into the mid-2026 deployment goal. Richman referenced “forward flow” relationships in which builders request programmatic buying power, describing roughly $9 billion of such relationships across about 10 counterparties. Nitkin added that existing development funding commitments embedded in the current $2.4 billion “other agreements” balance also contribute to the projected growth, and he said management would still feel confident in the deployment target even without adding new counterparties.
Separately, the company said it is working with its bank group on additional floating-rate debt capacity to diversify its fixed-rate bond structure and better match the floating-rate nature of a portion of its option payment income. Management said the “other agreements” bucket is “vast majority” floating, subject to a floor, and indicated that the floor is generally 50 to 200 basis points below the current rate.
Richman closed by reiterating the company’s focus on “durable, fundamental growth,” adding that Millrose is seeking to build new relationships and “new use cases” for land banking capital.
Millrose Properties Corp is a publicly traded real estate investment trust that focuses on the acquisition, ownership and development of industrial and logistics properties. The company seeks to capitalize on the growing demand for modern warehouse facilities driven by e-commerce, freight distribution and last-mile delivery requirements. Millrose structures its investments to generate stable, long-term rental income through diversified lease agreements with industrial and logistics operators.
The firm’s core activities include sourcing strategically located industrial assets, overseeing property management operations and executing targeted development or renovation projects.
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