Millrose Properties, Inc. · NYSE:MRP
Millrose Properties — Investor Presentation (February 2025)
29 slides from Millrose Properties's investor presentation, Feb 24, 2025
Slide 1: Investor Presentation February 2025
Exhibit 99.1 Investor Presentation FEBRUARY 2025
Slide 2: Disclaimer
Disclaimer This presentation relating to Millrose Properties, Inc. (“Millrose,” “we,” “our,” “us,” or the “Company”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1934, as amended, and Section 21E of the Securities Exchange Act of 1934, as a
Slide 3: Disclaimer (Cont'd) Basis of Presentation
Disclaimer (Cont’d) Basis of Presentation The historic financial information of Millrose presented herein as of September 30, 2024, reflects operations and financial information that represents the business assets that were spun off to Millrose (referred to as the “Predecessor Millrose Business”). T
Slide 4: Presenters
Presenters Darren Richman Rob Nitkin Garett Rosenblum Chief Executive Officer & Chief Operating Officer Chief Financial Officer & President Treasurer Prior Experience Prior Experience Prior Experience
Slide 5: Introduction to Millrose Properties
Introduction to Millrose Properties Millrose Properties (“Millrose”, “MRP”, “Company”) provides capital solutions for homebuilders through acquisition and development of residential homesites, and just-in-time delivery of finished homesites to such homebuilders by way of option contracts with contra
Slide 6: Millrose Portfolio Snapshot
Millrose Portfolio Snapshot PLATFORM SNAPSHOT 105,440 862 / 26 8.5% Total Homesites Total Communities / Total States Initial Monthly Option Fee Payment ~$5.8B ~$6.5B ~7% 1 2 Shareholders’ Equity Total Land Assets & Cash Initial Target Return on Equity 0.0x ~$1.4B . 3 Leverage at Spin Liquidity Exter
Slide 7: Millrose's Simple Business Model Efficiently Recycles Capital
Millrose’s Simple Business Model Efficiently Recycles Capital Land Land Homesite Homesite Proceeds Identified Purchased Developed Delivered Recycled Land selected Millrose Millrose funds Homebuilder Millrose recycles and vetted by purchases land homebuilder land purchases cash proceeds to homebuilde
Slide 8: Enabling Separation of Land and Homebuilding Creates Two Attractive, Distinct Investment Propositions
Enabling Separation of Land and Homebuilding Creates Two Attractive, Distinct Investment Propositions Land Homebuilding Construct Pay horizontal home development costs Acquire Deliver finished finished homesite Market homesite home Receive Deliver Acquire deposit The Millrose The Modern and Solution
Slide 9: Millrose Key Investment Highlights
Millrose Key Investment Highlights 1 Experienced management team with unique external management construct Mission critical assets with large, investment grade counterparty 2 Low-risk asset base: entitled, lower duration 3 Significant scale and geographic diversification 4 Numerous embedded risk mit
Slide 10: Investment Highlights
Investment Highlights ——
Slide 11: Kennedy Lewis' Industry Experience, Relationships, and Streamlined Origination are Key to Millrose's Future Success
1 Kennedy Lewis’ Industry Experience, Relationships, and Streamlined Origination are Key to Millrose’s Future Success Kennedy Lewis Partnership is a competitive advantage Kennedy Lewis operates investment vehicles in homebuilder finance and other structured credit business lines • Minority non-contr
Slide 12: Mutually Beneficial Relationship with Lennar, Investment Grade Homebuilder and Primary Counterparty
2 Mutually Beneficial Relationship with Lennar, Investment Grade Homebuilder and Millrose's Primary Counterparty Millrose provides Lennar with a dependable source of capital for just-in-time homesite delivery STRATEGIC BENEFITS TO MILLROSE ✓ Best-in-class operating platform • Over 70 years of experi
Slide 13: Well-Rounded and Low-Risk Initial Asset Base Composition
3 Well-Rounded and Low-Risk Initial Asset Base Composition Millrose Base Portfolio Overview Millrose's Asset Base is Structured to Reduce Risk Development Status ✓ Nationwide and geographically diversified Land Not Yet Ready for Development Finished Homesites portfolio with 105,440 homesites across
Slide 14: A Vast and Geographically Diverse Platform
4 A Vast and Geographically Diverse Platform Millrose’s geographic footprint is spread throughout the United States in locations with positive demographics and growth potential TOP 10 STATES BY ESTIMATED GEOGRAPHIC FOOTPRINT BY REGION TAKEDOWN PROCEEDS Est. Takedown % of Total State Homesites Procee
Slide 15: Structured to Provide Material Downside Protections for Investors
5 Structured to Provide Material Downside Protections for Investors ✓ ✓ Stable, Consistent Payments: Resilient to Volatility: Monthly option fee payments are variable and Monthly option fee payments provide the REIT designed to account for shifts in market conditions, with consistent contractual mon
Slide 16: Material Margin of Safety from a Downward Movement in Home Prices
5 Material Margin of Safety from a Downward Movement in Home Prices Millrose’s business model is not dependent on home price appreciation Furthermore, Millrose’s “margin of safety” is principally derived from a homebuilder’s option deposit and anticipated profit In the event of a material shift in h
Slide 17: Millrose's Transaction Flow is Simple and Easy to Understand
6 Millrose’s Transaction Flow is Simple and Easy to Understand INCOME STATEMENT BALANCE SHEET Homebuilder Homebuilder Option Fee Rate X Investment Balance Property Millrose Revenue Finished Acquisition & 1 – Management Fee Homesite Sale Development Millrose EBITDA Funding +$ – Interest Expense -$ Pr
Slide 18: Housing Market is Undersupplied and Homebuilders Require Entitled Finished Homesites
7 Housing Market is Undersupplied and Homebuilders Require Entitled Finished Homesites to Help Meet Demand HOMEBUILDERS ARE FINISHED HOMESITES ARE HOUSING MARKET IS FOCUSED ON MEETING A CRITICAL INPUT TO UNDERSUPPLIED DEMAND FOR NEW HOMES BUILDING A NEW HOME UNDERSUPPLY OF HOMES IN THE U.S. NEW HOME
Slide 19: Millrose is Positioned to Capitalize on the Homebuilding Sector's Shift Towards an Asset Light Model
7 Millrose is Positioned to Capitalize on the Homebuilding Sector’s Shift Towards an Asset Light Model PUBLIC HOMEBUILDERS % LOTS OPTIONED – 2014 vs. CURRENT 2014 Current 82% 62% 60% 33% 27% 19% 1 2 Lennar Large cap. homebuilder average Homebuilding sector average Note: 2014 information based on fis
Slide 20: Millrose's Sizeable Total Addressable Market
7 Millrose’s Sizeable Total Addressable Market Millrose Will be an Attractive Option to Industry Players MILLROSE’S ANNUAL TOTAL MARKET OPPORTUNITY 2 2 Top 10 homebuilders Remaining public / private homebuilders ✓ Highly transparent institutional public platform ✓ Lower cost than traditional alterna
Slide 21: Creation of Millrose's Permanent Capital Vehicle Provides for a Win-Win Partnership with Homebuilders
7 Creation of Millrose’s Permanent Capital Vehicle Provides for a “Win-Win” Partnership with Homebuilders (Benefits to Homebuilders) Ability to frictionlessly underwrite transactions and provide land banking Ease of Operations management solutions in real-time using the HOPP’R 1 Seeded unlevered bal
Slide 22: Multipronged Investment Strategy Designed to Expand Strategic Homebuilder and Third-Party Relationships
7 Multipronged Investment Strategy Designed to Expand Strategic Homebuilder and Third-Party Relationships to Drive… Lennar Potential Strategic Third Party Assets (Forward Assets) Homebuilder Relationships Deal Size Range $10-100M $10-100M $10-100M Entitled Land Ready to be Entitled Land Ready to be
Slide 23: ...Strong Cash Flow Growth as Platform Scales
7 …Strong Cash Flow Growth as Platform Scales 1 ILLUSTRATIVE CASH FLOW YIELD AVAILABLE FOR DEBT SERVICE AND DIVIDENDS 10.25% 9.25% 7.25% Initial Incremental strategic Incremental assets homebuilder relationships third-party relationships 2 3 Option fee payment 8.50% 10.50% 11.50% Less: Mgmt. fee 1.2
Slide 24: Unlevered Day Balance Sheet and Conservative Leverage Approach
8 Unlevered Day 1 Balance Sheet and Conservative Leverage Approach PRUDENT CAPITAL STRUCTURE SIGNIFICANT LIQUIDITY ENABLES GROWTH Unsecured revolving credit Cash on Quick cash conversion cycle with 39% of initially facility capacity balance sheet transferred assets having a weighted average life of
Slide 25: Millrose Provides a Differentiated and Attractive Opportunity
issuers 8 Millrose Provides a Differentiated and Attractive Opportunity Public Land Development Companies Scale ~$6.5B GAV < $5B GAV ✓ Revenue generation Contractual monthly option payments Land sales ✓ Land duration Short term Short, medium and long term ✓ Market sensitivity Highly insulated Highly
Slide 26: Appendix
Appendix
Slide 27: Millrose Transaction Mechanics
Millrose Transaction Mechanics Millrose purchases residential land and sells finished homesites back to homebuilders at a predetermined cost and takedown schedule under an option contract Land Homesite Land Purchase Development Acquisition Millrose purchases and holds title to Builder will: Builder
Slide 28: Overview of Master Program Agreement Between Lennar and Millrose
Overview of Master Program Agreement Between Lennar and Millrose Lennar and Millrose will enter into the Master Program Agreement to implement the HOPP’R, and the terms of such agreement which will govern how the Transferred Assets and potential future projects will be subjected to the HOPP’R arrang
Slide 29: Overview of Master Option Agreement Between Lennar and Millrose
Overview of Master Option Agreement Between Lennar and Millrose The Master Option Agreement between Lennar and Millrose sets forth the terms and provisions relating to Lennar’s Purchase Option, including terms relating to Lennar’s Option Deposits, Monthly Option Payments, Takedown Schedules and Take
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