New York City-based Brave Warrior Advisors reduced its stake in Millrose Properties (MRP 0.32%) by nearly 2.5 million shares in the third quarter, a move that contributed an estimated $43.5 million position change from quarter to quarter.
What Happened
According to a Securities and Exchange Commission (SEC) filing dated November 14, Brave Warrior Advisors sold a portion of its position in Millrose Properties during the third quarter, with the change in position value totaling approximately $43.5 million.
What Else to Know
Brave Warrior Advisors' move reduced its position in Millrose Properties to 4.2% of reportable AUM as of September 30.
Top holdings after the filing:
- NYSE: ELV: $592.6 million (13.8% of AUM)
- NYSE: SNX: $536.3 million (12.5% of AUM)
- NYSE: OMF: $440.1 million (10.2% of AUM)
- NASDAQ: SLM: $322.7 million (7.5% of AUM)
- NYSE: AN: $265.6 million (6.2% of AUM)
As of Tuesday, Millrose Properties shares were priced at $31, up 44% since their public-market debut in February.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Tuesday) | $31.00 |
| Market Capitalization | $5.1 billion |
| Revenue (TTM) | $411 million |
| Dividend Yield | 5.7% |
Company Snapshot
- Millrose Properties operates a Homesite Option Purchase Platform (HOPP'R) that facilitates residential land banking and provides homebuilders with access to controlled land positions.
- The company’s business model centers on enabling capital-light expansion for homebuilders through land option contracts and related real estate services.
- Its primary customers are institutional and large-scale homebuilders seeking efficient solutions for residential land acquisition and development.
Millrose Properties is a publicly traded residential real estate investment trust (REIT) specializing in land option platforms for homebuilders. The company leverages its HOPP'R model to enable capital-light expansion for builders while providing investors with access to income-generating residential real estate opportunities.
Foolish Take
Millrose continues to post rapid balance-sheet expansion and rising cash generation, but its shares have rallied since the IPO and now reflect a more complex mix of growth, leverage and execution risk. With that in mind, Brave Warrior’s decision to reduce its exposure suggests a recalibration rather than an abandonment of the thesis, especially as the fund maintains a still-sizable stake.
Millrose’s latest quarter showed why institutional investors are engaged. The company generated $852 million in net cash proceeds from homesite sales, including $766 million from home construction company Lennar, and it redeployed $858 million back into land acquisition and development with Lennar. Revenue, meanwhile, reached $179.3 million, and AFFO was $122.5 million, or $0.74 per share, supported by high option-fee income and an expanding portfolio that now includes approximately 139,000 homesites across 30 states. Liquidity totaled $1.6 billion at quarter-end, strengthened by $2 billion in newly issued senior notes.
For long-term investors, Millrose offers a scalable, capital-light model with recurring economics, but leverage, a dependence on counterparti,es and the pace of redeployment remain key risks to monitor.
Glossary
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
13F: A quarterly report filed by institutional investment managers to disclose their equity holdings.
Dividend Yield: Annual dividends paid by a company divided by its current share price, shown as a percentage.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Alpha: A measure of an investment's performance compared to a benchmark, indicating outperformance or underperformance.
REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-producing real estate and distributes most income to shareholders.
Land Banking: The practice of acquiring and holding land for future development or sale.
Capital-Light: A business model that requires minimal investment in physical assets to grow operations.
Homesite Option Purchase Platform (HOPP'R): A platform enabling homebuilders to secure land through options rather than outright purchase.
Position: The amount of a particular security or asset owned by an investor or fund.
