Millrose Properties NYSE: MRP reported second-quarter 2026 adjusted funds from operations of $127.6 million, or $0.77 per diluted share, as recurring option-fee income increased alongside its invested capital base. The company said its exit run-rate AFFO was about $0.80 per share after redeploying capital from early development-loan repayments.
Net income for the quarter was approximately $125.9 million, or $0.76 per diluted share. Recurring option-fee income totaled $195.4 million, while development-loan income was $1.5 million, according to Chief Financial Officer Garett Rosenblum.
Millrose ended the quarter with about $8.8 billion of invested capital and $9.7 billion of total assets. The company declared its sixth consecutive quarterly dividend increase, raising the dividend to $0.77 per share. The aggregate dividend was approximately $127.9 million and was fully supported by recurring earnings, management said.
Capital Recycling and Portfolio Growth
Chief Executive Officer Darren Richman said Millrose recycled roughly $1 billion of capital during the quarter through builder takedowns and development-loan repayments, then redeployed approximately $1.1 billion into new opportunities. The difference was funded with a modest draw on the company’s revolving credit facility.
Millrose reported no option terminations during the quarter and said it has had no option terminations since the platform’s inception. Richman said the company’s builder counterparties have honored every scheduled option contract, contrasting that result with public homebuilders that have recorded charges for abandoned parcels.
The portfolio included approximately 143,771 home sites across 877 communities in 30 states at quarter-end, according to Chief Operating Officer Robert Nitkin. Millrose added two counterparty relationships during the quarter. Management described the platform as increasingly diversified beyond its Lennar Master Program Agreement, which represented about 68% of invested capital, while other agreements accounted for the remaining 32%.
Those other agreements generated a weighted average yield of approximately 10.6% in the quarter. Nitkin said the company has been prioritizing opportunities with stronger builders, lower development complexity and greater margins of safety, even if that creates some mix-related variability in yields.
Multifamily Expansion
One of Millrose’s new relationships was a land-banking arrangement with JPI, a wholly owned subsidiary of Sumitomo Forestry. The transaction marks Millrose’s first expansion into multifamily assets.
Nitkin said the JPI agreement is focused on rental multifamily properties and covers land and horizontal improvements rather than vertical construction. He said its economics and structure are broadly consistent with the company’s existing land-banking agreements outside the Lennar program, including deposits and fixed option rates on invested balances.
Management said it would be selective in multifamily and would evaluate each project based on land basis, prospective property value, counterparty strength and contingency plans if a developer does not complete a takedown. Richman said Millrose is considering additional residential applications for its platform but is not pursuing retail, industrial or other nonresidential development categories.
“We’re being opportunistic,” Nitkin said of the multifamily opportunity. “I would hesitate to call it a core strategy at this point.”
Balance Sheet and Deployment Outlook
Millrose ended the quarter with approximately $485 million outstanding on its revolver, $34 million of cash and about $1.4 billion of available liquidity. Its debt-to-capitalization ratio was approximately 30%.
Rosenblum said the company was finalizing an arrangement with lending partners that would reduce the borrowing rate on its revolving credit facility by 25 basis points in exchange for a fee. Interest expense was about $40 million in the quarter, while management-fee expense was $29.9 million and income-tax expense was approximately $2.5 million.
Richman said management is reassessing its appropriate leverage target as it gains more operating history across its portfolio. The company did not announce a change to its 33% debt-cap framework, although he said Millrose has more confidence in the consistency and timing of its cash flows than it did at its inception.
Management also reiterated its interest in potentially supporting capital-efficient consolidation among homebuilders. In May, Millrose announced its intent to provide land-banking capital for Dream Finders Homes’ proposed acquisition of Beazer Homes, though Richman noted that no agreement exists between those companies.
On the company’s deployment outlook, Nitkin said Millrose’s pipeline remains active and demand for off-balance-sheet capital solutions remains strong. Management said it has discussed potential net deployment of $2 billion for the year if unconstrained by capital, while organic deployments have been running at roughly $400 million per quarter and may approach $500 million with acquisitions.
Housing Market View
Senior Market Risk Analyst Steven Hensley said builders are managing through affordability pressures and elevated mortgage rates by controlling costs, reducing speculative inventory and improving construction cycle times. He said incentives remain elevated but appear to be trending in a more favorable direction.
Hensley also pointed to public builders’ owned and controlled lot positions declining for four consecutive quarters and said new Millrose transactions over the past four quarters carried an average underwritten gross margin of roughly 21%.
Management attributed that margin profile to disciplined underwriting, builder cost structures, improved incentives and geographic mix. Nearly half of new transactions were in the Southeast, including North Carolina, Georgia and Tennessee, where Hensley said home values and demand have held up relatively well.
Richman said the company continues to underwrite assuming no home-price appreciation and views elevated mortgage rates as likely to remain part of its baseline planning assumptions. While acknowledging that the first-time-buyer segment remains difficult, management said builders’ need to preserve future community count while limiting balance-sheet land ownership continues to support demand for Millrose’s capital platform.
About Millrose Properties (NYSE:MRP)
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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