Millrose Properties (MRP) FY2025 10-K Risk Factors: 34 New, 16 Dropped

What the changes say

Millrose Properties faces high portfolio concentration with Lennar across California, Florida, and Texas.
Counterparty bankruptcy or termination rights directly threaten operating revenues.
Strict debt-to-equity and capital priority rights constrain external financing flexibility.

What changed since the prior 10-K

New

NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
KL may decide to execute on different business strategies and make business decisions different than those made in the past, which may lead to outcomes that do not achieve anticipated objectives and may adversely affect our financial performance
Our limited operating history and potential changes in Kennedy Lewis's business strategies may lead to poor financial performance.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
We are subject to risks associated with having a highly concentrated portfolio
Our real estate portfolio is highly concentrated in California, Florida, and Texas, relying heavily on Lennar and limited counterparties.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Lennar’s operations or capital resources could have a significant adverse impact on our business, financial condition, or results of operations, as discussed elsewhere in this “Risk Factors” section
Lennar agreements restrict our third-party debt to a 1:1 debt-to-equity ratio without prior approval, limiting funding flexibility.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Certain terms in the Lennar Agreements may hinder our ability to expand our business, attract new counterparties to use our homesite option platform, or negotiate competitive terms with counterparties other than Lennar
Unfavorable terms in Lennar agreements are difficult and costly to amend without Lennar's written consent.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Certain of the rights granted to Lennar in the Founder’s Rights Agreement are exclusive to Lennar, which will require our Board to enforce such rights
Lennar solely selected asset pools under cross agreements before we had independent management, risking simultaneous value declines.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
We have not obtained independent appraisals or fairness opinions as to the value of our real estate assets, including those acquired in the Spin-Off from Lennar and in the Rausch Transaction
We did not obtain independent appraisals for real estate assets acquired in the Spin-Off and Rausch Transaction.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Our counterparties’ obligation to undertake Land Development on our land assets may negatively impact our business
Counterparties handle all construction, and predetermined budgets do not cover liabilities or environmental remediation costs.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
If we or our major counterparties, including Lennar, enter into bankruptcy, the counterparty agreements may be unenforceable
Bankruptcy of Millrose or major counterparties like Lennar could render master option agreements unenforceable and halt operating revenues.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
If we cannot continue to enter into new counterparty agreements, which may be limited by the Capital Priority Right, our business and sources of income could be materially and adversely affected
Short cash conversion cycles mean income could cease once current assets are sold if new counterparty agreements are not secured.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Other Counterparties are under no obligation to continue doing business with us beyond their existing agreements. If we cannot secure new transactions with Other Counterparties, our ability to maintain cash flow, fund operations, and pursue growth opportunities could be materially and adversely affected
Lennar's capital priority rights and rate-matching controls limit our ability to attract and negotiate competitive terms with other counterparties.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Land values can decline due to changes in supply and demand for homesites, existing housing inventory, and overall market conditions. Inventory carrying costs can be significant and may result in losses in poorly performing communities or markets
Lennar may pause horizontal development and reduce monthly option payments to 50% during market downturns, cutting cash inflows.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Lennar’s Effective Equity Price Protection Right may limit equity raises during the first 18 months following the Spin-Off, which could result in dilution and downward pressure on our Class A Common Stock price
High interest rates and limited operating history make securing capital difficult, while Lennar equity protections risk stock dilution.
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders may be diluted, and the terms of such financing transactions may include liquidation or other preferences that adversely affect the rights of our stockholders
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
If a significant counterparty, such as Lennar, fails to perform, our entire operations could be materially affected, and we may be forced to seek bankruptcy protection
NewRisks Related to Our Business Model and Investment in a Recently Formed Entity
Disruptions to our technology platform could impair our ability to execute transactions and recycle capital
NewRisks Related to Our Debt Obligations
As of December 31, 2025, we had approximately $2.1 billion of outstanding indebtedness, including $2.0 billion of Senior Notes and outstanding borrowings of $0.1 billion with $1.225 billion of availability under our Revolving Credit Facility
NewRisks Related to Our Debt Obligations
We may not be able to generate sufficient cash to service all of our indebtedness
NewRisks Related to Our Debt Obligations
our future ability to raise funds by issuances of debt or equity securities or sales of assets
NewRisks Related to Our Debt Obligations
Despite our current indebtedness levels, we may still be able to incur substantially more debt, including secured indebtedness, and other obligations
NewRisks Related to Our Debt Obligations
Our debt agreements contain restrictions that limit our flexibility in operating our business
NewRisks Related to Our Debt Obligations
As a result of these covenants, we may be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs
NewRisks Related to Our Debt Obligations
Our indebtedness subjects us to interest rate risk
NewRisks Related to the Land Banking Industry
Additionally, even if our Manager identifies appropriate land assets, those assets may not be presented to Millrose’s counterparties under the Allocation Policy and could instead be allocated to traditional land banking entities managed by Kennedy Lewis, who may compete with us in the market
NewRisks Related to the Land Banking Industry
We cannot assure that our growth strategies will succeed and we may incur significant costs without delivering the anticipated benefits
NewRisks Related to the Land Banking Industry
We continue to engage in discussions with other homebuilders interested in becoming new counterparties; however, there is no assurance that we will successfully negotiate agreements with additional counterparties or secure new business arrangements outside of our current counterparty base within any specific timeframe
NewRisks Related to the Land Banking Industry
We operate in a competitive and evolving industry, which could adversely affect our growth and profitability
NewRisks Related to the Land Banking Industry
We may change the profile of our Real Estate Portfolio without stockholder consent
NewRisks Related to Our Management Structure
We pay substantial fees to KL which reduce funds we have available for distribution to stockholders
NewRisks Related to Our Management Structure
There is no guarantee that KL will successfully identify and consummate new business opportunities, which may impede our growth and reduce stockholder returns
NewRisks Related to Our Management Structure
If we internalize our management functions, we could incur significant costs and face operational challenges
NewRisks Related to Our Management Structure
Any adverse changes in KL’s or its affiliates' financial condition or our relationship with KL could negatively impact our operating performance and stockholder returns
NewRisks Related to Our Management Structure
KL’s fee structure under the Management Agreement may create conflicts of interests that are not aligned with stockholders’ long-term interests
NewRisks Related to Our Governance Structure
The Miller Family, members of which are substantial stockholders of Lennar, has substantial voting power with regard to us and the ability to exercise influence over certain corporate actions
NewRisks Related to Legal, Regulatory, Tax and Accounting Compliance
Prospective investors are urged to consult their tax advisors regarding potential future changes to the U.S. federal tax laws on an investment in our stock

Dropped

DroppedRisks Related to Our Business Model and Investment in a Newly Formed Entity
We have no history of operating a HOPPR, and may not develop a successful business if we are not able to successfully become (and remain) Lennars preferred business partner for financing the acquisition and development of land or otherwise procure HOPPR agreements outside of the Lennar Agreements
DroppedRisks Related to Our Business Model and Investment in a Newly Formed Entity
Our initial business consists primarily of owning and selling the Transferred Assets and the Supplemental Transferred Assets in connection with providing the HOPPR to Lennar. Therefore, we are subject to risks associated with having a portfolio that is highly concentrated by one business counterparty
Lacking operating history for HOPP'R platform and inability to use Lennar economies of scale.
DroppedRisks Related to Our Business Model and Investment in a Newly Formed Entity
Lennars Work on the Transferred Assets and on any Future Property Assets we (through Millrose Holdings) acquire in connection with our ongoing relationship with Lennar may negatively impact our business
DroppedRisks Related to Our Business Model and Investment in a Newly Formed Entity
If we or Lennar enter into bankruptcy, the Master Program Agreement or the Master Option Agreement may be unenforceable
Initial business limited to transferred assets and HOPP'R services for Lennar.
DroppedRisks Related to Our Business Model and Investment in a Newly Formed Entity
Our primary land assets in our Real Estate Portfolio are the Transferred Assets and the Supplemental Transferred Assets. The properties in the Transferred Assets and the Supplemental Transferred Assets are expected to have a short cash conversion cycle
DroppedRisks Related to Our Intellectual Property
We entered into a HOPPR License Agreement with a wholly-owned subsidiary of Lennar, which is critical to our business. The HOPPR Rights are owned by a subsidiary of Lennar, and any changes to the HOPPR License Agreement will impact our access to the HOPPR Rights and may adversely impact our business
DroppedRisks Related to Our Intellectual Property
Our business relies on our ability to provide the HOPPR, including the Recycled Capital HOPPR, to our customers, and we may lose our competitive advantage against other land banks as other entities in the future may also acquire a license to provide the HOPPR to their customers
DroppedRisks Related to the Land Banking Industry
We cannot make any assurances that our growth or expansion strategies will be successful, and we may incur a variety of costs to engage in such strategies, including through new asset acquisitions, and the anticipated benefits may never be realized
DroppedRisks Related to the Land Banking Industry
Our Real Estate Portfolio primarily includes the Transferred Assets and the Supplemental Transferred Assets. The properties in the Transferred Assets and the Supplemental Transferred Assets are expected to have a short cash conversion cycle
DroppedRisks Related to Our Management Structure
We pay substantial fees to KL, which payments increase the risk that we may not earn a profit. There is also no guarantee that KL will be successful identifying and consummating new business opportunities with Other Customers, which also increases the risk that you will not earn any returns on your investment
DroppedRisks Related to Our Management Structure
If we internalize our management functions, we could incur significant costs associated with being self-managed
Lennar's obligation to complete horizontal development on transferred and future property assets.
DroppedRisks Related to Our Management Structure
Any adverse changes in the financial health of KL or its affiliates or our relationship with them could hinder our operating performance and the return on your investment
Risk that master program or option agreements become unenforceable during bankruptcy.
DroppedRisks Related to Our Management Structure
KL faces conflicts of interest relating to the fee structure under the Management Agreement, which could result in actions that are not necessarily in the long-term best interest of our stockholders
Short cash conversion cycles of transferred and supplemental assets.
DroppedRisks Related to Our Governance Structure
The Miller Family, members of which are substantial stockholders of Lennar, has substantial voting power with regard to us, and may be able to cause us to do things that are favorable to Lennar
DroppedRisks Related to Our Common Stock
Lennar currently retains ownership of a certain amount of our common stock, and its decisions as to future distributions or dispositions of our common stock, which is out of our control, may have a material adverse impact on the value of our common stock
DroppedRisks Related to Our Common Stock
We are an emerging growth company and intend to take advantage of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors

Reworded

100% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
We have not obtained environmental reports on all of our real estate assets, and we rely upon our counterparties for certain information regarding the homesites
Changed from lacking independent asset appraisals to lacking independent Phase I environmental reports for real estate assets.
Was: We have not obtained independent appraisals or fairness opinions as to the value of any of our real estate assets or any environmental reports on any of our real estate assets, including the Transferred Assets, and we rely upon Lennar and our Other Customers for certain information regarding the Homesites
98% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
If we are not able to raise additional capital to fund our operations, or if we cannot access capital on attractive terms, we may not always have sufficient funding to maintain our operations
Removed specific $1.335 billion revolving credit facility size and updated available debt funding sources.
97% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Declines in the market value of our Real Estate Portfolio could materially and adversely affect our business, financial condition, and result of operations
Clarified GAAP inventory write-down risks resulting from fluctuating land values and homesite demand.
Was: If the market value of our Real Estate Portfolio declines, our profits could decrease, and we may incur losses
97% rewrittenRisks Related to the Land Banking Industry
Our inability to successfully acquire an adequate inventory of land assets at reasonable prices could materially and adversely impact our operations
Updated from relying solely on Lennar to identify future property assets to depending on multiple counterparties for land acquisition opportunities.
Was: Our inability to successfully acquire an adequate inventory of Future Property Assets at reasonable prices could adversely impact our operations
97% rewrittenRisks Related to the Land Banking Industry
We may acquire land assets and entities holding such land assets that involve risks that could adversely affect our business and financial condition
Added risks that Kennedy Lewis lacks homebuilding expertise, potentially forcing Millrose to construct homes itself upon a builder default.
Was: We may acquire Future Property Assets, and entities holding such Future Property Assets that involve risks that could adversely affect our business and financial condition
97% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Our agreements with Lennar involve conflicts of interest, and we might have received better terms from unaffiliated third parties than the terms we received in these agreements
Emphasized that pre-Spin-Off agreements negotiated by Lennar and Kennedy Lewis were not at arm's length.
96% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
As a holding company, our dependence on our subsidiaries for cash flow may negatively affect our business
Detailed specific holding company asset composition, including MPH Parent membership interests and SPE LLC development loans.
96% rewrittenRisks Related to Our Management Structure
We are and have been party to transactions with related parties that may increase the risk of allegations of conflicts of interest
Added litigation expense risks and management distraction from potential challenges to related-party transactions with Lennar and Kennedy Lewis.
Was: We are party to transactions with related parties that may increase the risk of allegations of conflicts of interest
95% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Any exercise by Lennar of its Enforcement Rights pursuant to the Founder’s Rights Agreement may severely negatively impact our business operations and financial condition
94% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Ownership of real estate assets is subject to environmental risks and liabilities, which may not be covered by the representations and warranties and indemnities provided to us in the counterparty agreements
Was: Ownership of land and other real estate assets is subject to environmental risks and liabilities, which may not be covered by the representations and warranties and indemnities provided to us in the Lennar Agreements (or any future HOPPR agreements with new customers)
92% rewrittenRisks Related to the Land Banking Industry
Our insurance coverage may not be sufficient to cover all potential losses
Was: Our insurance coverage may not cover all potential losses
92% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
The Rausch Transaction included properties outside of the geographies in which Lennar has historically operated, and property values in those geographies may be different from those in which Lennar has operated
Was: The Supplemental Transferred Assets Transaction included properties outside of the geographies in which Lennar has historically operated, and property values in those geographies may be different from those in which Lennar has operated
92% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Volatility in the market may impact our ability to do business
92% rewrittenRisks Related to Our Management Structure
We may be at an increased risk for dissident stockholder activities due to perceived conflicts of interest arising from our external management structure and relationships
91% rewrittenRisks Related to Our Management Structure
KL can terminate the Management Agreement on 60 days’ notice under certain circumstances, and we may not be able to find a suitable replacement within that time, which could disrupt our operations and materially and adversely affect our business, financial condition and results of operations
Was: KL can terminate the Management Agreement on 60 days notice under certain circumstances, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our business, financial condition and results of operations
91% rewrittenRisks Related to Our Management Structure
We depend upon KL’s key personnel, and if KL cannot recruit and retain key personnel for us, our business, financial condition and results of operations could be significantly impacted
Was: We depend upon key personnel of KL, and if KL cannot recruit and retain key personnel for us, our business, financial condition and results of operations could be significantly impacted
89% rewrittenRisks Related to Our Management Structure
You have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder
89% rewrittenRisks Related to Our Management Structure
KL and its officers and employees face competing demands on their time, which may adversely affect our performance
Was: KL and its officers and employees face competing demands relating to their time, and this may cause our operating results to suffer
88% rewrittenRisks Related to Our Management Structure
There are significant potential conflicts of interest with KL that could affect our business returns
Was: There are significant potential conflicts of interest that could affect our business returns
87% rewrittenRisks Related to the Land Banking Industry
Our business is susceptible to risks from natural disasters, geopolitical events and other factors outside of our control that may delay development of land assets that we hold for homebuilders
Was: Our business is susceptible to risks from natural disasters, geopolitical events and other events outside of our control that may delay development on the land we hold for Lennar and any Other Customers
87% rewrittenRisks Related to Our Management Structure
The termination of the Management Agreement with KL may require us to pay a substantial termination fee, including in the case of a termination for unsatisfactory performance, which may limit our ability to end our relationship with KL
86% rewrittenRisks Related to Our Management Structure
Our business, financial condition and results of operations could suffer in the event of system failures or cybersecurity attacks
85% rewrittenRisks Related to the Land Banking Industry
Land assets and real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to stockholders
85% rewrittenRisks Related to Our Management Structure
KL maintains a contractual, not fiduciary, relationship with us, and its liability is limited under the Management Agreement as we have agreed to indemnify the Manager against certain liabilities
Was: KL maintains a contractual as opposed to a fiduciary relationship with us. KLs liability will be limited under the Management Agreement, and we have agreed to indemnify the Manager against certain liabilities
84% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Past performance by the management team, who are employees of Kennedy Lewis and their respective affiliates, may not be indicative of our future performance
Was: Past performance by the management team who are employees of Kennedy Lewis and their respective affiliates may not be indicative of future performance of an investment in us
84% rewrittenRisks Related to the Land Banking Industry
A decline in new home prices could require us to write down the carrying value of land we own
Was: A decline in prices of new homes could require us to write down the carrying value of land we own
77% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
We are a recently formed company with limited operating history, and you have a limited basis on which to evaluate our ability to achieve our business objectives or to perform as a standalone and separate business
Was: We are a newly formed company with limited operating history, and you have a limited basis on which to evaluate our ability to achieve our business objectives or to even perform as a standalone and separate business
74% rewrittenRisks Related to the Land Banking Industry
Real estate valuation is inherently subjective and uncertain, and is subject to change, especially during periods of volatility
74% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
We are subject to a wide range of general and industry-specific laws and regulations relating to the protection of the environment which require compliance that can be burdensome and expensive
71% rewrittenRisks Related to Our Business Model and Investment in a Recently Formed Entity
Our recycled capital business model is contingent on our counterparties electing to exercise their land purchase options
Was: Our recycled capital business model is contingent on our customers electing to exercise their land purchase options
66% rewrittenRisks Related to the Land Banking Industry
There are significant risks inherent in owning land for new home construction
Was: There are substantial risks inherent in owning land for new home construction
54% rewrittenRisks Related to Our Management Structure
Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations
47% rewrittenRisks Related to Our Management Structure
ESG initiatives, requirements and market expectations may impose additional costs and risks
Was: ESG initiatives, requirements and market expectations may impose additional costs and expose us and our customers to new risks
44% rewrittenRisks Related to Legal, Regulatory, Tax and Accounting Compliance
New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify or remain qualified as a REIT
44% rewrittenRisks Related to Our Common Stock
The market price and trading volume of our Class A Common Stock may be volatile and may face negative pressure, including as a result of future sales or distributions of our Class A Common Stock
43% rewrittenRisks Related to Our Common Stock
Your voting power in Millrose may be further diluted if we issue more shares of our Common Stock in the future, including in connection with the acquisition of any future property assets
39% rewrittenRisks Related to Our Governance Structure
In addition, Lennar has a Management Succession Consent Right. However, there is no guarantee that we will not have a change in control at some point in the future
36% rewrittenRisks Related to Operating as a Public Company
KL does not have prior experience in managing publicly traded companies
35% rewrittenRisks Related to Legal, Regulatory, Tax and Accounting Compliance
Our current organizational structure consists of a parent company (Millrose), which wholly owns MPH Parent, a TRS. MPH Parent, in turn, owns, either directly or through intervening subsidiaries, the Property LLCs where all of our land assets are held
Was: Our current organizational structure consists of a parent company (Millrose), which wholly owns Millrose Holdings, a TRS. Millrose Holdings, in turn, owns, either directly or through intervening subsidiaries, the Property LLCs where all of our land assets are held
32% rewrittenRisks Related to Our Common Stock
We cannot assure you of our ability to pay dividends in the future
29% rewrittenRisks Related to Operating as a Public Company
We rely solely on our Manager for services related to ensuring our compliance with all laws, regulations, rules, policies and practices applicable to public companies (including corporate governance practices)
25% rewrittenRisks Related to Our Governance Structure
Our dual-class capital structure may adversely affect the market price of our Class A Common Stock and in turn the value of our Class B Common Stock
22% rewrittenRisks Related to Our Governance Structure
Some investors may not invest in our Class A Common Stock as a result of our dual-class capital structure and our overall governance profile, which may adversely affect the trading price of our Class A Common Stock
20% rewrittenRisks Related to Legal, Regulatory, Tax and Accounting Compliance
Complying with REIT Requirements may require us to forgo otherwise attractive investments or to dispose of otherwise attractive investments

All 97 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business Model and Investment in a Recently Formed Entity

01We are a recently formed company with limited operating history, and you have a limited basis on which to evaluate our ability to achieve our business objectives or to perform as a standalone and separate business77% rewritten
02KL may decide to execute on different business strategies and make business decisions different than those made in the past, which may lead to outcomes that do not achieve anticipated objectives and may adversely affect our financial performanceNew
03The Rausch Transaction included properties outside of the geographies in which Lennar has historically operated, and property values in those geographies may be different from those in which Lennar has operated92% rewritten
04We are subject to risks associated with having a highly concentrated portfolioNew
05Lennar’s operations or capital resources could have a significant adverse impact on our business, financial condition, or results of operations, as discussed elsewhere in this “Risk Factors” sectionNew
06Our recycled capital business model is contingent on our counterparties electing to exercise their land purchase options71% rewritten
07Our agreements with Lennar involve conflicts of interest, and we might have received better terms from unaffiliated third parties than the terms we received in these agreements97% rewritten
08Certain terms in the Lennar Agreements may hinder our ability to expand our business, attract new counterparties to use our homesite option platform, or negotiate competitive terms with counterparties other than LennarNew
09Certain of the rights granted to Lennar in the Founder’s Rights Agreement are exclusive to Lennar, which will require our Board to enforce such rightsNew
10Any exercise by Lennar of its Enforcement Rights pursuant to the Founder’s Rights Agreement may severely negatively impact our business operations and financial condition95% rewritten
11We have not obtained independent appraisals or fairness opinions as to the value of our real estate assets, including those acquired in the Spin-Off from Lennar and in the Rausch TransactionNew
12We have not obtained environmental reports on all of our real estate assets, and we rely upon our counterparties for certain information regarding the homesites100% rewritten
13Ownership of real estate assets is subject to environmental risks and liabilities, which may not be covered by the representations and warranties and indemnities provided to us in the counterparty agreements94% rewritten
14We are subject to a wide range of general and industry-specific laws and regulations relating to the protection of the environment which require compliance that can be burdensome and expensive74% rewritten
15Our counterparties’ obligation to undertake Land Development on our land assets may negatively impact our businessNew
16If we or our major counterparties, including Lennar, enter into bankruptcy, the counterparty agreements may be unenforceableNew
17If we cannot continue to enter into new counterparty agreements, which may be limited by the Capital Priority Right, our business and sources of income could be materially and adversely affectedNew
18Other Counterparties are under no obligation to continue doing business with us beyond their existing agreements. If we cannot secure new transactions with Other Counterparties, our ability to maintain cash flow, fund operations, and pursue growth opportunities could be materially and adversely affectedNew
19Declines in the market value of our Real Estate Portfolio could materially and adversely affect our business, financial condition, and result of operations97% rewritten
20Land values can decline due to changes in supply and demand for homesites, existing housing inventory, and overall market conditions. Inventory carrying costs can be significant and may result in losses in poorly performing communities or marketsNew
21Past performance by the management team, who are employees of Kennedy Lewis and their respective affiliates, may not be indicative of our future performance84% rewritten
22If we are not able to raise additional capital to fund our operations, or if we cannot access capital on attractive terms, we may not always have sufficient funding to maintain our operations98% rewritten
23Lennar’s Effective Equity Price Protection Right may limit equity raises during the first 18 months following the Spin-Off, which could result in dilution and downward pressure on our Class A Common Stock priceNew
24To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders may be diluted, and the terms of such financing transactions may include liquidation or other preferences that adversely affect the rights of our stockholdersNew
25Volatility in the market may impact our ability to do business92% rewritten
26As a holding company, our dependence on our subsidiaries for cash flow may negatively affect our business96% rewritten
27If a significant counterparty, such as Lennar, fails to perform, our entire operations could be materially affected, and we may be forced to seek bankruptcy protectionNew
28Your investment return may be adversely affected if we are required to register as an investment company under the Investment Company Act
29Disruptions to our technology platform could impair our ability to execute transactions and recycle capitalNew

Risks Related to Our Debt Obligations

30As of December 31, 2025, we had approximately $2.1 billion of outstanding indebtedness, including $2.0 billion of Senior Notes and outstanding borrowings of $0.1 billion with $1.225 billion of availability under our Revolving Credit FacilityNew
31We may not be able to generate sufficient cash to service all of our indebtednessNew
32our future ability to raise funds by issuances of debt or equity securities or sales of assetsNew
33Despite our current indebtedness levels, we may still be able to incur substantially more debt, including secured indebtedness, and other obligationsNew
34Our debt agreements contain restrictions that limit our flexibility in operating our businessNew
35As a result of these covenants, we may be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needsNew
36Our indebtedness subjects us to interest rate riskNew

Risks Related to the Land Banking Industry

37There are significant risks inherent in owning land for new home construction66% rewritten
38Our business is susceptible to risks from natural disasters, geopolitical events and other factors outside of our control that may delay development of land assets that we hold for homebuilders87% rewritten
39Our insurance coverage may not be sufficient to cover all potential losses92% rewritten
40Our inability to successfully acquire an adequate inventory of land assets at reasonable prices could materially and adversely impact our operations97% rewritten
41Additionally, even if our Manager identifies appropriate land assets, those assets may not be presented to Millrose’s counterparties under the Allocation Policy and could instead be allocated to traditional land banking entities managed by Kennedy Lewis, who may compete with us in the marketNew
42A decline in new home prices could require us to write down the carrying value of land we own84% rewritten
43Land assets and real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to stockholders85% rewritten
44We cannot assure that our growth strategies will succeed and we may incur significant costs without delivering the anticipated benefitsNew
45We continue to engage in discussions with other homebuilders interested in becoming new counterparties; however, there is no assurance that we will successfully negotiate agreements with additional counterparties or secure new business arrangements outside of our current counterparty base within any specific timeframeNew
46Real estate valuation is inherently subjective and uncertain, and is subject to change, especially during periods of volatility74% rewritten
47We may acquire land assets and entities holding such land assets that involve risks that could adversely affect our business and financial condition97% rewritten
48We operate in a competitive and evolving industry, which could adversely affect our growth and profitabilityNew
49We may change the profile of our Real Estate Portfolio without stockholder consentNew

Risks Related to Our Management Structure

50We depend upon KL’s key personnel, and if KL cannot recruit and retain key personnel for us, our business, financial condition and results of operations could be significantly impacted91% rewritten
51KL can terminate the Management Agreement on 60 days’ notice under certain circumstances, and we may not be able to find a suitable replacement within that time, which could disrupt our operations and materially and adversely affect our business, financial condition and results of operations91% rewritten
52You have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder89% rewritten
53We pay substantial fees to KL which reduce funds we have available for distribution to stockholdersNew
54There is no guarantee that KL will successfully identify and consummate new business opportunities, which may impede our growth and reduce stockholder returnsNew
55If we internalize our management functions, we could incur significant costs and face operational challengesNew
56The termination of the Management Agreement with KL may require us to pay a substantial termination fee, including in the case of a termination for unsatisfactory performance, which may limit our ability to end our relationship with KL87% rewritten
57Any adverse changes in KL’s or its affiliates' financial condition or our relationship with KL could negatively impact our operating performance and stockholder returnsNew
58There are significant potential conflicts of interest with KL that could affect our business returns88% rewritten
59KL maintains a contractual, not fiduciary, relationship with us, and its liability is limited under the Management Agreement as we have agreed to indemnify the Manager against certain liabilities85% rewritten
60We are and have been party to transactions with related parties that may increase the risk of allegations of conflicts of interest96% rewritten
61KL’s fee structure under the Management Agreement may create conflicts of interests that are not aligned with stockholders’ long-term interestsNew
62KL and its officers and employees face competing demands on their time, which may adversely affect our performance89% rewritten
63We may be at an increased risk for dissident stockholder activities due to perceived conflicts of interest arising from our external management structure and relationships92% rewritten
64Our business, financial condition and results of operations could suffer in the event of system failures or cybersecurity attacks86% rewritten
65ESG initiatives, requirements and market expectations may impose additional costs and risks47% rewritten
66Artificial intelligence (“AI”) and other machine learning techniques could increase, accelerate, or amplify competitive, operational, legal and regulatory risks to our business in ways that we cannot predict
67Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations54% rewritten

Risks Related to Our Governance Structure

68Our dual-class capital structure may adversely affect the market price of our Class A Common Stock and in turn the value of our Class B Common Stock25% rewritten
69Some investors may not invest in our Class A Common Stock as a result of our dual-class capital structure and our overall governance profile, which may adversely affect the trading price of our Class A Common Stock22% rewritten
70The Miller Family, members of which are substantial stockholders of Lennar, has substantial voting power with regard to us and the ability to exercise influence over certain corporate actionsNew
71Our rights and the rights of our stockholders to recover claims against our directors and officers are limited, which could reduce your and our recovery against them if they cause us to incur losses
72 a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated
73We may not have sufficient funds to satisfy indemnification claims of our officers and directors
74Our Charter and Bylaws, along with applicable provisions of Maryland law, include certain anti-takeover defense measure provisions that may make a merger, tender offer or proxy contest difficult, which could depress the market price of our Class A Common Stock and in turn the value of our Class B Common Stock
75In addition, Lennar has a Management Succession Consent Right. However, there is no guarantee that we will not have a change in control at some point in the future39% rewritten
76Maryland law may limit the ability of a third party to acquire control of us

Risks Related to Legal, Regulatory, Tax and Accounting Compliance

77We might fail to qualify or remain qualified as a REIT
78unless Millrose is entitled to relief under statutory provisions, it could not elect to be subject to tax as a REIT for four taxable years following the year during which it was disqualified
79Complying with REIT Requirements may require us to forgo otherwise attractive investments or to dispose of otherwise attractive investments20% rewritten
80Even though we intend to qualify as a REIT, we will face tax liabilities that could reduce our cash flows
81Our current organizational structure consists of a parent company (Millrose), which wholly owns MPH Parent, a TRS. MPH Parent, in turn, owns, either directly or through intervening subsidiaries, the Property LLCs where all of our land assets are held35% rewritten
82To continue qualifying as a REIT, we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our business objectives and reduce your overall return
83Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends
84The stock ownership restrictions of the Code for REITs and the stock ownership limits in our Charter may inhibit market activity in shares of our stock and restrict our business combination opportunities
85The ability of the Board to revoke our REIT qualification without stockholder approval may cause adverse consequences to all of our stockholders
86New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify or remain qualified as a REIT44% rewritten
87Prospective investors are urged to consult their tax advisors regarding potential future changes to the U.S. federal tax laws on an investment in our stockNew

Risks Related to Operating as a Public Company

88Our Manager is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
89Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting
90KL does not have prior experience in managing publicly traded companies36% rewritten
91We rely solely on our Manager for services related to ensuring our compliance with all laws, regulations, rules, policies and practices applicable to public companies (including corporate governance practices)29% rewritten

Risks Related to Our Common Stock

92There is currently a limited history of an active trading market for our Class A Common Stock, which may restrict your ability to sell your shares
93Our Class B Common Stock is not listed on any exchange or in any other organized market, and may not trade at all, which may limit your ability to transfer shares of Class B Common Stock
94The market price and trading volume of our Class A Common Stock may be volatile and may face negative pressure, including as a result of future sales or distributions of our Class A Common Stock44% rewritten
95Your voting power in Millrose may be further diluted if we issue more shares of our Common Stock in the future, including in connection with the acquisition of any future property assets43% rewritten
96We cannot assure you of our ability to pay dividends in the future32% rewritten
97Our ability to pay dividends is limited by the requirements of Maryland law

Other Millrose Properties 10-Ks

FY2024 10-K risk factors
79 risks
Millrose Properties relies heavily on Lennar as its primary business counterparty and customer for land banking operations. The company operates externally managed by Kennedy Lewis with substantial credit facilities and specialized land rights.
Filed Mar 31, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.