Millrose Properties, Inc.

Counterparties are required to maintain adequate builder risk insurance and commercial general liability insurance before commencing Land Development or improvements, and land assets acquired under option agreements must be insured by counterparties consistent with industry standards.

Title and interest in property assets are evaluated on a case-by-case basis as they are acquired, and we obtain certain representations and warranties regarding title and interest from sellers at acquisition. Millrose generally does not obtain appraisals, valuations or fairness opinions for land assets before acquiring them. Millrose did not obtain appraisals, valuations or fairness opinions for the land assets acquired in the Spin-Off from Lennar and in the Rausch Transaction.

Properties in our Real Estate Portfolio are subject to state and local taxes, which are typically borne by homebuilders while their purchase options remain outstanding.

For additional discussion of our Real Estate Portfolio, its utilization in our business and risks associated with holding such properties, see “Part I. Item 1. Business—Our Objectives and Strategies —Portfolio Overview,” “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part I. Item 1A. Risk Factors—Risks Related to Our Business Model and Investment in a Recently Formed Entity” in this Form 10-K.

• MRP HTPB, LLC Delaware⁴
• MRP HUHGB, LLC Delaware⁴
• MRP HWRB, LLC Delaware⁴
• MRP TMHCBTR, LLC Delaware⁴
• Millrose Properties Alabama, LLC Alabama⁴
• Millrose Properties Arizona, LLC Arizona⁴
• Millrose Properties Arkansas, LLC Arkansas⁴
• Millrose Properties California, LLC California⁴
• Millrose Properties Colorado, LLC Colorado⁴
• Millrose Properties Delaware, LLC Delaware⁴
• Millrose Properties Florida II, LLC Florida⁴
• Millrose Properties Florida, LLC Florida⁴
• Millrose Properties Georgia, LLC Georgia⁴
• Millrose Properties Holdings, LLC Delaware⁴
• Millrose Properties Idaho, LLC Idaho⁴
• Millrose Properties Illinois, LLC Illinois⁴
• Millrose Properties Indiana, LLC Indiana⁴
• Millrose Properties Kansas, LLC Kansas⁴
• Millrose Properties Maryland, LLC Maryland⁴
• Millrose Properties Minnesota, LLC Minnesota⁴
• Millrose Properties Missouri, LLC Missouri⁴
• Millrose Properties Nevada, LLC Nevada⁴
• Millrose Properties New Jersey, LLC New Jersey⁴
• Millrose Properties New York, LLC New York⁴
• Millrose Properties North Carolina, LLC North Carolina⁴
• Millrose Properties Oklahoma, LLC Oklahoma⁴
• Millrose Properties Oregon, LLC Oregon⁴
• Millrose Properties Pennsylvania, LLC Pennsylvania⁴
• Millrose Properties SPE LLC Delaware⁴
• Millrose Properties South Carolina, LLC South Carolina⁴
• Millrose Properties Tennessee, LLC Tennessee⁴
• Millrose Properties Texas, LLC Texas⁴
• Millrose Properties Utah, LLC Utah⁴
• Millrose Properties Virginia, LLC Virginia⁴
• Millrose Properties Washington, LLC Washington⁴
• Millrose Properties West Virginia, LLC West Virginia⁴
• Millrose Properties Wisconsin, LLC Wisconsin⁴
• Millrose RCH LandCo, Ltd. Delaware⁴
• NW Florida LD, LLC Florida⁴
• NWA LD, LLC Arkansas⁴
• OKC L Dev., LLC Oklahoma⁴
• RCH Holdings, Inc. Delaware⁴
• San Antonio LD, LLC Texas⁴
• Tulsa L Dev., LLC Oklahoma⁴

• Our counterparties’ obligation to undertake Land Development on our land assets may negatively impact our business.
• If we or our major counterparties, including Lennar, enter into bankruptcy, the counterparty agreements may be unenforceable.
• 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.
• Declines in the market value of our Real Estate Portfolio could materially and adversely affect our business, financial condition, and result of operations.
• Past performance by the management team, who are employees of Kennedy Lewis and their respective affiliates, may not be indicative of our future performance.
• 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.
• Volatility in the market may impact our ability to do business.
• As a holding company, our dependence on our subsidiaries for cash flow may negatively affect our business.
• Your investment return may be adversely affected if we are required to register as an investment company under the Investment Company Act.
• Disruptions to our technology platform could impair our ability to execute transactions and recycle capital.
• Risks Related to Our Debt Obligations
• We have a substantial amount of indebtedness. Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, reduce our funds available for discretionary purposes, and increase the risk that we might default on our indebtedness.
• We may not be able to generate sufficient cash to service all of our indebtedness.
• Despite our current indebtedness levels, we may still be able to incur substantially more debt, including secured indebtedness, and other obligations.
• Our debt agreements contain restrictions that limit our flexibility in operating our business.
• Our indebtedness subjects us to interest rate risk.
• Risks Related to the Land Banking Industry
• There are significant risks inherent in owning land for new home construction.
• 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.
• Our insurance coverage may not be sufficient to cover all potential losses.
• Our inability to successfully acquire an adequate inventory of land assets at reasonable prices could materially and adversely impact our operations.
• A decline in new home prices could require us to write down the carrying value of land we own.
• Land assets and real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to stockholders.
• We cannot assure that our growth strategies will succeed and we may incur significant costs without delivering the anticipated benefits.
• Real estate valuation is inherently subjective and uncertain, and is subject to change, especially during periods of volatility.
• We may acquire land assets and entities holding such land assets that involve risks that could adversely affect our business and financial condition.
• We operate in a competitive and evolving industry, which could adversely affect our growth and profitability
• We may change the profile of our Real Estate Portfolio without stockholder consent.
• Risks 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.
• 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.
• You have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder.
• We pay substantial fees to KL which reduce funds we have available for distribution to stockholders.
• There is no guarantee that KL will successfully identify and consummate new business opportunities, which may impede our growth and reduce stockholder returns.
• If we internalize our management functions, we could incur significant costs and face operational challenges.
• 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.
• 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.
• There are significant potential conflicts of interest with KL that could affect our business returns.
• 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.
• We are and have been party to transactions with related parties that may increase the risk of allegations of conflicts of interest.
• KL’s fee structure under the Management Agreement may create conflicts of interests that are not aligned with stockholders’ long-term interests.
• KL and its officers and employees face competing demands on their time, which may adversely affect our performance.
• 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.
• General Risk Factors
• Our business, financial condition and results of operations could suffer in the event of system failures or cybersecurity attacks.
• ESG initiatives, requirements and market expectations may impose additional costs and risks
• Artificial 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.
• 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.
• Risks 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.
• 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.
• 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.
• Our 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.
• We may not have sufficient funds to satisfy indemnification claims of our officers and directors.
• Our 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.
• Maryland law may limit the ability of a third party to acquire control of us.
• Our Bylaws designate any state court of competent jurisdiction within the State of Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other agents.
• Risks Related to Legal, Regulatory, Tax and Accounting Compliance
• We might fail to qualify or remain qualified as a REIT.
• Complying with REIT Requirements may require us to forgo otherwise attractive investments or to dispose of otherwise attractive investments.
• Even though we intend to qualify as a REIT, we will face tax liabilities that could reduce our cash flows.
• Our organizational structure, including our ownership of interests in MPH Parent and other TRSs in the future, raises certain tax risks.
• To 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.
• Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.
• The 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.
• The ability of the Board to revoke our REIT qualification without stockholder approval may cause adverse consequences to all of our stockholders.
• 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.
• Risks Related to Operating as a Public Company