Lennar buys Irvine, Calif., military base for $650 million.

Byline: Matthew Haggman

Feb. 18--Lennar Corp. is spending more than $1 billion for a former Marine Corps base in Southern California, in a deal that will allow the Miami developer to build a 3,400-home community in one of the country's hottest real estate markets.

With an offer of $650 million for the land, Lennar won the bidding Thursday in an online auction by the federal government for the 3,718-acre El Toro Marine base in Irvine, Calif. The military base, which began operating during World War II, was shuttered in 1999.

The company also agreed to pay $200 million to develop a 1,300-acre park within the Orange County property and spend "several hundred million" more for infrastructure needs, said Emile Haddad, Lennar's California regional president.

Lennar, which had nearly $1 billion in revenue in 2004, is partnering with Miami Beach-based LNR Property Corp. and a handful of other financial backers in the deal. The acquisition marks Lennar's seventh conversion of a military base, an area that has become a specialty for the publicly held homebuilder. It is also converting the likes of Hunters Point Naval Shipyard in San Francisco and South Weymouth Naval Shipyard near Boston into mixed-used communities that include residential, retail and office space.