================================================================================
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1998

                         COMMISSION FILE NUMBER 1-13223

                            LNR PROPERTY CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                     DELAWARE                               65-0777234
       (STATE OR OTHER JURISDICTION OF                   (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)

                760 NORTHWEST 107TH AVENUE, MIAMI, FLORIDA 33172
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)

                                (305) 485-2000
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                                  NAME OF EACH EXCHANGE
             TITLE OF EACH CLASS:                 ON WHICH REGISTERED:
  COMMON STOCK, PAR VALUE 10/cent/ PER SHARE     NEW YORK STOCK EXCHANGE

       SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [x] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  Yes [ ] No [x]

     As of January 28, 1999, 24,901,460 shares of common stock and 10,748,133
shares of Class B common stock (which can be converted into common stock) were
outstanding. Of the total shares outstanding, 24,437,698 shares of common stock
and 850,203 shares of Class B common stock, having a combined aggregate market
value (assuming the Class B shares were converted) on that date of $546,977,299
were held by non-affiliates of the registrant.

                                          PART OF FORM 10-K INTO WHICH REFERENCE
    DOCUMENTS INCORPORATED BY REPORT        INTO THIS DOCUMENT IS INCORPORATED
          LNR Property Corporation                  Parts I, II and IV
  1998 Annual Report To Stockholders*
          LNR Property Corporation                       Part III
             1999 Proxy Statement
---------------
* The LNR Property Corporation 1998 Report to Stockholders is incorporated
  herein only to the extent specifically stated.
================================================================================
<PAGE>
                                     PART I

     THIS ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN FORWARD LOOKING
STATEMENTS THAT ARE SUBJECT TO RISK AND UNCERTAINTY. ALTHOUGH THE COMPANY
BELIEVES THE EXPECTATIONS REFLECTED IN ITS FORWARD LOOKING STATEMENTS ARE
REASONABLE, IT IS POSSIBLE THEY WILL PROVE NOT TO HAVE BEEN CORRECT,
PARTICULARLY GIVEN THE CYCLICAL NATURE OF THE REAL ESTATE MARKET. AMONG THE
FACTORS WHICH CREATE UNCERTAINTIES ABOUT THE COMPANY'S FUTURE PERFORMANCE ARE:
(A) CHANGES IN INTEREST RATES, (B) CHANGES IN DEMAND FOR COMMERCIAL REAL ESTATE
NATIONALLY, IN AREAS IN WHICH THE COMPANY OWNS PROPERTIES, OR IN AREAS IN WHICH
PROPERTIES SECURING MORTGAGES THE COMPANY OWNS ARE LOCATED, (C) INTERNATIONAL,
NATIONAL OR REGIONAL BUSINESS CONDITIONS WHICH AFFECT THE ABILITY OF MORTGAGE
OBLIGORS TO PAY PRINCIPAL OR INTEREST WHEN IT IS DUE, (D) THE CYCLICAL NATURE
OF THE COMMERCIAL REAL ESTATE BUSINESS AND (E) CHANGES IN MARKETS FOR VARIOUS
TYPES OF REAL ESTATE BASED SECURITIES.

ITEM 1. BUSINESS.

OVERVIEW

     LNR Property Corporation ("LNR" and, together with its subsidiaries, the
"Company") is a real estate investment and management company, which structures
and makes real estate and real estate related investments and, through its
expertise in developing and managing properties, seeks to enhance the value of
those investments. The Company has been engaged in the development, ownership
and management of commercial and multi-family residential properties since
1969. LNR's Chairman, Chief Executive Officer and President have been with the
Company and worked together for more than a decade. Over the last five years,
revenues and EBITDA have increased at compound annual growth rates of 31.8% and
36.8%, respectively.

     LNR was formed by Lennar Corporation ("Lennar") in June 1997 to separate
Lennar's real estate investment and management business from its homebuilding
business. On October 31, 1997, Lennar distributed the stock of LNR to Lennar's
stockholders in a tax-free spin-off (the "Spin-off"). Activities conducted by
Lennar, as predecessor to the Company, of the type currently being conducted by
the Company are treated below as historical activities of the Company.

     The Company's real estate investment activities primarily consist of:

     /bullet/ acquiring, developing, managing and repositioning commercial and
              multi-family residential real estate properties and loans,

     /bullet/ acquiring, (often in partnership with financial institutions and
              real estate funds) and managing portfolios of real estate assets,

     /bullet/ investing in unrated and non-investment grade rated commercial
              mortgage-backed securities, ("CMBS"), as to which the Company has
              the right to be special servicer (i.e., to oversee workouts of
              underperforming and non-performing loans) and

     /bullet/ making high yielding real estate related loans and equity
              investments.

     The Company adjusts its investment focus from time to time to adapt to
changes in markets and phases of the real estate cycle. The Company does not
have specific policies as to the type of real estate related assets it will
acquire, the percentage of assets it will invest in particular types of real
estate related assets or the percentage of the interests in particular entities
it will acquire. Instead, it


                                       2
<PAGE>

reviews, at least monthly, the types of real estate related investment
opportunities which may at that time be available, the market factors which may
affect various types of real estate related investments (including the
likelihood of changes in interest rates or availability of investment capital)
and other factors which may affect the attractiveness of particular investment
opportunities.

     At November 30, 1998, the Company's assets consisted of:
<TABLE>
<CAPTION>
                                       BOOK
TYPE OF ASSET                          VALUE       DESCRIPTION/COMMENT
-------------                     --------------   -------------------
                                   (IN MILLIONS)
<S>                               <C>              <C>
Commercial properties .........     $   852.5      Multi-family apartment buildings, office and industrial
                                                   buildings, retail centers, hotels and land.

Real estate loans .............          97.9      Primarily mortgage loans. Also includes loans to
                                                   developers and builders, sometimes with profit
                                                   participations.

Partnerships ..................         194.5      Primarily 16 partnerships which acquired portfolios of
                                                   loans and/or properties, including four partnerships
                                                   investing in Japanese loan portfolios; and 10 partnership
                                                   interests from the Affordable Housing Group
                                                   acquisition. Also, includes Lennar Land Partners, a land
                                                   partnership with Lennar.

CMBS ..........................         434.2      Unrated or non-investment grade rated tranches of
                                                   CMBS pools acquired at significant discounts from face
                                                   value, as to which the Company has the right to be
                                                   special servicer and can seek to increase collections of
                                                   underlying loans.

Cash and other assets .........         164.7      Cash at November 30, 1998 consisted of $28.4 million of
                                                   unrestricted cash and $56.3 million restricted cash, of
                                                   which $47.3 million was collateral for a letter of credit
                                                   and $7.6 million was related to the acquisition of the
                                                   Affordable Housing Group. Other assets primarily
                                                   include tax receivables, prepaid expenses and accounts
                                    ---------      receivable.
  Total .......................     $ 1,743.8
                                    =========
</TABLE>

REAL ESTATE INVESTMENTS AND RELATED ACTIVITIES

COMMERCIAL AND MULTI-FAMILY RESIDENTIAL RENTAL REAL ESTATE

     In 1969 Lennar began engaging in the development, ownership and management
of commercial and residential multi-family rental real estate. It's initial
activities of this type included acquiring an apartment complex and building
and operating small office buildings, local regional shopping centers and other
commercial and industrial facilities on properties being developed as part of
Lennar's homebuilding operations. Gradually, this was expanded to general
development, acquisition and active management of commercial and residential
multi-family rental real estate, as well as acquiring land for development and
sale or leasing for commercial uses. Among other things, these activities
helped offset the cyclical nature of Lennar's homebuilding business. At
November 30, 1998, the Company's portfolio included 13 shopping centers with
1.1 million square feet of rentable space, 12 office buildings with 2.5 million
square feet of rentable space, four industrial properties with 0.9 million
square feet of rentable space, 10,929 apartment units (53 properties), a mobile
home park and five hotels.

     The shopping centers the Company owns and operates include seven small
regional shopping centers (sometimes referred to as "strip centers"), with
between 12,000 square feet and 36,400 square


                                       3
<PAGE>

feet of rentable store space and six larger shopping centers, with 72,000
square feet to 462,000 square feet of rentable store space. All the small
regional centers are located in Florida. Of the larger shopping centers, four
are in Florida and two are in Arizona.

     The Company's 12 office buildings range from one to 36 stories and have an
aggregate of 2.5 million square feet of rentable office space. Three of the
office buildings are in Florida, two are in Georgia, four are in California,
one is in Louisiana, one is in Virginia and one is in Utah. The Company's
industrial properties are located in Florida, California and Texas with between
80,000 square feet and 382,000 square feet of rentable floor space.

     The Company's 53 apartment properties range in size from 40 to 712 units.
The apartment properties are geographically located as follows:
<TABLE>
<CAPTION>
                              NUMBER OF
STATE                         PROPERTIES
-----                        -----------
<S>                             <C>
Washington .............        13
Florida ................         6
Oregon .................         5
Montana ................         3
Nevada .................         3
New Mexico .............         3
Texas ..................         3
Arizona ................         2
California .............         2
Colorado ...............         2
Illinois ...............         2
Pennsylvania ...........         2
Virginia ...............         2
Georgia ................         1
Idaho ..................         1
Maryland ...............         1
Tennessee ..............         1
Wisconsin ..............         1
                                --
                                53
                                ==
</TABLE>

     During 1998, the Company entered the business of owning, developing and
syndicating multi-family and senior housing residential rental apartments,
which qualify for Low-Income Housing Tax Credits, by acquiring from Pacific
Harbor Capital, Inc., a wholly-owned subsidiary of PacifiCorp, controlling
interests in a group of entities as well as certain direct partnership
interests known as the Affordable Housing Group ("AHG"). AHG, as part of LNR,
continues to grow and as of November 30, 1998 AHG owned approximately 7,000
residential rental apartments (47 properties), many of which qualify for
Low-Income Housing Tax Credits. Of the apartments, 41% are located in the
Northwestern United States, 15% are located in the Midwest, 10% are located in
the East, 23% are located in the Far West, and the remainder are located in the
Southeast and Southwest. At November 30, 1998, the Company's balance sheet
included AHG balances as follows: properties of approximately $229 million,
investments in partnerships of approximately $13 million and approximately $146
million of pre-existing property-specific mortgage financing that is
non-recourse to the Company.

     The five hotels owned by the Company have a total of 1,155 rooms. Two of
the properties are under development and the other three are managed by
national chains under management contracts which can be terminated by either
party on 30 days' notice.

     In addition to the Company's operating properties, the Company owns
commercially zoned land, 1.7 million square feet of which is leased under
ground leases and approximately 1,050 acres of which is to be used for specific
projects or sold.


                                       4
<PAGE>

     The Company maintains a program of liability, property loss and damage and
other insurance which covers all the Company's properties and which the Company
believes is adequate to protect it against all reasonably foreseeable material
insurable risks.

     The net book value at November 30, 1998 and the operating results for the
year ended on that date with regard to various types of properties owned by the
Company, and related furniture, furnishings and equipment, were as follows:
<TABLE>
<CAPTION>
                                                                                    NET
                                                                                 OPERATING      NOI AS A
                                                      NET BOOK     OCCUPANCY       INCOME       % OF NET
                                                        VALUE         RATE         (NOI)       BOOK VALUE
                                                     ----------   -----------   -----------   -----------
                                                              (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                                                   <C>              <C>        <C>              <C>
Stabilized operating properties
 Commercial ......................................    $128,361          99%       $19,317          15%
 Multi-family ....................................      28,164          92%         7,586          27%
 Hotel and other .................................      32,815          71%         6,249          19%
Under development or repositioning
 Commercial ......................................     144,653                      2,688
 Multi-family ....................................     111,811                      5,509
 Hotel ...........................................      31,872                         --
                                                      --------                    -------
Total market rate operating properties ...........     477,676                     41,349

AHG multi-family properties:
 Stabilized(1) ...................................     174,120          96%         8,220           5%
 Development .....................................      55,009                         --
                                                      --------                    -------
Total AHG multi-family properties ................     229,129                      8,220

Furniture, fixtures and equipment ................       5,614                         --
Land held for investment .........................     140,048                         --
                                                      --------                    -------
Total operating properties and equipment .........    $852,467                    $49,569
                                                      ========                    =======
</TABLE>
----------------
(1) NOI and NOI as a percentage of net book value excludes the annualized
    effect of tax credits; if included, NOI and NOI as a percentage of net
    book value would have been $20,591 and 12%, respectively.

     The Company's financing strategy with regard to its real estate portfolio
is normally to obtain financing secured by specific assets when the Company
acquires them. This type of financing usually is short- or intermediate-term.
However, the Company sometimes seeks more permanent financing in cases where
the market for an asset makes long-term debt an attractive option and the loan
can be assumed or prepaid.

PORTFOLIOS OF COMMERCIAL MORTGAGE LOANS AND OWNED REAL ESTATE

     In 1992, the Company began acquiring, directly and through partnerships,
portfolios of commercial mortgage loans and related pools of owned real estate
assets in the United States. Its first transaction of this type was a
partnership with The Morgan Stanley Real Estate Fund, which acquired from
Resolution Trust Corporation a portfolio of almost $1 billion face value of
assets consisting of more than 1,000 mortgage loans and 65 properties. Its
second transaction of this type was a partnership portfolio acquisition in 1993
which included a portfolio of real estate assets with a face amount of more
than $2 billion, in what the Company believes is one of the largest real estate
portfolio acquisitions ever to take place in the United States. Since 1993, the
Company has formed 10 additional partnerships with several different investment
banking firms and real estate funds to purchase and handle workout activities
regarding portfolios of distressed commercial loans and related real estate.
The Company's partners in these additional partnerships included affiliates of
Lehman Brothers Inc., Morgan Stanley Dean Witter and Westbrook Partners.
Involvement of these partners both gave the Company access to investment
opportunities it might not otherwise have had and reduced the amount the
Company had to invest to acquire interests in large portfolios.


                                       5
<PAGE>

     In each of these partnerships, one of the Company's subsidiaries acts as
the managing general partner and conducts the business of the partnership. The
Company earns management fees and asset disposition fees from the partnerships
and has carried interests in cash flow and sales proceeds once the partners
have recovered their capital and achieved specified returns. The Company's
investments ranged from 15% to 50% of the partnerships' capital and totaled
$165 million, out of a total of $684 million invested in the partnerships. By
November 30, 1998, the partnerships had distributed a total of $1.2 billion to
the partners, of which $363 million had been distributed to the Company. By
November 30, 1998, the Company also received management and asset disposition
fees totaling approximately $53 million. As the U.S. real estate markets
strengthened in 1996 and 1997, substantially fewer large real estate portfolios
became available at what the Company viewed as attractive prices. The Company
has not participated in a partnership which acquired a portfolio of
underperforming real estate assets in the United States since August, 1996
(although since late 1997, the Company has become part of several partnerships
to acquire portfolios of underperforming and non-performing commercial mortgage
loans in Japan, see below). However, the Company has continued to acquire
individual underperforming real estate assets. Currently, the partnerships the
Company formed are engaged primarily in enhancing and disposing of assets in
the portfolios they acquired, as well as collecting sums paid with regard to
portfolio assets.

     Since June 1992, the Company has also acquired directly, without partners,
three portfolios of real estate assets with face amounts of between $21 million
and $75 million.

     The Company's principal activity with respect to distressed portfolios
(whether owned by partnerships or directly owned by the Company) is to manage
the workout of non-performing loans, including negotiating new or modified
financing terms and foreclosing on defaulted loans. The portfolio loans consist
primarily, but not entirely, of fixed-rate first mortgage loans secured by
office and industrial buildings, shopping centers and multi-family residential
properties. The assets generally are held only as long as is required to
enhance their value and bring them to resolution either through collection of
principal or sale. Approximately 20% to 25% of the total portfolio is turned
over each year. The Company believes its workout and property rehabilitation
skills are the principal reasons financial institutions have sought the Company
as a partner in acquiring portfolios of distressed assets and have given the
Company management control of the partnerships.

     Debt financing for partnerships' acquisitions of real estate related asset
portfolios has usually been on a non-recourse basis and with no guarantees by
the Company or any other of the partners. In some cases, the lender must be
repaid in full before a partnership can make cash distributions to the Company
and its partners. The Company's financing strategy with regard to real estate
related asset portfolios in which it invests directly is to seek financing
which matches the underlying loans. This type of financing usually gives
lenders recourse to those of the Company's subsidiaries which invest in the
partnerships acquiring particular asset portfolios.

     During 1998, the Company entered into several partnerships to acquire
portfolios of non-performing commercial mortgage loans in Japan, where it has
opened an office to oversee its loan workout and real estate asset management
operations. The Company has now invested in or committed to invest in nine
portfolios of non-performing loans in Japan. As of November 30, 1998, the total
investment in these partnerships was $28.1 million. At this point, there can be
no assurance that these new investments will achieve the same level of results
as the distressed U.S. portfolio business has.

INVESTMENTS IN CMBS

     As a further use of its loan and real estate workout capabilities, the
Company acquires unrated and non-investment grade rated subordinated CMBS and
provides "special servicing" for the mortgage pools to which they relate. Fitch
IBCA, Inc., which rates special servicers of CMBS on the basis of management
team, organizational structure, operating history, workout and asset
disposition experience and strategies, information systems, investor reporting
capabilities and financial resources,


                                       6
<PAGE>

has given the Company Fitch's highest rating. At November 30, 1998, the Company
was entitled to be the special servicer with regard to 44 securitized
commercial mortgage pools and owned unrated CMBS related to 39 of those pools.
Special servicing is the business of managing and working out the problem
assets in a pool of commercial mortgages or other assets. For example, when a
mortgage in a securitized pool goes into default, the special servicer
negotiates with the borrower on behalf of the pool to resolve the situation.
The Company uses as special servicer essentially the same workout skills it
applies with regard to its distressed asset portfolios. Because the holders of
the unrated CMBS receive everything that is collected after the more senior
levels of CMBS have been paid in full, the Company and other holders of unrated
CMBS are the principal beneficiaries of increased collections. Therefore,
ownership of the unrated CMBS gives the Company an opportunity to profit from
its special servicing in addition to receiving fees for being special servicer.
The Company has not purchased unrated CMBS unless it has had the right to be
the special servicer of the mortgage pools to which they relate.

     The Company also, in some instances, purchases non-investment grade rated
subordinated CMBS relating to commercial mortgage pools as to which the Company
will act as special servicer. The Company expects to receive a yield on these
securities based on the stated interest and amortization of the Company's
purchase discount. However, if, as senior CMBS issued with regard to a pool
begin to be paid down and the performance of the pool exceeds initial
expectations, then the ratings of the subordinated CMBS are sometimes upgraded
by the rating agencies. This increases their market values and gives the
Company an opportunity to achieve gains on the sale of the securities, as well
as receiving the stated interest while it holds them. Therefore, purchases of
non-investment grade rated subordinated securities, like purchases of unrated,
more junior securities, are a means for the Company to profit from its workout
skills.

     Particularly in periods of falling interest rates, there often are
prepayments of mortgages underlying CMBS. Because the Company usually purchases
CMBS at significant discounts from their face amounts, prepayments tend to
increase the Company's yield as a percentage of its investment.

     The Company is currently financing its purchases of CMBS through cash flow
generated from operations, repurchase obligations and borrowings under its
short-term and medium-term revolving credit lines.

     The following are the CMBS held by the Company at November 30, 1998:
<TABLE>
<CAPTION>
                                                WEIGHTED                                 WEIGHTED     WEIGHTED
                                                 AVERAGE                                  AVERAGE     AVERAGE
                                     FACE       INTEREST        BOOK       % OF FACE       CASH         BOOK
                                    AMOUNT        RATE         VALUE         AMOUNT      YIELD(1)     YIELD(2)
                                 -----------   ----------   -----------   -----------   ----------   ---------
                                                      (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                               <C>              <C>       <C>              <C>          <C>          <C>
BB rated or above ............    $120,275         8.40%     $103,134         85.7%         9.9%        13.7%
B rated ......................     219,927         7.26%      156,191         71.0%        10.2%        13.0%
Unrated ......................     644,115         6.86%      158,606         24.6%        29.0%        23.2%
Unrealized gains on securities
 and other ...................          --           --        16,226           --           --           --
                                  --------                   --------
Total CMBS portfolio .........    $984,317         7.11%     $434,157         44.1%        17.3%        17.0%
                                  ========                   ========
</TABLE>
----------------
(1) Cash yield is determined by annualizing the actual cash received during the
    month ended November 30, 1998, and dividing the result by the book value
    at November 30, 1998.

(2) Book yield is determined by annualizing the interest income for the month
    of November 30, 1998, and dividing the result by the book value at
    November 30, 1998.

COMMERCIAL REAL ESTATE LENDING

     The Company holds mortgage loans made with regard to commercial properties
as well as mortgage loans made to the developers and builders of commercial
properties or residential


                                       7
<PAGE>

communities. At November 30, 1998, the Company had mortgage loans on commercial
properties with a total outstanding principal balance of $74.2 million and
mortgage loans to developers and builders with a total outstanding principal
balance of $32.2 million. The states in which the properties securing the
Company's mortgage loans were located were as follows:
<TABLE>
<CAPTION>
                        PRINCIPAL AMOUNT
STATE                       OF LOANS
-----                  -----------------
                         (IN THOUSANDS)
<S>                         <C>
Nevada .............        $ 50,715
California .........          44,804
Florida ............           7,136
Texas ..............           3,704
                            --------
Total ..............        $106,359
                            ========
</TABLE>

     The mortgage loans are primarily first mortgage loans secured by a
convention center, office buildings, a shopping center and land acquired for
development. The mortgage loans to developers and builders are usually
subordinate to construction loans, and provide the Company, in addition to
interest income, participations in profits after the developers or builders
have achieved specified financial targets. The types of loans and collateral
held by the Company at November 30, 1998, were as follows:
<TABLE>
<CAPTION>
                                         PRINCIPAL AMOUNT
TYPE OF LOAN                                 OF LOANS
------------                            -----------------
                                          (IN THOUSANDS)
<S>                                          <C>
Mortgage loans
 Convention center ..................        $ 45,000
 Office buildings ...................          17,504
 Shopping center ....................           4,142
 Commercial land ....................           2,664
 Apartment buildings ................           1,210
 Industrial park and other ..........           3,672
Developer and builder loans .........          32,167
                                             --------
Total ...............................        $106,359
                                             ========
</TABLE>

     The Company identifies opportunities to make commercial and developer or
builder loans through brokers and relationships with other real estate
companies and developers.

     The Company evaluates possible loans with in-house personnel, who perform
site visits and do market, demographic and financial analyses with regard to
the collateral for the loans. The Company applies guidelines, which change from
time to time depending on the type of property and market conditions, relating
to loan-to-value ratio, debt coverage and other financial ratios. In most
instances the guidelines the Company has applied have been similar to those
applied in evaluating commercial mortgages for inclusion in mortgage
securitizations (although the Company has not to date securitized any of the
commercial loans it originated for its own account). Sometimes the Company has
made subordinated loans to which it applies other guidelines, but which bear
interest at rates which are higher than those on senior commercial mortgage
loans, and some of which provide the Company participations in profits from the
underlying properties.

LENNAR LAND PARTNERS

     Before the Spin-off, Lennar and the Company transferred to Lennar Land
Partners (the "Land Partnership"), which is 50% owned by the Company and 50%
owned by Lennar, parcels of land or interests in land and other assets which
had a total book value on Lennar's books at October 31, 1997 of approximately
$372.4 million. This land was acquired by Lennar primarily to be used for
residential home development. The parcels of land or interests in land
contributed by the Company had been contributed to the Company by Lennar so the
Company could contribute them to the Land


                                       8
<PAGE>

Partnership. From November 1, 1997 through November 30, 1998, the Land
Partnership had land sale revenues of $232.0 million, of which $93.9 million
was from sales to Lennar. During that period, the Land Partnership obtained
control of approximately 8,000 additional homesites, primarily through
partnership arrangements. At November 30, 1998, the Land Partnership's land
consisted of approximately 24,898 potential home sites in 29 communities, of
which 18 communities with 15,707 potential home sites are in Florida, two
communities with 596 potential home sites are in Arizona, five communities with
3,514 potential home sites are in Texas and four communities with 5,081
potential home sites are in California. Approximately 8% of the land is
developed and ready to be built upon, 47% of the land was in various stages of
development and 45% of the land was totally undeveloped.

     When Lennar contributed that land to the Company and to the Land
Partnership, Lennar retained options to purchase up to approximately 22% of the
contributed land at prices it established. As of November 30, 1998 Lennar
continues to retain options to acquire approximately 13% of the remaining land.
The remaining land is available for sale to independent homebuilders or to
Lennar at prices determined from time to time, which, as is discussed below,
the Company must approve.

     The Land Partnership has an agreement with Lennar under which Lennar, for
a fee, administers all day-to-day activities of the Land Partnership, including
overseeing planning and development of properties and overseeing sales of land
to Lennar and other builders.

     The Land Partnership is governed by an Executive Committee consisting of
representatives of Lennar and of the Company, with Lennar's representatives and
the Company's representatives each having in total one vote. This, in effect,
gives each of Lennar and the Company a veto with regard to matters presented to
the Executive Committee. LNR's by-laws require that all significant decisions
relating to the Land Partnership be approved by a Board of Directors committee
consisting entirely of directors who have no relationship with Lennar.

     Lennar may, but is under no obligation to, offer additional properties to
the Land Partnership. Lennar is free to acquire properties for itself without
any consideration of whether those properties might have been appropriate for
the Land Partnership. The Company is, in effect, able to veto any proposals
that the Land Partnership acquire properties proposed by Lennar. Arrangements
with regard to particular properties might include, (i) options to Lennar to
purchase all or portions of properties, (ii) rights of first refusal for Lennar
to acquire lots if other builders propose to acquire them, or (iii) buy/sell
arrangements under which, if Lennar wanted to purchase lots on which it did not
have an option, it would propose a purchase price and the Company would have
the option to approve the sale to Lennar at that price or to purchase the lots
for that price (probably in order to resell them to someone who would be
willing to pay a higher price).

     The Company might seek to acquire commercial portions of properties owned
or acquired by the Land Partnership or options relating to them. If it did,
Lennar could, if it wanted to do so, veto acquisitions by the Company. To date,
LNR has not acquired any commercial portions of properties owned by the Land
Partnership or options relating to them.

     The Land Partnership has a $125 million revolving line of credit, and a
$100 million term loan, each of which matures in 2001. If the Land Partnership
defaults under those credit facilities, the lenders have the right to require
the Company, together with Lennar, to purchase the Land Partnership's
obligations to the lenders, or a portion of them. However, if the default is
failure to meet financial covenants, the lenders must give Lennar and the
Company the opportunity to cure the default. Many of the Land Partnership's
assets are subject to non-recourse mortgage loans. The revolving line of credit
is available to supplement financing which is available with regard to specific
properties. As of November 30, 1998, there was $9 million outstanding under the
revolving line of credit, and $68 million outstanding under the term loan.

MARKET RISK ON FINANCIAL INSTRUMENTS

     The primary market risk to which the Company has exposure is interest rate
risk. Changes in interest rates can affect the Company's net income and cash
flows, the value of its CMBS and other


                                       9
<PAGE>

interest earning assets held for sale and the level of realized gains from
sales of assets. As changes in market conditions occur, interest rates can
either increase or decrease. As interest rates move, interest expense from the
variable component of the Company's debt balances will move in the same
direction. With respect to its CMBS and mortgage loan portfolios, changes in
interest rates generally do not affect the Company's interest income as its
investments are predominately fixed-rate. However, the fair value of the
portion of the Company's CMBS portfolio that is held for sale will move
inversely to changes in interest rates. Changes in the market value of these
investments do not affect the Company's consolidated earnings as mark-to-market
adjustments are not reflected in the Company's net income until particular
assets are sold.

The Company's objective in managing its exposure to interest rate changes is to
limit the impact of interest rate changes on earnings and cash flows. The
Company may use a variety of financial instruments to reduce its interest rate
risk. On the debt side, from time to time, the Company uses interest rate swap
agreements whereby the Company exchanges its variable interest on certain debt
balances for another party's obligation to pay fixed interest. This allows the
Company to reduce the effects (positive or negative) of interest rate changes on
operations. These agreements are entered into for specific property-level
financings and are generally matched with the debt relative to term and
principal amount. These financial instruments carry a number of risks, including
a risk of nonperformance on the part of the counterparty and a risk that the
financial instrument will not function as expected. In addition, a significant
portion of the Company's debt is not subject to interest rate fluctuations
because it bears interest at a fixed rate. On the asset side, the Company
periodically sells treasury securities short to hedge a portion of its
available-for-sale CMBS portfolio. At November 30, 1998, the Company was
obligated to deliver $46 million of securities it had sold short. This offsets
the impact of interest rate movements on the market value of a portion of the
Company's CMBS portfolio.

     The following table presents certain information on the Company's assets
and liabilities which are sensitive to interest rate changes:
<TABLE>
<CAPTION>
                                    1999         2000        2001        2002
                                ------------ ----------- ----------- -----------
                                       (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                              <C>            <C>         <C>         <C>
Rate Sensitive Assets
 Interest earning cash and
  cash equivalents ............  $  84,681          --          --          --
 Available-for-sale
  investment securities(1).....     11,100      35,898      67,369      10,808
 Weighted average
  interest rate(3) ............        7.7%        7.9%        8.3%        7.5%
 Mortgage loans held
  for sale(1) .................     16,751      54,575      10,497       4,828
 Weighted average
  interest rate(3) ............       10.8%       10.2%       11.8%       12.0%
Rate Sensitive Liabilities
 Variable rate mortgage
  loans and other debts
  payable(1) ..................    278,622     189,714     128,226      19,085
 Weighted average
  interest rate(3) ............        6.8%        6.7%        6.7%        6.5%
Off balance sheet financial
 instruments
 Variable-to-fixed interest
  rate swap
  agreements(2) ...............     20,600       7,951          --      16,000
 Weighted average
  interest rate(3) ............        6.7%        6.4%         --         6.9%
<CAPTION>
                                                                       BOOK      FAIR
                                    2003     THEREAFTER   TOTAL(1)    VALUE     VALUE
                                ----------- ------------ ---------- --------- ---------
                                          (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                                <C>         <C>        <C>        <C>       <C>
Rate Sensitive Assets
 Interest earning cash and
  cash equivalents ............        --           --     84,681     84,681    84,681
 Available-for-sale
  investment securities(1).....    10,000      274,028    409,203    300,171   300,171
 Weighted average
  interest rate(3) ............       7.5%         7.4%
 Mortgage loans held
  for sale(1) .................        --           --     86,651     75,729    84,588
 Weighted average
  interest rate(3) ............        --           --
Rate Sensitive Liabilities
 Variable rate mortgage
  loans and other debts
  payable(1) ..................       575       43,851    660,073    660,073   660,073
 Weighted average
  interest rate(3) ............       6.4%         6.4%
Off balance sheet financial
 instruments
 Variable-to-fixed interest
  rate swap
  agreements(2) ...............        --       21,000     65,551         --    64,812
 Weighted average
  interest rate(3) ............        --          7.8%
</TABLE>
----------------
(1) Estimated future cash flows (carrying amounts plus estimated discounts)
    using expected maturities.

(2) Notional principal amounts at scheduled maturities.

(3) Weighted average interest rates represent stated rates.

                                       10
<PAGE>

     In addition to the assets shown above, the Company has fixed-rate
investments in CMBS and mortgage loans which it intends and has the ability to
hold until maturity. The Company's investment in CMBS which is classified as
held-to-maturity has a book and estimated market value of $134.0 million and
$184.8 million, respectively, at November 30, 1998. This investment has stated
maturities through 2030 and is expected to return principal of $73.0 million in
2001, $14.6 million in 2002 and $312.5 million, thereafter. The Company's
investment in loans which are held for investment have a book value of $22.2
million and an estimated market value of $26.6 million at November 30, 1998 and
is expected to return principal amounts of $8.9 million in 1999; $1.2 million
in 2000; $0.6 million in 2001; $0.5 million in 2002; $16.0 million in 2003 and
$1.4 million, thereafter. These fixed-rate investments are held to maturity and
the future cash flows are not expected to be negatively affected by changes in
market interest rates.

COMPETITION

     In virtually all aspects of its activities, the Company competes with a
variety of real estate development companies, real estate investment trusts,
investment firms, investment funds and others. The principal area of
competition is for the purchase of real estate assets and securities at prices
which the Company believes will enable it to achieve its desired returns. As
the real estate industry improved over most of the past two years, the Company
encountered increased competition in several of the markets in which it
competes, including the purchase of certain types of real estate and CMBS, as
well as real estate lending. The Company believes that its access to investment
opportunities through its relationships and presence in markets across the
country, its ability to quickly underwrite and evaluate those opportunities and
its expertise in real estate workout and management helped the Company to
compete effectively in the purchase of those types of assets.

     While the fundamentals of the real estate market remained strong,
liquidity concerns created turmoil in the market place during the fourth
quarter of 1998 causing a sharp decline in the market prices of real estate
related securities. This caused a number of firms to record significant losses,
and led to at least one major CMBS investor to file under Chapter 11 of the
Bankruptcy Code. The Company was not materially affected by the decline in
prices of real estate related securities because:

     /bullet/ The Company usually acquires real estate related securities for
              their long-term yields and to benefit from increases in the values
              of the underlying assets (both of which have remained strong), not
              as short-term investments. Therefore, temporary fluctuations in
              market prices of securities do not affect the Company's net income
              while it holds the securities.

     /bullet/ The Company does not originate mortgages for securitization and
              therefore was not required to sell them at a loss when the
              securitization market weakened.

     /bullet/ The Company had not recognized "gain on sale" non-cash income from
              retained residuals of securitized asset pools.

     /bullet/ The Company remained liquid primarily as a result of a diversified
              debt structure.

     Based on the above, the Company believes it was at a competitive advantage
and was able to use the market weakness as an opportunity to make strategic
investments.

     Competitive conditions relating to shopping centers, office buildings,
industrial properties, residential apartment buildings and hotels owned or
operated by the Company vary depending on the locations of particular
properties. Most often these facilities compete for tenants or other uses based
on their locations, the facilities provided and the pricing of the leases or
room rates. As general economic conditions have improved in 1997 and 1998,
occupancies generally increased in many of the Company's markets, which helped
to reduce the amount of competition in existing properties and has allowed for,
in certain instances, new development.

     The Company is not a significant national competitor with regard to any of
the properties it owns or any type of real estate securities, except that
industry sources regarding issuances of CMBS indicate


                                       11
<PAGE>

that the CMBS as to which the Company had the right to assume the special
servicing represented 12.8% and 16.7% of all the CMBS issued in 1997 and 1998,
respectively.

INVESTMENT COMPANY ACT

     The Company intends to conduct its business at all times so as not to
become regulated as an investment company under the Investment Company Act of
1940. Accordingly, the Company does not expect to be subject to the restrictive
provisions of the Investment Company Act. The Investment Company Act applies to
entities which hold themselves out as being involved primarily in investing,
reinvesting or trading in securities or which own investment securities having
a value exceeding 40% of the value of the entities' total assets (other than
government securities or cash) on an unconsolidated basis. The Investment
Company Act exempts, among others, entities that are "primarily engaged in the
business of purchasing or otherwise acquiring mortgages and other liens on and
interests in real estate" ("Qualifying Interests"). Under the current
interpretation of the staff of the Securities and Exchange Commission, to
qualify for this exemption, the entity must maintain at least 55% of its assets
in Qualifying Interests. The Company's investments in real estate and mortgage
loans generally constitute Qualifying Interests and the Company believes that
its unrated CMBS constitute Qualifying Interests when the Company has the
right, as special servicer, to foreclose upon any defaulted loan which backs
such securities and to take all other actions that a servicer generally may
take in connection with a defaulted loan. Analyses of the Company's assets at
November 30, 1998 indicated that (a) less than 40% of the Company's assets,
other than Government securities or cash, on an unconsolidated basis, were
investment securities and (b) more than 55% of the Company's assets were
Qualifying Interests. If, however, due to a change in the Company's assets, or
a change in the value of particular assets, the Company were to become an
investment company which is not exempt from the Investment Company Act, either
the Company would have to restructure its assets so it would not be subject to
the Investment Company Act, or the Company would have to change materially the
way it conducts its activities. Either of these changes could require the
Company to sell substantial portions of its assets at a time the Company might
not otherwise want to do so, and the Company could incur significant losses as
a result. Further, in order to avoid becoming subject to the requirements of
the Investment Company Act, the Company may be required at times to forego
investments it would like to make or otherwise to act in a manner other than
that which the Company's management believes would maximize its earnings.

REGULATION

     Commercial properties owned by the Company or partnerships in which it
participates must comply with a variety of state and local regulations relating
to, among other things, zoning, treatment of waste, construction materials
which must be used and some aspects of building design.

     In its loan workout activities, the Company is required to comply with a
number of Federal and state laws designed to protect debtors against
overbearing loan collection techniques. However, in most instances, laws of
this type apply to consumer level loans (including home mortgages), but do not
apply to commercial loans.

     The Company's hotels have to be licensed to conduct various aspects of
their businesses, including sales of alcoholic beverages.

EMPLOYEES

     At November 30, 1998, the Company had 433 full time and 48 part time
employees, of whom 10 were senior management, 47 were corporate staff, 272 were
engaged in asset acquisitions, loan workouts and rehabilitation and disposition
of properties and 152 were hotel personnel.

     None of the Company's employees is represented by a union. The Company
believes its relationships with its employees are good.


                                       12
<PAGE>

ITEM 2. PROPERTIES.

     For information about properties owned by the Company for use in its
commercial activities, see Item 1.

     The Company maintains its principal executive offices at 760 Northwest
107th Avenue, Miami, Florida, in a building which was built and is owned by the
Company. Those offices consist of approximately 16,000 square feet. The Company
has additional offices in various office buildings owned by the Company and it
leases offices in two other facilities.

ITEM 3. LEGAL PROCEEDINGS.

     The Company is not subject to any legal proceedings other than suits
relating to properties it owns, which the Company views as an ordinary part of
its business, and most of which are covered by insurance. LNR believes these
suits will not, in aggregate, have a material adverse effect upon the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1998.

                                       13
<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS.

     The information required by Item 5 is incorporated by reference from page
43 of the Company's 1998 Annual Report to Stockholders.

ITEM 6. SELECTED FINANCIAL DATA.

     The information required by Item 6 is incorporated by reference on page 16
of the Company's 1998 Annual Report to Stockholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

     The information required by Item 7 is incorporated by reference from pages
17 through 24 of the Company's 1998 Annual Report to Stockholders.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

     The information required by Item 7a is included in Item 1 above.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The information required by Item 8 is incorporated by reference from pages
25 through 42 of the Company's 1998 Annual Report to Stockholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

     Not applicable.

                                       14
<PAGE>
                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Information about the Company's directors is incorporated by reference to
the definitive proxy statement, which will be filed with the Securities and
Exchange Commission not later than March 30, 1999 (120 days after the end of
the Company's fiscal year). The following individuals were LNR's executive
officers at the date of this report:
<TABLE>
<CAPTION>
                                                            YEAR OF
NAME/POSITION                                       AGE     ELECTION
-------------                                       ---     --------
<S>                                                 <C>        <C>
Stuart A. Miller
  Chairman of the Board and Director ...........    41         1997
Steven J. Saiontz
  Chief Executive Officer and Director .........    40         1997
Jeffrey P. Krasnoff
  President and Director .......................    43         1997
Shelly Rubin
  Financial Vice President .....................    36         1997
Michelle R. Simon
  Secretary and Corporate Counsel ..............    35         1997
Robert Cherry
  Vice President ...............................    36         1997
Steve I. Engel
  Vice President ...............................    52         1997
Mark A. Griffith
  Vice President ...............................    42         1997
David G. Levin
  Vice President ...............................    43         1997
Ronald E. Schrager
  Vice President ...............................    37         1997
David O. Team
  Vice President ...............................    38         1997
Margaret A. Jordan
  Treasurer ....................................    47         1997
John T. McMickle
  Corporate Controller .........................    41         1997
</TABLE>

     Stuart A. Miller is the Company's Chairman of the Board. Mr. Miller became
the Chairman of the Board of LNR when the Company was formed in June 1997. Mr.
Miller has been the President and Chief Executive Officer of Lennar since April
1997. For more than five years prior to April 1997, Mr. Miller was a vice
president of Lennar and held various executive positions with Lennar
subsidiaries, including being the president of its principal homebuilding
subsidiary from December 1991 to April 1997 and the president of its principal
real estate investment and management division (the predecessor to a
substantial portion of our business) from April 1995 to April 1997.

     Steven J. Saiontz is the Company's Chief Executive Officer. Mr. Saiontz
became LNR's Chief Executive Officer and a Director when the Company was formed
in June 1997. For more than five years prior to that, he was the president of
Lennar Financial Services, Inc., a wholly-owned subsidiary of Lennar. Mr.
Saiontz is currently a Director of Lennar. He is the brother-in-law of Stuart
A. Miller and the son-in-law of Leonard Miller.

     Jeffrey P. Krasnoff is the Company's President. Mr. Krasnoff became LNR's
President when the Company was formed in June 1997 and became a Director in
December 1997. From 1987 until June 1997, he was a vice president of Lennar.
From 1990 until he became the President of LNR,


                                       15
<PAGE>

Mr. Krasnoff was involved almost entirely in Lennar's real estate investment
and management division (the predecessor to a substantial portion of the
Company's business).

     Shelly Rubin is the Company's Financial Vice President. She became LNR's
Financial Vice President when the Company was formed in June 1997. From May
1994 until June 1997, she was the principal financial officer of Lennar's real
estate investment and management division (the predecessor to a substantial
portion of the Company's business). From 1991 until May 1994, Ms. Rubin was
employed by Burger King Corporation as the controller for its real estate
division.

     Michelle R. Simon is the Company's Secretary and Corporate Counsel. She
became LNR's Secretary and Corporate Counsel when the Company was formed in
June 1997. From 1994 until June 1997, she was the counsel to Lennar's real
estate investment and management division (the predecessor to a substantial
portion of the Company's business). From 1992 to 1994, Ms. Simon was an
associate and then a vice president in the investment banking division, special
execution group, of Goldman, Sachs & Co.

     Robert Cherry is a Vice President of LNR, responsible for sourcing and
evaluating new investment opportunities. From March 1995 until October 1997,
Mr. Cherry had similar responsibilities for LNR and Lennar's real estate
investment and management division (the predecessor of the Company). From March
1994 until February 1995, he was a vice president of G. Soros Realty
Advisors/Quantum North America Realty Fund. Prior to that he held analyst
positions with various entities including Moody's Investor Service and Sullivan
& Cromwell.

     Steven I. Engel is a Vice President of LNR, responsible for managing the
Japan office. From 1992 until 1997, Mr. Engel primarily was responsible for the
special servicing of the CMBS portfolio for LNR and Lennar's real estate
investment and management division (the predecessor of the Company). From 1987
to 1992, Mr. Engel owned and managed his own single family construction company
with projects in Broward, Collier and Lee counties in Florida.

     Mark A. Griffith is a Vice President, responsible for managing LNR's
Eastern Regional Division. From February 1990 until October 1997, Mr. Griffith
had similar responsibilities for Lennar's real estate investment and management
division (the predecessor to a substantial portion of the Company's business).

     David G. Levin is a Vice President, responsible for managing Lennar
Capital Services, one of the Company's subsidiaries. From February 1992 until
early 1997, Mr. Levin was responsible for managing the Miami Division of
Lennar's real estate investment and management division (the predecessor to a
substantial portion of the Company's business), which was at that time
primarily focused on partnerships with the Morgan Stanley Real Estate Fund.
Prior to that he had various positions with commercial real estate firms
including managing director of Bear Stearns Real Estate Group.

     Ronald E. Schrager is a Vice President, responsible for managing the Miami
Division of LNR, which is primarily focused on CMBS/special servicing. Since
August 1992, he held several positions in Lennar's real estate investment and
management division, managing various areas. Prior to that he served as a vice
president of Chemical Bank's Real Estate Finance Group.

     David O. Team is a Vice President, responsible for the Company's Western
Regional Division. From April 1996 until October 1997, Mr. Team had similar
responsibilities for Lennar's real estate investment and management division
(the predecessor to a substantial portion of the Company's business). From 1994
to 1996, Mr. Team was the owner and president of Windward Realty Group, a real
estate development firm. From 1992 to 1993, he was a senior vice president with
American Real Estate Group.

     Margaret A. Jordan joined LNR in September 1997 as Treasurer. From
February 1993 to August 1997, Ms. Jordan worked as an independent contractor
and financial consultant to real estate


                                       16
<PAGE>

businesses. From June 1987 to January 1993, Ms. Jordan was employed by Atlantic
Gulf Communities Corporation, serving as assistant treasurer and then senior
vice president and treasurer.

     John T. McMickle joined LNR in July 1997 as Controller. From 1994 to June
1997, Mr. McMickle was responsible for financial reporting at Ryder System.
Prior to that he was employed as a senior manager by Price Waterhouse LLP.

ITEM 11. EXECUTIVE COMPENSATION.

     The information required by Item 11 is incorporated by reference from
pages 6 through 8 of the Company's 1999 Proxy Statement, which will be filed
with the Securities and Exchange Commission not later than March 30, 1999 (120
days after the end of the Company's fiscal year).

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by Item 12 is incorporated by reference from
pages 3 through 4 of the Company's 1999 Proxy Statement, which will be filed
with the Securities and Exchange Commission not later than March 30, 1999 (120
days after the end of the Company's fiscal year).

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information called for in Item 13 is incorporated by reference from
page 7 of the Company's 1999 Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than March 30, 1999 (120 days
after the end of the Company's fiscal year).


                                       17
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
                                                                                                      PAGE
                                                                                                     NUMBER
                                                                                                    -------
<S>       <C>    <C>                                                                                  <C>
(A)       1.     Financial Statements

                  Items A through E are incorporated by reference from pages 25 through 42 of
                  the Company's 1998 Annual Report to Stockholders.

                  Consolidated financial statements of Lennar Land Partners as of
                  November 30, 1998 and 1997 and for year ended November 30, 1998 and the
                  period October 31, 1997 (Inception) to November 30, 1997. .....................     F-1

          2.     Consolidated Financial Statement Schedules
                  Report of Independent Auditors ................................................     F-11
                  Schedule II--Valuation and Qualifying Accounts ................................     F-12
                  Schedule III--Real Estate and Accumulated Depreciation ........................     F-13
                  Schedule IV--Mortgage Loans on Real Estate ....................................     F-14

(B)       1.     Report on Form 8-K

                  A report on Form 8-K/A, dated January 12, 1999, was filed by the registrant
                  with respect to the pro forma information for the nine months ended
                  August 31, 1998 for the acquisition of the Affordable Housing Group.

                  A report on Form 8-K, dated January 19, 1999, was filed by the registrant
                  with respect to the year ended November 30, 1998 press release.

                  A report on Form 8-K, dated January 20, 1999, was filed by the registrant
                  with respect to its registration statement on Form S-3 relating to $400,000,000
                  maximum aggregate offering price of common stock, preferred stock,
                  depositary shares, debt securities, warrants and guarantees, filed by the
                  Company on November 25, 1998.
</TABLE>

(C) 1. Index to Exhibits

<TABLE>
<S>        <C>
    3.1    Certificate of Incorporation and amendment.*

    3.2     By-laws.*

   10.1    Separation and Distribution Agreement between the Company and Lennar Corporation,
           dated June 10, 1997.*

   10.2    LNR Property Corporation Employee Stock Ownership/401(k) Plan.*

   10.3    Shared Facilities Agreement between LNR Property Corporation and Lennar Corporation.*

   10.4    Partnership Agreement by and between Lennar Land Partners Sub, Inc. and LNR Land
           Partners Sub, Inc.*

   10.5    Revolving Credit Agreement dated as of December 5, 1997, among LNR Property
           Corporation and certain subsidiaries and Bank of America National Trust and Savings
           Association, as lender and agent.*

   10.6    Master Repurchase Agreement dated as of December 8, 1997, between LNR Sands
           Holdings, Inc. and Goldman Sachs Mortgage Company.*
</TABLE>

                                       18
<PAGE>


<TABLE>
<S>         <C>
   10.7     Reverse Repurchase Agreement dated as of October 21, 1997, between DLJ Mortgage
            Capital, Inc. and LNR Property Corporation, Lennar Capital Services, Inc., Nevada
            Securities Holdings, Inc., Lennar Securities Holdings, Inc., Lennar MBS, Inc. and LFS Asset
              Corp.*

   10.8     Amended and Restated Credit Agreement dated as of October 31, 1997, between Lennar
            Capital Services, Inc. and Lennar MBS, Inc. as borrowers and Nationsbank of Texas, N.A. as
            lender.*

   10.9     Credit Agreement among Lennar Land Partners as borrower, and the First National Bank of
            Chicago, et al.*

   10.10    Revolving Credit Agreement dated as of November 6, 1997, by and between Lennar Capital
            Services, Inc. and The Bank of New York.*

   10.11    Reverse Repurchase Agreement dated as of June 7, 1996, between CS First Boston (Hong
            Kong) Limited and Lennar Financial Services, Lennar MBS, Inc., Lennar Securities
            Holdings, Inc., and LFS Asset Corp.*

   10.12    Credit Agreement dated as of May 15, 1998, between LNR Florida Funding, Inc., and
            German American Capital Corporation.

   11.1     Statement Regarding Computation of Earnings Per Share.

   13.1     Pages 16 through 43 of the 1998 Annual Report to Stockholders.

   21.1     List of subsidiaries.

   27.1     Financial Data Schedule.
</TABLE>
----------------
*  Previously filed.

                                       19
<PAGE>
                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        LNR PROPERTY CORPORATION

                                        BY: /s/ STEVEN J. SAIONTZ
                                           ------------------------------------
                                           Steven J. Saiontz
                                           Chief Executive Officer and Director
                                           (Principal Executive Officer)


                                           February 26, 1999

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
        NAME AND SIGNATURE                           TITLE                          DATE
        ------------------                           -----                          ----       
<S>                                 <C>                                      <C>
/s/  STUART A. MILLER               Chairman of the Board and Director       February 26, 1999
---------------------------------
           Stuart A. Miller

/s/  STEVEN J. SAIONTZ              Chief Executive Officer and Director     February 26, 1999
---------------------------------   (Principal Executive Officer)
          Steven J. Saiontz

/s/  JEFFREY P. KRASNOFF            President and Director                   February 26, 1999
---------------------------------
            Jeffrey P. Krasnoff

/s/  SHELLY RUBIN                   Financial Vice President                 February 26, 1999
---------------------------------   (Principal Financial Officer)
             Shelly Rubin

/s/  JOHN T. McMICKLE               Corporate Controller                     February 26, 1999
---------------------------------   (Principal Accounting Officer)
             John T. McMickle

/s/  LEONARD MILLER                 Director                                 February 26, 1999
---------------------------------
            Leonard Miller

/s/  SUE M. COBB                    Director                                 February 26, 1999
---------------------------------
             Sue M. Cobb

/s/  CARLOS M. DE LA CRUZ           Director                                 February 26, 1999
---------------------------------
           Carlos M. de la Cruz

/s/  BRIAN L. BILZIN                Director                                 February 26, 1999
---------------------------------
           Brian L. Bilzin
</TABLE>

 

                                       20
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Partners of Lennar Land Partners:

     We have audited the accompanying consolidated balance sheets of Lennar
Land Partners and subsidiaries (the "Partnership") as of November 30, 1998 and
1997, and the related consolidated statements of operations, cash flows and
partners' capital for the year ended November 30, 1998 and the period from
inception (October 31, 1997) to November 30, 1997. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Lennar Land
Partners and subsidiaries at November 30, 1998 and 1997, and the results of
their operations and their cash flows for the year ended November 30, 1998 and
the period from inception (October 31, 1997) to November 30, 1997 in conformity
with generally accepted accounting principles.


DELOITTE & TOUCHE LLP


Miami, Florida
January 8, 1999

                                      F-1
<PAGE>

                             LENNAR LAND PARTNERS

                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                          AS OF NOVEMBER 30,
                                                    -------------------------------
                                                         1998             1997
                                                    --------------   --------------
<S>                                                 <C>              <C>
                  ASSETS

Cash ............................................   $ 15,375,848        5,317,869
Land held for development and sale ..............    237,453,597      327,819,509
Operating properties and equipment, net .........     17,411,365       18,014,813
Investments in partnerships .....................     53,099,206       18,030,049
Other assets ....................................     16,015,903       10,143,968
                                                    ------------      -----------
    Total assets ................................   $339,355,919      379,326,208
                                                    ============      ===========
       LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and other liabilities ..........   $ 39,102,399       20,511,958
Due to affiliate ................................      1,108,192        8,924,270
Negative goodwill ...............................      1,351,112       10,910,157
Mortgage notes and other debts payable ..........     98,488,166      153,815,223
                                                    ------------      -----------
    Total liabilities ...........................    140,049,869      194,161,608
Partners' capital ...............................    199,306,050      185,164,600
                                                    ------------      -----------
                                                    $339,355,919      379,326,208
                                                    ============      ===========
</TABLE>

                 See accompanying notes to consolidated financial statements.


                                      F-2
<PAGE>
                              LENNAR LAND PARTNERS

                     CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE YEAR ENDED NOVEMBER 30, 1998 AND THE PERIOD FROM
               INCEPTION (OCTOBER 31, 1997) TO NOVEMBER 30, 1997
<TABLE>
<CAPTION>
                                                      1998            1997
                                                 --------------   ------------
<S>                                              <C>              <C>
REVENUES

 Land sales:
  Third party lot sales ......................   $94,197,102       4,031,488
  Affiliate lot sales ........................    90,716,843       3,176,176
  Third party acreage sales ..................    39,454,724         424,682
                                                 -----------       ---------
    Total land sales .........................   224,368,669       7,632,346
 Equity in earnings of partnerships ..........    29,190,882         779,758
 Club operations .............................     2,158,698         143,900
 Amortization of negative goodwill ...........     9,502,911         232,131
 Other .......................................     5,305,849         358,698
                                                 -----------       ---------
    Total revenues ...........................   270,527,009       9,146,833
                                                 -----------       ---------
COSTS AND EXPENSES

 Cost of land sales:
  Third party lot sales ......................    68,606,945       3,513,643
  Affiliate lot sales ........................    66,426,824       2,547,610
  Third party acreage sales ..................    25,383,793         403,649
                                                 -----------       ---------
    Total cost of land sales .................   160,417,562       6,464,902
 Selling, general and administrative .........    12,534,503       1,460,440
 Management fees paid to affiliate ...........     6,000,000         500,000
 Club operations .............................     2,333,494         162,715
                                                 -----------       ---------
    Total costs and expenses .................   181,285,559       8,588,057
                                                 -----------       ---------
NET INCOME ...................................   $89,241,450         558,776
                                                 ===========       =========
</TABLE>

                 See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>
                             LENNAR LAND PARTNERS

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE YEAR ENDED NOVEMBER 30, 1998
     AND THE PERIOD FROM INCEPTION (OCTOBER 31, 1997) TO NOVEMBER 30, 1997
<TABLE>
<CAPTION>
                                                                          1998                1997
                                                                    ----------------   -----------------
<S>                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income .....................................................   $ 89,241,450               558,776
 Adjustments to reconcile net income to net cash provided by
   operating activities:
  Depreciation and amortization, net ............................     (7,763,691)             (143,824)
  Equity in earnings of partnerships ............................    (29,190,882)             (779,758)
  Changes in assets and liabilities:
   Decrease in land held for development and sale ...............     72,240,180             1,229,125
   Increase in other assets .....................................     (5,876,994)           (4,229,306)
Increase in accounts payable and other liabilities ..............     18,590,441             3,610,303
   (Decrease) increase in due to affiliate ......................     (7,816,078)            8,924,270
                                                                    ------------            ----------
    Net cash provided by operating activities ...................    129,424,426             9,169,586
                                                                    ------------            ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of operating properties and equipment ................       (464,637)              (90,578)
 Investments in partnerships ....................................    (27,789,507)                   --
 Distributions from partnerships ................................     39,314,754             5,000,000
                                                                    ------------            ----------
    Net cash provided by investing activities ...................     11,060,610             4,909,422
                                                                    ------------            ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowings under revolving credit agreement ................      3,356,498             5,821,411
 Mortgage notes and other debts payable:
  Proceeds from borrowings ......................................      4,448,103           100,151,043
  Principal payments ............................................    (63,131,658)           (6,490,608)
Partnership formation--cash contributed by partners .............             --               757,015
Contributions received from partners ............................      8,900,000                    --
Distributions to partners .......................................    (84,000,000)         (109,000,000)
                                                                    ------------          ------------
    Net cash used in financing activities .......................   (130,427,057)           (8,761,139)
                                                                    ------------          ------------
Net increase in cash ............................................     10,057,979             5,317,869
Cash at beginning of period .....................................      5,317,869                    --
                                                                    ------------          ------------
Cash at end of period ...........................................   $ 15,375,848             5,317,869
                                                                    ============          ============
Supplemental disclosures of non-cash investing
  and financing activities:
 Partnership formation--assets contributed by partners ..........   $         --           375,751,013
 Partnership formation--liabilities assumed by partners .........   $         --            82,145,189
 Contribution of land to partnerships ...........................   $ 18,125,732                    --
</TABLE>
                 See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>
                             LENNAR LAND PARTNERS

                 CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
                      FOR THE YEAR ENDED NOVEMBER 30, 1998
     AND THE PERIOD FROM INCEPTION (OCTOBER 31, 1997) TO NOVEMBER 30, 1997
<TABLE>
<CAPTION>
                                              LENNAR LAND             LNR LAND
                                          PARTNERS SUB, INC.     PARTNERS SUB, INC.          TOTAL
                                         --------------------   --------------------   -----------------
<S>                                         <C>                    <C>                  <C>
Initial capitalization ...............      $ 146,802,912          $ 146,802,912        $  293,605,824
Distributions ........................        (54,500,000)           (54,500,000)         (109,000,000)
Net income ...........................            279,388                279,388               558,776
                                            -------------          -------------        --------------
Balance at November 30, 1997 .........         92,582,300             92,582,300           185,164,600
Contributions ........................          4,450,000              4,450,000             8,900,000
Distributions ........................        (42,000,000)           (42,000,000)          (84,000,000)
Net income ...........................         44,620,725             44,620,725            89,241,450
                                            -------------          -------------        --------------
Balance at November 30, 1998 .........      $  99,653,025          $  99,653,025        $  199,306,050
                                            =============          =============        ==============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>
                             LENNAR LAND PARTNERS

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          NOVEMBER 30, 1998 AND 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF ORGANIZATION AND OPERATIONS

     Lennar Land Partners (the "Partnership") is a Florida general partnership
which was formed at the close of business on October 31, 1997 through the
contribution of assets and related liabilities by Lennar Land Partners Sub,
Inc., a wholly-owned subsidiary of Lennar Corporation ("Lennar"), and LNR Land
Partners Sub, Inc., a wholly-owned subsidiary of LNR Property Corporation
("LNR"). All amounts were recorded by the Partnership at the carrying value of
the partners. As defined in the Partnership Agreement, the managing general
partner is Lennar Land Partners Sub, Inc., which holds a 50% ownership interest
in the Partnership. The other general partner, LNR Land Partners Sub, Inc.,
holds the other 50% ownership interest.

     The Partnership is engaged in the acquisition, development and sale of
land. Additionally, the Partnership owns and operates recreational facilities
in several of the communities it develops. The Partnership also invests in
partnerships (and similar entities) which acquire, develop and sell land and,
in certain instances, also build and sell homes.

BASIS OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts of
Lennar Land Partners, its wholly-owned subsidiaries and partnerships (and
similar entities) in which a controlling interest is held. The Partnership's
investments in partnerships (and similar entities) in which less than a
controlling interest is held are accounted for by the equity method. All
significant intercompany transactions and balances have been eliminated.

USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

REVENUE RECOGNITION

     Revenues from land sales are recognized when a significant down payment is
received, the earnings process is complete and the collection of any remaining
receivables is reasonably assured.

LAND HELD FOR DEVELOPMENT AND SALE

     The cost of land held for development and sale includes direct and
indirect costs, capitalized interest and property taxes. The cost of land,
major infrastructure, amenities and other common costs are apportioned among
the parcels within a real estate community. Land is carried at cost, unless the
land within a community is determined to be impaired, in which case the
impaired land will be written down to fair value. Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," requires long-lived assets
be evaluated for impairment based on undiscounted future cash flows of the
assets. Write-downs

                                      F-6
<PAGE>
                             LENNAR LAND PARTNERS

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

                          NOVEMBER 30, 1998 AND 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

of land deemed to be impaired will be recorded as adjustments to the cost basis
of the respective land. As of November 30, 1998 and 1997, there were no assets
considered impaired under the provisions of this statement.

INTEREST AND REAL ESTATE TAXES

     Interest and real estate taxes attributable to land and operating
properties are capitalized and added to the cost of those properties as long as
the properties are being actively developed. During 1998 and 1997, interest
costs of $10,283,403 and $999,631, respectively, were incurred and capitalized.

OPERATING PROPERTIES AND EQUIPMENT

     Operating properties and equipment are recorded at cost. Depreciation is
calculated to amortize the cost of depreciable assets over their estimated
useful lives using the straight-line method. The estimated useful life for
operating properties is 39 years and for equipment is 2 to 20 years.

NEGATIVE GOODWILL

     At the formation of the Partnership, certain assets and the related
negative goodwill were contributed. The negative goodwill is being amortized
over the life of the assets acquired that gave rise to the negative goodwill. A
substantial portion of these assets was sold during 1998.

INCOME TAXES

     No provision for income taxes has been included in the consolidated
financial statements for the Partnership since the payment of such taxes is the
obligation of the partners.

RECLASSIFICATION

     Certain prior period amounts in the consolidated financial statements have
been reclassified to conform with the 1998 presentation.

2.  LAND HELD FOR DEVELOPMENT AND SALE

     Land held for development and sale consists of individual lots and land
parcels for sale to homebuilders, including Lennar. These properties are
located in Florida, California, Texas and Arizona. Land parcels are in various
stages of development as of November 30, 1998 and 1997.

                                      F-7
<PAGE>
                            LENNAR LAND PARTNERS

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

                          NOVEMBER 30, 1998 AND 1997

3. OPERATING PROPERTIES AND EQUIPMENT

     Operating properties and equipment at November 30, 1998 and 1997 consisted
of the following:
<TABLE>
<CAPTION>
                                                       1998             1997
                                                  --------------   -------------
<S>                                               <C>               <C>
   Community recreational facilities ..........    $ 14,805,335     14,102,562
   Sales center ...............................         726,526        726,526
                                                   ------------     ----------
      Total land and buildings ................      15,531,861     14,829,088
   Furniture, fixtures and equipment ..........       2,991,823      3,279,585
                                                   ------------     ----------
                                                     18,523,684     18,108,673
   Accumulated depreciation ...................      (1,112,319)       (93,860)
                                                   ------------     ----------
                                                   $ 17,411,365     18,014,813
                                                   ============     ==========
</TABLE>

4. INVESTMENTS IN PARTNERSHIPS

     Summarized financial information on a combined 100% basis related to the
Partnership's significant partnerships and similar entities accounted for by
the equity method as of November 30, 1998 and 1997 and for the year ended
November 30, 1998 and the period from inception (October 31, 1997) to November
30, 1997 was as follows:
<TABLE>
<CAPTION>
                                                            1998             1997
                                                       --------------   --------------
<S>                                                    <C>               <C>
   ASSETS:
    Cash ...........................................   $ 38,027,581        4,519,197
    Real estate inventories ........................    176,012,698      102,726,108
    Other assets ...................................      5,812,413        9,601,132
                                                       ------------      -----------
                                                       $219,852,692      116,846,437
                                                       ============      ===========
   LIABILITIES AND EQUITY:
    Accounts payable and other liabilities .........   $ 41,388,747       45,122,388
    Notes and mortgages payable ....................     71,842,534       36,565,082
    Equity of:
     The Partnership ...............................     53,790,256       17,486,948
     Others ........................................     52,831,155       17,672,019
                                                       ------------      -----------
                                                       $219,852,692      116,846,437
                                                       ============      ===========
</TABLE>
<TABLE>
<CAPTION>
                                                          1998           1997
                                                    ---------------   ----------
<S>                                                  <C>              <C>
   Revenues .....................................    $206,294,488     5,082,352
   Costs and expenses ...........................     140,533,692     3,498,977
                                                     ------------     ---------
   Earnings of partnerships .....................    $ 65,760,796     1,583,375
                                                     ------------     ---------
   The Partnership's share of earnings ..........    $ 29,190,882     779,758
                                                     ============     =========
</TABLE>

     At November 30, 1998 and 1997, the Partnership's equity interests in these
partnerships ranged from 33% to 50%. These partnerships are primarily involved
in the acquisition, development and sale of residential land. The Partnership
shares in the profits and losses of these partnerships and, when appointed the
manager of the partnerships, receives fees for the management of the assets.
The

                                      F-8
<PAGE>
                              LENNAR LAND PARTNERS

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

                          NOVEMBER 30, 1998 AND 1997

4. INVESTMENTS IN PARTNERSHIPS--(CONTINUED)

outstanding debt of these partnerships is not guaranteed by the Partnership.
However, Lennar and LNR guarantee some of the debt for certain partnerships
(see Note 7).

5. ACCOUNTS PAYABLE AND OTHER LIABILITIES

     Accounts payable and other liabilities at November 30, 1998 and 1997
consisted of the following:
<TABLE>
<CAPTION>
                                            1998           1997
                                       -------------   ------------
<S>                                    <C>             <C>
   Accounts payable ................   $ 7,916,424      5,336,308
   Land sales deposits .............    17,921,730      2,642,591
   Deferred income .................     3,235,288         30,671
   Accrued property taxes ..........     2,876,913        796,462
   Accrued loan costs ..............            --      3,479,178
   Other liabilities ...............     7,152,044      8,226,748
                                       -----------      ---------
                                       $39,102,399     20,511,958
                                       ===========     ==========
</TABLE>

6. MORTGAGE NOTES AND OTHER DEBTS PAYABLE

     Mortgage notes and other debts payable at November 30, 1998 and 1997
consisted of the following:
<TABLE>
<CAPTION>
                                                                            1998             1997
                                                                       --------------   -------------
<S>                                                                     <C>              <C>
   Term loan note with a floating interest rate (6.5% at
    November 30, 1998), secured by certain real estate,
    due in 2001 ....................................................    $68,013,342      99,262,000
   Mortgage notes on land, with interest rates ranging from 0% to
    6.5%, secured by certain real estate, due through 1999 .........     21,296,915      48,731,812
   Revolving credit note payable with a floating interest rate (6.5%
    at November 30, 1998), secured by certain real estate,
    due in 2001 ....................................................      9,177,909       5,821,411
                                                                        -----------      ----------
                                                                        $98,488,166     153,815,223
                                                                        ===========     ===========
</TABLE>

     The Partnership has entered into two secured credit facilities (together
the "Land Facilities") in the aggregate amount of $225,000,000 which may be
used to refinance existing indebtedness, for working capital, for acquisitions,
for interest payments and for general partnership purposes. One facility is
structured as a $125,000,000 revolving credit facility (the "revolving credit
note") which will mature in November 2001, subject to a one-year extension at
the request of the Partnership and with the consent of the lenders. The second
facility is a $100,000,000 secured term loan facility (the "term loan note")
which amortizes in equal quarterly amounts of $7,000,000 that began during the
fourth quarter of 1998 and matures in November 2001. Advances under the Land
Facilities are limited by certain borrowing base calculations, and are secured
by security interests in all real and personal property in the borrowing base.
Both Lennar and LNR guarantee these obligations. The interest rate under the
Land Facilities is the London Interbank Offered Rate (LIBOR) plus 90 basis
points.

     The minimum aggregate principal maturities of mortgage notes and other
debts payable subsequent to November 30, 1998 are as follows:
1999--$49,296,915; 2000--$28,000,000; and 2001--
$21,191,251.

                                      F-9
<PAGE>
                             LENNAR LAND PARTNERS

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

                          NOVEMBER 30, 1998 AND 1997

7. RELATED PARTY TRANSACTIONS

     Lennar is paid a monthly fee for managing the day-to-day operations of the
Partnership. As manager, Lennar is also entitled to reimbursement for all
out-of-pocket expenses directly incurred in its capacity as manager (the
"Direct Expenses") including but not limited to costs and expenses of employees
(salary, bonus and benefits), contractors, agents, professional fees,
telephone, travel, productions and reproductions of documents and postage. In
addition to the Direct Expenses, Lennar will share some of its employees,
contractors, agents, facilities and equipment and other expenses with the
Partnership (the "Indirect Expenses"). The reimbursement for the Indirect
Expenses is $500,000 per month which is reflected as management fees paid to
affiliate in the consolidated statements of operations. During 1998, the
Partnership reimbursed Lennar $1,683,251 of Direct Expenses and $6,000,000 of
Indirect Expenses. During 1997, the Partnership reimbursed Lennar $153,905 of
Direct Expenses and $500,000 of Indirect Expenses.

     The Partnership, in the ordinary course of business, sells land to Lennar.
During 1998, these land sales amounted to $90,716,843 in revenues and generated
gains totaling $24,290,019. During 1997, these land sales amounted to
$3,176,176 in revenues and generated gains totaling $628,566.

     At November 30, 1998, the partners guaranteed $85,191,251 of the
Partnership's debt and $30,302,454 of the debt of one of the Partnership's
partnerships. Lennar guarantees an additional $293,632 of the debt of one of
the Partnership's partnerships. During 1998 and 1997, the Partnership paid
Lennar guarantee fees totaling $632,004 and $64,896, respectively.

     Lennar funded the deficits of the community recreational facilities of the
Partnership's non-master planned communities. During 1998 and 1997, the
Partnership received deficit funding from Lennar of $1,144,890 and $115,993,
respectively.

     At November 30, 1998 and 1997, the Partnership owed Lennar $1,108,192 and
$8,924,270, respectively, for advances, Indirect Expenses and Direct Expenses.

8. COMMITMENTS AND CONTINGENT LIABILITIES

     The Partnership is subject to the usual obligations associated with
entering into contracts for the purchase, development and sale of real estate
in the routine conduct of its business.

     Through an arrangement with Lennar as managing partner, the Partnership is
committed, under various letters of credits, to perform certain development
activities and provide certain guarantees in the normal course of business.
Outstanding letters of credit under this arrangement totaled $46,300,000 at
November 30, 1998.

                                      F-10
<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
Of LNR Property Corporation:

     We have audited the consolidated financial statements of LNR Property
Corporation (the "Company") as of November 30, 1998 and 1997, and for each of
the three years in the period ended November 30, 1998, and have issued our
report thereon dated January 19, 1999 such report is included elsewhere in this
Form 10-K. Our audits also included the financial statement schedules of LNR
Property Corporation, listed in Item 14. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.


DELOITTE & TOUCHE LLP


Miami, Florida
January 19, 1999

                                      F-11
<PAGE>

                    LNR PROPERTY CORPORATION AND SUBSIDIARIES

                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS

VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED NOVEMBER 30, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                 ADDITIONS
                                                     ----------------------------------
                                                                          CHARGED
                                                         CHARGED         (CREDITED)
                                         BEGINNING      TO COSTS          TO OTHER                               ENDING
DESCRIPTION                               BALANCE     AND EXPENSES        ACCOUNTS           (DEDUCTIONS)        BALANCE
-----------                            ------------- -------------- ------------------- --------------------- ------------
<S>                                     <C>               <C>             <C>                 <C>               <C>
Year ended November 30, 1998

 Allowances deducted from assets to
  which they apply:
  Allowances for doubtful accounts and
    notes receivable .................  $   703,000       278,000               --              (864,000)         117,000
                                        ===========       =======               ==            ==========          =======
  Deferred income and unamortized
    discounts ........................  $ 6,706,000            --         (122,000)           (1,028,000)(A)    5,556,000
                                        ===========       =======         ========            ==========        =========
  Loan loss reserve ..................  $ 2,038,000       910,000               --                    --        2,948,000
                                        ===========       =======         ========            ==========        =========
Year ended November 30, 1997

 Allowances deducted from assets to
  which they apply:
  Allowances for doubtful accounts and
    notes receivable .................  $   938,000       467,000         (702,000)                   --          703,000
                                        ===========       =======         ========            ==========        =========
  Deferred income and unamortized
    discounts ........................  $10,851,000            --          235,000            (4,380,000)(C)    6,706,000
                                        ===========       =======         ========            ==========        =========
  Loan loss reserve ..................  $ 2,071,000            --               --               (33,000)       2,038,000
                                        ===========       =======         ========            ==========        =========
  Valuation allowance ................  $ 2,908,000            --               --            (2,908,000)(C)           --
                                        ===========       =======         ========            ==========        =========
Year ended November 30, 1996

 Allowances deducted from assets to
  which apply:
  Allowances for doubtful accounts and
    notes receivable .................  $   871,000       511,000               --              (444,000)         938,000
                                        ===========       =======         ========            ==========        =========
  Deferred income and unamortized
    discounts ........................  $13,112,000            --         (746,000)(B)        (1,515,000)(C)   10,851,000
                                        ===========       =======         ========            ==========       ==========
  Loan loss reserve ..................  $        --     1,869,000        1,396,000            (1,194,000)       2,071,000
                                        ===========     =========        =========            ==========       ==========
  Valuation allowance ................  $   340,000     2,711,000          580,000              (723,000)       2,908,000
                                        ===========     =========        =========            ==========       ==========
</TABLE>

Notes:

(A) Includes amortization of discounts.

(B) Includes discounts on mortgages purchased.

(C) Includes transfers to Lennar Corporation of approximately $4.2 million and
    amortization of discount and other.


                                      F-12
<PAGE>
                    LNR PROPERTY CORPORATION AND SUBSIDIARIES

                                 SCHEDULE III

          SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (D)(E)

                         YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<CAPTION>
                                                                              COST
                                                                          CAPITALIZED
                                             INITIAL COST                SUBSEQUENT TO
                                              TO COMPANY                  ACQUISITION
                                     ----------------------------- --------------------------
                                                     BUILDING AND     IMPROVE-     CARRYING
DESCRIPTION           ENCUMBRANCES        LAND       IMPROVEMENTS      MENTS         COSTS
-----------         ---------------- -------------- -------------- ------------- ------------
<S>                 <C>              <C>            <C>            <C>           <C>
Rental office
 property -
 GA ............... $          --      5,237,000     20,020,000     14,758,000     944,000
Rental office
 property -
 CA ...............            --     26,670,000     37,499,000        414,000          --
Other
 miscellaneous
 properties
 which are
 individually
 less than 5%
 of total .........   333,493,000    131,715,000    303,701,000    203,396,000   2,394,000
                    -------------    -----------    -----------    -----------   ---------
                    $ 333,493,000    163,622,000    361,220,000    218,568,000   3,338,000
                    =============    ===========    ===========    ===========   =========
<CAPTION>
                                   GROSS AMOUNT
                                     AT WHICH                                         DATE OF
                                    CARRIED AT                     ACCUMULATED     COMPLETION OF     DATE
                                  CLOSE OF PERIOD                DEPRECIATION(B)    CONSTRUCTION   ACQUIRED
                    ------------------------------------------- ----------------- --------------- ---------
DESCRIPTION             LAND(A)     BUILDINGS(A)     TOTAL(C)
-----------         -------------- -------------- -------------
<S>                 <C>            <C>            <C>           <C>               <C>             <C>
Rental office
 property -                                                                           Under
 GA ...............   5,237,000     35,722,000     40,959,000    1,145,000         Construction       1996
Rental office
 property -
 CA ...............  26,670,000     37,913,000     64,583,000      543,000           Various          1998
Other
 miscellaneous
 properties
 which are
 individually
 less than 5%
 of total ......... 145,456,000    495,750,000    641,206,000   38,255,000           Various       Various
                    -----------    -----------    -----------   ----------
                    177,363,000    569,385,000    746,748,000   39,943,000
                    ===========    ===========    ===========   ==========
</TABLE>

Notes:

(A) Includes related improvements and capitalized carrying costs.

(B) Depreciation is calculated using the straight-line method over the
    estimated useful lives which vary from 15 to 30 years.

(C) The aggregate cost of the listed property for federal income tax purposes
    was $613,788,000 at November 30, 1998.

(D) The listed real estate includes operating properties completed or under
    construction.

(E) Reference is made to Notes 1, 6 and 8 of the consolidated financial
    statements.

<PAGE>

(F) The changes in the total cost of investment properties and accumulated
    depreciation for the three years ended November 30, 1998 are as follows (in
    thousands):

<TABLE>
<CAPTION>
                                                                        1998         1997         1996
                                                                    ------------ ------------ -----------
<S>                                                                  <C>            <C>         <C>
      Cost:
       Balance at beginning of year ...............................  $ 257,376      234,010     304,833
       Additions, at cost .........................................    501,075       86,921      34,410
       Cost of real estate sold ...................................    (27,187)     (55,381)     (9,051)
       Transfers ..................................................     15,484        1,826       3,818
                                                                     ---------      -------     -------
        Balance at end of year ....................................  $ 746,748      257,376     234,010
                                                                     =========      =======     =======
      Accumulated depreciation:
       Balance at beginning of year ...............................  $  31,904       31,971      28,686
       Depreciation and amortization charged against earnings .....     12,283        5,195       5,170
       Depreciation on real estate sold ...........................     (4,244)      (5,262)     (1,885)
                                                                     ---------      -------     -------
        Balance at end of year ....................................  $  39,943       31,904      31,971
                                                                     =========      =======     =======
</TABLE>
                                      F-13
<PAGE>
                    LNR PROPERTY CORPORATION AND SUBSIDIARIES

                                  SCHEDULE IV

                         MORTGAGE LOANS ON REAL ESTATE

                               NOVEMBER 30, 1998
<TABLE>
<CAPTION>
                                                              FINAL         PERIODIC
                                              INTEREST       MATURITY       PAYMENT
DESCRIPTION                                     RATE           DATE          TERMS
-----------                              ----------------- ----------- -----------------
<S>                                       <C>              <C>         <C>
First mortgage notes secured real estate
 and other:
 Convention center - NV ................    Libor +300        2000     Interest Only
 Office building - CA ..................         7.81%        2003     Varying Payment
 Retail center - TX ....................        10.00%        1999     Varying Payment
 Other .................................      6%-11.75%    1999-2012   Various

Second mortgage notes secured by real
 estate:
 Residential Development - CA ..........        12.00%        2001     Varying Payment
 Industrial Development - CA ...........        25.00%        1999     Varying Payment
 Residential Development - NV ..........        20.00%        1999     Varying Payment
 Residential Development - CA ..........        12.00%        2000     Varying Payment
 Other .................................  10.00%-20.00%    1999-2001   Various

<CAPTION>
                                                                                   PRINCIPAL
                                                                                    AMOUNT
                                                                                   OF LOANS
                                                                                  SUBJECT TO
                                                                    CARRYING      DELINQUENT
                                                       FACE        AMOUNT OF       PRINCIPAL
                                          PRIOR     AMOUNT OF      MORTGAGES          OR
DESCRIPTION                               LIENS     MORTGAGES        (A)(B)        INTEREST
-----------                              ------- --------------- ------------- ----------------
<S>                                      <C>      <C>             <C>           <C>
First mortgage notes secured real estate
 and other:
 Convention center - NV ................          $  45,000,000    45,000,000
 Office building - CA ..................             16,645,000    12,640,000
 Retail center - TX ....................              3,704,000     3,355,000        3,704,000(C)
 Other .................................              8,843,000     7,641,000
                                                  -------------    ----------
                                                     74,192,000    68,636,000        3,704,000
Second mortgage notes secured by real
 estate:
 Residential Development - CA ..........              7,402,000     7,402,000
 Industrial Development - CA ...........              6,288,000     6,288,000
 Residential Development - NV ..........              5,711,000     5,711,000
 Residential Development - CA ..........              5,439,000     5,439,000
 Other .................................              7,327,000     7,327,000
                                                  -------------    ----------
                                                     32,167,000    32,167,000
                                                  -------------    ----------
                                                    106,359,000   100,803,000
  Loan Loss Reserve ....................                           (2,948,000)
                                                                  -----------
                                                  $ 106,359,000    97,855,000        3,704,000
                                                  =============   ===========   ==============
</TABLE>
Notes:

(A) For Federal income tax purposes, the aggregate basis of the listed
    mortgages was $102,000,000 at November 30, 1998.

(B) Carrying amounts are net of unamortized discounts.
 
(C) Loan is in the process of being renegotiated and the expected loss, which is
    only a portion of the loan, has been reserved.

(D) The changes in the carrying amounts of mortgages for the years ended
    November 30, 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
                                                     1998             1997            1996
                                              ----------------- --------------- ---------------
<S>                                            <C>               <C>             <C>
       Balance at beginning of year .........  $   86,849,000    $  64,441,000   $  53,551,000
       Additions (deductions):
        New mortgage loans, net .............     137,242,000       67,319,000      77,369,000
        Collections of principal ............    (126,432,000)     (20,085,000)    (53,347,000)
        Transfers to Lennar Corporation .....               0      (24,918,000)     (7,063,000)
        Amortization of discount ............       1,106,000           92,000         488,000
        Deferred income recognized ..........               0                0               0
        Other ...............................        (910,000)               0      (6,557,000)
                                               --------------    -------------   -------------
       Balance at end of year ...............  $   97,855,000    $  86,849,000   $  64,441,000
                                               ==============    =============   =============
</TABLE>
                                      F-14
<PAGE>

                                 EXHIBIT INDEX
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                         DESCRIPTION
  -------                                        -----------
    <S>      <C>
    10.12    Credit Agreement dated as of May 15, 1998, between LNR Florida Funding, Inc., and
             German American Capital Corporation.

    11.1     Statement Regarding Computation of Earnings Per Share.

    13.1     Pages 16 through 43 of the 1998 Annual Report to Stockholders.

    21.1     List of subsidiaries.

    27.1     Financial Data Schedule.
</TABLE>