================================================================================

                       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, 2000

                         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. ____

         As of February 14, 2001, 23,965,026 shares of common stock and
9,999,480 shares of Class B common stock (which can be converted into common
stock) were outstanding. Of the total shares outstanding, 22,837,042 shares of
common stock and 101,550 shares of Class B common stock, having a combined
aggregate market value (assuming the Class B shares were converted) on that date
of $676,688,464 were held by non-affiliates of the registrant.

<PAGE>

Documents Incorporated by Reference       Part of Form 10-K Into Which Document
Into this Report                                  is Incorporated

LNR Property Corporation 2000
  Annual Report To Shareholders*          Parts I, II and IV

LNR Property Corporation 2001            Part III
Proxy Statement

* The LNR Property Corporation 2000 Annual Report to Shareholders is
incorporated herein only to the extent specifically stated.

================================================================================

                                       2
<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. THE FACTORS, AMONG OTHERS, THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED BY THE FORWARD
LOOKING STATEMENTS INCLUDE: (A) CHANGES IN DEMAND FOR COMMERCIAL REAL ESTATE
NATIONALLY, IN AREAS IN WHICH THE COMPANY OWNS PROPERTIES, OR IN AREAS IN WHICH
PROPERTIES SECURING MORTGAGES DIRECTLY OR INDIRECTLY OWNED BY THE COMPANY ARE
LOCATED, (B) INTERNATIONAL, NATIONAL OR REGIONAL BUSINESS CONDITIONS WHICH
AFFECT THE ABILITY OF MORTGAGE OBLIGORS TO PAY PRINCIPAL OR INTEREST WHEN IT IS
DUE, (C) THE CYCLICAL NATURE OF THE COMMERCIAL REAL ESTATE BUSINESS, (D) CHANGES
IN INTEREST RATES AND (E) CHANGES IN THE MARKET 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, finance and management company, which
structures and makes real estate and real estate related investments and,
through its expertise in developing and managing properties and working out
underperforming and non-performing commercial loans, seeks to enhance the value
of those investments. The Company and its predecessors have been engaged in the
development, ownership and management of commercial and multi-family residential
properties since 1969. Over the last seven years, the Company has grown revenues
and EBITDA at compound annual growth rates of 33.3% and 36.1%, respectively.

LNR was formed by Lennar Corporation ("Lennar") in June 1997 to separate
Lennar's real estate investment, finance 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"). In connection
with the Spin-off, the Company agreed that until 2002, it would not engage in
homebuilding or related activities (other than purchasing securities backed by
residential mortgages and providing financing to homebuilders or land
developers) and Lennar agreed that until 2002, it would not engage in various
activities in which the Company was engaged at the time of the Spin-off (which
is most of the principal activities in which the Company currently is engaged).

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

o    acquiring, developing, managing and repositioning commercial and
     multi-family residential real estate properties,

o    investing in high-yielding real estate loans and purchasing at a discount
     portfolios of loans, backed by real estate, and

o    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).

                                       3
<PAGE>

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 its 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 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.

The Company performs extensive due diligence before making investments in order
to evaluate investment risks and opportunities and see whether it will be able
to use its skills to enhance the value of the investments. For example, before
bidding for a CMBS investment, the Company performs an asset by asset evaluation
of the assets underlying the CMBS, including site visits, analyses of rent
rolls, vacancy rates, tenant strength, local markets as well as loan and
borrower characteristics. The Company's formalized pre-investment procedures
allow its senior management to exercise significant control and discipline over
all its investment decisions.

                                       4
<PAGE>

At November 30, 2000, the Company's assets consisted of:
<TABLE>
<CAPTION>
            Type of Asset           Book Value                    Description/Comment
----------------------------------------------------------------------------------------------------
                                  (In millions)
<S>                                      <C>       <C>
Real estate properties                   $871.5    Rental apartment communities, office buildings,
                                                   industrial/warehouse facilities, hotels, retail
                                                   centers and land.

Real estate loans                        244.0     Primarily first mortgage loans. Also includes
                                                   loans to developers and builders, sometimes with
                                                   profit participations.

Real estate securities                   696.4     Unrated and 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.

Partnerships                             354.0     o  Real estate property partnership investments of
                                                      $234.2 million (primarily Lennar Land Partners,
                                                      a partnership with Lennar, and 60 partnership
                                                      interests in affordable housing communities).

                                                   o  Real estate loan partnership investments of $14.2
                                                      million (primarily partnerships which acquired
                                                      portfolios of loans and/or properties at discounts).

                                                   o  A real estate securities partnership investment
                                                      of $105.6 million (Madison Square Company LLC,
                                                      a vehicle that invests primarily in CMBS).

Cash and other assets                    183.0     Cash at November 30, 2000 consisted of $2.0
                                                   million of unrestricted cash and $85.3 million of
                                                   restricted cash comprised primarily of:

                                                   o  $32.6 million of funds held in trust for asset
                                                      purchases and development and

                                                   o  $52.3 million of short-term investment
                                                      securities held as collateral for a letter of
                                                      credit that provides credit enhancement to
                                                      tax-exempt bonds.

                                                   Other assets include several small investments in
                                                   entities in related businesses, accounts
                                                   receivable, interest receivable, deferred costs
                                                   and other.

                                ---------------
    Total                             $2,348.9
                                ===============
</TABLE>

                                        5
<PAGE>

Real Estate Properties

In 1969 Lennar began engaging in the development, ownership and management of
commercial and residential multi-family rental real estate. Its initial
activities of this type included owning and operating small office buildings,
local neighborhood retail centers and other commercial and industrial facilities
on properties being developed as part of Lennar's homebuilding operations,
primarily in Florida. Gradually, this was expanded to general development,
acquisition and management of commercial and residential multi-family rental
real estate, as well as acquiring land for development and sale or leasing for
commercial uses, throughout the United States. In most instances, the Company
uses local talent to perform on-site management, leasing, maintenance and
development activities. Over the years, the Company has established
relationships with a large network of these experts across the country. The
Company often partners with some of the developers to direct the development and
repositioning of the properties. In these instances, the Company's employees
closely supervise the operation of the properties and the activities of the
outside management companies and developers. At November 30, 2000, the Company's
real estate property portfolio, which includes stabilized properties and
properties in various stages of development and/or lease-up, included:
<TABLE>
<CAPTION>
           Type                  Number of Properties        Square Feet/ Units/ Rooms
--------------------------------------------------------------------------------------------------
<S>                                      <C>              <C>
  Apartment communities                  91               14,000 units
  Office buildings                       23               5.5 million square feet
  Industrial/warehouse facilities         5               1.8 million square feet
  Hotels                                  9               1,885 rooms
  Retail centers                         11               1.2 million square feet
  Land:
     Leased                              21               2.2 million square feet (50 acres)
     Other                                -               570 acres
</TABLE>

Apartment Communities

The Company's 91 apartment communities range in size from 20 to 600 units. These
apartment communities are comprised of both market-rate and affordable housing
communities. The apartment communities are geographically located as follows:

                                   Number of
State                             Properties
-----                             ----------
Washington                             19
Oregon                                 11
California                              8
Texas                                   7
Nevada                                  7
Arizona                                 5
New Mexico                              5
Virginia                                5
Pennsylvania                            4
Illinois                                3
Montana                                 3
Colorado                                3
Florida                                 3
South Carolina                          2
Wisconsin                               2
Other                                   4
                                    ----------
                                       91
                                    ==========

                                       6
<PAGE>

During 1998, the Company entered the business of owning, developing and
syndicating multi-family and senior housing residential rental communities,
which qualify for Low-Income Housing Tax Credits ("affordable housing
communities"). The Company acquired 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"). As of November 30, 2000, AHG had ownership
interests in approximately 10,300 affordable housing apartment units (80
communities), substantially all of which qualify for Low-Income Housing Tax
Credits. These tax credits can be used to increase the Company's after-tax
income by reducing income taxes or by selling tax credits through the
syndication of partnership interests. Approximately 89% of the affordable
housing communities were constructed by AHG or under its supervision. AHG
acquired the other affordable housing communities after they were completed.

When the Company acquired AHG in 1998, its strategy was to retain the tax
credits generated through owning affordable housing communities and then use
those credits to reduce the Company's overall effective tax rate. However, the
demand for credits has since increased significantly and the Company found it
could generate higher returns on its investment by selling the credits instead
of holding them. The Company began to shift its strategy away from owning
interests in affordable housing communities toward syndicating such interests.

During 2000, the Company syndicated most of the tax credits related to nine AHG
properties by placing the limited partnership interests of the entities which
own the individual properties into a new limited liability company and selling a
majority interest in that limited liability company. The Company retained a
minority interest in the limited liability company.

Office Buildings

The Company's 23 office buildings range from one to 36 stories and have an
aggregate of 5.5 million square feet of rentable office space. Eleven of the
office buildings are in California, four are in Florida, two are in Georgia, two
are in Utah, two are in North Carolina, one is in Louisiana and one is in
Virginia.

Industrial/Warehouse Facilities

The Company's five industrial/warehouse/distribution facilities range from
53,000 square feet to 747,000 square feet of usable floor space. All of these
facilities are in California.

Hotels

The Company's nine hotels have or will have a total of 1,885 rooms. Five of the
hotels, representing 882 rooms, are stabilized and carry the name of a national
chain. The other four hotels are under development or being repositioned.

Retail Centers

The retail centers in the Company's portfolio include: (i) two small
neighborhood retail centers (sometimes referred to as "strip centers"), with
between 30,000 square feet and 36,000 square feet of rentable store space, as
well as parking areas and public areas, (ii) eight larger regional retail
centers, with 58,000 square feet to 276,000 square feet of rentable store space,
and (iii) one single tenant property with 85,000 square feet. Both of the small
retail centers and the single-tenant property are located in Florida. Of the
larger retail centers, three are in Florida, two are in Arizona, two are in
California and one is in Louisiana.

                                       7
<PAGE>

Land

In addition to the Company's operating properties, the Company owns commercially
zoned land, 2.2 million square feet of which is leased to others under long-term
ground leases and 570 acres of which is to be used for specific development
opportunities or sold.

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.

Lennar Land Partners

Before the Spin-off, Lennar and the Company transferred to a general
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. In 1999,
certain assets and liabilities of this land partnership were contributed at net
book value to a second general partnership and Lennar and the Company each
received 50% general partnership interests in the second partnership. The two
partnerships are collectively referred to as Lennar Land Partners ("LLP"). The
land was originally 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 LLP and receive a 50% interest in LLP. From November 1, 1997 through
November 30, 2000, LLP had land sale revenues of $665.8 million, of which $315.5
million was from sales to Lennar. During that period, LLP obtained control of
9,600 additional homesites, primarily through partnership arrangements. At
November 30, 2000, LLP's land consisted of 17,487 potential home sites in 25
communities, of which 14 communities with 11,615 potential home sites are in
Florida, five communities with 1,470 potential home sites are in Texas and six
communities with 4,402 potential home sites are in California. Approximately 6%
of the land was developed and ready to be built upon, 42% of the land was in
various stages of development and 52% of the land was totally undeveloped.

When Lennar contributed land to the Company and to LLP in 1997, Lennar retained
options to purchase up to approximately 22% of the contributed land at prices it
established. Through November 1999, almost all the options relative to the
originally contributed land had either been exercised or terminated. On November
30, 1999, Lennar obtained options to purchase up to an additional 6,300
homesites at prices it established, subject to agreement by the Company. At
November 30, 2000 Lennar had options remaining to purchase 2,740 homesites. 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.

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

LLP 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 LLP
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 LLP.
Lennar is free to acquire properties for itself without any consideration of
whether those properties might have been appropriate for LLP.

                                       8
<PAGE>

The Company is, in effect, able to veto any proposals that LLP 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 LLP or options relating to them. If it did, Lennar could, if it
wanted to do so, veto acquisitions by the Company.

Other than limited maintenance guarantees provided by the Company on a portion
of LLP's debt, the debt of LLP is non-recourse to the Company.

Real Estate Loans

High-Yielding Real Estate Loans

The Company invests in high-yielding real estate loan opportunities including
primarily first mortgage loan participations and mezzanine loans. At November
30, 2000, the Company's real estate loan portfolio consisted of:

         (In thousands)

                                                            Principal
                                                            Amount of
                     Type of Loan                             Loans
         -----------------------------------             ----------------
         First mortgage loans                             $      243,564
         Mezzanine loans                                          13,283
                                                                 -------
         Total                                            $      256,847
                                                                 =======

The types of loans and collateral held by the Company at November 30, 2000, were
as follows:

         (In thousands)

                                                            Principal
                                                            Amount of
                     Type of Loan                             Loans
         -----------------------------------             ----------------

         First mortgage loans
            Mixed use                                     $       89,800
            Hotel                                                 51,000
            Office buildings                                      42,318
            Convention center                                     37,500
            Multi-family                                          12,861
            Shopping center                                        7,006
            Industrial park                                        1,953
            Residential land and other                             1,126
         Mezzanine loans                                          13,283
                                                             ------------
         Total                                            $      256,847
                                                             ============

                                       9
<PAGE>

The states in which the properties securing the Company's real estate loans were
located were as follows:

         (In thousands)

                                                  Principal
                                                  Amount of
                State                               Loans
         ---------------------                 ----------------
         California                          $          53,598
         New York                                       40,850
         Nevada                                         37,500
         Massachusetts                                  35,200
         Texas                                          29,900
         Georgia                                        23,800
         Virginia                                       14,600
         Florida                                        11,443
         Minnesota                                       7,300
         Indiana                                         2,656
                                                ---------------
         Total                               $         256,847
                                                ===============

The Company's first mortgage loan portfolio consists primarily of structured
junior loan participations in high-quality short- to medium-term variable rate
first mortgage real estate loans. The Company works with leading financial
institutions in underwriting and structuring these loans. The senior
participations are securitized in many cases by the financial institutions. The
Company is designated as the special servicer for both the securitizations and
the participations. The Company had $216.4 million of these investments at
November 30, 2000.

The mezzanine loans are made to developers or builders of residential
communities. These loans are usually subordinate to construction loans, and
often provide the Company, in addition to interest income, participations in
profits after the developers or builders have achieved specified financial
targets.

The Company identifies opportunities to make commercial mortgage loans and
residential development loans through relationships with other real estate
companies, financial institutions, developers and brokers.

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. When the Company
makes subordinated loans, it may apply other guidelines, but these loans bear
interest at rates that are higher than those on senior mortgage loans, and some
of these loans provide the Company participations in profits from the underlying
properties.

Discounted Portfolios of Commercial Mortgage Loans

In the early 1990's, the Company began acquiring portfolios of non-performing
commercial mortgage loans and related pools of owned real estate assets in the
United States. The Company formed partnerships with several financial
institutions and real estate funds to purchase and handle the workout activities
for over $5 billion of these distressed commercial assets.

                                       10
<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 original
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, 2000, the partnerships had distributed a total of $1.4 billion to
the partners, of which $406 million had been distributed to the Company. The
Company also received management and asset disposition fees totaling
approximately $62.0 million. As the U.S. real estate markets strengthened in the
mid to late 1990's, substantially fewer large real estate portfolios became
available at what the Company viewed as attractive prices. The Company has not,
since August 1996, participated in a partnership which acquired a portfolio of
non-performing real estate assets in the United States. Today, most of the
assets from these domestic portfolios have been liquidated.

Beginning in late 1997, the Company entered into several partnerships to acquire
portfolios of non-performing commercial mortgage loans in Japan. In April 2000,
the Company sold its investment interests in these Japanese real estate loan
portfolios at a profit.

The Company's principal activity with respect to distressed portfolios is to
manage the workout of non-performing loans, including negotiating new or
modified financing terms and foreclosing on defaulted loans. The assets
generally are held only as long as is required to enhance their value and
prepare them for sale. 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 guaranties 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.

Real Estate Securities

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. and Standard and Poor's, 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, has given the Company their
highest rating. At November 30, 2000, the Company was entitled to be the special
servicer with regard to 65 securitized commercial mortgage pools represented by
over 10,000 underlying properties in all 50 states. The Company had investments
in subordinated CMBS related to 60 of those pools at November 30, 2000. Special
servicing is the business of managing and working out the problem assets in a
pool of commercial mortgage loans or other assets. For example, when a mortgage
loan 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

                                       11
<PAGE>

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. The ratings of the subordinated CMBS are sometimes upgraded
by the rating agencies if the performance of the pool exceeds initial
expectations. 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 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 increase the
Company's yield as a percentage of its investment.

The Company's CMBS investments are collateralized by pools of mortgage loans on
commercial real estate assets located across the country. Concentrations of
credit risk with respect to these securities are limited due to the diversity of
the underlying loans across geographical areas and diversity among property
types.

Madison Square Company LLC

In early April 1999, the Company entered into a venture, Madison Square Company
LLC ("Madison"), to acquire approximately $2.2 billion of high-yielding real
estate related assets. The partners include an affiliate of Credit Suisse First
Boston ("CSFB"), a company controlled by real estate investor Peter Bren and Sun
America Life Insurance Co. The partners have total equity commitments of $490
million, $125 million of which is provided by the Company.

CSFB has provided a credit facility to fund up to $1.76 billion of financing to
the venture, which is non-recourse to the partners.

At November 30, 2000, the Company's investment in the venture was approximately
$105.6 million, representing a 25.8% ownership interest. The Company maintains a
significant ongoing role in the venture, for which it earns fees, both as the
special servicer for the purchased CMBS transactions and as the provider of
management services. The Company also has an effective veto on Madison's
investments.

Quantitative and Qualitative Disclosures About Market Risk

The Company's business activities contain elements of market risk. The primary
market risks the Company are subject to include: (i) exposure to changes in
demand for commercial real estate space in areas in which the Company owns
properties, or in areas in which properties securing mortgages directly or
indirectly owned by the Company are located, (ii) declines in the value of real
estate assets due to changes in real estate markets or the economy in general,
(iii) the ability of mortgagors to meet debt obligations, and (iv) interest rate
risk.

The first three risk factors noted above are affected primarily by general
economic conditions and to some extent by the interest rate environment. Because
these factors are not under the Company's control, the attempts by the Company
to minimize these risks may not always be effective. The Company attempts to
manage these market risks by maintaining a portfolio of assets that is diverse
by segment, geographic area and property type. The Company does not invest in
disproportionately large assets. No single asset owned by the Company at
November 30, 2000 accounted for more than 3% of the Company's total assets. The
Company will not make any investment before extensive hands-on property level
due diligence is performed. For each asset, the Company will evaluate the local
market, rental rates, vacancy rates and, if applicable, loan and borrower
characteristics. Cash flows are evaluated at the property level and loan levels,
if applicable and assumptions are stressed for downside scenarios. Before any
investment is made, it must be approved by corporate senior management through a
formal process.

Interest rates are highly sensitive to many factors, including governmental
monetary and tax policies, domestic and international economic and political
conditions, and other factors beyond the control of the Company. The Company has
an interest rate risk management policy with the objective of (i) managing its
interest costs and (ii) reducing the effect of unpredictable changes in asset
values related to movements in interest rates on the Company's
available-for-sale securities. As more fully discussed in Note 5 to the
Company's Consolidated Financial Statements, the Company employs hedging
strategies to limit the effects of changes in interest rates on its operating
income and cash flows and on the value of its available-for-sale securities.

The Company's approach to managing interest rate risk is based primarily on
match funding, with the objective that floating-rate assets be primarily
financed by floating-rate liabilities and fixed-rate assets be primarily
financed by fixed-rate liabilities. Most of the Company's floating rate assets
are financed with floating rate debt. To the extent that the Company has
fixed-rate assets financed with floating-rate debt, the Company periodically
enters into derivative financial instruments, primarily interest rate swap
agreements, to manage its interest costs and hedge against risks associated with
changing interest rates. At November 30, 2000, 70% of the Company's existing
indebtedness had interest at variable rates. Approximately 35% of this debt was
match-funded against floating-rate assets and 15% was swapped to fixed rate. The
remaining 50% of the variable-rate indebtedness was unmatched and unhedged. As a
result, at year end, a 100 basis point change in LIBOR would have impacted the
Company's net earnings by approximately 2.6%. Subsequent to November 30, 2000,
the Company entered into additional interest rate swap agreements which fixed
the interest rates on an additional 21% of variable rate debt that was
outstanding at November 30, 2000. Including the impact of these swaps, a 100
basis point change in LIBOR would have impacted the Company's net earnings by
1.5%. At November 30, 1999, 67% of the Company's indebtedness had interest at
variable rates. Approximately 6% of this debt was match-funded against
floating-rate assets and 12% was swapped to fixed rate. The impact of a 100
basis point change in LIBOR at November 30, 1999 would have impacted the
Company's net earnings by approximately 4.9%.

To manage the risk associated with unpredictable changes in asset values related
to movements in interest rates on the Company's available-for-sale securities,
the Company periodically uses derivative financial instruments, primarily
interest rate swap agreements or treasury securities. Changes in the market
value of the Company's available-for-sale securities may not affect the
Company's net earnings or cash flow directly but may affect the unrealized gains
or losses recorded in stockholders' equity and may affect the Company's ability
to borrow.

The Company believes its interest rate risk management policy is generally
effective. Nonetheless, the Company's profitability may be adversely affected
during particular periods as a result of changing interest rates. In addition,
hedging transactions using derivative instruments involve risks such as
counter-party credit risk and legal enforceability of hedging contracts. The
counter-parties to the Company's arrangements are major financial institutions
with which the Company and its affiliates may also have other financial
relationships. These counter-parties potentially expose the Company to credit
loss in the event of non-performance.

For the year ended November 30, 2000, the Company changed its presentation of
market risk disclosure to provide more meaningful information related to the
Company's market risk. The Company believes that the disclosures above present a
complete and accurate representation of the market risk which impacts it.

                                       12
<PAGE>

Competition

In virtually all aspects of its activities, the Company competes with a variety
of public and private real estate development companies, real estate investment
trusts, investment firms, investment funds, a variety of financial
institutions 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 risk-adjusted returns. The Company believes
that its access to investment opportunities through its relationships and
presence in markets across the country, its access to capital for these asset
classes, its ability to quickly underwrite and evaluate those opportunities and
its expertise in real estate workout and management helps the Company to
compete effectively in the purchase of those types of assets. In addition, its
experience in adding value to real estate and its top rating as a special
servicer to CMBS transactions often attract firms which have access to
attractive investment opportunities but who do not have the Company's skills.

Competitive conditions relating to apartment communities, office buildings,
industrial/warehouse facilities, hotels and retail centers owned or operated by
the Company vary depending on the locations of particular properties. Most often
these facilities compete for tenants or other users based on their locations,
the facilities provided and the pricing of the leases or room rates. As general
economic conditions stayed at strong levels in 1999 and 2000, occupancies
remained in balance in many of the Company's markets, which helped to reduce the
effects of competition on 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.


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 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, and
maintain an additional 25% in Qualifying Interests or other real estate related
assets. The Company's investments in real estate and mortgage loans generally
constitute Qualifying Interests and the Company believes its investments in
subordinated CMBS constitute Qualifying Interests when it has the right, as
special servicer, to foreclose upon properties which secure loans that back the
CMBS and to take the other actions a servicer may take in connection with
defaulted loans. Analysis of the Company's assets at November 30, 2000 indicated
that (i) more than 55% of its assets were Qualifying Interests and (ii) more
than 80% of its assets were Qualifying Interests and other real estate related
assets. Therefore, it qualifies for this exemption. If, however, due to a change
in the Company's assets, or a change in the value of particular assets, the
Company was 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 it 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 its management believes would maximize its
earnings.

                                       13
<PAGE>

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 sometimes is required to comply with
federal and state laws designed to protect debtors against overbearing loan
collection techniques. However, most 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, 2000, the Company had 491 full time and 10 part time employees,
of whom 10 were senior management, 60 were corporate staff, 274 were engaged in
asset acquisitions, loan workouts and rehabilitation and disposition of
properties and 157 were hotel personnel.

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


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 17,375 square feet. The Company
has additional offices in various office buildings it owns and the Company
leases offices in eight other facilities.

Item 3. Legal Proceedings.

The Company is not subject to any legal proceedings other than suits in the
ordinary course of its business, 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 2000.

                                       14
<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 64 of
the Company's 2000 Annual Report to Stockholders.

Item 6. Selected Financial Data.

The information required by Item 6 is incorporated by reference on page 34 of
the Company's 2000 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 35
through 44 of the Company's 2000 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 45
through 63 of the Company's 2000 Annual Report to Stockholders.

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.

Not applicable.

                                       15
<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, 2001 (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:

Name/Position                                      Age          Year of Election
-------------                                      ---          ----------------

Stuart A. Miller                                    43                1997
    Chairman of the Board and Director

Steven J. Saiontz                                   42                1997
    Chief Executive Officer and Director

Jeffrey P. Krasnoff                                 45                1997
    President and Director

Shelly Rubin                                        38                1997
    Vice President and Chief Financial Officer

Zena M. Dickstein                                   43                2000
    General Counsel and Secretary

Robert Cherry                                       38                1997
    Vice President

Steven I. Engel                                     54                1997
    Vice President

Mark A. Griffith                                    44                1997
    Vice President

David G. Levin                                      45                1997
    Vice President

Ronald E. Schrager                                  39                1997
    Vice President

David O. Team                                       40                1997
    Vice President

Steven N. Bjerke                                    39                2000
    Corporate Controller

Margaret A. Jordan                                  49                1997
    Treasurer

                                       16
<PAGE>

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 the Company's business) from April 1995 to April 1997. Mr. Miller is
currently a Director of Lennar. He is the son of Leonard Miller (co-founder and
Chairman of the Board of Lennar) and the brother-in-law of Steven J. Saiontz.

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, 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 a Vice President and the Chief Financial Officer of LNR. She
became a Vice President and Chief Financial Officer 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.

Zena M. Dickstein is the Company's General Counsel and Secretary. She assumed
this position when she joined the Company in June 2000. From 1987 to June 2000,
Ms. Dickstein was at the law firm of Steel Hector and Davis LLP where she was
Deputy Chair of the firm's real estate department, headed the firm's commercial
leasing and real estate health care teams and served on various management
committees of the law firm.

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 to a substantial portion of the
Company's business). 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 October 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 to a substantial portion of
the Company's business). From 1987 to 1992, Mr. Engel was a real estate
developer and attorney.

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 LNR and Lennar's real estate investment and
management division (the predecessor to a substantial portion of the Company's
business).

                                       17
<PAGE>

David G. Levin is a Vice President, responsible for sourcing and evaluating new
investment opportunities. 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 Real Estate
Finance and Servicing 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 (the predecessor to a substantial
portion of the Company's business), 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 LNR and 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.

Steven N. Bjerke is the Company's Controller. He assumed this position in
January 2000. Mr. Bjerke joined LNR in April 1999 as Vice President of Strategic
Planning. From February 1990 to March 1999, Mr. Bjerke was employed by Ryder
System, Inc., where he held various positions in the accounting and finance
functions, most recently as group director of planning for Ryder's truck leasing
and rental division.

Margaret A. Jordan is the Company's Treasurer. She also served as Secretary of
LNR from January 2000 to June 2000. Ms. Jordan has been the Treasurer of LNR
since joining the Company in September 1997. From February 1993 to August 1997,
Ms. Jordan worked as an independent contractor and financial consultant to real
estate 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.


Item 11. Executive Compensation.

The information required by Item 11 is incorporated by reference from pages 6
through 9 of the Company's 2001 Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than March 30, 2001 (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 2
through 4 of the Company's 2001 Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than March 30, 2001 (120 days after
the end of the Company's fiscal year).

Item 13. Certain Relationships and Related Transactions.

The information required by Item 13 is incorporated by reference from page 7
of the Company's 2001 Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than March 30, 2001 (120 days after
the end of the Company's fiscal year).

                                       18
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.


(A) 1.   Financial Statements

         Items A through E are incorporated by reference from pages 45
         through 63 of the Company's 2000 Annual Report to
         Stockholders.

         Combined financial statements of Lennar Land Partners and
         Lennar Land Partners II as of November 30, 2000 and 1999 and
         for the years ended November 30, 2000, 1999 and 1998.              F-1

         Financial statements of Madison Square Company LLC as of
         December 31, 2000 and 1999 and for the year ended December 31,
         2000 and the period from March 25, 1999 (date of inception)
         through December 31, 1999.                                         F-15

    2.   Consolidated Financial Statement Schedules

         Report of Independent Auditors                                     F-27

         Schedule II - Valuation and Qualifying Accounts                    F-28

         Schedule III - Real Estate and Accumulated Depreciation            F-29

         Schedule IV - Mortgage Loans on Real Estate                        F-30

(B) 1.  Reports on Form 8-K

        None

(C) 1.  Index to Exhibits

         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.*

                                       19
<PAGE>

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

         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.*

         10.13    Amended and Restated Credit Agreement dated as of October 4,
                  1999, by and between LNR Florida Funding, Inc., and German
                  American Capital Corporation.*

         10.14    LNR Property Corporation Savings Plan.*

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

         10.16    Second Amended and Restated Revolving Credit Agreement dated
                  as of July 14, 2000, between LNR Property Corporation and
                  certain subsidiaries, the lenders and Bank of America, N.A.,
                  as administrative agent, U.S. Bank, National Association, as
                  syndication agent, Fleet National Bank, as documentation agent
                  and Guaranty Federal Bank, F.S.B., as managing agent with Bank
                  of America Securities LLC, as sole lead arranger and sole book
                  manager.

         10.17    Supplement and Amendment to Annex 1-A of the Master Repurchase
                  Agreement dated August 17, 2000 and the Master Repurchase
                  Agreement dated as of March 31, 2000, between Bear Stearns
                  International Limited and LNR CMBS Holding Corp.

         10.18    Second Supplemental Indenture dated as of February 8, 2001,
                  between LNR Property Corporation and US Bank Trust National
                  Association, as successor trustee (relating to LNR's 10-1/2%
                  Senior Subordinated Notes due 2009.) (Incorporated by
                  reference from Exhibit to Current Report on Form 8-K filed
                  February 15, 2001.)

         11.1     Statement Regarding Computation of Earnings Per Share.

         13.1     Pages 34 through 64 of the 2000 Annual Report to Stockholders.

         21.1     List of subsidiaries.


----------------------
* Previously filed.

                                       20
<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

/s/ Steven J. Saiontz                                 February 23, 2001
-----------------------------------------
Steven J. Saiontz
Chief Executive Officer and Director
(Principal Executive Officer)

       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:

             Signature and Title                            Date
             -------------------                            ----


/s/ Stuart A. Miller                                  February 23, 2001
-----------------------------------------
Stuart A. Miller
Chairman of the Board and Director


/s/ Steven J. Saiontz                                 February 23, 2001
-----------------------------------------
Steven J. Saiontz
Chief Executive Officer and Director
(Principal Executive Officer)


/s/ Jeffrey P. Krasnoff                               February 23, 2001
-----------------------------------------
Jeffrey P. Krasnoff
President and Director


/s/ Shelly Rubin                                      February 23, 2001
-----------------------------------------
Shelly Rubin
Vice President and Chief
Financial Officer (Principal
Financial Officer)


/s/ Steven N. Bjerke                                  February 23, 2001
-----------------------------------------
Steven N. Bjerke
Corporate Controller (Principal
Accounting Officer)

                                       21
<PAGE>

/s/  Brian L. Bilzin                                  February 23, 2001
-----------------------------------------
Brian L. Bilzin
Director


/s/ Sue M. Cobb                                       February 23, 2001
-----------------------------------------
Sue M. Cobb
Director


/s/ Edward Thaddeus Foote II                          February 23, 2001
-----------------------------------------
Edward Thaddeus Foote II
Director


/s/ Stephen E. Frank                                  February 23, 2001
-----------------------------------------
Stephen E. Frank
Director


/s/ Leonard Miller                                    February 23, 2001
-----------------------------------------
Leonard Miller
Director

                                       22
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Partners of Lennar Land Partners and Lennar Land Partners II:

We have audited the accompanying combined balance sheets of Lennar Land Partners
and Lennar Land Partners II, all of which are under common ownership and common
management, (collectively, the "Partnerships") as of November 30, 2000 and 1999
and the related combined statements of operations, cash flows and partners'
capital for the years ended November 30, 2000, 1999 and 1998. These combined
financial statements are the responsibility of the Partnerships' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 combined financial statements referred to above present
fairly, in all material respects, the financial position of Lennar Land Partners
and Lennar Land Partners II at November 30, 2000 and 1999, and the combined
results of their operations and their cash flows for the years ended November
30, 2000, 1999 and 1998 in conformity with accounting principles generally
accepted in the United States of America.

DELOITTE & TOUCHE LLP
Certified Public Accountants

Miami, Florida
January 9, 2001


                                      F-1
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
                             Combined Balance Sheets
                           November 30, 2000 and 1999


                                                      2000              1999
                                                  ------------      -----------
Assets
    Cash                                          $ 14,695,398       48,141,744
    Restricted cash                                         --       90,000,000
    Land held for development and sale             218,171,259      276,235,050
    Operating properties and equipment, net         45,622,856       17,635,188
    Investments in partnerships                     23,177,423       25,498,018
    Other assets                                    18,498,526       20,627,032
                                                  ------------      -----------
             Total assets                         $320,165,462      478,137,032
                                                  ============      ===========

Liabilities and Partners' Capital
    Accounts payable and other liabilities        $ 22,859,353       23,296,651
    Deferred revenue                                23,060,000        5,210,000
    Due to affiliate                                 1,825,560          555,064
    Mortgage notes and other debts payable         115,038,341      219,209,559
                                                  ------------      -----------
             Total liabilities                     162,783,254      248,271,274

    Partners' capital                              157,382,208      229,865,758
                                                  ------------      -----------
                                                  $320,165,462      478,137,032
                                                  ============      ===========



     See accompanying notes to combined financial statements.


                                      F-2
<PAGE>

                              Lennar Land Partners
                          and Lennar Land Partners II
                       Combined Statements of Operations
              For the Years Ended November 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>

                                                    2000            1999            1998
                                                 -----------     -----------     -----------
<S>                                             <C>              <C>              <C>
Revenues
   Land sales:
     Affiliate homesite sales                   $112,273,630     109,327,044      90,716,843
     Third party homesite sales                   87,647,803      91,212,830      94,197,102
     Third party acreage sales                    15,353,949      17,965,220      39,454,724
                                                 -----------     -----------     -----------
        Total land sales                         215,275,382     218,505,094     224,368,669
   Equity in earnings of partnerships             21,217,611      18,160,134      29,190,882
   Club operations                                 3,428,590       3,027,448       2,158,698
   Amortization of negative goodwill                      --       1,351,112       9,502,911
   Other                                          16,565,496      10,409,582       5,305,849
                                                 -----------     -----------     -----------
           Total revenues                        256,487,079     251,453,370     270,527,009
                                                 -----------     -----------     -----------

Costs and Expenses
   Cost of land sales:
     Affiliate homesite sales                     72,700,370      77,415,895      66,426,824
     Third party homesite sales                   68,911,101      77,552,825      68,606,945
     Third party acreage sales                     7,935,841      11,265,515      25,383,793
                                                 -----------     -----------     -----------
        Total cost of land sales                 149,547,312     166,234,235     160,417,562
   Selling, general and administrative            27,861,492      13,012,117      12,534,503
   Management fees paid to affiliate               6,503,557       6,000,000       6,000,000
   Club operations                                 3,258,268       3,061,932       2,333,494
                                                 -----------     -----------     -----------
           Total costs and expenses              187,170,629     188,308,284     181,285,559
                                                 -----------     -----------     -----------
Net Income                                      $ 69,316,450      63,145,086      89,241,450
                                                 ===========     ===========     ===========

</TABLE>


     See accompanying notes to combined financial statements.


                                      F-3
<PAGE>
                              Lennar Land Partners
                           and Lennar Land Partners II
                    Combined Statements of Partners' Capital
              For the Years Ended November 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                               Lennar Land           LNR Land
                             Partners Sub, Inc.  Partners Sub, Inc.
                                and Lennar            and LNR
                              Land Partners        Land Partners
                               Sub II, Inc.         Sub II, Inc.        Total
                               -------------       -------------    ------------
<S>                            <C>                   <C>            <C>
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
Distributions                    (16,292,689)       (16,292,689)    (32,585,378)
Net income                        31,572,543         31,572,543      63,145,086
                               -------------       -------------    ------------
Balance at November 30, 1999     114,932,879        114,932,879     229,865,758
Contributions                      2,000,000          2,000,000       4,000,000
Distributions                    (72,900,000)       (72,900,000)   (145,800,000)
Net income                        34,658,225         34,658,225      69,316,450
                               -------------       -------------    ------------
Balance at November 30, 2000   $  78,691,104         78,691,104     157,382,208
                               =============       =============    ============
</TABLE>


See accompanying notes to combined financial statements.


                                      F-4
<PAGE>
                              Lennar Land Partners
                           and Lennar Land Partners II
                        Combined Statements of Cash Flows
              For the Years Ended November 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                2000              1999              1998
                                                                            -------------     -------------     -------------
<S>                                                                         <C>                  <C>               <C>
Cash flows from operating activities:
     Net income                                                             $  69,316,450        63,145,086        89,241,450
     Adjustments to reconcile net income to net cash provided
       by operating activities:
         Depreciation and amortization, net                                     1,084,423          (970,692)       (7,763,691)
         Equity in earnings of partnerships                                   (21,217,611)      (18,160,134)      (29,190,882)
         Gain on sales of operating properties and equipment                   (6,782,226)               --                --
         Changes in assets and liabilities:
           Decrease in land held for development and sale                      36,885,909        56,675,913        72,240,180
           (Increase) decrease in other assets                                  2,128,506         2,271,709        (5,876,994)
           Increase (decrease) in accounts payable and other liabilities         (437,298)      (22,830,010)       18,590,441
           Increase in deferred revenue                                        17,850,000         5,210,000                --
           Increase (decrease) in due to affiliate                              1,270,496          (553,128)       (7,816,078)
                                                                            -------------     -------------     -------------
             Net cash provided by operating activities                        100,098,649        84,788,744       129,424,426
                                                                            -------------     -------------     -------------

Cash flows from investing activities:
     Operating properties and equipment:
         Additions                                                            (13,649,216)       (1,460,753)         (464,637)
         Proceeds from sales                                                   12,251,730                --                --
     Investments in partnerships                                                       --       (50,847,716)      (27,789,507)
     Distributions from partnerships                                           23,823,709        49,055,656        39,314,754
                                                                            -------------     -------------     -------------
             Net cash provided by (used in) investing activities               22,426,223        (3,252,813)       11,060,610
                                                                            -------------     -------------     -------------

Cash flows from financing activities:
     Net borrowings (repayments) under revolving credit facilities             68,963,236        (9,070,153)        3,356,498
     Mortgage notes and other debts payable:
        Proceeds from borrowings                                                       --       117,643,531         4,448,103
        Principal payments                                                   (173,134,454)      (34,758,035)      (63,131,658)
     Decrease (increase) in restricted cash                                    90,000,000       (90,000,000)               --
     Contributions received from partners                                       4,000,000                --         8,900,000
     Distributions to partners                                               (145,800,000)      (32,585,378)      (84,000,000)
                                                                            -------------     -------------     -------------
             Net cash used in financing activities                           (155,971,218)      (48,770,035)     (130,427,057)
                                                                            -------------     -------------     -------------

     Net increase (decrease) in cash                                          (33,446,346)       32,765,896        10,057,979
     Cash at beginning of year                                                 48,141,744        15,375,848         5,317,869
                                                                            -------------     -------------     -------------
     Cash at end of year                                                    $  14,695,398        48,141,744        15,375,848
                                                                            =============     =============     =============


     Supplemental disclosures of non-cash investing
       and financing activities:
         Contribution of land to partnerships                               $          --                --        18,125,732
         Consolidation of entity previously accounted for under
           the equity method - assets and liabilities recorded:
           Land held for development and sale                               $          --        83,132,482                --
           Mortgage notes and other debts payable                                      --       (39,000,000)               --
           Other, net                                                                  --        (2,387,513)               --
           Investments in partnerships                                                 --       (41,744,969)               --
                                                                            -------------     -------------     -------------
                                                                            $          --                --                --
                                                                            =============     =============     =============
</TABLE>


     See accompanying notes to combined financial statements.


                                      F-5
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
                     Notes to Combined Financial Statements


1.  Organization and Summary of Significant Accounting Policies

Description of Organization and Operations

Lennar Land Partners ("LLP") 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. ("Lennar Sub I"), a
wholly-owned subsidiary of Lennar Corporation ("Lennar"), and LNR Land Partners
Sub, Inc. ("LNR Sub I"), a wholly-owned subsidiary of LNR Property Corporation
("LNR"). All amounts were recorded by LLP at the carrying value of the partners.
Lennar Sub I and LNR Sub I each received 50% partnership interests in LLP.

In July 1999, certain assets and liabilities of LLP were contributed at net book
value to a second general partnership, Lennar Land Partners II ("LLP II").
Lennar, through Lennar Land Partners Sub II, Inc. ("Lennar Sub II"), and LNR,
through LNR Land Partners Sub II, Inc. ("LNR Sub II"), each received 50%
partnership interests in LLP II.

Lennar Sub I is the managing general partner of LLP and Lennar Sub II is the
managing general partner of LLP II.

LLP and LLP II (the "Partnerships") are under common ownership and management
and are engaged in the acquisition, development and sale of land. Additionally,
the Partnerships own and operate recreational facilities in several of the
communities they develop. The Partnerships also invest in partnerships (and
similar entities) which acquire, develop and sell land and, in certain
instances, also build and sell homes.


Basis of Combination

The accompanying combined financial statements include the accounts of the
Partnerships, their wholly-owned subsidiaries and partnerships (and similar
entities) in which a controlling interest is held. The Partnerships' 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.

In 1999, the Partnerships obtained a controlling interest in one of its
partnerships which was being accounted for by the equity method. At such time,
the Partnerships began consolidating the assets and liabilities of the entity.
The effect on the Combined Balance Sheets of consolidating this entity is
included in the Combined Statements of Cash Flows under Supplemental Disclosures
of Non-Cash Investing and Financing Activities.


Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.


                                      F-6
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


1.  Organization and Summary of Significant Accounting Policies (continued)

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.


Cash

The Partnerships consider all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.


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 that long-lived assets be evaluated for
impairment based on undiscounted future cash flows of the assets. Write-downs of
land deemed to be impaired will be recorded as adjustments to the cost basis of
the respective land. As of November 30, 2000 and 1999, 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 2000, 1999 and 1998, interest costs of
$10,472,188, $6,585,214 and $10,283,403, respectively, were incurred and
$9,048,037, $6,328,383 and $10,283,403, respectively, were 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 15 years.


Negative Goodwill

At the formation of LLP, certain assets and the related negative goodwill were
contributed. The negative goodwill was amortized over the lives of the assets
acquired that gave rise to the negative goodwill. Negative goodwill was fully
amortized at November 30, 1999.


                                      F-7
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


1.  Organization and Summary of Significant Accounting Policies (continued)

Income Taxes

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


New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Standards ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138, which is
required to be adopted for fiscal years beginning after June 15, 2000. SFAS No.
133 will require the Partnerships to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the nature of
the hedge, a change in the fair value of the derivative will either be offset
against the change in the fair value of the hedged asset, liability, or firm
commitment through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. The implementation of SFAS No. 133
will not have a material impact on the Partnerships' results of operations or
financial position.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements, which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. SAB No. 101 is
applicable for the Partnerships beginning in the fourth quarter of the year
ending November 30, 2001. Management does not currently believe that the
implementation of SAB No. 101 will have a material impact on the Partnership's
results of operations or financial position.


Reclassifications

Certain prior year amounts have been reclassified to conform with the 2000
presentation.


                                      F-8
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)

2.   Land Held for Development and Sale

Land held for development and sale consists of individual homesites 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 at November 30, 2000 and 1999.

3.   Operating Properties and Equipment

Operating properties and equipment at November 30, 2000 and 1999 consisted of
the following:

                                                      2000             1999
                                                  ------------     ------------
         Community recreational facilities        $ 43,598,589       14,823,419
         Sales center                                1,890,549        1,890,549
                                                  ------------     ------------
             Total land and buildings               45,489,138       16,713,968
         Furniture, fixtures and equipment           3,064,197        3,259,254
                                                  ------------     ------------
                                                    48,553,335       19,973,222
         Accumulated depreciation                   (2,930,479)      (2,338,034)
                                                  ------------     ------------
                                                  $ 45,622,856       17,635,188
                                                  ============     ============


                                      F-9
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


4.   Investments in Partnerships

Summarized financial information on a combined 100% basis related to the
Partnerships' significant partnerships and similar entities accounted for by the
equity method as of November 30, 2000 and 1999 and for the years ended November
30, 2000, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
                                                            2000              1999
                                                         ------------     ------------
<S>                                                      <C>                 <C>
         Assets:
         Cash                                            $ 11,676,310        4,583,899
         Real estate inventories                          105,959,116      126,322,905
         Other assets                                       3,819,111        2,595,562
                                                         ------------     ------------
                                                         $121,454,537      133,502,366
                                                         ============      ===========
         Liabilities and equity:
         Accounts payable and other liabilities          $ 18,380,492       29,861,086
         Notes and mortgages payable                       55,066,610       39,174,379
         Equity of:
             The Partnerships                              23,177,423       25,832,402
             Others                                        24,830,012       38,634,499
                                                         ------------     ------------
                                                         $121,454,537      133,502,366
                                                         ============      ===========
</TABLE>

<TABLE>
<CAPTION>
                                                          2000             1999             1998
                                                      ------------     ------------     ------------
<S>                                                   <C>               <C>              <C>
         Revenues                                     $139,289,132      210,032,897      206,294,488
         Costs and expenses                            104,852,299      171,286,026      140,533,692
                                                      ------------     ------------     ------------
         Earnings of partnerships                     $ 34,436,833       38,746,871       65,760,796
                                                      ============     ============     ============
         The Partnerships' share of earnings          $ 21,217,611       18,160,134       29,190,882
                                                      ============     ============     ============
</TABLE>


At November 30, 2000 and 1999, the Partnerships' 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 Partnerships
share in the profits and losses of these partnerships and, when appointed the
manager of the partnerships, receive fees for the management of the assets. The
outstanding debt of these partnerships is not guaranteed by the Partnerships.
However, both Lennar and LNR provide limited maintenance guarantees on the debt
of one of the partnerships (see Notes 7 and 8).

                                      F-10
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


5.  Accounts Payable and Other Liabilities

Accounts payable and other liabilities at November 30, 2000 and 1999 consisted
of the following:


                                                 2000             1999
                                              -----------     -----------
         Accounts payable                     $ 5,978,564      12,729,777
         Deposits                               4,939,348       3,204,965
         Deferred income                        2,400,339         880,533
         Accrued property taxes                 1,573,865       2,791,743
         Other liabilities                      7,967,237       3,689,633
                                              -----------     -----------
                                              $22,859,353      23,296,651
                                              ===========     ===========

6.  Deferred Revenue

The Partnerships entered into a Club Option Agreement whereby the Partnerships
granted to a private equity membership club (the "Club") the right and option to
purchase certain recreational facilities (the "Club Facilities"). Pursuant to
the Club Option Agreement, all membership contributions received by the Club are
paid to the Partnerships as a non-refundable option deposit and shall be applied
toward the purchase price of the Club Facilities. Deferred revenue of
$23,060,000 and $5,210,000 had been collected as of November 30, 2000 and 1999,
respectively.

                                      F-11
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)

7.  Mortgage Notes and Other Debts Payable

Mortgage notes and other debts payable at November 30, 2000 and 1999 consisted
of the following:
<TABLE>
<CAPTION>
                                                                              2000             1999
                                                                          ------------     ------------
<S>                                                                       <C>                <C>
         Revolving credit facilities with floating interest rates
           (ranging from 8.4% to 9.5% at November 30, 2000),
           secured by certain real estate, due through 2002               $107,231,936       40,000,000

         Mortgage notes on land, with a fixed interest rate
           of 7% at November 30, 2000, secured by certain
           real estate, due 2002                                             7,656,405       29,498,081

         Term loan note with a floating interest rate, collateralized
           by cash, paid in 2000                                                    --       90,000,000

         Term loan note with a floating interest rate, secured by
           certain real estate, paid in 2000                                        --       43,167,199

         Revolving credit notes payable with floating interest
           secured by certain real estate, paid in 2000                             --          107,756

         Unsecured notes payable                                               150,000       16,436,523
                                                                          ------------     ------------
                                                                          $115,038,341      219,209,559
                                                                          ============     ============
</TABLE>

In 2000, the Partnerships obtained a $75,000,000 revolving credit facility with
a financial institution, which was initially used to refinance existing
indebtedness and subsequently used to acquire land, land development and for
other general purposes, including distributions to partners. This credit
facility matures in February 2002 and is subject to a one-year extension at the
request of the Partnerships and with the consent of the financial institution.
Borrowings under this credit facility are limited by certain borrowing base
calculations and are collateralized by real estate in the borrowing base. At
November 30, 2000, $56,670,992 was outstanding. Interest is payable monthly and
is tied to the Prime Rate. The interest rate was 9.5% at November 30, 2000.

Additionally in 2000, the Partnerships obtained a $20,000,000 revolving credit
facility with a financial institution for the financing of certain real estate.
This credit facility matures in January 2002 and is subject to a one-year
extension at the request of the Partnerships and with the consent of the
financial institution. Borrowings under this credit facility are limited by
certain borrowing base calculations and are collateralized by real estate in the
borrowing base. Both Lennar and LNR provide limited maintenance guarantees on
this obligation. At November 30, 2000, $10,560,944 was outstanding. Interest is
based on LIBOR and was 8.4% at November 30, 2000.


                                      F-12
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


7.  Mortgage Notes and Other Debts Payable (continued)

In 1999, the Partnerships obtained a controlling interest in one of its
partnerships which was being accounted for by the equity method. This
partnership has a $40,000,000 line of credit facility with a financial
institution. This credit facility matured in December 2000 and was modified
subsequent to year end. The modification provides for a new maturity date of
December 2001 and quarterly principal payments of $5,000,000. This facility is
subject to a one-year extension at the request of the Partnerships and with the
consent of the financial institution. Interest is payable monthly and is based
on LIBOR. Lennar provides limited maintenance guarantees on this obligation.
Outstanding borrowings on the line of credit are collateralized by real estate
and were $40,000,000 at November 30, 2000 and 1999. The interest rate at
November 30, 2000 and 1999 was 8.4% and 7.2%, respectively.

The minimum aggregate principal maturities of mortgage notes and other debts
payable subsequent to November 30, 2000 are as follows: 2001 - $22,806,405 and
2002 - $92,231,936.

8.  Related Party Transactions

Lennar is paid a monthly fee for managing the day-to-day operations of the
Partnerships. 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 shares some of its employees, contractors, agents,
facilities and equipment and other expenses with the Partnerships (the "Indirect
Expenses"). The reimbursement for the Indirect Expenses is reflected as
management fees paid to affiliate in the combined statements of operations. The
Partnerships reimbursed Lennar $2,835,875, $1,534,164 and $1,683,251 for Direct
Expenses in 2000, 1999 and 1998, respectively, and $6,503,557, $6,000,000 and
$6,000,000 for Indirect Expenses in 2000, 1999 and 1998, respectively.

The Partnerships, in the ordinary course of business, sell land to Lennar.
During 2000, these land sales amounted to $112,273,630 in revenues and generated
gains totaling $39,573,260. During 1999, these land sales amounted to
$109,327,044 in revenues and generated gains totaling $31,911,149. During 1998,
these land sales amounted to $90,716,843 in revenues and generated gains
totaling $24,290,019. The Partnerships believe amounts paid by Lennar for land
sales approximate amounts that would have been paid by independent third
parties.

At November 30, 2000, Lennar and LNR provided limited maintenance guarantees on
certain indebtedness totaling $10,560,944 of the Partnerships' debt and each
provided a 50% limited maintenance guarantee on $36,863,000 of the debt of one
of the Partnerships' partnerships. At November 30, 2000, Lennar provided limited
maintenance guarantees on certain indebtedness totaling $40,150,000 of the
Partnerships' debt. During 2000, 1999 and 1998, the Partnerships paid the
partners guarantee fees totaling $33,554, $283,721 and $632,004, respectively.

During 1999, the Partnerships entered into a transaction with Lennar that was
accounted for as a nonmonetary exchange of similar assets. The net assets
received in the transaction were recorded by the Partnerships at the net book
value of the assets given up of $42,173,384.


                                      F-13
<PAGE>

                              Lennar Land Partners
                           and Lennar Land Partners II
               Notes to Combined Financial Statements (continued)


8.  Related Party Transactions (continued)

Lennar funds the deficits of the community recreational facilities of the
Partnerships' non-master planned communities. During 2000, 1999 and 1998, the
Partnerships received deficit funding from Lennar of $508,109, $521,198 and
$1,144,890, respectively.

At November 30, 2000 and 1999, the Partnerships owed Lennar $1,825,560 and
$555,064, respectively, for advances, Indirect Expenses and Direct Expenses.

9.  Commitments and Contingent Liabilities

The Partnerships are 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.

The Partnerships are parties to various claims, legal actions and complaints
arising in the ordinary course of business. In the opinion of management, the
disposition of these matters will not have a material adverse effect on the
financial condition of the Partnerships.

Through an arrangement with Lennar as managing partner, the Partnerships are
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 $9,400,000 at
November 30, 2000.


                                      F-14
<PAGE>
                         Report of Independent Auditors

To the Members of
Madison Square Company LLC

We have audited the accompanying balance sheets of Madison Square Company LLC
(the Company) as of December 31, 2000 and 1999, and the related statements of
income, members' equity, and cash flows for the year ended December 31, 2000 and
the period from March 25, 1999 (date of inception) through December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
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 financial statements referred to above present fairly, in
all material respects, the financial position of Madison Square Company LLC as
of December 31, 2000 and 1999, and the results of its operations and its cash
flows for the year ended December 31, 2000 and the period from March 25, 1999
(date of inception) through December 31, 1999, in conformity with accounting
principles generally accepted in the United States.

                                       Ernst & Young LLP

Miami, Florida
February 6, 2001

                                      F-15

<PAGE>


                           Madison Square Company LLC

                                 Balance Sheets

                                            December 31,
                                          2000        1999
                                       ----------------------
                                          (in thousands)

Assets
Cash and cash equivalents              $    2,153  $    5,190
Investment securities                   1,512,561   1,638,669
Other assets                               14,550      17,265
                                       ----------------------
Total assets                           $1,529,264  $1,661,124
                                       ======================

Liabilities and members' equity
Accounts payable and accrued expenses  $    5,132  $    5,775
Loan payable to affiliate               1,098,705   1,263,145
                                       ----------------------
Total liabilities                       1,103,837   1,268,920

Members' equity                           425,427     392,204
                                       ----------------------
Total liabilities and members' equity  $1,529,264  $1,661,124
                                       ======================



See accompanying notes.


                                      F-16
<PAGE>

                           Madison Square Company LLC

                              Statements of Income

                                                                Period from
                                                                  March 25
                                                                1999 (date of
                                                                  inception)
                                               Year ended         through
                                               December 31,      December 31,
                                                  2000              1999
                                               ------------     --------------
                                                      (in thousands)

Revenues:
   Interest income                              $227,342          $121,053
   Other income                                   19,863             4,886
                                                --------------------------
Total revenues                                   247,205           125,939

Expenses:
   General and administrative expenses             9,604             9,611
   Interest expense                               91,061            53,522
                                                --------------------------
Total expenses                                   100,665            63,133
                                                --------------------------

Net income                                      $146,540          $ 62,806
                                                ==========================



See accompanying notes.

                                      F-17
<PAGE>
                           Madison Square Company LLC

                          Statements of Members' Equity

         Year ended December 31, 2000 and the period from March 25, 1999
                  (date of inception) through December 31, 1999
                                 (in thousands)
<TABLE>
<CAPTION>
                                           Madison
                                           Square              Madison               LNR                Best
                                          Management           Square              Madison             Property
                                            LLC               Equity, Inc.       Square, Inc.         Fund, L.P.
                                          ----------------------------------------------------------------------

<S>                                       <C>                 <C>                 <C>                 <C>
Initial members' contributions            $     444           $  95,427           $  63,073           $  63,073
   Contributions from members                   191              40,963              27,075              23,394
   Assignment of member interest                 --                  --                  --             (93,787)
   Distributions to members                     (50)            (10,789)             (7,130)             (4,486)
   Net income                                   122              26,302              17,385              11,806
                                          ----------------------------------------------------------------------
Balance at December 31, 1999                    707             151,903             100,403                  --
   Distributions to members                  (3,188)            (40,302)            (30,138)                 --
   Net income                                 3,248              53,264              38,703                  --
                                          -----------------------------------------------------------------------
Balance at December 31, 2000              $     767           $ 164,865           $ 108,968           $      --
                                          =======================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                               Sun America
                                                                 Life                                    Total
                                              BPF              Insurance             BPF/LNR            Members'
                                              LLC                 Co.              Partnership           Equity
                                          ----------------------------------------------------------------------

<S>                                       <C>                 <C>                 <C>                 <C>
Initial members' contributions            $      --           $      --           $       --          $ 222,017
   Contributions from members                 3,681              37,504                   --            132,808
   Assignment of member interest             93,787                  --                   --                 --
   Distributions to members                  (2,644)               (328)                  --            (25,427)
   Net income                                 5,579               1,612                   --             62,806
                                          ---------------------------------------------------------------------
Balance at December 31, 1999                100,403              38,788                   --            392,204
   Distributions to members                 (30,138)             (9,551)                  --           (113,317)
   Net income                                38,703              12,622                   --            146,540
                                          ---------------------------------------------------------------------
Balance at December 31, 2000              $ 108,968           $  41,859           $       --          $ 425,427
                                          =====================================================================
</TABLE>

See accompanying notes

                                      F-18
<PAGE>
                           Madison Square Company LLC

                            Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                         Period from
                                                                                           March 25
                                                                                        1999 (date of
                                                                                          inception)
                                                                         Year ended        through
                                                                        December 31,     December 31,
                                                                            2000             1999
                                                                        ----------------------------
                                                                               (in thousands)
<S>                                                                     <C>              <C>
Operating activities
Net income                                                              $   146,540      $    62,806
Adjustments to reconcile net income to net cash provided by
   operating activities:
     Accretion of purchase discount                                         (16,134)          (2,327)
     Changes in operating assets and liabilities:
       Decrease in investment securities (deferred interest)                  1,421           21,409
       Decrease (increase) in other assets                                    2,715           (2,979)
       (Decrease) increase in accounts payable and accrued expenses            (643)           5,775
                                                                        ----------------------------
Net cash provided by operating activities                                   133,899           84,684

Investing activities
Purchase of investment securities                                                --       (1,750,052)
Principal repayments from investment securities                             140,821           78,015
                                                                        ----------------------------
Net cash provided by (used in) investing activities                         140,821       (1,672,037)

Financing activities
Proceeds from loan payable to affiliate                                          --        1,400,042
Principal payments on loan payable to affiliate                            (164,440)        (136,897)
Cash contributions from members                                                  --          354,825
Cash distributions to members                                              (113,317)         (25,427)
                                                                        ----------------------------
Net cash (used in) provided by financing activities                        (277,757)       1,592,543
                                                                        ----------------------------

Net (decrease) increase in cash and cash equivalents                         (3,037)           5,190
Cash and cash equivalents at beginning of period                              5,190               --
                                                                        ----------------------------
Cash and cash equivalents at end of period                              $     2,153      $     5,190
                                                                        ============================
</TABLE>

See accompanying notes.

                                      F-19
<PAGE>

                           Madison Square Company LLC

                          Notes to Financial Statements

                                December 31, 2000

1. Organization and Nature of Business

Madison Square Company LLC (Company), a Delaware limited liability company, was
formed on March 25, 1999, for the purpose of investing in unrated and
non-investment grade rated commercial mortgage backed securities (CMBS), as
further discussed in Notes 2 and 3.

The Company's members currently consist of BPF/LNR Partnership (BPF/LNR), a
non-equity managing member, and as non-managing members, Madison Square
Management LLC (Madison), a 0.1815% member, Madison Square Equity, Inc. (Madison
Equity), a 39.0084% member, LNR Madison Square, Inc. (LNR), a 25.78285% member,
BPF LLC (BPF LLC), a 25.78285% member, and SunAmerica Life Insurance Co.
(SunAmerica), a 9.2444% member.

The original members of the Company were Madison, as managing member, and as
non-managing members, Madison Equity, LNR, and Best Property Fund, L.P. (BPF).
On July 1, 1999, effective as of March 25, 1999, BPF transferred to LNR an
interest in the Company relating to a capital commitment in the amount of $25
million and a related capital contribution in the amount of $12.6 million,
causing BPF and LNR to have equal members' interest of 28.4091%. Effective
October 20, 1999, BPF assigned its interest to BPF LLC. On November 3, 1999,
BPF/LNR was admitted as a non-equity member. SunAmerica was admitted as a member
on November 4, 1999, after purchasing its interest from the then existing
members. Lastly, on November 22, 1999, the members' ownership percentages were
equalized to achieve the target ownership percentages as if all capital
commitments were fully funded. Going forward, the ownership percentages that
currently exist will remain constant and any additional capital contributions
will be made in those proportions.

The Operating Agreement sets forth the basis for capital contributions,
allocations and distributions to the members including allocations of profits
and losses, special allocations for tax purposes and distributions of cash flow
from the Company.

The Company will cease to exist on March 31, 2004, unless sooner terminated or
further extended pursuant to the provisions in the Operating Agreement.

                                      F-20
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

For purposes of the statements of cash flow, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents. Concentrations of credit risk and market risk associated with
cash and cash equivalents are considered low due to the credit quality of the
issuers of the financial instruments held by the Company and due to their short
duration to maturity.

Investment Securities

Investment securities, which consist of investments in rated and unrated
portions of various issues of CMBS and a participating whole loan pool, are
accounted for in accordance with Statement of Financial Accounting Standards No.
115 (FAS 115), Accounting for Certain Investments in Debt and Equity Securities.
FAS 115 requires that debt and equity securities that have determinable fair
values be classified as available-for-sale unless they are classified as
held-to-maturity or trading. Securities classified as held-to-maturity are
carried at amortized cost because they are purchased with the intent and ability
to hold to maturity. At December 31, 2000 and 1999, all investment securities
held by the Company are classified as held-to-maturity.

Interest Income Recognition

In accordance with Financial Accounting Standards Statement No. 91,
Non-Refundable Fees and Costs Associated with Originating or Acquiring Loans and
Initial Direct Costs of Leases, the Company recognizes interest income on its
CMBS using the effective interest method, which results in a level yield over
the projected life of the investments. Changes in estimated yields are due to
revisions in estimates of future credit losses, losses incurred and actual
prepayment speeds. During 2000 and 1999, the Company recognized income based
upon yields ranging from approximately 11.3% to 34.3% and 9.6% to 34.3%,
respectively, with a weighted average of 14.9% and 12.7%, respectively.

                                      F-21
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Impact of New Accounting Standards

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities (FAS 133), which is
required to be adopted in years beginning after June 15, 1999. Subsequent to the
issuance of FAS 133, the Financial Accounting Standards Board issued SFAS No.
137, Accounting for Derivative Instruments and Hedging Activities--Deferral of
the Effective Date of FASB Statement No. 133, which extended the effective date
to fiscal years beginning after June 15, 2000. Because of the Company's minimal
use of derivatives, management does not anticipate that the adoption of the new
statements will have a significant effect on earnings or the financial position
of the Company.

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.

Income Tax Matters

The accompanying financial statements include no provision for income taxes,
since pursuant to the provisions of the applicable federal, state, and local
taxing authorities, each item of income, gain, loss, deduction or credit is
reportable by the members.

                                      F-22
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

3. Investment Securities

Investment securities are stated at amortized cost which represents actual cost
adjusted for discount accretion using the effective interest method. Investment
securities consists of the following (in thousands):

                                               December 31,
                                            2000           1999
                                        ---------------------------

         Certificate face value         $2,037,435       $2,184,605
         Purchase discount                (502,044)        (524,528)
         Deferred interest                 (22,830)         (21,408)
                                        ---------------------------
                                        $1,512,561       $1,638,669
                                        ===========================

In general, principal payments on each class of security are made in the order
of the stated maturities of each class so that no payment of principal will be
made on any class until all classes having an earlier maturity date have been
paid in full. Each security is, in effect, subordinate to other securities of
classes with earlier maturities. The principal repayments on a particular class
are dependent upon collections on the underlying mortgages, affected by
prepayments and extensions, and as a result, the actual maturity of any class of
securities may differ from its stated maturity. In addition, the Company has an
investment in a participating whole loan pool and has begun to receive principal
payments from this investment. At December 31, 2000, the Company's investment
securities, with stated maturities through 2023, have coupon rates ranging from
5.86% to 9.56%.

The investments represent securities that are collateralized by pools of
mortgage loans on commercial real estate assets located across the country.
Concentrations of credit risk with respect to these securities are limited due
to the diversity of the underlying loans across geographical areas and diversity
among property types. In addition, the Company only invests in these securities
when one of its affiliates performs significant due diligence analysis on the
real estate supporting the underlying loans and when it has the right to select
an affiliate as special servicer for the entire securitization. The special
servicer impacts the performance of the securitization by using its loan workout
and asset management expertise to resolve non-performing loans.

                                      F-23
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

4. Loan Payable to Affiliate

The purchases of the investments were partially financed by loans under the
Company's credit facility of $1.76 billion from Credit Suisse First Boston
Mortgage Capital, LLC (CSFB), an affiliate of Madison and Madison Equity.
Interest is payable at a rate per annum equal to the sum of the adjusted LIBOR
plus 125 basis points during the original term of the facility (7.94% and 7.71%
at December 31, 2000 and 1999, respectively). The loans are collateralized by
substantially all of the assets of the Company and have an original maturity of
March 31, 2002. The Credit Agreement provides for two one-year extensions. Upon
each extension, the underlying interest rate will increase by 100 basis points.
The Company has the option to prepay the loans at any time prior to the maturity
date without penalty. The Credit Agreement allowed for additional borrowings
through March 31, 2000. As of December 31, 2000, the Company had no available
borrowings under the Credit Agreement.

Pursuant to the Credit Agreement, the borrower is required to make interest and
principal payments on a monthly basis. Principal payments are made as defined in
the Credit Agreement. Interest payments made to CSFB totaled $91.4 million and
$50.3 million for the year ended December 31, 2000 and for the period from March
25, 1999 (date of inception) through December 31, 1999, respectively.

5. Related Party Transactions

Management Fees

From March 25, 1999 to November 2, 1999, the Operating Agreement provided for
management fees to be paid to the Managing Company Group, as defined, which
included Terra Management LLC (Terra), an affiliate of Madison and Madison
Equity. A portion of the management fee was then distributed to Lennar Partners,
Inc. (LPI), an affiliate of LNR, for services rendered in connection with the
Administration and Servicing Agreement. Effective November 3, 1999, the
Operating Agreement was amended to provide for payment of the management fees to
the managing partnership, BPF/LNR, which distributes a portion of the fee to LPI
and Terra. The remainder of the fee is distributed to BPF LLC and LNR, the
partners of BPF/LNR.

                                      F-24
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

5. Related Party Transactions (continued)

The management fee is calculated as 1.5%, per annum, of the Net Cash Flow Value,
as defined, payable on a quarterly basis in arrears. During 2000 and 1999, the
Company incurred management fees of approximately $7.0 million and $3.7 million,
respectively. At December 31, 2000 and 1999, included in accounts payable and
accrued expenses is approximately $1.8 million and $1.5 million, respectively,
related to this fee.

Other

During 2000 and 1999, the Company reimbursed affiliates approximately $2.0
million and $911,000, respectively, for certain overhead expenses including
payroll, rent and other administrative expenses. At December 31, 2000 and 1999,
included in accounts payable and accrued expenses is approximately $50,000 and
$355,000, respectively, related to this reimbursement.

6. Fair Value of Financial Instruments

Statement of Financial Standards No. 107, Disclosures about Fair Value of
Financial Instruments (FAS 107), requires disclosure of fair value information
about financial instruments, whether or not recognized in the balance sheet, for
which it is practical to estimate that value. In cases where quoted market
prices are not available, fair values are based on estimates using present value
or other valuation techniques. These techniques are significantly affected by
the assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates could not be
substantiated by comparison to independent markets and, in many cases, may not
be realized in immediate settlement of the instrument.

                                      F-25
<PAGE>

                           Madison Square Company LLC

                    Notes to Financial Statements (continued)

6. Fair Value of Financial Instruments (continued)

The following table presents the carrying amount and estimated fair value of
financial instruments held by the Company (in thousands):

                                              Carrying           Fair
                                               Amount            Value
                                             ---------------------------
         December 31, 2000
         Assets:
            Cash and cash equivalents        $    2,153       $    2,153
            Investment securities             1,512,561        1,569,579

         Liabilities:
            Loan payable to affiliate         1,098,705        1,098,705

         December 31, 1999
         Assets:
            Cash and cash equivalents        $    5,190       $    5,190
            Investment securities             1,638,669        1,674,197

         Liabilities:
            Loan payable to affiliate         1,263,145        1,263,145

The following methods and assumptions were used by the Company in estimating
fair value:

     Cash and Cash Equivalents--The amount reported in the Balance Sheets
     approximates fair value.

     Investment Securities--The fair value is calculated by discounting the
     estimated future cash flows at a rate which approximates current market.

     Loan Payable to Affiliate--The amount reported in the Balance Sheets
     approximates fair value as it is primarily tied to market rates of
     interest.

                                      F-26
<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 and subsidiaries (the "Company") as of November 30, 2000 and 1999,
and for each of the three years in the period ended November 30, 2000, and have
issued our report thereon dated January 16, 2001, except for note 18 as to which
the date is February 26, 2001; 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 consolidated financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

DELOITTE & TOUCHE LLP
Certified Public Accountants

Miami, Florida
January 16, 2001

                                      F-27

<PAGE>
                            LNR PROPERTY CORPORATION
                                   Schedule II
                        Valuation and Qualifying Accounts
                  Years Ended November 30, 2000, 1999, and 1998

<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, 2000
       Allowances deducted from assets to which they apply:
          Allowances for doubtful accounts and notes receivable    $  597,000    958,000         --            --      1,555,000
                                                                   ==========    =======    =======    ==========     ==========
          Deferred income and unamortized discounts                $5,360,000         --         --    (1,177,000)(A)  4,183,000
                                                                   ==========    =======    =======    ==========     ==========
          Loan loss reserve                                        $2,038,000         --         --            --      2,038,000
                                                                   ==========    =======    =======    ==========     ==========
Year ended November 30, 1999
       Allowances deducted from assets to which they apply:
          Allowances for doubtful accounts and notes receivable    $  117,000    662,000    153,000      (335,000)       597,000
                                                                   ==========    =======    =======    ==========     ==========
          Deferred income and unamortized discounts                $6,451,000         --         --    (1,091,000)(A)  5,360,000
                                                                   ==========    =======    =======    ==========     ==========
          Loan loss reserve                                        $2,948,000         --         --      (910,000)     2,038,000
                                                                   ==========    =======    =======    ==========     ==========
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         --    773,000    (1,028,000)(A)  6,451,000
                                                                   ==========    =======    =======    ==========     ==========
          Loan loss reserve                                        $2,038,000    910,000         --            --      2,948,000
                                                                   ==========    =======    =======    ==========     ==========
</TABLE>

         Notes:
         (A) Includes amortization of discounts

                                      F-28

<PAGE>

                    LNR PROPERTY CORPORATION AND SUBSIDIARIES
                                  Schedule III
                 Real Estate and Accumulated Depreciation (D)(E)
                          Year ended November 30, 2000
<TABLE>
<CAPTION>
                                                                       Costs
                                                                    Capitalized
                                        Initial Cost               Subsequent to
                                         to Company                 Acquisition
                                 --------------------------  -------------------------
                                               Building and                 Carrying
Description        Encumbrances      Land      Improvements  Improvements    Costs
-----------        ------------  ------------  ------------  ------------  -----------
<S>                <C>           <C>           <C>           <C>           <C>
Rental
    office
    property-
    GA ........... $ 41,761,000  $  5,238,000  $ 20,020,000  $ 37,320,000  $ 2,525,000
    NC ...........   33,978,000     4,480,000    40,320,000       262,000           --

    CA ...........           --    26,670,000    15,104,000     2,571,000       10,000

    apartment
    property-
    VA ...........   24,830,000     5,915,000     1,538,000    34,873,000    3,991,000

Other
    miscellaneous
    properties
    which are
    individually
    less than 5%
    of total .....  372,953,000   131,461,000   221,411,000   296,677,000    8,881,000
                   ------------  ------------  ------------  ------------  -----------
                   $473,522,000  $173,764,000  $298,393,000  $371,703,000  $15,407,000
                   ============  ============  ============  ============  ===========
</TABLE>

<PAGE>

<TABLE>
<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-
    GA ........... $  5,238,000  $ 59,865,000  $ 65,103,000   $ 3,991,000          1999          1996
    NC ...........    4,480,000    40,582,000    45,062,000       337,000        Completed
                                                                               when acquired     2000
    CA ...........   26,670,000    17,685,000    44,355,000     7,827,000        Completed
                                                                               when acquired     1998
    apartment
    property-
    VA ...........    5,915,000    40,402,000    46,317,000            --          2001          1997

Other
    miscellaneous
    properties
    which are
    individually
    less than 5%
    of total .....  131,461,000   526,969,000   658,430,000    35,671,000         Various      Various
                   ------------  ------------  ------------   -----------
                   $173,764,000  $685,503,000  $859,267,000   $47,826,000
                   ============  ============  ============   ===========
</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 10 to 40 years.
(C)      The aggregate gross cost of the listed property for Federal income tax
         purposes was $725,981,000 at November 30, 2000.
(D)      The listed real estate includes operating properties completed or under
         construction.
(E)      Reference is made to Notes 1, 7 and 11 of the consolidated financial
         statements.
(F)      The changes in the total cost of real estate properties and accumulated
         depreciation for the three years ended November 30, 2000 are as follows
         (in thousands):

<PAGE>
<TABLE>
<CAPTION>
                                                               2000            1999            1998
                                                            -----------     -----------     ---------
<S>                                                         <C>             <C>               <C>
Cost:
  Balance at beginning of year                              $ 1,005,652         746,748       257,376
  Additions, at cost                                            335,239         446,922       501,075
  Cost of real estate sold                                     (152,016)       (169,642)      (27,187)
  Transfers                                                    (329,608)        (18,376)       15,484
                                                            -----------     -----------     ---------
    Balance at end of year                                  $   859,267       1,005,652       746,748
                                                            ===========     ===========     =========
Accumulated depreciation:
  Balance at beginning of year                              $    39,192          39,943        31,904
  Depreciation and amortization charged against earnings         27,850          24,637        12,283
  Depreciation on real estate sold                               (8,663)        (22,441)       (4,244)
  Transfers                                                     (10,553)         (2,947)           --
                                                            -----------     -----------     ---------
    Balance at end of year                                  $    47,826          39,192        39,943
                                                            ===========     ===========     =========
</TABLE>

                                      F-29

<PAGE>

                    LNR PROPERTY CORPORATION AND SUBSIDIARIES
                                   Schedule IV
                          Mortgage Loans on Real Estate
                                November 30, 2000
<TABLE>
<CAPTION>
                                                                                                                          Principal
                                                                                                                            Amount
                                                                                                                           of Loans
                                                                                                                          Subject to
                                                                                                              Carrying    Delinquent
                                                Final           Periodic                          Face        Amount of   Principal
                                  Interest     Maturity         Payment              Prior      Amount of     Mortgages       or
         Description                Rate         Date            Terms               Liens      Mortgages     (A)(B)(C)    Interest
------------------------------  -------------  ---------  ---------------------   -----------  ------------  -----------  ----------
<S>                              <C>           <C>        <C>                     <C>          <C>            <C>         <C>
First mortgage notes secured
by real estate and other:

   Mixed use - TX, GA, MA        Libor + 650     2003     Interest Only                        $ 40,000,000   40,000,000
   Convention center - NV        Libor + 550     2001     Interest Only                          37,500,000   37,500,000
   Mixed use - MA                Libor + 650     2002     Interest Only                          35,200,000   35,200,000
   Hotel - FL, CA & NY           Libor + 750     2002     Interest Only                          30,000,000   30,000,000
   Hotel - NY                    Libor + 700     2001     Interest Only                          21,000,000   21,000,000
   Office building - TX          Libor + 625     2002     Interest Only                          21,000,000   21,000,000
   Office building - CA             8.456%       2003     Varying Payment                        16,307,000   13,781,000
   Conference Center - VA        Libor + 750     2003     Interest Only                          14,600,000   14,600,000
   Multifamily - CA              Libor + 625     2003     Interest Only                          12,100,000   12,100,000
   Office building - NY          Libor + 650     2001     Interest Only                           5,000,000    5,000,000
   Retail Center - NY            9.75%-10.50%    2003     Principal and Interest                  4,350,000      150,000
   Other                         5.89%-15.00%  2000-2011  Various                                 6,507,000    2,411,000
                                                                                               ------------  -----------  ----------
                                                                                                243,564,000  232,742,000          --
Second mortgage notes secured
by real estate:

   Residential Development - CA        12.50%    2003     Varying Payment                         2,935,000    2,935,000
   Residential Development - CA        15.00%    2001     Varying Payment                         2,651,000    2,651,000
   Residential Development - CA        12.00%    2001     Varying Payment                         2,832,000    2,832,000
   Residential Development - CA        22.00%    2003     Varying Payment                         2,507,000    2,507,000
   Residential Development - CA        22.00%    2002     Varying Payment                         1,910,000    1,910,000
   Residential Development - CA        10.00%    2001     Varying Payment                           448,000      448,000
                                                                                               ------------  -----------  ----------
                                                                                                 13,283,000   13,283,000          --
                                                                                               ------------  -----------  ----------
                                                                                                256,847,000  246,025,000
           Loan Loss Reserve                                                                                  (2,038,000)
                                                                                               ------------  -----------  ----------
                                                                                               $256,847,000  243,987,000          --
                                                                                               ============  ===========  ==========
</TABLE>
<PAGE>

Notes:
(A)      For Federal income tax purposes, the aggregate basis of the listed
         mortgages was $255,671,000 at November 30, 2000.
(B)      Carrying amounts are net of unamortized discounts.
(C)      The changes in the carrying amounts of mortgages for the years ended
         November 30, 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                         2000                1999             1998
                                     -------------       -----------      ------------
<S>                                  <C>                 <C>              <C>
Balance at beginning of year         $ 152,827,000        97,855,000        86,849,000

Additions (deductions):
      New mortgage loans, net          164,655,000        83,901,000       137,242,000
      Collections of principal         (74,797,000)      (30,885,000)     (126,432,000)
      Amortization of discount           1,177,000         1,091,000         1,106,000
      Change in loan loss reserve                0           910,000          (910,000)
      Other                                125,000           (45,000)
                                     -------------       -----------      ------------
Balance at end of year               $ 243,987,000       152,827,000        97,855,000
                                     =============       ===========      ============
</TABLE>

                                      F-30
<PAGE>

                                 EXHIBIT INDEX


EXHIBIT NO.       EXHIBIT DESCRIPTION
-----------       -------------------

10.16             Second Amended and Restated Revolving Credit Agreement dated
                  as of July 14, 2000, between LNR Property Corporation and
                  certain subsidiaries, the lenders and Bank of America, N.A.,
                  as administrative agent, U.S. Bank, National Association, as
                  syndication agent, Fleet National Bank, as documentation agent
                  and Guaranty Federal Bank, F.S.B., as managing agent with Bank
                  of America Securities LLC, as sold lead arranger and sole book
                  manager.

10.17             Supplement and Amendment to Annex 1-A of the Master Repurchase
                  Agreement dated August 17, 2000 and the Master Repurchase
                  Agreement dated as of March 31, 2000 between Bear, Stearns
                  International Limited and LNR CMBS Holding Corp.

11.1              Statement Regarding Computation of Earnings Per Share.

13.1              Pages 34 through 65 of the 2000 Annual Report to Stockholders.

21.1              List of subsidiaries.