Toll Brothers Announce New, $400M Investment Venture

The venture will have $400 million in funding for third party builders and developers.

preview-Toll_Brothers-400x400Toll Brothers has announced a new capital and asset management venture, according to the Philadelphia Business Journal and a release from the company. The venture is in partnership with a “large institutional investor” who is yet unnamed, and its goal is “to provide builders and developers with land banking and joint venture capital.”

The venture will be managed by Gibraltar, the Horsham-based Toll Brothers’ subsidiary for capital and asset management. It will have $400 million of funding, with 75% coming from the mystery investor and the other 25% from Toll Brothers. The venture will focus on providing third party builders and developers with the necessary funds. 

Gibraltar was created in the wake of the economic downturn in 2010 to buy distressed assets, according to Fred Cooper, Toll Brothers Senior VP of Finance and Investor Relations. Now that the economy has bounced back, those opportunities aren’t as plentiful. This venture represents a new direction for Gibraltar.

“Buying distressed loans and assets isn’t as much of an opportunity anymore in the U.S.,” Cooper added. “But what they’ve noticed is that in a lot of cases the loans they bought, they ended up taking over the property and what they’re doing now is selling lots to homebuilders and they’ve noticed a lot of developers are struggling with access to capital.”

“Many builders require capital beyond the capacity of their balance sheets to fund land acquisition and development,” said Roger A. Brush, Gibraltar’s president and managing director, in the release. “Gibraltar has established relationships with many builders to whom it is selling land and improved lots. We are also securing approvals and installing site improvements on many projects.”

As part of this deal, the investor and Toll Brothers have also set up another 75/25 agreement in which the investor acquired most of Gibraltar’s wholly owned portfolio of assets.

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