Toll Brothers went shopping in Manhattan and picked up a prime piece of land on the Upper East Side at Lexington Ave. and E. 65th Street. By summer it expects to be selling 25 luxury residences in a 15-story building on the site.
The company did not release a sales price for the property. Frederick N. Cooper, Toll's senior vice president for finance and investor relations stopped short of saying that the land was a distressed project. Instead he said the development of the site was "stalled" before the purchase.
With its $2 billion in cash on hand and its experience with big-city luxury developments, Toll is uniquely positioned to jump on such high-end land buys quickly.
"In New York City we have the capital and the capability," said Cooper. Already, the company has ongoing projects in Brooklyn and Queens as well as across the Hudson River in Hoboken and Jersey City, N.J.
"We are actively looking for additional opportunities in the metro New York City urban market, which has outperformed nearly all our other territories across the U.S.," said Rick Hartman, Toll's regional president in charge of the Metro NY urban market in a news release on the purchase. "With our capital, our ability to move quickly, and the brand we are building in New York City, we are a logical call for distressed owners, banks and others looking to get out from under distressed projects."
New York City is far from the only place Toll is looking for land. "We are always opportunistic in everything we do," said Cooper. And these days the company is finding opportunities and acting on them across many markets.
"The acquisition of this premier property on the Upper East Side of Manhattan is another example of our ability to move quickly to take advantage of opportunities that are emerging in the current challenging real estate market," said Douglas C. Yearley Jr., Toll's CEO, in the purchase announcement. "With over $2 billion in available capital, we have been purchasing notes and properties across our various product liens in stages ranging from unimproved land to partially completed projects."
The Manhattan parcel was bought with Toll Brothers capital. But the company is also using capital from its recently formed Gibraltar Capital and Asset Management venture to buy distressed land and assets elsewhere. In July, Gibraltar, which is a partnership with Oaktree Capital Management, bought AmTrust Banks' portfolio of $1.7-billion in troubled real estate loans and properties from the FDIC.
Learn more about markets featured in this article: New York, NY.