Toll Brothers (NYSE:TOL) on Monday said its Gibraltar Capital and Asset Management subsidiary is joining in a venture with an unnamed large institutional investor to provide builders and developers with land banking and joint-venture capital.
The company said the new venture "will finance builders' and developers' acquisition and development of land and home sites, and pursue other complementary opportunistic investment strategies." Gilbraltar will manage, with a total of $400 million of funding commitments: 75% from the investor and 25% from Toll. Additionally, the unnamed investor and Toll have formed a separate 75/25 joint venture which acquired most of Gibraltar's wholly-owned portfolio of existing assets. Gibraltar's JV assets are not affected.
Robert Toll, executive chairman of Toll who is known for his ability to make sense of business jargon, said in a statement, "We believe this platform will serve a growing need in the market."
Roger A. Brush, Gibraltar's president and managing director, explained the new venture "will provide much needed acquisition and development capital to third-party residential builders and developers in lot-constrained markets across the country."
He continued, "Many builders require capital beyond the capacity of their balance sheets to fund land acquisition and development. 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. Our track record and land development expertise give us particular insight in working with builder clients."
Gibraltar was formed in 2010 to acquire distressed real estate loan portfolios from financial institutions. On its own and in partnerships, it was a successful investor and manager in the acquisition and workout of more than $2.2 billion of residential and commercial loan portfolios, a portion of which Gibraltar directly managed."