Toll Brothers went shopping in Manhattan recently. Now in the luxury builder's possession: A prime piece of land on the Upper East Side at Lexington Ave. and E. 65th Street. By summer, Toll 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, but Frederick N. Cooper, Toll's senior vice president for finance and investor relations stopped short of saying that the land was a distressed project. He said the development of the site had been "stalled."
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, N.J., and Jersey City, N.J.
In addition, Toll is "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 N.Y. 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."
Added Toll CEO Douglas C. Yearley Jr. in the purchase announcement: "With [more than] $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.
New York City is far from the only place Toll is looking for land. "We are always opportunistic in everything we do," said Cooper.
Teresa Burney is a senior editor for BUILDER and BIG BUILDER magazines.
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