Yahoo Finance Toll Brothers Partners With Carlyle to Develop Emblem 120
Toll Brothers, Inc.’s TOL subsidiary, Toll Brothers Apartment Living teams up with an affiliate of global investment firm — The Carlyle Group Inc. CG — to develop Emblem 120.
Toll Brothers Apartment Living will manage the development, marketing, leasing and property management of its fourth project in the Boston suburbs. Notably, Wells Fargo Bank, N.A. has provided a construction loan facility, and the debt and equity financing are arranged by Toll Brothers’ in-house Finance Department.
Emblem 120 is a 289-unit luxury apartment community, located on a 3.4-acre site in Boston’s northern suburb of Woburn, MA. This six-story wood-frame-over-steel podium building community will be easily accessible to Woburn’s Anderson Regional Transportation Center, and many educational institutions like Harvard and M.I.T.
Luxury New Home Market to Drive Growth
Toll Brothers mostly focuses on offering luxury homes. Most of its communities are located in prosperous suburban areas that have easy access to major cities. Recently, the company announced the acquisition of Thrive Residential, which specializes in building unique communities in urban in-fill neighborhoods in Nashville and Atlanta. The buyout has broadened its geographies, product lines and price points.
To mitigate land availability constraints, the company has secured some of the most sought-after urban locations in the country, where land is scarce and approvals are not easy to obtain.
However, demand for such high-end markets has been declining in recent times, thanks to reduced activity of wealthy overseas purchasers, many of whom seek amenity-rich, full-service communities with on-site property management. Moreover, the coronavirus outbreak in China led to shortages of lighting fixtures and small appliances, prompting it to delay the sale of 11 homes in California during the last reported quarter, which is one of the company’s biggest markets.
Our Take
Shares of this nation's leading builder of luxury homes — which currently carries a Zacks Rank #3 (Hold) — have declined 48.7% in the year-to-date period compared with its the Zacks Building Products - Home Builders industry’s 29.6% fall. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Although the company remains optimistic about attaining higher deliveries in second-quarter fiscal 2020, the above-mentioned headwinds are likely to plague the company and overall industry, which includes biggies like PulteGroup Inc. PHM and D.R. Horton, Inc. DHI.
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