Overview of America's Luxury Builder - Toll Brothers
Toll Brothers builds upscale homes in the United States, focusing on move-up, second-home, and retired buyers. Its homes are single-family houses and multi-family apartments that are priced from about $150,000 to more than $775,000. The builder also develops neighborhoods for active adults and operates country club communities. Subsidiary companies provide related financial services and products including insurance coverage, title and mortgage services, and landscaping. Toll Brothers builds new homes in 50 markets in about 20 states.
Like other builders, Toll Brothers closed on less homes during the housing meltdown and financial crisis. It went from constructing some 8,600 homes in fiscal 2006 to fewer than 3,000 in fiscal 2010. Rising unemployment, falling home values, lack of consumer confidence, and overall poor economic conditions dragged down the builders performance despite low interest rates and home affordability.
The homebuilding company saw its revenues drop by more than 75 percent from 2006 to 2010. Those numbers dropped mainly due to less homes being sold. Toll Brothers finished up 2007 with an overstock of houses of around 3,950 homes for sale but by 2010 that number was cut by more than half. Those years were somber ones for the entire real estate industry, as builders built too many homes and were left holding large inventories. Adding to the problem, the subprime mortgage crisis left many borrowers in default, leading to an abundance of foreclosures.
However, the meltdown wasn't all bad for Toll Brothers. In effort to profit from the economic crisis the builder joined forces with Oaktree Capital Management in 2010 to acquire at a discount some $1.7 billion worth of troubled loans from the FDIC. The assets used to be held by AmTrust Bank, which went under and was seized by regulators in late 2009.
Toll Brothers is positioning itself for a recovery in the industry by buying up distressed properties throughout the real estate market. The company boosted its land holdings in 2010 and its plans to increase the number of its selling developments by the end of 2011. Toll Brothers is betting on an upswing in home buying as pent up demand is released and consumer confidence goes back on the rise
Like other builders, Toll Brothers closed on less homes during the housing meltdown and financial crisis. It went from constructing some 8,600 homes in fiscal 2006 to fewer than 3,000 in fiscal 2010. Rising unemployment, falling home values, lack of consumer confidence, and overall poor economic conditions dragged down the builders performance despite low interest rates and home affordability.
The homebuilding company saw its revenues drop by more than 75 percent from 2006 to 2010. Those numbers dropped mainly due to less homes being sold. Toll Brothers finished up 2007 with an overstock of houses of around 3,950 homes for sale but by 2010 that number was cut by more than half. Those years were somber ones for the entire real estate industry, as builders built too many homes and were left holding large inventories. Adding to the problem, the subprime mortgage crisis left many borrowers in default, leading to an abundance of foreclosures.
However, the meltdown wasn't all bad for Toll Brothers. In effort to profit from the economic crisis the builder joined forces with Oaktree Capital Management in 2010 to acquire at a discount some $1.7 billion worth of troubled loans from the FDIC. The assets used to be held by AmTrust Bank, which went under and was seized by regulators in late 2009.
Toll Brothers is positioning itself for a recovery in the industry by buying up distressed properties throughout the real estate market. The company boosted its land holdings in 2010 and its plans to increase the number of its selling developments by the end of 2011. Toll Brothers is betting on an upswing in home buying as pent up demand is released and consumer confidence goes back on the rise
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