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Toll Brothers outlines developments in fiscal Q1, Q2

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Toll Brothers outlines developments in fiscal Q1, Q2

One of Toll Brothers Inc.'s rental property joint ventures that owned, developed and operated a student housing community in College Park, Md., sold its assets to an unrelated party for $219.0 million in the first quarter of fiscal 2018.

The homebuilder received $39.3 million in cash and realized a gain of $30.8 million in the six months ended April 30. The joint venture repaid a $110.0 million loan in connection with the deal.

During the first fiscal quarter, Toll Brothers acquired land and entered into a joint venture to develop a 112-unit luxury rental apartment project in Belmont, Mass., incurring land and land development costs of about $22.1 million. The joint venture partner acquired 50% stake in the property for $11.0 million. In March, the venture secured a $42.4 million construction loan for the project and as at April 30, it had no outstanding borrowings under the facility. As of the same date, Toll Brothers' investment in the venture totaled $15.6 million, according to a filing.

In the subsequent quarter, the homebuilder acquired land in the Capitol Riverfront of Washington, D.C., and entered into a joint venture to develop a 308-unit luxury rental apartment building on the site, incurring about $27.4 million in land and land development costs. The venture partner acquired a half-stake in the project for $17.8 million, reimbursing Toll Brothers for the development and construction costs it incurred prior to the transaction. Following the stake sale, the homebuilder recognized a $1.0 million gain during the period.

The venture secured a $72.7 million construction loan for the Capitol Riverfront project and as at April 30, it had no outstanding borrowings under the facility. As at April 30, Toll Brothers' investment in this venture amounted to $11.0 million.

In May, another of the company's rental property joint ventures, which owned, developed and operated a multifamily rental property in Westborough, Mass., sold its assets to an unrelated party for $65.5 million and repaid its outstanding loan balance of $30.1 million. From this deal, Toll Brothers received $12.1 million in cash and expects a gain from the sale of roughly $8.6 million in the third quarter.

In March, the Pennsylvania Attorney General informed Toll Brothers that it was reviewing the company's construction of stucco homes in Pennsylvania after 2005. The company will produce documents and information upon the former's request, according to the filing. The homebuilder said it cannot currently predict the eventual scope or outcome of these matters.