Toll Brothers (TOL) Inks Partnership With PGIM, Boosts Expansion
Toll Brothers (TOL) is on an expansion spree, unveiling its partnership with PGIM Real Estate to develop Momentum Midtown community in Atlanta, GA.
Toll Brothers Inc. TOL recently announced that its rental subsidiary — Toll Brothers Apartment Living — has entered into an agreement with PGIM Real Estate (PRKAX) to build Momentum Midtown in Atlanta, GA. This strategic partnership has arranged a $96-million construction loan from Wells Fargo Bank N.A through Toll Brothers’ in-house Finance Department.
Momentum Midtown will be a 36-storied, 376-unit luxurious rental apartment at 1018 West Peachtree Street in the prime location of Atlanta’s tech community. Being located in the neighborhood of MARTA rail station and the Hartsfield-Jackson International Airport, the community is easily accessible to the city’s prime transportation corridors and employment centers.
Concerning this, Charles Elliott, president of Toll Brothers Apartment Living, stated, “Momentum Midtown will mark our fourth project in the thriving Atlanta market. We’re looking forward to building another community with the same elevated customer experience and quality that we are known for nationwide.”
Locational Advantage & Strategic Partnership Driving Growth
The U.S. housing market is witnessing an impressive comeback on major data points post the COVID-led shutdowns, with home sales rising at a record pace, defying low inventory levels, and broad-based economic and public health risks. The housing market rebound, followed by coronavirus vaccine rollout, assures that 2021 will be a good one.
Given the significant pent-up housing demand, Toll Brothers has secured some of the most sought-after urban locations in the country, where land is scarce, and approvals are not easy to obtain. Toll Brothers uses its strong liquidity position to secure the most sought-after urban locations in the country like New York City Market, Northern New Jersey, Washington DC and Philadelphia. The company’s solid land position places it well to meet the growing demand in these regions, thus lending it a competitive edge over its peers who are presently facing land availability constraints.
On Aug 24, 2021, Toll Brothers announced a strategic partnership with Equity Residential to selectively acquire and develop sites for new rental apartment communities in Metro Boston, MA; Atlanta, GA; Austin, TX; Denver, CO; Orange County/San Diego, CA; Seattle, WA, and Dallas-Fort Worth, TX.
Shares of Toll Brothers have gained 27% so far this year compared with the Zacks Building Products - Home Builders industry’s 9.8% rise. The company has been benefiting from its strategy of broadening the product lines, price points and geographies.
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Zacks Rank & Key Picks
Currently, Toll Brothers carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same industry include M/I Homes, Inc. MHO, Taylor Morrison Home Corporation TMHC and Landsea Homes Corporation LSEA. M/I Homes sports a Zacks Rank #1 (Strong Buy), while Taylor Morrison Home and Landsea Homes carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
M/I Homes Home and Taylor Morrison Home’s earnings for 2021 are expected to grow 63.3% and 173.4%, respectively.
Landsea Homes has a trailing four-quarter earnings surprise of 68.3%, on average.
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