Equity Residential Partners With Toll Brothers For Rental Apartment Communities

Equity Residential EQR is partnering with luxury home builder Toll Brothers Inc TOL to develop new rental apartment communities in key U.S. markets.
The parties initially intend to selectively acquire and develop sites for apartment rental communities in six metro markets, Atlanta, Austin, Boston, Denver, Orange County/San Diego, Seattle, and Dallas-Fort Worth.
Equity Residential will invest 75% of the equity for each selected project, and Toll Brothers will invest 25% over the next three years.
Equity Residential will have the option to acquire each property upon stabilization.
The parties have targeted an initial minimum co-investment of about $750 million in combined equity, or nearly $1.9 billion capacity, assuming 60% leverage.
Three properties currently controlled by Toll Brothers, with a total anticipated project cost of approximately $242 million, will jump-start the venture.
Toll Brothers will act as a managing member of each project, overseeing approvals, design, and construction.
Price Action: EQR shares are trading lower by 0.72% at $81.75, while TOL traded higher by 4.51% at $62.06 on the last check Tuesday.