Distressed Homes: Toll Brothers Invests Instead of Building More


You can't blame them for trying to make lemonade. Toll Brothers, the nation's largest builder of luxury homes, says it has launched an investment firm to take advantage of the housing bust.

Gibraltar Capital and Asset Management, a wholly-owned subsidiary, will trade distressed property and loan portfolios, take over struggling construction projects and resell them to other builders, and help banks and developers deal with the distressed real estate on their books.

Translation: Toll Brothers, which made a ton of money selling pricey homes during the boom, is now using that money to scoop up some of those properties at cents to the dollar. Makes perfect business sense, right?

Doug Yearley, Toll Brothers' CEO thinks so, too. "We believe there are many potential investments arising from the distress in the real estate industry," he says in a press release, adding that the company plans to tap into its relationships, expertise, and of course, "capital access" to "add value."

How does this affect you?