Toll Brothers JV Develops 3 DFW Projects

The Fort Worth, Frisco Square and Dallas communities are the partners’ first projects since forming in 2021.

Dallas skyline. Image courtesy of Unsplash

To kick off its strategic partnership, Equity Residential and Toll Brothers will develop three new rental communities in the Dallas-Fort Worth area. The three communities total 1,053 units and will be the companies’ first three joint ventures after establishing its $1.9 billion partnership in August 2021.

Projects include The Settler, a four-story development totaling 362 units in downtown Fort Worth, Remy, a five-story property with 357 units in Frisco Square, and Lyle, a five-story community in Dallas totaling 334 units. Toll Brothers will build each community with a pool, a pet spa, parking garages, coworking spaces, fitness centers and other amenities.

Construction financing for all three projects was arranged by Toll Brothers’ in-house finance department. U.S. Bank is providing a construction loan for The Settler, while Santander Bank, N.A. is providing the financing for both Remy and Lyle.

Mark Parrell, president & CEO of Equity Residential, said in prepared remarks that these three projects will be a strong start to the strategic partnership. He added that the company is interested in capturing some of the growing population of the affluent renter demographic seen in the Dallas-Fort Worth metro.

6 key markets in mind

Beyond its first three Dallas projects, the JV is looking to focus on acquiring and developing sites for apartment rental communities in specific metros, including Atlanta, Boston, Denver, Seattle and Orange County/San Diego, as well as Austin and Dallas-Fort Worth in Texas. Under the partnership, Equity Residential will commit to investing 75 percent equity for each selected project, while Toll Brothers will contribute 25 percent equity.

Equity Residential also gets the option of acquiring each property after they’ve stabilized. The partnership has an initial minimum co-investment of approximately $750 million in combined equity, or nearly $1.9 billion capacity, assuming 60 percent leverage.

Prior to the partnership, Equity Residential acquired three other communities, totaling 909 units, which Toll Brothers Apartment Living developed with other partners in the Dallas and Atlanta markets. Outside its partnership with Equity Residential, Toll Brothers is also working with Hines and Trez Capital on a single-family home community in McKinney, Texas.

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