Landmarks
Since founding the business with his brother Bruce in 1967 — and going public in 1986 — Toll has expanded the company’s portfolio to include products beyond its first basic homes. To say Toll multitasks is misleading; to call the company a construction business is confining.
“It’s an understatement to say that Bob thinks out of the box,” says Fred Cooper, Toll Brothers’ vice president, finance and investor relations. “He gets more done in a 24-hour day than anyone I know.”
This on-the-move mentality drives Toll Brothers’ innovation, and Toll himself is motivated by improving the lives of the people his company touches.
“We are constantly taking advantage of new opportunities and investigating new growth strategies,” Cooper says.
Existing markets such as Denver, Chicago and Reno are ripe, and New Jersey high-rise complexes with Manhattan skyline views are hot as well, he says.
“Over the long term, we have the potential to double or triple the size of our company just by expanding in our existing markets,” Cooper says. “You have a growing potential of possible luxury home buyers and, in addition, the baby boomers right now are entering the peak of their earning and home-buying years.”
To attract that market, Toll has super-sized his early starter home designs. He recalls his first For Sale signs: “I started off with two homes that went for $17,490 and $18,490 — hardwood floors were included but carpet was extra,” Toll says, noting how interior upgrades have changed. “I brought my brother, Bruce, into the business with me and we did 20 homes the first year, 40 homes the next year, and I haven’t looked back since.”
A second-generation builder, Toll says he “went from law to learning” when he left his job as an attorney. He spent days in the field, selling, supervising and building, and nights at a family friend’s home.
“It’s very difficult for a father to teach his own son,” he says. “I took lessons at night. I would go to my father’s friend and say, ‘What do I do next in building this house?'”
Toll plugged away and plotted plans for his first community, a starter home development in Chester County.
“I remember every time we sold a home, I used to sing, “Inglewood, da-da-da,” he imitates with Broadway gusto.
Toll’s tune caught on, and construction boomed in the 1970s. He built apartments and several new communities and expanded into New Jersey.
And when the market lagged, his energy and persistence persevered.
“I remember begging on my hands and knees and literally dancing on a table,” Toll says, illustrating a negotiation with a savings and loan officer to secure mortgages for expansion. “One S&L officer said, ‘If you get on the table and dance, I’ll give you two mortgages.’ I did — and I got two mortgages.”
This scenario wouldn’t surprise McCarron, one of 4,847 employees infected by Toll’s contagious personality.
“There is never a dull moment, always something new,” says the 19-year employee. “He has more energy than most of us, and he likes to surround himself with a great talent base. He loves to have smart people who want to work hard, have fun, challenge the status quo and come up with new ideas.”
The economy hasn’t been all song and dance the last four decades, but Toll Brothers’ diverse portfolio positions the company to grow whether interest rates are sluggish or soaring, Cooper says. Today, Toll plants his high-end designs in golf course communities, urban lots, empty-nester homes and resort-style country club settings. Thirty percent of the business targets the growing empty nesters market; 12 percent caters to active adults.
“We focus on the luxury market, and our typical buyer borrows about 70 percent of the purchase price of the home vs. roughly 85 percent for the starter-home market,” Cooper says. “Our buyers typically are not as impacted by interest rates.”
And it helps that many Toll Brothers buyers are already familiar with the name, McCarron adds.
“We get a lot of brand-name benefits from executives who move from place to place,” she says. “They are excited to learn we are in their market because they know and trust our name.”
That trust begins before the blueprints are drawn. Construction is a hospitality industry, in a sense, and Toll’s team plays the part of social coordinator and community activist before homeowners even move in.
“In our subdivisions, we host parties for families and children to get to know each other,” McCarron says. “Even though they aren’t physically moved in yet, they feel like they are part of the community. We aren’t just building 20 houses, then leaving.”
Charity events that support each Toll Brothers community create a sustainability that outlasts curb appeal.
“Every place we build, we have many, many employees who live in that community, so it’s easy for us to see how our efforts benefit the local community,” McCarron says.
