Toll Bros. acquires loan for 132 East 65th Street where it plans a 15-story condo

Toll Bros., one of the nation's largest home builders, is planning a 15-story building with 25 apartments at 132 East 65th Street on the southeast corner of Lexington Avenue.

It announced the purchase of the site today and said that sales were expected to commence next summer.

Douglas C. Yearley, Jr., the Company's chief executive officer, stated that "The acquisition of this premier property on the Upper East Side of Manhattan is another example of our ability to move quickly to take advantage of opportunities that are emerging in the current challenging real estate market."

"With over $2 billion in available capital, we have been purchasing notes and properties across our various product lines in stages ranging from unimproved land to partially completed projects. We are also purchasing portfolios through our recently formed Gibraltar Capital and Asset Management venture, which in July 2010 partnered to acquire a $1.7 billion FDIC portfolio of nearly 300 assets. Gibraltar also gives us the capability to use Toll Brothers' broad expertise and national footprint to underwrite and opportunistically acquire a wider variety of distressed real estate assets."

Rick Hartman, the Company's regional president in charge of the Metro NY urban market stated: "We are pleased to continue expanding our presence in the New York City market where our City Living operations has ongoing projects in Manhattan, Brooklyn, Queens and across the Hudson River in Hoboken and Jersey City, New Jersey."

"We are actively looking for additional opportunities in the metro New York City urban market, which has outperformed nearly all our other territories across the U.S. With our capital, our ability to move quickly, and the brand we are building in New York City, we are a logical call for distressed owners, banks and others looking to get out from under distressed projects."

Toll Brothers, Inc. is the nation's leading builder of luxury homes. The move extends Toll's "City Living" line of higher-density projects, which have been built in Brooklyn, Jersey City and Hoboken, among other areas. Toll, which is based in Horsham, Pa., is also developing the very attractive Northside Piers on the East River in Brooklyn and 303 E. 33rd St. in the Murray Hill neighborhood.

The 65th Street site was formerly occupied by a five-story building that was erected in 1870 and designed by F. S. Barus and then given a stucco facade in 1922 designed by George Schmitt.

In 2009, Davis Development Holdings, headed by Trevor Davis, faced a $17-million foreclosure suit from Ark Real Estate Partners after he defaulted on his plans to redevelop the site with a residential building that was to named the Honore. Mr. Davis was the former development partner of Aby Rosen and Michael Fuchs of RFR Holdings. Mr. Davis had purchased the properties at 859 and 861-3 Lexington Avenue from Barry Kieselstein-Cord for $23 million and the purchase included air-rights from the Caravan Institute at 132 East 65th Street that was a foundation established in 1929 by Mirza Ahmad Sohrab and Lewis Stuyvesant Chandler and his wife Julie in the former Chanler townhouse. It was notable for have an attractive cast-iron fence and an irregular fenestration pattern.

An October 11, 2010 article by Theresa Agovino in crainsnewyork.com said that "Grubb & Ellis New York Inc., has been tapped to market a loan for a site on East 65th Street and Lexington Avenue that went into default last year when Trevor Davis failed to make a payment."

The article said that Mr. Davis "had already started excavating the site where he planned to build a 17-story condo with a retail component," adding that "the loan is held by an investor group that had been hoping to reach a deal with Mr. Davis but opted to sell when an agreement couldn't be hammered out."