Toll Brothers Announces Entry Into Seattle Market With Acquisition of CamWest Development LLC

HORSHAM, Pa., Nov. 21, 2011 (GLOBE NEWSWIRE) — Toll Brothers, Inc., (NYSE:TOL) (, the nation’s leading builder of luxury homes, today announced its entry into the Seattle market through the acquisition of substantially all of the assets and operations of CamWest Development LLC (“CamWest”), one of the largest privately held home building companies in the Pacific Northwest. The purchase price, which was not disclosed, was paid in cash.

CamWest develops a variety of home types, including luxury single-family homes, condominiums, and townhomes, throughout the Seattle metropolitan area, primarily in King and Snohomish Counties. The firm has been recognized by the homebuilding industry through various awards for innovation in housing, green building practices, and excellence in marketing. Its homes typically sell from the mid $300,000s to $700,000’s, with some homes selling for over $1 million. The average price of its homes currently in backlog is approximately $500,000. The company was established in 1989 by Eric Campbell and has delivered more than 2,800 homes in the Seattle market since then. For calendar year 2011, CamWest anticipates delivering approximately 180 homes and producing revenues of approximately $90 million.

In addition to existing backlog, the assets acquired by Toll Brothers include approximately 1,300 lots owned and 200 lots controlled in King and Snohomish Counties. The acquisition will increase Toll Brothers’ selling communities count by approximately 15 communities. Toll Brothers expects the acquisition to be accretive in FY 2012.

Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated: “We are excited to enter the Seattle market with the acquisition of CamWest. It is one of the premier luxury homebuilders in the region with a long history of delivering exceptional quality and value to its homeowners. Seattle is a high barrier-to-entry home building market with a robust employment base and a concentration of affluence. Eric Campbell and the CamWest team provide a great management platform with a strong land position and well-established relationships with local land sellers and subcontractors.”

Eric Campbell, founder and president for CamWest Development, stated: “Toll Brothers’ brand name, reputation, and capital resources make it the ideal partner to expand upon the success that CamWest has achieved. Seattle is a market with many opportunities. We look forward to a great future as a member of the Toll family.”

Zelman Partners LLC acted as exclusive financial advisor to CamWest.

Toll Brothers, Inc. is the nation’s leading builder of luxury homes. The Company began business in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves move-up, empty-nester, active-adult, and second-home buyers and operates in 20 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Texas, Virginia, and Washington.

Toll Brothers builds an array of luxury residential communities, principally on land it develops and improves: single-family detached and attached home communities, master planned resort-style golf communities, and urban low-, mid- and high-rise communities. The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, home security, and landscape subsidiaries. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. The Company acquires and develops commercial properties through Toll Commercial and its affiliate, Toll Brothers Realty Trust, and purchases large distressed real estate portfolios through its wholly owned subsidiary, Gibraltar Capital and Asset Management.

Toll Brothers is honored to have won the three most coveted awards in the homebuilding industry: America’s Best Builder from the National Association of Home Builders, the National Housing Quality Award, and Builder of the Year. Toll Brothers proudly supports the communities in which it builds; among other philanthropic pursuits, the Company sponsors the Toll Brothers Metropolitan Opera International Radio Network, bringing opera to neighborhoods throughout the world. For more information, visit

Certain information included in this release is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, information related to: anticipated operating results; financial resources and condition; selling communities; home deliveries; average home prices; consumer demand and confidence; contract pricing; business and investment opportunities; and market and industry trends.

Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other Company reports, SEC filings, statements and presentations. These risks and uncertainties include, among others: local, regional, national and international economic conditions; fluctuating consumer demand and confidence; interest and unemployment rates; changes in sales conditions, including home prices, in the markets where we build homes; the competitive environment in which we operate; the availability and cost of land for future growth; conditions that could result in inventory write-downs or write-downs associated with investments in unconsolidated entities; the ability to recover our deferred tax assets; the availability of capital; uncertainties in the capital and securities markets; liquidity in the credit markets; changes in tax laws and their interpretation; effects of governmental legislation and regulation; the outcome of various legal proceedings; the availability of adequate insurance at reasonable cost; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, the applicability and sufficiency of our insurance coverage; the ability of customers to obtain financing for the purchase of homes; the ability of home buyers to sell their existing homes; the ability of the participants in various joint ventures to honor their commitments; the availability and cost of labor and building and construction materials; the cost of raw materials; construction delays; domestic and international political events; and weather conditions.

Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: Frederick N. Cooper (215) 938-8312
Joseph R. Sicree (215) 938-8045

Debt Restructuring Helping Builders Survive Today’s Financial Crisis

Reprint from Nation’s Building News – The Official Online Newspaper of NAHB

Debt Restructuring Helping Builders Survive Today’s Financial Crisis

(This is the first in a series of articles on what builders need to know about restructuring their debt and planning for surviving financial adversity in today’s real estate market.)

By David McCain and Bill Albers, MPKA, LLC

Even as the promise of a housing recovery moves closer into sight, debt restructuring is the name of the game for many builders in their attempt to set themselves on a realistic course and survive the worst economic times since the Great Depression.

There is a natural progression of emotions that unfolds as we see our financial world disintegrate around us. Initial thoughts center on protecting the equity we have invested in our projects, and for many this can represent years of profits, time and personal guarantees rolled over from one community to the next.

As real estate entrepreneurs, we understand dirt, real estate and hard assets and tend to shy away from paper stocks and bonds. Unfortunately, in an effort to protect what we have, we continue to make payments against a loan and a project that will never pencil out under current conditions.

Embracing self denial, we can’t believe that our project will fail. With a Herculean effort, we know we can make it succeed. So we embark on the impossible task of seeking take-out capital at full origination value in a market that most likely doesn’t even support half of that value.

Eventually, we begin to capitulate, both emotionally and financially, as we realize that our project just doesn’t support its original value, we have run out of money to support it and we are not going to be able to convince anyone to invest in it despite our best efforts. Ultimately, we are forced to seek help.

Shortcomings of Self Reliance

After realizing that a project is in need of significant financial right sizing and requires debt restructuring, it is only natural to want to attack the problem ourselves. For some, this method can actually succeed. After all, why incur the expense of hiring a professional if you can find the solution yourself?

But for most builders, hiring a professional is the most economically beneficial alternative. Too often, self-help advocates are too emotionally invested in the project, in their personal balance sheet (exposed as a result of personal guarantees) and in their relationship with the bank officer to be successful.

More often than not, the banker with whom we have been friendly for 20 years is replaced by a skeptical work-out officer, or, worse yet, our bank gets taken over and is merged or falls into government control.

As a real estate entrepreneur, we may have spent an entire lifetime making our financial resumes as strong and viable as possible. But in the debt restructuring arena, the weaker the financial resume, the greater is the likelihood of reducing or eliminating lender demands for payments on bloated loan balances or contributions towards personal guarantee obligations. Humility, not hubris, is the winning formula for a successful outcome.

Legal Help

Once we have decided we need help, the next natural inclination is to engage legal counsel. This can often be counterproductive. While some attorneys are exceptional negotiators and deal makers, many are fierce advocates, trained to win at all costs. But regardless of that, as soon as you communicate to the bank that you have hired counsel, all direct bank communication will cease. With a fiduciary responsibility to do so, the bank will hire counsel to speak to your counsel. As a result, your communications, now filtered, will become more guarded and formal (not to mention the fact that you will end up paying the fees for both your counsel and the bank’s counsel).

In most instances, the bank will hire litigation counsel that is well versed in foreclosure and collection. Your counsel will need to be well versed in debtors’ rights and borrower defenses. The game plan will change from workout and restructure negotiations to a battle over taking or keeping title to the property and valuing the property so that your personal balance sheet can be attacked.

Any negotiations from this point forward will likely occur after each litigation milestone is reached and as leverage changes in favor of one party or the other depending on the outcome of each step. At this point, the bank will seek to enforce the four corners of the loan documents by taking title and collecting any deficiency due against the note as a result of the diminished property value. You will absolutely be playing defense in this scenario. Judgments obtained in most states are recorded and are collectable for up to 20 years. In addition, to help execute them most states allow a creditor to take depositions in which you will have to disclose your entire financial life and produce a massive amount of financial documents. As you can easily see, playing out the litigation process is wrought with peril and uncertainty, except for the certainty of cost, time and expense.

No Substitute for Experience

The help that builders need is most likely to come from a debt restructure specialist, who negotiates loan workouts and creative solutions to real estate and financing issues in a controlled and non-confrontational environment. The right debt restructure specialist can be welcomed as a participant by both the bank and the borrower.
The effectiveness of the debt restructure negotiator depends on many factors. The most successful typically possess a unique combination of skills and professional experiences not easily duplicated, coupled with credibility and professionalism.

The ideal attributes of this specialist are first, the lack of emotional attachment to the original real estate project or the balance sheet of the borrower, guarantor or bank.

Next, the ability to evaluate a project from a multitude of perspectives is essential. For instance, the specialist should have lending experience to be able to appreciate and understand banking issues and processes, including: risk-based capital and loan-to-value issues; accounting laws and banking regulations that artificially create opportunities or requirements to take or forgo certain actions; experience and understanding of loan and special asset committees; skills to evaluate the capacity to pay; and the ability to communicate to bankers on this level.

In addition, the specialist should have experience as a borrower, home builder and developer, so there is familiarity with operational, development and entitlement issues, sales and marketing, demographics, appropriate product offerings and mixes, development timelines and the resources required to make a project successful.

Also, the specialist should have experience as a private equity investor, so there is an understanding of the returns investors expect, investment timeline horizons and the relationships within the private equity arena needed to provide a ready stable of available capital to support restructuring solutions.

Finally, the specialist should have legal and litigation experience to be knowledgeable of the differing foreclosure laws and timelines of each state, including insolvency and bankruptcy issues.

And while this mix of lending, developing, investing and legal experiences is ideal, it still needs to be coupled with the ability to analyze potential resolutions from all four perspectives, create a solution and then mediate a fair and acceptable resolution for all. There is no substitute for experience. Your vetting process should include a careful review of candidates’ backgrounds and experience in the four areas discussed above. Choose debt restructure specialists that have a proven track record of results in today’s environment.

The next article in this series will describe the debt restructuring process, realistic expectations, restructure methods and potential outcomes.

In future articles, the debt restructure specialists of MPKA will delve into case studies of recently transacted deals.

David McCain and Bill Albers are the principals of MPKA, LLC. They have successfully restructured more than $1 billion worth of home builder and developer debt over the last 24 months.

Please call Claire Spence at 281-359-2118 to schedule a call with David McCain or Bill Albers.