Benzinga | Aug 24, 2021 02:15PM EDT

Equity Residential Partners With Toll Brothers For Rental Apartment Communities

* Equity Residential (NYSE:EQR) is partnering with luxury home builder Toll Brothers Inc (NYSE:TOL) to develop new rental apartment communities in key U.S. markets.

* The parties initially intend to selectively acquire and develop sites for apartment rental communities in six metro markets, Atlanta, Austin, Boston, Denver, Orange County/San Diego, Seattle, and Dallas-Fort Worth.

* Equity Residential will invest 75% of the equity for each selected project, and Toll Brothers will invest 25% over the next three years.

* Equity Residential will have the option to acquire each property upon stabilization.

* The parties have targeted an initial minimum co-investment of about $750 million in combined equity, or nearly $1.9 billion capacity, assuming 60% leverage.

* Three properties currently controlled by Toll Brothers, with a total anticipated project cost of approximately $242 million, will jump-start the venture.

* Toll Brothers will act as a managing member of each project, overseeing approvals, design, and construction.

* Price Action: EQR shares are trading lower by 0.72% at $81.75, while TOL traded higher by 4.51% at $62.06 on the last check Tuesday.