• 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.

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