Toll Brothers underwrites lots for tomorrow’s market, not yesterday’s
As demand moderates, Toll Brothers is tightening its underwriting hurdle rates and doubling down on prime "Main and Main" sites
Toll Brothers' shift in underwriting strategy is a telling sign of the current market conditions. By tightening its hurdle rates, the company is essentially being more selective about the projects it takes on, focusing on those with stronger fundamentals. This move suggests that Toll Brothers is preparing for a more challenging environment, where demand is no longer as robust as it was in the past.
This change in approach is particularly relevant for the paint industry, as it may impact the demand for paint and coatings in new construction projects. With Toll Brothers prioritizing "Main and Main" sites, which are likely to be more resilient and in-demand, we may see a shift in the types of projects that drive paint sales. Specifically, this could mean more focus on high-end residential and commercial projects, where premium paint products are often used.
As the market continues to evolve, it's worth watching how other builders and developers respond to changing demand conditions. Will they follow Toll Brothers' lead and tighten their underwriting standards, or will they try to maintain their current pace of development? Additionally, paint manufacturers and suppliers should keep a close eye on Toll Brothers' project pipeline and adjust their production and marketing strategies accordingly. By doing so, they can ensure they're well-positioned to meet the changing needs of the market.
Originally reported by housingwire.com. PaintNews adds analysis for real estate & property readers.