Luxury Home Builder Toll Brothers Is Exiting the Multifamily Business

Toll Brothers has risen 12% so far this year. (Dreamstime)

Key Points

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• Toll Brothers is selling its multifamily housing portfolio to Kennedy Wilson for $347 million.
• Kennedy Wilson will acquire Toll Brothers’ Apartment Living platform and general partner interests in 18 completed apartment and student housing properties.
• Toll Brothers intends to dispose of remaining assets and exit the multifamily development business.

Home builder Toll Brothers is selling a chunk of its multifamily housing portfolio to real estate investment company Kennedy Wilson for $347 million. The builder best known for its luxury single-family homes plans to exit the multifamily business entirely, it said in a filing.

Toll Brothers stock was up 0.3% shortly after the market opened, while Kennedy Wilson stock jumped 2.9%.

Kennedy Wilson will acquire Toll Brothers’ Apartment Living platform in a deal expected to close in October, including its in-house development team, according to a news release included in a filing with the Securities and Exchange Commission. Kennedy Wilson will also acquire Toll Brothers’ general partner interests in 18 completed apartment and student housing properties—assets worth $2.2 billion—as well as 29 properties at various stages of development.

It will also manage 20 apartment and student housing properties that Toll Brothers will continue to own—for now, at least.

“It is Toll Brothers’ intention to dispose of these remaining assets over time and exit the multifamily development business,” the release said.

The company stands out among other public builders due to its primary focus on luxury homes, with an average selling price in its most recently completed quarter around $1 million.

“This transaction will unlock significant capital for our stockholders, while allowing us to focus on our core home-building business and continue our transformation to a more asset-light home builder,” Douglas C. Yearley, Jr., chairman and CEO of Toll Brothers, said in a statement.

The sale to a company with the capacity to operate a large number of multifamily residences makes sense for Toll Brothers, notes Wedbush analyst Jay McCanless.

“The economies of scale of larger operators, like Kennedy Wilson and some of these others that are managing 80-, 90-, 100,000 doors—you just can’t get those as a home builder trying to be mainly single family,” he says.

Toll Brothers could use the cash to buy back shares or grow its community count, McCanless notes.

“It makes sense that they are monetizing these properties and looking to redeploy the funds elsewhere,” he says.

Housing as a whole has been under pressure in recent years. For companies in the single-family space, the reason is largely higher home prices and mortgage rates, which have combined to price many out of the housing market.

Luxury home sales have been a relative outlier: sales of existing homes priced above $1 million were up 7.1% from the year prior nationally in July, the most recent month for which National Association of Realtors data is available, outperforming other price categories and the broader 0.8% increase.

The multifamily market, meanwhile, has been swamped by a surge of new construction projects. Over a million properties with five or more units were completed in 2023 and 2024 combined, the highest total for any two-year period since the 1980s, government data show.

But the tide is slowly turning for multifamily operators, notes Chris Nebenzahl, the vice president of rental research at John Burns Research and Consulting.

“We’re coming down from peak supply, I think we’re absorbing units well, [and] people can see the light at the end of the tunnel for rent growth,” he says.

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