Toll Brothers, America's largest single-family home builder company, has reportedly decided on its next project - student housing. Douglas Yearly Jr., the chief executive of the firm, said in a statement that the company is planning on building high-end college dormitories.
The company is reportedly purchasing vacant lots near the University of Maryland and Penn State where it hopes to construct off-campus dorms for college students, reports The Wall Street Journal.
The high-end dorms will feature modern luxury amenities like separate bathrooms for each inmate, media rooms and state-of-the-art fitness centers as well, reports Business Journal.
Student Housing demand has risen over the years and college enrolments are expected to increase by more than 10 percent in the coming few years. Even though demand for student housing was less in the initial phase of 2012, new off-campus dorms with modern amenities have been out-performers throughout, reports Bloomberg.
Toll Brothers initially specialized in building single-family homes. However, in recent years they have diversified and entered into upscale home and community building as well. As uncertainty in the real estate sector looms, the construction giant hopes to insure their business by diversifying in a sector that is well in demand.
However, moving into the sector could prove to be risky for Toll Brothers as the firm's building experience is limited to "home-building" only. Student housing requires proper planning and designing to fit multiple needs. Many developers are adding resort-like amenities to dormitories in order to capture the market and Toll Brothers has to keep up with the competition, reports WSJ.
Toll Brothers was recently awarded the 2012 Builder of the Year by "Professional Builder", a construction magazine. This is the second time the firm has bagged the award.
As Toll Brothers is entering the "dormitory" market, it will be downsizing on its distressed real estate investing division, Gibraltar Capital and Asset management LLC that acquires foreclosed properties. The division has not been doing very well and the company plans on shutting the unit down, reports Bloomberg.
