Toll Brothers to Build Condo Project in KOP
Source, Philadelphia Business Journal, Natalie Kostelni
Toll Brothers Inc. is planning to construct a 60-unit condominium complex at the Village at Valley Forge, adding to a for-sale project the homebuilder is currently developing at that King of Prussia, Pa., mixed-use community.
The condominium building, which will cost between $30 million to $40 million to develop, will be constructed on about two acres Toll Brothers (NYSE: TOL) recently bought. The land is located roughly behind the Children’s Hospital of Philadelphia’s King of Prussia specialty care and surgery center. While the Horsham, Pa., homebuilder still needs to go through the approval process in Upper Merion, the residential project is a by-right use. The company expects to be under construction within the next four months.
Toll Brothers already has a residential project underway at the Village at Valley Forge called the Brownstones, which involves 132 stacked townhouses in 11 buildings. Sales have been brisk at the Brownstones and proven to the developer that there’s a market at the Village at Valley Forge for additional for-sale units, said Chuck Breder, division president at Toll Brothers. So far, 40 of the townhouses have sold and prices range between $400,000 and $500,000 depending on the unit size and location.
The regional housing market is faring well, according to recent reports by Berkshire Hathaway HomeServices and Long & Foster. Sales for the first nine months of the year rose by 7.8 percent with 64,671 residential properties trading, according to Berkshire Hathaway data. Last year at this point, 59,984 properties sold throughout the region. Other indicators, such as the number of days a house is up for sale before being sold, point to a robust market. The average number of days a house lingers on the market before selling has fallen to 54 days from 64 days, a 15.6 percent drop.
There is, however, a lack of inventory, which has been a challenge for the residential market throughout the region for the last couple of years, and remains a nagging issue for buyers and real estate agents. The number of properties on the market was reduced throughout the region in September. In Bucks County, inventory fell by 21 percent and in Philadelphia County by 20 percent, according to Long &
Foster data. In Montgomery County, where King of Prussia is located, inventory fell by 19 percent compared with a year ago.
The conditions combined to buoy sales at the Brownstones, for example, and encouraged Toll to move forward with the condo project.
“You would think it would be all 20, 30 or 40-year-olds buying them but there are a lot of older buyers,” Breder said about who is buying at the Brownstones.
The buyers have so far been attracted to the convenience and lifestyle of the mixed-use community as well the location. One resident moved in August from an apartment in Philadelphia to be closer to his job in West Chester, Pa., and Toll is banking on its proximity to employment centers to help with sales of the new condo project.