Real Estate

Leadership

An inside look at luxury home building with Doug Yearley

February 21, 2024

An inside look at luxury home building with Doug Yearley

Doug Yearley

Chairman & CEO, Toll Brothers

Willy Walker checked in with Doug Yearley, Chairman and CEO of Toll Brothers, to discuss everything from the importance of CRE branding to the feasibility of prefab homes.

I recently had the privilege of talking with Doug Yearley, the Chairman and CEO of Toll Brothers, the fifth-largest home builder in the US and one of the largest home builders catering to the luxury side of the new construction market. We discussed everything real estate, from the importance of branding to the feasibility of prefab homes.  

The best lessons from land deals with Robert Toll

Doug started his career at Toll Brothers doing land deals. Although he and Bob Toll didn’t always see eye-to-eye on every deal, one of the best deals they did together was jumping into the NYC luxury high-rise market. This was a bold move from a company that had previously only built suburban single-family homes, especially when just a half acre of land could cost over $100 million.  However, fortune often favors the bold, and their first luxury high-rise was a resounding success for the company. To date, Toll Brothers has built over 40 high-rises in the NYC area.  

What’s causing constraints in the housing supply?

Although you might expect customers who are buying houses that cost over one million dollars to finance their purchase through a mortgage, 26 percent of Toll Brothers’ sales last year were paid entirely with cash. Although some may attribute this to how expensive it is to borrow in today’s market, Doug believes it’s because the housing supply is so constrained right now.  Practically everyone across the United States has a mortgage rate below 4 percent, with many having a rate below 3 percent that they are simply unwilling to give it up. This means that those in the luxury market are turning to Toll Brothers to purchase a brand new home rather than trying to buy an existing home since the existing homes simply aren’t on the market or require a lot of updating.  

The future of Toll Brothers

I asked Doug what he thinks Toll Brothers will look like ten years from now, as well as what the market at large will look like. Doug sees Toll Brothers potentially scaling internationally. Although his team keeps an eye on what goes on outside of the States, Toll hasn’t made the jump yet. He also believes that there will be some great strides in technology that will help out home builders in a major way. He sees smaller arms of Toll Brothers’ business, Toll Brothers Apartment Living and Toll Brothers Campus Living brands, experiencing significant growth over the next ten years. 

Doug’s insights were a fascinating look inside the luxury home building and development in the dynamic NYC market. For more insights from leaders in commercial real estate, finance, government, and more, subscribe to the Walker Webcast.

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