5/14/2008 Update:

Hoboken no longer #1

Here’s another sign the Hoboken real estate market is deteriorating. During a conference call with analysts Tuesday, Toll Brothers Chief Executive Robert Toll lowered his grade for the Hoboken/Jersey City market to B. That’s a far cry from the A+ ratings Toll gave back when they said they were “Killing ‘em in Hoboken!” For the past year Toll has given Hoboken a B+ rating, but now it’s down to a B and Hoboken is no longer Toll’s best performing market. Princeton gets an A, though the rest of New Jersey gets a C.

Toll gives a lot of his markets an F, including western New Jersey towns off Route 78. Overall Toll says the spring selling season was “quite weak” in most markets, and some buyers are getting cold feet because they can’t sell their current homes for the price they need to upgrade to a Toll “luxury home”. Could it mean those parking lots by the Hudson Tea building won’t be turning into the already approved condo buildings anytime soon?

Older updates after the jump…

2/28/2008 Update:

Some news on Toll:

Big Loss, Hoboken Update, Arabs Buying Stock

Toll Brothers just reported its worst quarter ever, but not because of Hoboken. The biggest builder of “luxury” homes reported a loss of $96 million in its fiscal first quarter – it’s biggest loss in 22 years. Toll blamed the loss on the housing recession, which forced it to write down the value of developments. The loss of 61 cents a share was greater than expected, and a far cry from the $54 million gain a year earlier. On a conference call, Chief Executive Bob Toll said,

“Ceaseless talk of a recession continues to dampen the mood of consumers. This drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines.'’

When asked about our neck of the woods, Toll said:

“Hoboken and Jersey City continue to do really well for us in the urban high rise, but there are another 35 markets out there that we’re still waiting to see hope in… The projects in Hoboken and Jersey City… are selling very well and are progressing nicely.”

Meanwhile, The New York Times says the government of Abu Dhabi is spending some of its oil profits on shares of Toll Brothers. The Times says the Abu Dhabi Investment Authority (ADIA) took a large 4.5% position in Toll, and one estimate says the ADIA may have as much as $700 billion to spend:

“Abu Dhabi has about 9 percent of the world’s oil and 0.02 percent of its population. The result is a surfeit of petrodollars, much of which is funneled into a secretive, government-controlled investment fund that is helping to shift the balance of power in the financial world. Such riches, coupled with the more agressive stance being taken by ADIA and other sovereign funds, has raised concern in Washington that these investors will wield their wealth for political as well as financial reasons.”

12/6/2007:

A reader pointed out this recent Toll Brothers story on CNN.

Their first loss as a public company, and possibly not their last. Are there more economic downturns coming in our future?

11/12/2007 Update:

Toll Brothers is the biggest builder of luxury homes in America. Which one of its markets are doing the best in this time of strife? You guessed it: Hoboken.

Toll reported quarterly revenue fell 36 percent as their cancellation rate rose to the highest level ever. 39 percent of Toll’s customers backed out of their orders in August, September, and October. Signed contracts with customers were down 33 percent, and Toll said demand worsened last month as excess supply of available housing for sale kept customers at bay.

With all this bad news, CEO Bob Toll was asked to once again give letter grades to his markets. Hoboken/Jersey City came in at the top of the list with a B+. That unit includes Maxwell Place, Harborside Lofts, The Tea Building, and 700 Grove in JC. The rest of New Jersey got a D. Hoboken was followed by B-rated New York City, Connecticut and Delware. Toll gave many markets an F or worse, including Michigan, most of Florida, Southern Calfornia, and Arizona.

Many people are predicting much worse times ahead. What are your feelings about that? Agree / disagree?

8/22/2007 PM Update - Executive Conference Call:

On the Toll Brothers conference call, CEO Bob Toll said overall “traffic is pretty stinky out there.” He changed his tone when he was specifically asked if he still sees strength in the Hoboken/Jersey City markets. He said yes, they see strength here, and that both cities are considered “B+ markets” that are doing “very well”.

When an analyst asked Toll how the 700 Grove Street tower was selling, Toll said it was “pretty much the same as Hoboken”, as he ran through the sales figures:

Hudson Tea Building: 70% sold (still has renters)
Harborside Lofts: 72% sold
Maxwell Place: 78%/97% (probably referring to two phases)
700 Grove: 84% sold

Toll Brothers stock closed 5% higher today, but it’s down 31% this year.

8/22/07 Update: Toll Reports Q3 Profit

Tarragon may be at the brink of bankruptcy, but Toll Brothers continues to turn a profit. Toll shares rose this morning after the developer of Maxwell Place, Hudson Tea, and 700 Grove announced earnings that beat Wall Street estimates.

Toll said fiscal third quarter profit fell 85 percent as the housing slump cut sales and forced them to write down property values. Net income was 16 cents a share, much better than the 2 cents analysts predicted but way down from $1.07 in the same quarter last year.

CEO Robert Toll gives letter grades to each market they operate in. Earlier this month he gave Hoboken and Jersey City a “B+”. We’ll see if that’s still the case when Toll holds a conference call at 2pm today. Back in May Toll said “Hoboken is still pretty much going gangbusters.”

Description - Residential real estate developers
Website - www.tollbrothers.com
Address - 93 Washington St, Hoboken, New Jersey ( NJ ) 07030-3532
Telephone - (201) 963-4800

They wrote the SUV off as a business expense.

5/10/2007 Update:

Apparently, the “killing ‘em in Hoboken” is now just “severely injuring them in Hoboken”, as the A+ rating has been downgraded to a B+.

A question was posed to Bob Toll: “Bob – business is going downward, is this a correct interpretation?” Bob Toll – “yes”,

However, it seems as if our area is still one of the strongest in the country. Here’s their “report card” for the USA:

Mass / RI – F
CT – B+
NY exurbs – B+
NY Urban Q/Bk/M – B+/A-
NJ Urban Hob/JC – B+ [was – killing ‘em aka A+]
NJ exurbs – F
MI – F
Chicago – F
MIN – C-
PA – Phil – B
PA – Poconos – F
DE – C+
MD shore – F
DC/NVA – D+
Raleigh / CHA – B
SC – D
FL Central / Orlando – F
FL East Coast / Jcksvl / Tampa – F+
TX Dallas / SA – B
NoCal – B & D average C
SoCal – C
AZ – D-
Vegas – F
Reno – F
CO - C

Hoboken, Toll Brothers, Real Estate, Condos, Apartments