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Toll Brother mimics Lennar and other Savy Investors

Toll Brother mimics Lennar and other Savvy Investors

 

Toll Brother mimics Lennar and other Savy Investors

 

A joint venture between a Los Angeles-based private-equity firm and several home builders, including luxury builder Toll Brothers Inc., has prevailed in an auction to buy $1.7 billion in distressed loans once held by AmTrust Bank, according to people familiar with the matter.

The Federal Deposit Insurance Corp., which seized AmTrust in December, conducted the auction but declined to comment about the deals’ terms. But according to people working on the transaction, the portfolio contains about 280 loans on land and residential real-estate assets located in Nevada, California, Florida and Arizona, with an average balance of about $6 million.

The deal, scheduled to close soon, is the latest in a series of distressed land deals involving home builders and private-equity funds. In February, Lennar Corp., the nation’s third-largest builder by annual sales, partnered with Starwood Land Ventures LLC to pay $243 million for a 40% stake in a portfolio consisting of residential and commercial loans auctioned off by the FDIC.

It is unclear how big a stake Toll or Oaktree purchased in this latest deal and how much they paid. Toll and Oaktree officials declined to comment.

In a typical distressed-loan deal, an investor pays dimes on the dollar for the assets, which it eventually sells or develops at a profit. The FDIC often pays the buyer a fee to manage the assets as well.

 3/23/2011