Gibraltar Capital and Asset Management LLC, a wholly owned subsidiary of Toll Brothers Inc. (TOL) and Deutsche Bank (DB) together announced the closing of a private transaction with a large financial institution.

The transaction involves the purchase of a portfolio consisting of 83 non-performing loans with outstanding balances of almost $200 million. The average size of the loan is approximately $2.4 million. The portfolio, mainly consisting of residential acquisition, development and construction loans, is located in the nine states of U.S. along with Washington D.C. 

Besides, this is the second real estate portfolio transaction of Gibraltar, whose asset value is approximately $2 billion. Last year, it entered into a transaction with Oaktree Capital Management LP and Milestone Asset Resolution Co. to purchase a portfolio of loans with a face value of $1.7 billion from the Federal Deposit Insurance Corp.

With a critical condition in the homebuilding industry, large homebuilders tend to engage in managing and trading distressed real estate assets to strengthen their financial positions. In this regard, Lennar Corp.’s (LEN) formation of Rialto Investments is worth mentioning as it has received huge success since its set up in early 2010.

Similarly, Toll Brothers is highly confident about Gibraltar’s future and hopes to use its own expertise, relationships, network, brand name, nationwide presence and capital strength to get into complex transactions in order to maximize the value of underperforming real estate assets.

During the first quarter of fiscal 2011, Toll Brothers reported per share loss of 10 cents compared with 34 cents in the corresponding quarter of prior fiscal. The narrower loss was attributable to higher revenues, cost-cuts and reduced property impairments. Revenues were up 2% to $334.1 million, driven by a rise in average delivery prices of homes.

 
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