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A Toll Bros. founder sees new business opportunities amid global troubles

Joseph N. DiStefano, The Philadelphia Inquirer on

Published in Home and Consumer News

Hundreds of Philly-area bridges are slowly deteriorating. Should travelers be worried?

So I started turning on Hunting Park Avenue. But now they've been digging up Hunting Park. So I have to go all the way down Broad Street to get into town. It seems crazy, all this to put a pipe in.

Q: Will rising interest rates slow construction?

A: Interest rates have been so low, for so long, it's been really easy to be in the real estate business. I've gotten loans on properties last year at rates I'd have said you were crazy. Two 35-year loans for less than 2.5% interest, from HUD. For multifamily developments, apartments.

When I went in business in 1968, mortgage rates were just going up to 6%, from 5.5%. We thought it was the end of the world. Compared to that, interest rates are still remarkably low.

But now inflation is coming. Rents have been increasing.

 

Q: Won't that cut demand for new apartments?

A: We're building a lot more apartments. We finished four or five communities in the last three years. Everything is getting leased 100%. We have no vacancies at the Promenade, that's 400 apartments up at Dreshertown and Welsh Roads, we built that a year and a half ago. You know how, in King of Prussia, they have added all those apartments near the shopping center? These apartments are right above the shopping.

We're getting ready to build more in Montgomery and Delaware and Bucks Counties. We'll open at Granite Run before the end of the year. We're building in Lower Moreland, on a piece of ground I've owned for years on Philmont Avenue. And I just bought the half of the Prudential campus I didn't already own at Welsh Road near the turnpike a couple of weeks ago.

Anybody who's built anything in the last 10 years in Montgomery County is filled up. My biggest fear is, with shipping as it is, I won't be able to get all the electronics — dishwashers and ovens, the ones I want. The lumber is there, but it's expensive.

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