“You Can Buy More Land in an Afternoon…
Than You Can Get Rid of in a Lifetime.”
This simple home-building proverb sits framed, front and center, on Doug Yearley’s desk at the Toll Brothers corporate headquarters outside of Philadelphia. As Toll’s CEO and chief dealmaker, Yearley likes to keep the axiom close as a constant reminder of one of the most important lessons that legendary builder and company chairman Bob Toll taught him during his 22 years with the company — when it comes to buying land, be selective and be careful, but don’t be afraid to pay for the best.
To that end, Yearley, Toll, and company COO Rick Hartman personally evaluate every land acquisition deal in the company’s pipeline. If a proposal doesn’t pass the Toll-test, it’s nixed or sent back to the drawing board.
“We will pay to control land at the corner of Main and Main, because in a bad market that’s where people buy and in a good market that’s where you drive price,” says Yearley. “We’re not going to go to the Inland Empire because that’s where land is cheap. We will pay up to be in Princeton, N.J., and we’ll pay almost whatever it takes as long as it makes sense.”
Bob Toll’s land lesson is one of a half-dozen “Toll-isms” that executives and employees repeated during our visit to the Toll offices in Horsham, Pa., for the 2012 Builder of the Year report. Bob and his brother, Bruce, who together founded the company more than 45 years ago, like to share their knowledge through, among other methods, these Yogi Berra-ish observations that seem to take on a life of their own.
Here are several other Toll-isms that have become legendary in the halls of Toll Brothers:
• “Seven fat years and seven lean years.” Bob and Bruce have built their business while navigating numerous downturns. They understand the cyclical nature of home building and are always preparing for the next market slump.
• “Always check the back door.” Bob stresses to his team about planning for the worst-case scenario when working a deal.
• “Put the hay down when the goats can get it.” In short, only advertise when people are ready to consume your message.
• “Always get it in writing.” Cover your butt at all times.
• “A wise man knows what he does not know.” The Toll culture is built on Bob and Bruce’s conservative nature. They don’t take unnecessary risks, and they understand their strengths and weaknesses.
Read more about our 2012 Builder of the Year at: http://www.housingzone.com/builder-year-report-toll-brothers-new-guard-new-era-more-success.