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Despite a growing concern among experts regarding the impact of high interest rates and limited availability on the overall real estate sector, the luxury real estate market continues to demonstrate remarkable resilience and robust demand. This sector presents lucrative opportunities, particularly for passive income investors looking for high-value properties. A prime example of a company excelling in this domain is luxury home builder Toll Brothers (NYSE: TOL), which has achieved impressive performance leading to a notable 9% increase in its dividend. Investors may want to evaluate whether this stock aligns with their investment strategy.

Founded in 1967, Toll Brothers has made a name for itself as not just a builder of homes, but as a creator of dream homes. Headquartered in Fort Washington, Pennsylvania, the company proudly touts itself as "America's Luxury Home Builder." The remarkable journey of Toll Brothers began with its founders, Robert and Bruce Toll, who transformed a standard house into a luxurious residence. This endeavor was not just a business venture; it became a profound reflection of the American dream, showcasing a property that aspiring homeowners yearned to possess.

The Tolls' venture into real estate was deeply influenced by their father, who was also a developer. Drawing from this familial inspiration, the brothers quickly established their reputation in the luxury segment of the Philadelphia housing market. Their initial success in this competitive arena propelled them to take their company public in 1986, with their stock debuting at a modest price of $12.50 per share.

Fast forward to 1993, and Toll Brothers had reached a significant milestone by constructing and selling its 10,000th home. At this point, the company had expanded its operations into a variety of real estate markets across the United States, including North Carolina, California, Texas, New York, and Florida. As New York and California already boasted well-established real estate markets, the strategic decision to venture into the burgeoning markets of the Sun Belt, such as North Carolina, Florida, and Texas, proved to be exceptionally astute and beneficial for the company's growth.

In a related trend, investment giant BlackRock has identified 2025 as a pivotal year for alternative assets. This forecast aligns with the growing interest in non-traditional investment avenues, as evidenced by a New York City-based firm that has quietly amassed a community of over 60,000 investors, all eager to explore an alternative asset class previously reserved for the wealthiest individuals, including billionaires like Jeff Bezos and Bill Gates.

In 2006, Toll Brothers expanded its portfolio to include luxury condominiums by establishing Toll Brothers City Living. The first project under this new division was One Ten Third, a stunning 21-story tower in Manhattan featuring 77 opulent residences. Since its inception, Toll Brothers City Living has successfully broadened its portfolio, incorporating luxurious developments not just in the dynamic New York Metro Area but also in Philadelphia and Washington, D.C. This diversification speaks volumes about the company's commitment to catering to affluent buyers and their evolving needs in the luxury market.