High Asset

Kennedy Wilson Pays $264M for Multifamily Assets – Los Angeles Business Journal

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Beverly Hills-based real estate investment company Kennedy-Wilson Holdings Inc. and its partners acquired three multifamily properties for a combined $264 million.
The properties acquired were the 180-unit Central Park Commons in Idaho, the 221-unit Paceline in Washington and the 504-unit AYA ABQ in New Mexico. The $264 million total purchase price did not include closing costs.

Kennedy Wilson now owns roughly 50% of the properties. The company and its partners invested $149 million of equity.
Kennedy Wilson expects to add $6 million to its initial annual net operating income.
The company plans to embark on a value-add strategy for the three properties.

“Central Park Commons, Paceline and AYA are ideal additions to our growing collection of properties that cater to residents seeking a suburban, outdoor-oriented lifestyle within close range of the economic vibrancy of downtown Boise, Seattle and Albuquerque,” Kurt Zech, president of Kennedy Wilson’s multifamily division, said in a statement. “Identifying high-quality communities that provide relative affordability in burgeoning markets is the hallmark of Kennedy Wilson’s West Coast multifamily investment process, and we are excited to build on that strategy while creating additional value and expanding our presence in these key markets with the support of our strategic partners.”

Kennedy Wilson has been busy. Last month Toronto-based Fairfax Financial Holdings Ltd. agreed to make a $300 million preferred equity investment in the company. Kennedy Wilson plans to use the money for its development pipeline and real estate investments and to pay off unsecured bank borrowings. Fairfax also increased its first mortgage target within Kennedy Wilson’s debt investment platform from $2 billion to $5 billion.

Fairfax Financial had made past investments in Kennedy Wilson, including a $100 million equity investment in 2010. The two firms have partnered on $8 billion worth of acquisitions, including $5 billion of real estate-related debt investments.

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