Kennedy Wilson and its partners have acquired three multifamily communities in fast-growing West Coast markets in separate transactions for $264 million, excluding closing costs. The communities include the 504-unit garden-style AYA ABQ in Albuquerque, New Mexico; the 180-unit garden-style Central Park Commons in Meridian, Idaho; and the 221-unit Paceline in Shoreline, Washington. These acquisitions expand the global real estate investment company’s apartment portfolio to more than 36,000 units.
Kennedy Wilson has an approximate 50% ownership in the acquisitions, which were completed within its co-investment portfolio. The firm and its partners have invested $149 million of equity, including $75 million by Kennedy Wilson. According to the firm, the properties are expected to add approximately $11 million of initial annual net operating income, including $6 million to Kennedy Wilson. The three communities will undergo value-add upgrades, including unit interior renovations, common area refreshes, and enhanced amenities.
“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 with close range of the economic vibrancy of downtown Boise, Seattle, and Albuquerque,” said Kurt Zech, president of Kennedy Wilson’s multifamily division. “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.”
In addition to the acquisitions, Kennedy Wilson recently announced that Fairfax Financial Holdings Limited, through its affiliates, will provide a $300 million strategic preferred equity investment. The firm, which focuses on multifamily and office properties in the Western U.S., United Kingdom, and Ireland, plans to use the proceeds to fund its development pipeline and real estate investments as well as pay off its unsecured bank borrowings.
Fairfax also has boosted its first mortgage target with Kennedy Wilson’s debt investment platform by $3 million to $5 million. According to Kennedy Wilson, it expects to have an approximately 5% interest in future debt investments within the platform while earning customary fees as asset manager. In addition to the $2 billion invested in the firm’s global debt platform, approximately $4 billion in additional investment capacity with a strong pipeline of future opportunities now exists.
“We are excited to expand our long-standing relationship with Fairfax through this preferred equity investment and debt investment platform expansion, which highlights the strength of our investment strategy as we continue growing our global business,” said William McMorrow, Kennedy Wilson chairman and CEO. “This new permanent capital will provide us flexibility as we grow our income-producing portfolio and complete our development projects.”