Company announces €175 million partial redemption of KWE bonds due November 2025

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--$KW--Kennedy-Wilson Holdings, Inc. (NYSE: KW), a leading global real estate investment company with $28 billion in AUM across its real estate equity and debt investment portfolio, today reported results for Q3-2024:

Financial Results

"Our Q3 activity continued the substantial progress we have been making throughout 2024 on our key initiatives, including the stabilization of our developments, the completion of non-core asset sales which generated $375 million of cash to KW, and the expansion of our investment management business centered around the theme of rental housing," said William McMorrow, Chairman and CEO of Kennedy Wilson. "Our debt investment platform has achieved over $2 billion in originations within multifamily and student housing development this year, with an incremental $1 billion currently in the pipeline. Additionally, in October, we were very pleased to announce a new platform with CPPIB, initially targeting the acquisition of £1 billion in single-family rental housing assets in the UK. This sets the stage for continued growth in our investment management business, which has seen fees grow by 51% year-to-date."

Portfolio Update

• Estimated Annual NOI Grows to $492 million and Fee-Bearing Capital Grows to $8.8 billion:
  • Estimated Annual NOI: Estimated Annual NOI grew to $492 million (from $485 million in Q2-24) primarily driven by asset stabilizations and partially offset by non-core asset dispositions.
  • Investment Management Fees: Grew by 39% in Q3-24 (vs Q3-23) to $22 million primarily as a result of increasing levels of recurring base management fees and originations from KW's debt investment platform.

• Multifamily Stabilizations Add $12 million to Estimated Annual NOI in Q3-24; $29 Million in YTD-24:
  • The Company stabilized two California multifamily properties totaling 512 units during Q3-24: Anacapa Canyon in Southern California and 38 North in Northern California. These assets added $12 million in Estimated Annual NOI.
  • In 2024, the Company has added $29 million in Estimated Annual NOI from stabilizing approximately 2,000 multifamily units.
  • With these stabilizations, the Multifamily portfolio has grown to represent 62% of Est. Annual NOI.
• Development and Lease-up Portfolio Expected To Add ~$60 million in Estimated Annual NOI:
  • Near Term Stabilization: Expected to add $36 million in Estimated Annual NOI by YE-25 from the stabilization of the lease-up portfolio.
  • U.S. Multifamily Completes Construction of 462 Units:
    • In addition to stabilizing Anacapa Canyon (310 units) and 38 North (202 units), the Company completed construction of Vintage at Spanish Springs (257 units) and Vintage at Washington Station (205 units) in the Mountain West, which are both currently in lease-up.
    • In total, the Company has 2,158 units in the Western U.S. undergoing lease-up or development, which are expected to add $15 million in Estimated Annual NOI upon stabilization.
  • Development Portfolio Nears Completion: In 2024, the Company has spent $31 million of cash on development vs. $122 million spent in 2023 (through Q3-23). The Company has $3 million of remaining development costs.
• Multifamily Same Property Performance(1): Improving Occupancy Leads to NOI Growth

Investment Management Business

• 39% Growth in Investment Management Fees:
  • Q3-24 Investment Management fees grew by 39% to $22 million (vs Q3-23) driven by higher levels of Fee-Bearing Capital and $422 million of new originations from the Company's Debt Investment Platform.
  • YTD-24 Investment Management fees grew by 51% to $69 million (vs. YTD-23).
• Fee-Bearing Capital Grew to a Record $8.8 billion in Q3-24, +5% YTD:
  • In addition to the $8.8 billion in Fee-Bearing Capital, the Company has future incremental Fee-Bearing Capital consisting of the following:
    • $3.1 billion in future fundings on previously originated loans within the Debt Investment Platform.
    • $3.0 billion in incremental non-discretionary capital available from certain strategic partners for equity and debt investment.
• Debt Investment Platform Grows to $8.2 billion in Q3-24:
  • Q3-24 Investment Activity Increases Platform By 3%: In Q3-24, originated $422 million in new construction loans, completed $205 million in additional fundings on existing loans, and realized $220 million in repayments
  • Debt Investment Platform: Includes $5.1 billion in outstanding loans ($4.9 billion of Fee-Bearing Capital) and $3.1 billion of future funding commitments. KW has an average ownership of 5%.
  • Debt Platform Growth Since Q2-23: Completed $2.3 billion in new originations since June 30, 2023, with over $1 billion in new originations in process and expected to close in Q4-24.

Real Estate Investment Activity

• Q3-24: $234 million in Gross Dispositions ($148 million at share):
  • Consolidated Portfolio: Sold last remaining wholly-owned asset in Spain (retail) and a multifamily property in the Pacific Northwest, for a total of $130 million. These asset sales generated $63 million of cash and a gain on sale of $6 million to KW.
  • Co-Investment Portfolio: Sold $104 million of real estate investments comprised of three investments from its commingled funds and sales from its non-core residential holdings, in which KW's weighted-average ownership was 22%.
• YTD-24: $650 million in Gross Dispositions ($526 million at share) Generated $375 million of Cash to KW

Balance Sheet and Liquidity

• Line of Credit Renewal and Expansion: The Company's credit facility was expanded to $550 million in partnership with a ten-member banking syndicate. The new credit facility has a fully extended maturity of September 2028.
• Cash and Line of Credit Availability: As of September 30, 2024, Kennedy Wilson had a total of $367 million(1) in cash and cash equivalents and $177 million drawn on its $550 million revolving credit facility.
• Debt Profile: Kennedy Wilson's share of debt had a weighted average effective interest rate of 4.6% per annum and a weighted average maturity of 4.8 years as of September 30, 2024. Approximately 96% of the Company's debt is either fixed or hedged with interest rate hedges.
• Interest Rate Hedging Strategy: The Company hedges its floating rate exposure through the use of interest rate caps and swaps. The Company's interest rate hedges have a weighted average maturity of 1.2 years. The Company received $10 million of cash from its interest rate derivatives in Q3-24, which is not reflected as an offset to interest expense. Since 2022, the Company has received $73 million from its interest rate hedges.
• Foreign Currency Hedging Strategy: Kennedy Wilson hedges its exposure to foreign currency fluctuations by borrowing in the currency in which it invests and using foreign currency hedging instruments. As of September 30, 2024, the Company has hedged approximately 94% of the carrying value of its foreign currency investments, using local currency debt and hedging instruments with a weighted average term of 2.0 years.

Subsequent Events

In October, the Company announced the launch of a new UK single-family rental housing joint-venture with Canadian Pension Plan Investment Board ("CPPIB") targeting £1 billion in real estate. The venture will target energy efficient, new-build housing stock in strong and growing local economies that offer residents excellent connectivity, attractive local amenities, and proximity to strong employment prospects and educational institutions. CPPIB will hold 90% of the venture and Kennedy Wilson will hold a 10% ownership interest moving forward.

The Company announced a €175 million early redemption of its €475 million outstanding euro-denominated 3.25% notes due November 2025 issued by Kennedy Wilson Europe Real Estate Limited, a wholly-owned subsidiary of Kennedy Wilson. The redemption will be completed on December 18, 2024 and funded using cash proceeds from its previously announced asset sale program and existing liquidity. The Company expects the redemption price to be equal to approximately 100.2% of the principal amount redeemed plus accrued interest.(2)

Conference Call and Webcast Details

Kennedy Wilson will hold a live conference call and webcast to discuss results at 9:00 a.m. PT/12:00 p.m. ET on Thursday, November 7. The direct dial-in number for the conference call is (844) 340-4761 for U.S. callers and (412) 717-9616 for international callers. A replay of the call will be available for one week beginning one hour after the live call and can be accessed by (877) 344-7529 for U.S. callers and (412) 317-0088 for international callers. The passcode for the replay is 3844190.

The webcast will be available at: . A replay of the webcast will be available one hour after the original webcast on the Company's investor relations web site for three months.

About Kennedy Wilson

Kennedy Wilson (NYSE: KW) is a leading real estate investment company with $28 billion of assets under management in high growth markets across the United States, the UK and Ireland. Drawing on decades of experience, our relationship-oriented team excels at identifying opportunities and building value through market cycles, closing more than $50 billion in total transactions across the property spectrum since going public in 2009. Kennedy Wilson owns, operates, and builds real estate within our high-quality, core real estate portfolio and through our investment management platform, where we target opportunistic equity and debt investments alongside our partners. For further information, please visit .

Forward-Looking Statements

Statements made by us in this report and in other reports and statements released by us that are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are necessarily estimates reflecting the judgment of our senior management based on our current estimates, expectations, forecasts and projections and include comments that express our current opinions about trends and factors that may impact future operating results. Disclosures that use words such as "believe," "anticipate," "estimate," "intend," "may," "could," "plan," "expect," "project" or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. These statements are not guarantees of future performance, rely on a number of assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and uncertainties that could cause our actual results, performance or achievement, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties may include the factors and the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the "SEC"), including the Item 1A. "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2023, as amended by our subsequent filings with the SEC. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in the context of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed in our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise.

Common Definitions

• "KWH," "KW," "Kennedy Wilson," the "Company," "we," "our," or "us" refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned subsidiaries.
  

• "Adjusted EBITDA" represents net (loss) income before interest expense, loss (gain) on early extinguishment of debt, our share of interest expense included in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in unconsolidated investments, preferred dividends, provision for (benefit from) income taxes, our share of taxes included in unconsolidated investments, share-based compensation expense for the Company, and EBITDA attributable to noncontrolling interests.
  Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at . Our management uses Adjusted EBITDA to analyze our business because it adjusts net income for items we believe do not accurately reflect the nature of our business going forward or that relate to non-cash compensation expense or noncontrolling interests. Such items may vary for different companies for reasons unrelated to overall operating performance. Additionally, we believe Adjusted EBITDA is useful to investors to assist them in getting a more accurate picture of our results from operations. However, Adjusted EBITDA is not a recognized measurement under GAAP and when analyzing our operating performance, readers should use Adjusted EBITDA in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not remove all non-cash items or consider certain cash requirements such as tax and debt service payments. The amount shown for Adjusted EBITDA also differs from the amount calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.
  
• "Adjusted Fees" refers to Kennedy Wilson's gross investment management and property services fees adjusted to include Kennedy Wilson's share of fees eliminated in consolidation, and performance fees included in unconsolidated investments.

Investor Relations
Daven Bhavsar, CFA
(310) 887-3431
dbhavsar@kennedywilson.com

Corporate Headquarters
151 S. El Camino Drive
Beverly Hills, CA 90212