KW - Earnings call transcript Q1 2019 | Kennedy-Wilson Holdings, Inc.

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Operator

Good day, and welcome to the Kennedy-Wilson First Quarter 2019 Earnings Call and Webcast. Today's call is being recorded. After today's presentation, there will be an opportunity to ask questions. [Operator instructions]. I would now like to turn the call over to Daven Bhavsar. ahead. go Please

Daven Bhavsar

the Executive good call one us replay Investor and of is week information. Bhavsar, Officer Matt call, Daven Mary for adjusted Justin Kennedy-Wilson; Thank archived Chief financial income. being Enbody, are available be morning. webcast net Bill joining Financial Windisch, Wilson; Kennedy today be months. President more Kennedy-Wilson. will Please website measures, adjusted replay. three Relations CEO President The see by McMorrow, for and On and we phone of Ricks, to will and Today's you webcast of will of This Vice including for is Chairman Kennedy-Wilson; for and certain and and by this live EBITDA refer non-GAAP

discussed find section our Commission. a differ measure GAAP like comparable turn indicated this and a and Chairman forward-looking the with reports McMorrow. forward-looking over in information and which other number is on uncertainties the now materially these may most may call items posted XXXX a release, the call statements. of made financial due the factors of include Securities the Actual to our filings I of risks, would description earnings from Exchange to and of call to CEO Bill along results on reconciliation website. relations You Statements with during directly this and first-quarter our can investor

Bill McMorrow

XXXX. and strategic for the we've and then open results I'll initiatives. property After have made XXXX, operating on to up Daven. quarter This record then you Thanks, we're and update everybody, financial on key to you solid us Good morning, in financial morning, start progress a it a review joining And we'll thank year our questions. of results for for today. our pleased the

$XXX million quarter. XXXX. $XX So of totaled net a in in income to of compared million adjusted $X.XX was was to XXXX. $XX compared in Adjusted $X.XX per QX loss million starting quarter for our a million EPS $XXX results QX share EBITDA with QX GAAP And in the loss compared XXXX. the to

portfolio and the the Europe, NOI with from XX% annual estimated Ireland primarily million, U.S. Kingdom. office from western was XX% and the in Our quarter our with ended XX% assets. coming of of by United represented real estate an portfolio multifamily $XXX and

initiatives X% where were revenue discuss each same were have been and in substantial later As existing to by in growth our from call, primarily a our NOI, growing property portfolio. growth quarter we across hotel by of organic completed. had will impacted expect These operations good value-add initiatives portfolio. property NOI, portfolio, property we with that development results same in another we and the the property completion now led our through some our of drop-in occupancy. completing global initiatives negatively These We

In property same had where Healthy invest initiatives. the growing a saw X% portfolio with our growth. quarter, continue multifamily which in and in our hotels, revenue we to support markets Excluding property value-added X%. in growth growth fundamentals rental assets and robust up to NOI portfolio, continue includes we up X% same capital NOI

as an LA quarter, California. interior XX%. our owned in growing submarket a received, initiatives and that clubhouse The of including well completing. next which growth debuted Mission and adjacent to which California university, revenue NOI of that of and Hills, asset growth NOI well growth limited In to university a with is Ventura up asset submarkets asset portfolio, the benefits County, the property Our is NOI The of mostly the market, renovations with in suburban X% we the of a made basis wholly very quarter assets multifamily we and in XX%. various Southern from has fantastic location Greater new a management had largest its is been are on XXXX as sits had supply

has Our quarter, to up occupancies Pacific almost and added the portfolio up We in the perform three NOI strength continues pool greater assets Seattle had this Northwest the with led X%. also X% a same property in great to same-store property by area presence outpacing region area, the well. XX,XXX began full-time the area technology XX,XXX job expanding to averages, total in more recently and Job and is continue growth area national Seattle employees Amazon, in in which the companies especially grow and Bellevue almost openings. than their

same strong Ireland economic portfolio property with continues NOI just Mary a great backdrop, in detail also perform market X%. growing continues well, in over Irish moment. will as Our up in The to multifamily have to discuss

Turning about which a assets office the the had to of largest NOI portfolio, component. our same. basis up the X% represent with revenue quarter, growth good up commercial same We and on

one, Now where two, the our I'd recycling number into and which and growing and number asset three, other producing are to like our management continuing we key business; our investment update to returns capital NOI; execute you recycling and investments program, initiatives, opportunities. sale our number strategic growing outsized strategic feed are, three capital global on on

projects, So starting growing NOI number value-add In continue one. which we focus are to aimed on U.S., completing organically. with the CapEx strategic at

this at course have XXX Salt the lobby well in another in Savior quarter in Portland renovations and the quarter, to as completed still and we Santa a City. and to as multifamily renovations XXX Lake we office leasing unit a entry, Fe in We example, residence Creekview, over XXX expect new year. completed that For of at the and do

these earning from typically to on cost returns We renovations. are XX XX%

where of also adding to some is excess existing land. evaluate garden communities our there density are to sale continuing apartment We

over market to multifamily X,XXX projects, markup feet current on through our commercial XX-acre of NOI of our NOI through we of Village resort. roughly the development property lease-up of joint of will end in over once also million we X,XXX add In units and number Vintage the XXX venture, XX% expect Housing square with our affordable housing. next engaged XXXX, the conditions, delivered quarter the and development senior and and and months. the add X.X that these We as initiatives in is management assets, development stabilized, end million have complete XX affordable units, Kona being rate which by Based and includes in of completing U.S., which to annualized

to our joint Mary platform, weighted We Ireland, in of cash expect in KW have of development years million the to be the units. of to cash stabilize XXX in million our expected the units has our the with greater development of in the received X,XXX pipeline, to X,XXX year, million we recouped capital-light turn next initial the of from units all President required to count minimal a tax grow the at this in bring projects time sale while to by which now unit represents credits, XX% we million will over over With by venture call XXXX. and few XXXX. detail. we Vintage complete Dublin, now the to from NOI. discuss distributions estimated and QX, These grown added $XX I'd of of almost From same pipeline toward XX to by Ricks, KW. remaining XX,XXX like Kennedy-Wilson, an $X additional the NOI annual is component estimated remain over large in million $XX investment this global currently on X,XXX track and manner A

Mary Ricks

activity groundwork Thanks, we've solid, moment. occupational Great. more in seen Europe, remained In for the growth. demand a In this levels a been quarter, UK, busy good future including Bill. it's setting the in NOI and after quarter-end place the on

so which feet business, has Capital retail XX,XXX is being making component making leased layer by this Starting of where food an really beverage almost we're on progress we negotiations top on excellent or are underpinned have the Dublin demand. urban bringing at space, dynamic square doing some place Irish all strong Our to lease there. additional and occupiers fundamentals, in very the artisanal with campus, Dock,

We represent We're for the one most strong QX and units year-end. offerings end also rental and of multifamily today. at by high-quality by best Capital the the operational of expect fully market be which Dock, in seeing to demand our unique leased

require It's also of ownership demand or high units by note of and annum landlords than that to XXXX lack remains estimated less to is in with there more. X, the important units driven The units on bring which apartments once institutional a undersupply. XXXX. to to significant of tenancy with multifamily still other in per which continues Ireland. by in represents year, leasing next units strongly, very Clancy market community key will X track total Phase XXX XXX half multifamily development second and City complete, Dublin X% Our Quay in alone is the controlled Ireland of between multifamily XXX deliver Dublin the to we're where largest perform XX,XXX

dominated on as say X,XXX decrease a refurbishment and that over we our the At stunning remains our And reception undertaken years, remain Dublin, the rolling marking the to and new demand was in hit there. renting Hotel, significant program We units forward. multifamily completed guests, all the in completion there. housing NOI Shelbourne partly to to the will Shelbourne of a to Dublin deep continues to NOI our medium-term price be development Autograph's luxury producer we in development contracts million is in a The amenitized firmly us in to key the subcontractors. closed. prudent to the that And the is look The allows recently major As in particularly our part is delivering sales manner, works such, has preeminent with Europe is brand, hotel million globally, we going while EU, a as Almost growing drive XXX focus new in hit And be X our become takeup Ireland we've Dublin is finance. contractors exciting But pleased and platforms the during one fixed of the top loyalty the our goal NOI continue portfolio few and temporary last leader our a the and to in goal of ADR see track philosophy quarter, I'm new a it strong of much refurbishment professionally lobby, maintaining had strategically it Collection to local utilizing needed our QX distribution, the NOI highest we Dublin, iconic and joining the for ever we've near Office offering. evolves the spirit managed for independent at $XX preservation successful leveraging of portfolio in we Shelbourne as Autograph of the are timeless and rebranding was most us. the high-growth Marriot's thrilled including powerful and of technology square market. by further. feet. services in and all economies hotels. over Shelbourne grow relationships independent leveraging with asset and announce approach because on hotels, our to our recorded and

XXXX, refurbishment, with in next property the current possession into this agreements key established the London, Friars of the alone. in WeWork The strategic the which XX% with foot midway XXXX office EU, property where which become due remain Maidenhead, space and UK, will Supply We're supported come for of existing and will from where The to The XX,XXX Bridge to the takeup X.X% city in takeup there businesses occupier square vacancies strongly, coming under perform ASOS a an Southeast the growth. excited have expected Importantly, unemployment asset The office At only us with to we square Court demand. implemented occupancy focusing to be planned XXXX. highest Dublin's on we building, local lease hitting the a Watford to are square Other QX where giving feet year. supporting UK year; expected the lease the with rate We is we've a play to XX% an good a we in significant Stockley already development for being with will quarter, strong just and strong buildings to in which roll feet lease XX% NOI has gain of rents preleased at fundamentals. have to southeast be demand had The market, at XX,XXX the is is highest market. from construction square last growth follow vacancies It's takeup include at annual pipeline, of the or with this out of constrained million fundamentals entire later In tenants, the in XXXX. dynamics Once through now additional rental market. balance, the that Irish to development jobs this expanding, of year compared the X.X a occupier ahead continues And center, once for in market and in discount in in complete, and reserved, active end with feet, we entire these further take drive created Park an GDP building Link number in XXXX. of X come fell total quarters. delivered full It example. strong a is million and quarter. doubled. London. vacant significant a complete, will to in grow Park, strategic currently since confidence remain developments will like economy X.X majority continues almost QX which this with strong, employment continues which agreement among XXXX pace in NOI consumption by complete has

industrial We the in end Moraleja be completion year. well at now to refurbishment occupied. Merlin in square are a assets Green leasing momentum. the shopping our Spain, refurbished leasing is foot Manchester, XX,XXX our asset Park, following center confident placed we project is the capitalize well, which this stabilized of the Madrid will In last quarter, Also, XXX% in of on strong

plans. X% During the signed quarter, leases we above at XX rent business

XX% of eight who sales and in securing We occupancy names with quarter-end, strong Spain, Subsequent we in top the Carrefour, growth, the lineup, This points have growth and signs The tenant signed percentage to to cash with the an and portfolio of sales. and in bringing almost with cash assets resulted now growing new GDP with the and has brands. the Carrefour €XX show year. forecasted X.X%. a income over years return to XX Spanish KW, group's retailer date in in Europe a which center, to portfolio XX% at improvement of located last generates lease resilience dramatically including across our X XX the occupies is leading term. for This majority economy footfall Madrid renewal continues billion XXXX accounts at has Barcelona. retail the fully to to of Spanish portfolio, Spanish on a growth upgraded

acquisitions, assets opportunistic XXX of returns. included primarily capital larger have acquired to included combination sales Irish asset from us assets sectors assets of into capital core purchaser previously recycling that portfolio our disposal developments. a at to about significant multifamily, across office from and portfolio program has where Our Europe able grown the today. and a multifamily We've gains noncore special typically out This through the redeploy smaller paying generate of our XXX we're and peek UK portfolio in and outsized has transformed purchases been sales

raising is key fee-bearing global capital. initiative second Our

a total our the new where major partner. million We $XXX interest properties a economic portfolio During million with have fees. earning totaling will more a U.S., $XXX manage the the of company investments while quarter, has this in insurance almost invested platform, the we now closed unlevered X% core in separate two and approximately customary KW account in as

of total, funds AXA excellent development growth now through up built IM progress We attractive opportunities. at continue institutional separate comingled will This to stages to great look and account Real joint units partners. and $X.X continue we are our totals account eight have our we U.S. investment In existing making discretionary capital growing venture Irish approximately platform invested we're units with properties with business. prospects, look as XX-XX Europe, various billion multifamily currently fee-bearing to our X,XXX at our with new on and In platform Assets. of X,XXX separate across

turn of way have over like continue three We dollars back the to to the I'd target two a raising activity of lot work globally of capital that, new several and And call years. of under over with toward to billions our Bill. next to

Bill McMorrow

Mary. very much, you Thank

recycling I is the The that third program asset sale focus area of on our mentioned, capital. the

of our $XXX sold was quarter, with Tahoe XX:XX Ritz-Carlton $XX major promotes the producing $XXX cash KW earned a to since assets, insurance IRR was of million Lake time The a in the QX. cash of recognized During an company. and biggest the million, quarter when which a for of million a $XXX KW. on to in of million. XXXX. We, $XX and profit Ritz KW, it venture this acquired included investment The beginning was of disposition share $XX gain XX% million This in we was million of at the

well properties for as UK U.S. noncore $XX million, We $XX retail in three as also assets. sold million

Going our reallocate smaller higher sale in asset investment we where earning noncore that where assets, program focus intend into We opportunities capital to management our will have some completed where value-add to on also and we continue plans. assets, fees promotes. attractive assets see potential, forward, with high-quality cases we're selling business and partners, we growth

since represented full In a overhead decrease sale division end Meyers the G&A this a of This by the quarter million. as at quarter of $X the our sale by in and also reduction fees as resulted first last the in quarter, three year. well million costs of research

During completed of we've asset our our rate rate finance loan which represents refinance at quarter, XXX on interest our XX% X.XX%, is interest end to completed and was new million in to rate our the which X% European EUR XX% history to basis floating were Capital stock completed the as partners, completed XX% the allocated partners with on fantastic lowest Dock. million the refinance in an repurchase part and our only capital QX, investment And team. of that we execution effective to CapEx, plan. investments we finally, follows. of cash $XX the and at lowered in the a This X, with

in our So continued initiatives. I'm once of to investment pleased and positive again, the key with continue we trends the our see progress markets

I'd it with to open questions. like that, So up to

Operator

session. begin Germain roster. We question-and-answer our instructions]. And will comes Securities. [Operator assemble question from our At Mitch pause now this of to we the momentarily will time, first JMP

Mitch Germain

Good morning, Bill.

in have guys You good always market. been really

You've terms of NOI curious good been of timing asset about sectors. market. really or Retail's and always XX% timing in I'm base. your

want you of or that time at look maybe you're a opportunistic exposure? lighten In is you think maybe looking actually the to it up more your do terms that to be way little sector, there, to

Bill McMorrow

we're the doing Well, simple answer's both. I think actually that

of at Stillorgan, in some upgrading million of for tenants really $XX there, -- our but one on you the opportunities. really, centers. in Salt we that about looking to at retail anchored sits funds call, very in shopping which same own ago, I sold saw got us asset other And asset. a what property. do to think, are quarter, lease redevelopment in first that of as a year one of of three, a I example, selling would roughly fairly big allowed mean, That I our large assets in and UK. grocery affluent Ireland value Dublin. a Tesco thing adding and the we're It's we with submarkets good has number by spent land. also of we bought name smaller of we've And occupancy, the long-term In Lake some sits also a piece the City it very the the property a we

say, hurt specific So our which And the markets. very we're assets, an bit studying. be has I geographic there's overreaction it's values. something opinion a of that in some in, of would on -- better-quality to would been It

CapEx the said selling So looking we're some looking We're things. in things through programs and buying both. like that value at, own, actually it's and but we adding through cases, the I doing something we're we're at our at beginning,

Mitch Germain

your Is helpful. next terms that commenced, in increase what's the is change you're way construction of really the That's really the making costs, development but that pipeline? about Okay. phase any not in impact or of looking been

Bill McMorrow

there. I is NOI great that management you're as if we an team new where XX% from say that construction have did, I'd Ireland, we focused, particularly, coming said of incredibly

and line around completed million there look when think to Capital was you of total on markets Dock, we've costs. compared between right construction the so, which I the somewhere costs, to other budget. $XXX on able that in we globally, end And on been hold time And at day, the at cost-wise

I and And would big so, I escalated. what prices -- not have are are really, say is seeing, would construction say, that that costs Mitch. we it's the land concern,

existing very a gotten so, things And in while that I I anything it's would very I we're you're would to be say, new to the buying. along consider that be prices, globally prices. have Land nice I embedded what have own, we say, good some, the we time very gains to think careful markets that in in retail

Mitch Germain

Shelbourne like on some lobby Last Based one running. regarding back and seems and renovation it area Great. from me. up comments Mary's other it's work, the common

So beyond? about more Does it how to and ramp sector more quarter should it think bit revenue to hotel second -- a build the of get there? back we normalized the levels, in a get is the back or does to get

Bill McMorrow

perform And we're And center add occupancies in belief the very even Autograph the to It's you year, here, big brand, in by hard from over Even brand, to that help it, by that's room the touching Shelbourne rights. to with were lobby nice two call profit in going a a time us expecting to impacted -- of in three, a little away this XX%. run also clarity operations have April forecast going we on some bar the so the of Renaissance that on looking the balance actually but for XXs, explain it very is for maybe those the the might to a beverage -- There's high looking the and sit but and And food the continued off Mary, No. shutdown. lobby, this heavily renovation. us. well. at

Mary Ricks

of ADRs, the Yes, which the our year. for already pushing the goal, seen really that's we've balance coming through

growth we're feel there. So where we with going good our NOI about

Bill McMorrow

Yes.

we strong expect forecasts a a very have. -- the for year balance of based clear, expected mean, on I months and we we the that think, nine seeing to bookings very the the we're I Mary, that be strong

Mary Ricks

we've driving, really And market hotel iconic all it's really is the Shelbourne now. talking it's as been about, And also, in Dublin, booming. Ireland. the And leisure high-end most

great doing are team the with it. So job a

Bill McMorrow

Yes.

Mitch. I think one more footnote,

Mitch Germain

Yes, please.

Bill McMorrow

in last whole Shelbourne year Ireland the The country. voted the hotel in one was number

had it we a XX call the I decrease occupancy a, So revenue days temporary year. and just for first the of

Mitch Germain

Got you.

be Okay, expect to as basically, just so right? usual, XQ business

Mary Ricks

yes. shut hotel Yes, I the and we down actually fully of -- actually was was lobby some mean, period for closed, the time.

So back, going that the really explains the the mean, drop the you're NOI of completely quarters. next And months are so track ADR. growing to that are have else over three very see in the NOI. open, expect But driving bookings on to and now solid, bookings we we I balance actually it's and for everything are nine

Bill McMorrow

put to was down And about NOI around quarter, it numbers some $X the million. in

So expect come renovations are back that some to we and now done. then that the

Mitch Germain

looking in NOI look Got of $XX have me, down don't I I but million fourth of income. you income, at the mean, I'm just front at north from quarter. you. were

So how sold just think understand assets to but should as hotel the well first about ramp. I And we you some know -- the trying quarter, in

Bill McMorrow

Yes. in million the of It hotels. some to of the was million so Shelbourne, $X majority sale the related annualized. Yes. $X that's quarter The

Operator

J.P. Anthony And Paolone our Morgan. next comes from of question

Anthony Paolone

good and you morning. Thank

of power some and in had states, same-store The it's side. City your wondering apartment the the mountain talk of Reno, you how for on is pricing how some Salt Lake real And question those about places to good be continue about much you Boise, further it. strong. you could very success? push Can runway results just you where whether think First

Bill McMorrow

that market mean, piece, we've I'm Matt, we owners seven that. you Boise, the say and one so I on it did ago, first We've markets. if much six years but both market the the City rate the senior. big particularly, got that And affordable or a those in common we to would going relates also get the there. not and not probably Salt into Lake first markets Reno. to I own in and But pipeline there. answer the Matt But characteristic senior let of as as units one were those institutional construction in sides affordable got mentioned, we of same to in

got we're the And the so, development we've institutional in in of including largest our compared market size we probably have the -- what to a Boise, owner, pipeline.

gives might granular. of us how But you we real want Matt, pricing because assets a and that to so more get these power. amenitize them, little And run

Matt Windisch

Sure. so for a Yes, I of stats. were now one growth at drivers a in we X% there, been levels those couple one mean, portfolio, quarters. apartment I Tony, the is we've a mountain growth key the which in the terms on states, same-store really at And think couple couple of affordability.

month. mountain be other you And at these so to And western in to affordable. a the relative our portfolio, it's continue U.S., places our markets $X,XXX relatively state in if look at average rent monthly

you our affordable, that's California a Southern is month. that $X,XXX which still portfolio, compare to If relatively

we're And cities of a continue relative lot places positive the quite at of education in if LA, affordability we tax lack in, of Seattle. employment there, that's great the systems thing, momentum San of as so, rent final those there's the happening there's competition and just growth rates lot and to runway of good look a then the think there pace the a that institutional Francisco a general to strong think because is clearly those to around like we just markets. a And And at markets. you

Justin Enbody

Tony, Justin. is Right. this

of seeing see when looking mountain we're you can our And is in and looking obviously the of bigger sort at the at going REITs of a think going those trade, markets, and where strategies, CBD good going affordability second were getting you at And states we're occupancy and affordability I some again. look lot rental we this the great success. were if markets. growth, more suburban. in after the We're

Anthony Paolone

to just And apartments units that then need Dublin staying as on next Mary. supply happening about to economy. you'd what's hand, years? mentioned off satisfy Great, for moment, be in a the maybe to to in if side the on Okay. for for, that good know sense what's of the one and Do hear. Don't in delivered but couple with year the have the pipeline XX,XXX have a this ground you'd you

Mary Ricks

I of those to in numbers. more to more a No. that few type. you be let definitely But though, know institutional, there's I now, back come been you we the can lot which back with product mean, find -- to more with it's positive me because Tony. that, it's come entrants a market, an I

Bill McMorrow

Bank virtually -- Matt these said companies, technology can the people Irish citizen, that as and again, are case of you of market, these in common if that calls, very, for you the we just these people half as in said, have is Morgan, these younger or if they I the extremely can and think at specific others can seen, and say, of -- capacity numbers, the you're Citi and banks, prior you've go I've of between population is capitalized systems. go least you Tony, you the out markets have like university to in we've two unlike characteristics the market XX-years-old. I and this, and in and at believe, cities, it's apartment if we've And university an Ireland, will you you these, great year. well that cost, a XX,XXX these JP now. very what apartment population to America, here single-family -- in average And you between very calls, And overall units with Dublin, hiring as build is can right Mary, about in Mary site population median the almost got Mary, the talk But age, and units. seen what in when for to getting And probably, say, States, go end somewhere what XX,XXX beginning I've youngest Europe. on somewhere low United both look to back It's Dublin you come but the Dublin in need an the know different housing you XX,XXX the apartment numbers having the at it said but zero. and with Seattle that to

Mary Ricks

Yes, sure.

Anthony Paolone

accounts number lot about in about of we I opportunities, found about a investors much number I'm fund goes because a have Thanks. just how how that just you think in so we shadow, suddenly at And just is terms just think could raising, to mean, if think then the that of billion, trying just of How that? should sort look $X.X Okay. of that investment is if capital? pipeline discretionary jump the the in you capital it speak, how terms should of and to versus up? we jump separate could

Mary Ricks

Yes.

the is so XX% is -- is and now, separate you right the what billion about comingled balance in funds, really. that accounts. $X.X of just So said, It's

where, if have, separate have platforms for those targets, hit assets the these these deals. investors basically capital there's then we certain So account okay, and we that returns meet

you saw what a the fund first quarter. core pipeline assets. And so, We've the got we did in of big

that mountain the other we've a as of pipeline where Ireland sort find in capital the have business, transactions capital, capital. we find past, business done can of need have providers a of in opportunities We And also we we repeat and AXA. just with with we

got our believe good which obviously up separate we're the that a well U.S. account fund we've businesses as will we then momentum Europe really Fund on. we're And continue So grow, here to in VI finishing in working on as

are so funds. discretionary And both of those

we'll And hit angles next the like to, that And business. keep expect about all we we said, that over So covering. years, of going those numbers we're I then capital talked for this forward growing couple really, year.

Anthony Paolone

Okay. that $XXX has not accounts is in begun said billion, two In $X.X separate first or these from you to earn in that quarter, yet? the million the the that

Bill McMorrow

It is.

Mary Ricks

the billion. It $X.X in is That is, yes.

Operator

comes next from Evercore. Sheila of McGrath question Our

Sheila McGrath

were for quarter quarter. Acquisitions first the for low, typical morning. Good

where Just the allocating sectors? prioritize is Is we expect looking wondering and should pipeline other how it you to U.S. versus or multifamily Europe, capital.

Bill McMorrow

can Thanks, year $X.X don't to that on split during It's of Yes. as about opportunities year. the we which about between see best numbers did we always dispositions. the say, was are have of want we transactions, same goals and risk-adjusted returns. billion where Sheila. terms buy any Last make roughly the And obviously we what predicated we acquisitions the specific in I

opportunities. lots lots scale As the company and years, see we the of achieved over has

got there's of ago or do a because would opportunities. to today I expect, we've years you've big And than more so, as that anyone capital got say, would out have pipeline nine would eight there. looking you

in Mary, investment one these key put of and really year, And so, Matt core were the that things place last platforms.

And to returns. so, number willing core any invest at I that particularly kinds think are and got to the point that separate accounts, from insurance Tony follow of we've onto Mary adding companies, was of too,

So were going was busy correct. said last beginning. end quarter at But the I related part I slow mean, to first in we you're the that see the I you're of number similar of year kind think to fourth quarter. And the that I year quarter. really to how at the a of think a just

Sheila McGrath

Okay. what And terms target your remind on front the volume? you expect Bill, of you what us in can disposition or

Bill McMorrow

looking getting that ramped up it that cash comparison selling, million they're going But -- time. capital will I part -- the decline think What will in cash to number. expect we're year. excess as in number the first of the asset said that recycling. amount for over either not this saw on a expenditures we're it we increase the own, percentage little that a, that to the year, from over up percentages We're million year assets this we amount, that $XXX KW And end as we said ownership at way the gross more this that of about $XXX will quarter, of we're balance assets take But from on got out of the gross I we've of that cash in exactly we're the sales. I we've that the be something of last the that existing will doing $XXX up in million. construction or And to year you generated

Sheila McGrath

wondering more into adjustment, driving what's a then the detail just in Okay. bit I quarter. on And fair could Great. on value the get that. And if variance you little was it was positive pretty

Matt Windisch

this Sheila, Matt. is Sure.

value was So the in fair Housing business. the of adjustment Vintage our majority

the the we're $XXX at million. at that quarter the we at million, at end $XXX So of had year, the end of and

a a about that's of came happening. some on was recent indication that result that evidence So third-party

that And Vintage. assets was our so some of the that driver, But of was up that main drove the value in region.

Sheila McGrath

I it then, expectations? Dock; Okay. we with wondering how multifamily an was on And the update is going get in at performing could if lease Capital up is line

Mary Ricks

we're Yes, well, of the I Sheila. like retail events in terms It's a doing. it Hi, going actually. there, talked is. quite had few We've about that really

-- we're in making it's terms maturing of the place really now So there.

that so So plot got mentioned, as going as in, and we've really a it's restaurants because beverage some that and of I great restaurants just area some of well, sort historically was land -- -- vacant. will be type

making very, doing or It's of by docks. so where we're the we that the very well. rents. place fully be But to really to as people So end leasing's we down driving at XXXX year-end QX expected, on target we're either the let going solid as budgeted, rents

Bill McMorrow

Yes.

what of XXX-plus we at to we year expect full the end And occupancy, XX%. like roughly. by the we there have So units Mary be said, consider

Sheila McGrath

plans is guess, your then long-term longer-term with on Scotland under might But that's so the just jewel. be still just development, a and I And assets. way Shelbourne Hawaii, those And Obviously, just a But Okay. curious hotel. views what your is hotel. crown the on the off.

Mary Ricks

Sure.

renovated We on at on on business for rooms, NOI. whole actually renovation, XXXX. And beautiful we've a cleaned XXXX, so in job the a year did common Scottish sort a hotel, good in the of lobby that. and that St. XXXX So books our Fairmont of all actually Andrew's, up did we our area more just than had we and driving been had

the we and bookings, renovated hoping in things corporate terms just going big because happen to job So our rooms that beautiful revenue, also did all the a we conference were there. were corporate of the

so, for XXXX strong, happen. to the bookings And very that things all the were we thought going very, are

asset an the year. sell to possibly this right at is that So price that looking we're later

Operator

And Bank. Hennessy question Tom of our comes Deutsche next from

Tom Hennessy

look solid you the to open more Good there a to would are out at explore. is opportunities up more otherwise percent morning. than And the lower looking I you half deploy that the seemed mean, in Dublin at U.S. you a be versus or UK, start. and When compare in overseas more funding funding head wouldn't a mix? the at capital one you costs it U.S., new opportunities and opportunities,

Bill McMorrow

so we're totality a really good yes, Tom. point, think, will in right an cap and financing at you're Dock Capital that probably around I I X% Well, making stabilize X.X%. mean, the rate,

the here is high-threes achievable obviously, would and United or not generally it. X% so front And six in percent United have in that the same States. financing spread of in That States here half a a

growth do we before Setting to get into we the DNA think opportunities our XX there, years part And so terms have drive bargains. really find other either other to that the what debt we from in for rationale of of is a get is that -- number that's but in aside just reasons, for what of platforms doing financing an have, standpoint. there financing really acquisition a There's we're Ireland. that very markets through or, core our people construction-wise big thinking the simply, debt alone advantage doesn't quite

DNA. that's And our so

costs And is having in driven in so, Ireland advantage none there's said really to clearly and the here compared financing Kingdom that, United the that debt But debt an to of are. doing States. by the United what

Mary Ricks

Yes.

gilts we what In a financial just helpful, of and levels, you're that's other fact, Bill spot are I but lot think rates cap And historical the so that's on we're have as adding where at the between ways spread not value, on. said, side. obviously --

Tom Hennessy

of makes sense. Okay. lot Yes, a that

on things. noncore Now, follow of up side just a the

future some do fund you development? be whether hotels mind, dispositions more these? sale, have in prior the opportunistically I size or to retail you them and use timeline do mean, or of mean, a of Meyers will the it how assets. the sales I you beyond Going

Bill McMorrow

in in strategy even Mary made and go Tom, that with did almost assets, have than couple the -- particularly to a in But that is in the somebody could $X XXXX. But fair, numbers-wise the said thought us earlier we get of I I've along offer an the we right we it. said and reduce number came for large fourth Ireland keep general, is wanted ended in United -- Kingdom. for was add of terms we assets as the on example, it's numbers to portfolios plan to to would into strategy her or mean, things. all more took we say comments, to quarter of long was in on those those we as have the And didn't our from billion we we term. of calls, I unencumbered up that higher plan sale and value properties, and quality the that a

I fit things don't think strategy, is core assets so, we long-term. us sell continue really the for to really as that's that think And to

Operator

to Craig instructions]. go Bibb Securities. next We'll CJS of [Operator

Craig Bibb

looking the asset Does Capital guys. Dock refi mean was only, I core floating. after Hi, on up impressive. multifamily? The that But I the not at be a leasing finish interest was five it that terms. years, mean, you might

Mary Ricks

No.

I us. asset for think Capital Dock is -- it's pretty a core

Bill McMorrow

the It building. too, part was Capital think, I the State part of describe Street. Mary Dock State might Street and you

Mary Ricks

that -- got Street so next asset State been We've mean, Yes. I've seen the I it. you Craig, so, area I whole with Dublin, in you've know there door.

office, resi, retail. the the the involves obviously which Dock, Capital have We

a on we Dock project. loan the then components enabling square soon. the box terms start we whole -- jewel that of which of did doing works that now. the those Capital We're in Quay, to some on a building break have was here of going Hanover will XX,XXX that's And And there there. That'll we're ground office finish So foot. docks be that all off end

term the that. seven-year on that we loan believe bought So And is certain we for a two cap we very the it's of a end is extensions, that us. so whole docklands which loan, five-year will get, a core with and one-year which there

I so can above the yes, to you're be than So that more whole going loan for -- so range never never mean, be mid-X% term.

Bill McMorrow

that outlined our of generally say for out is that we've Dock Capital equity And would the development sell, able to ever of we out, as project. an especially that's take one I plan I out speaking been area. all pointed not that And mean, asset would that whole she Mary

term it? going you And stream deed on so go that that for to has now is The an time. what did, Mary, we've of income on long kind lease got a

Mary Ricks

XX years.

Bill McMorrow

Yes.

certain. then occupancy these to XX-year very we're units the And So close And on a going to once then That'll certain in finished jewel Quay kind years, up. are apartment on term is Hanover XX And very, it's a XXX% a building. couple leased a term unique get box of very probably that's finalizing lease. get of leased XXX retail. same course the

Craig Bibb

what out on I'm done I it? with lay are guys late. got city you Mary, the the call did And look Okay. sorry; block like going you is to when

Mary Ricks

launched -- super sorry? on we the basis our excited planning But No, quarter. we're that. like second to that but we and about in expect We sometime hear on a back

Craig Bibb

detail? -- seeing more but Yes, to they're close you going two. are in layout going like guys development had the That's on. of Were very you look projects what large that one to the two what

Mary Ricks

everyone, I which as that's We're planning, Yes. a definitely which what campus, that you've we Craig, the whole really to But soon docks. excited will as in hopefully seen we combination great Apartments share partner. it. about soon. and that the mean, partners, with expect be half north that site going I is already ago. get know Northbank bought use and we bought really from that our then mixed commercial we with about to next of a a site resi, own we with NOMA of we And a year where one bought the another we

very that that. The big, on are working campus. be hard really will a team So together impressive

very in next one to our positive. two hopefully all quarters So they're plans but we there, announce the can

Craig Bibb

different Okay. We're now. guys up last at really all I not seeing and updating cap Justin now. U.S. terms real-time Cap maybe more movements? right interviews the year end not Matt. back the within rates Are of for question's last the our of you guess rate following. them and following down something Rates And in

Matt Windisch

that, Craig. say follow more you I'm not that I one sure Can time? if

Craig Bibb

over XX I'm or spreads are you cap in. rate to dates that's showing treasuries doubt seeing They've late, got cap stable. were narrow rates pull if guys is the wondering anything. But continued XX moving public pretty when up. The really Oh, days late.

Matt Windisch

I'd cap bit, Ireland U.S., say couple a same, Yes. in in the think down come little the bit down I past stayed have a and maybe months. come in the they've Generally, rates

Mary Ricks

I you're side, other and is a I is And Yes. very the mean, Ireland, of big cap spread. thing resi And is been cost this the as on Ireland in is of that commercial seeing There's the the still call, all going about and now on a the rates think that international entrance. part debt. we've talking averaged resi lot for on just of in X.XX%. right is,

whole all market. going market changed, first the Bill, into mean, which we when the I was there, So went Americans has from

Koreans. are docklands office on. have at Now and market you has on resi, original from been The question building the bids Ireland, to very you just see average there is in X.XX%. moved in your the an back big South whole Italians, numbers on marketed, Germans, But cap that's rates

Craig Bibb

Okay. Coast. you And West elsewhere direction rates think said I it's this a REITs and Seattle that the you are in comfortable earlier, think cap but pushing don't in in

buying U.S. West of the on not Coast right You're now?

Bill McMorrow

of as now, learned is business the off-market it, Well, declined. in market what to to attached I earth the think the component value-add nothing anybody look, a housing see that's but what size extent I yes, has far there's because of it's mean, we've the key. really that ownership the looking I And shaking, didn't mean mislead as our company at we doing. opportunities. to And we're multifamily

be highly You to able a where amenitized to it. to product and element have our is public, to to service clients, deliver there's the that

period there's it's going allows rate if add I'm in value cap a we're assets. we're buy, not more running, not buying these responsibility And XXX, than at cap or paying of grow it's that one attractive rate, we're over has in a generally, of platforms component that then look XXX basis But so an that but core it. saying to to points a three-year taking even for not buy not to if we're we're Matt core interested obviously time, unless us really

into exchange asset. continue something a deferred of selling extent we're other the better ourself to to to tax is The thing our that avail we ability

to Southern office that own, we're proceeds gains California here selling but right from that asset multifamily sale we're the a into in so, in exchange and higher we here going building And California. Southern the a quality now

Craig Bibb

debt And assets. finally, you into already, later going than have down NOI's projects? just Is right. the there is you're year, catch-up or addressed reallocated might faster to but as development this be that money All being pairing a in coming

Matt Windisch

think it And $XXX capital XX Yes. look the if the of you million pipeline, discussed, you saw, majority went XX million in into most including at coming is NOI pipeline. I there's that mean, allocation as And that the we months. as quarter, the of development of to XX I for next CapEx the development of CapEx. of

really it's difference terms cash of a so, the flow And in timing catching up.

we're A these to our are properties. once things stabilized, getting think returns X% materials, about talk class as are so, we on going to unlevered in we assets be And X% type these that

Operator

any Bill to back question-and-answer closing would McMorrow for I to our like session. over concludes remarks. the This conference now turn

Bill McMorrow

you your of follow-up everybody you've for today. and further thank us And as to So available support say, any your I any are if time talk always got questions.

thanks So again.

Operator

is for conference attending today's you Thank now presentation. concluded. The

Kennedy-Wilson (KW) 3 May 192019 Q1 Earnings call transcript