KW - Earnings call transcript Q3 2019 | Kennedy-Wilson Holdings, Inc.

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Operator

Good day and welcome to the Kennedy-Wilson Third Quarter 2019 Earnings Call and Webcast. Today’s conference is being recorded. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Vice President of Investor Relations, Mr. Bhavsar. Daven ahead. go Please

Daven Bhavsar

Vice good are is CEO Bill President of Windisch, Mary and Enbody, and joining Financial Chief of Bhavsar. us Ricks, Officer Executive Matt Kennedy-Wilson; today McMorrow, of of morning. you Kennedy-Wilson; Daven Justin This Kennedy-Wilson. And Kennedy-Wilson; President Thank Chairman and

website webcast and the Today’s available one for by live archived more for months. replay. see will for by Please three is Relations call webcast The for Investor phone week, be being replay be information. and will

On we measures, refer certain including to adjusted income. this net will call, non-GAAP EBITDA financial and adjusted

find the of comparable the GAAP can Relations website. our Investor which quarter items directly reconciliation and measure along release, our third section of You with a description financial XXXX most on of posted the earnings these is

this reports filings Statements this discussed information include risks, uncertainties factors may from Commission. Actual and a of forward-looking Securities on differ materially results number and call other made with in during the may and forward-looking Exchange call to due statements. indicated

to now McMorrow. our to and Chairman would call over turn Bill I CEO, the like

William McMorrow

morning, Good today. for joining and Daven. Thanks thank everybody, you us

in results, We of highlighted by property to of approximately quarter results, of are strong the same $XXX management report pleased continued further and business. another solid investment million growth investment transactions completion our

in from billion We’re Industries, $X.X alongside in active a separate the investment platform start preferred off of equity Eldridge an $XXX an to fourth quarter, million including account increased assets.

well our since in for highlights, quarter on progress our our XXXX. the going morning celebrate initiatives key on we’ll financial you anniversary as update November year key This and we’ve then operating review our public we property as the discuss as XX and made results strategic

$XX million quarter, Adjusted was to our per with XXXX. $XXX EPS QX a compared a from for compared flat Adjusted in represented totaled XXXX. million to of $X.XX So record EPS the and results, $X.XX of the in Both Kennedy-Wilson. $XXX EBITDA QX in net starting in quarter quarter third income of QX the was for share, quarter, million GAAP up XXXX. adjusted EPS GAAP

portfolio with up property continues up X% same Our perform property very X%. same and revenues to NOI well

QX, Our our growth Ireland, grow platform apartment more. States, Pacific Dublin, same by Northwest, robust results. NOI our in portfolio In portfolio to Southern multifamily saw California, property or in same saw we property which drive the continues X% Mountain all and

to QX. of Our largest the investment Northwest, same perform see with Seattle Greater side and region, increasing X% property occupancies The particular particular, continues east Seattle in continues growth. in in X.X% up Pacific the and to by area well, NOI significant

the million XX% to which XX million office there Kennedy-Wilson is primary Seattle According is under square of the which XX development east CBRE, is pre-leased, including in Greater market. the feet on investment approximately side, almost square feet area,

employees in employees surpassed also square job Facebook and and recently broader square over the adding over the million region, footprint is Seattle over XX grow in feet which X,XXX X,XXX currently openings with and Bellevue million to for its Amazon, existing Seattle has to the continues more. region. XX,XXX XX,XXX in space feet region full-time X

more now than have are the market. throughout companies world the from engineering setup There that outposts a XXX Seattle around

growth remain jobs continue significant we optimistic will to market. the so very that And new fuel this of

which which and by Our saw Salt includes quarter. increase Boise increase by our the in X% is same Mountain second region in revenues States. store largest NOI the property portfolio X% Lake, Reno, and

both Francisco. the a of Plus, than income Our coastal significantly living, States coupled Washington with Mountain intact. thesis and cities affordable benefit Strong drawing cost recreational taxes job like California. lower remains and and lifestyle, is outdoor expensive desired population residents much from growth state here from San

continues average. economy robust national lowest in Salt pace to in the rate and continues to be X.X%, best the to job more area country. XX the Lake a and double unemployment September, at grow In fell the of the the Greater one years The Utah’s growth across than performing X%, board totaled

dollars, XXXX, X to private monthly at growth Mountain There for sector office the and which be number in is global X portfolio. million apartments expected in the construction feet country. job delivered rents by State’s yearend lowest is XX% growth for pre-leased. ranks job X.X square under stand rate that Average of at our number our is represents $X,XXX Utah which of almost

we that the completion both our positive initiatives. there as region economic well in value-add upside confident are from is of as Thus activity further this

our by continues Ireland, to NOI has in growth Occupancy well. XX%, perform which portfolio X%. resulted in quarterly growing Finally, increased multifamily to X.X% of

rental draw from to high-quality amenity housing U.S. Europe are and product relocating for other the both package parts international continues demand residents of rental and from Our and that local unique

from a and Large to Salesforce are their well growth The Facebook, technology U.S. such Google, companies, companies. just very medical provide moment. and presence IT and financial pharma, color to market Mary as technology, some Microsoft, as services as well all in Dublin, continues in perform looking expand will

up stabilized X%. where which and revenue assets net our NOI a same office totaling Turning feet, X X% portfolio, various added commercial globally, from our to million property X.X we our through up commercial assets investment square platforms, was

from of growth year. robust rent U.S. XX% burn QX Our last of NOI saw free as the of result of a off portfolio

U.K. in a Additionally, highlight quarter moment the Mary strong leasing momentum will post end. in the

strategic be in I’d growth we initiatives the X key of drivers Now, to believe review our that future. like will the global our

fee raising our where capital into program, executing Number our property growing X, capital. and investments our fee-bearing management through recycling next opportunities. and NOI strategic number And, recycling returns X, on asset Number outsized producing over sale capital X, growing X we’re the other additional and investment years. our business

strategic the NOI aimed on number our an total, quarter, we to our which value-add in renovations X, of growing So, cost year-to-date average starting U.S. completing completed total with XXX, return In CapEx XX%. in team approximately U.S. XXX projects, another multifamily bringing with continue unit are multifamily focus at organically. on our the to

over NOI our continue organically. have by units year, like renovating to currently renovate, next which We to we’d of drive finish X,XXX end will

great progress We on square initiatives, X,XXX development. affordable also million market of one X to includes rate continue development and commercial and hotel which leasing feet properties multifamily our units, make and

all current we be be expected development $XXX XX% CapEx end expect We these expect the conditions, stabilized initiatives. approximately of NOI, construction the is years. of and to current we to of million invest end next both which next cash to to by our annual delivered by of X $XXX based approximately year our add across Globally, in the expect of And XXXX. market on million of assets

housing. U.S., development is joint our management over engaged under units In senior have vintage we X,XXX of the the housing and affordable in through development venture, and which

almost NOI. in We $X expect fourth quarter the estimated in XXX and These X,XXX to the by million another end annual of stabilize units will add projects XXXX.

venture is on this X% rates current joint we XX,XXX the X could remain we Dublin, in grow were track over to assets. buy XX% We next of where able minimal development from with our to higher are that similar years, to units cap where than pipeline required KW. cash build

in market are the X.X% Additionally, in that Ireland those X% rates borrowing than lower to the allows United financing States. permanent

discuss details. Mary call Ricks With to that, to I’d to like over greater hand the

Mary Ricks

The Thanks, KW’s NOI. or generates global XX% and leasing across European was $XXX portfolio a of solid QX quarter Europe, estimated annual in the Bill. million Spain. U.K., Ireland

with portfolio portfolio the end at XX% remains at occupancy occupied Our stabilized of commercial XX% and strong the at our QX. apartment

in visibility deliver in on of QX. We process to a positive have through asset management good NOI and growing expected momentum our combination leasing and

NOI our expected term, expected XXXX Longer add strong of pipeline from be million to delivered by million development development our unstabilized $XX global $XXX is in and to the portfolio.

XX across XX% been square previous of up XXX,XXX what the in delivered transactions an over leasing Focusing completed We’ve and lease transactions rent on over term X we’ve impressive have years. adding feet, certain quarter, key.

This followed been fantastic half have year-to-date by New in to the and renewals management lease asset adds activity. team bringing leases to XXX income year, over have transactions the rent the incremental total of our delivered million. review $X driver added the first work the of which main

increased XX% and UK in Swindon, now XXX,XXX a at feet as in The first us. income At entire asset the new rent the our from cost management XX%. regional industrial grows XX-year logistics and still certain. asset successful Orion industrial This lease is strong certain Park, activity significantly delivered space, existing tenant increase a Business asset of leasing is on now rent the years by X-year on an rental had industrial XX QX We on our yield story the review is we property rents term into portfolio square XX% in part adjoining review a term have Ipswich. our by where our lease. a expanding almost

the occupancy rent with and illustrating XX% is from which increase previous we blue-chip The XX%, Park at at a in industry Now which Peter remains high St. signed turning square XX-year benefit UK the leaders. offering new Business international continues park UK the of to in to feet office XXX,XXX per £XX lease business unique as campus at tenant. foot, a from Towers Manchester, Towers Group, a

management asset this Our since across growth has program asset delivered of XX% solid acquisition. rental

billion continued showing above XX X.X absorption which occupier XX% XXXX dynamics rising square to year. its in of quarter of central with feet, London QX hit is in XX-year QX which the market average. quarterly office the strongest investment in UK strength, The the Healthy increasing is million

located. to continues submarket strong of vacancy lowest Bridge X.X%, has of be submarket, suburb vacancy our where a at Victoria the asset which Friars is other the with in demand and Southbank any than Tenant only London Court X.X%

very a is Our Central with XX,XXX Road, office ensuring Buckingham XX leasing asset completed over years a the UK momentum in to and lease on we’ve Victoria, located expiry strong our UK. square of has we’re space. for continued XXX which and renewal expecting feet recently London Telegraph QX October into At Direct largest Shop Palace

a the discussion space out floor in We also and completion XXX% to lease rents upon on BPR XXX at be fourth are the attractive vacant will occupied. remaining

The South Chase, office Dublin office asset. square demand Ireland be to in suburban XXX,XXX as prime strong at The seen foot our continues

Our €XX to value discount South in XX% £XX and play out. at foot rents vacancy We per thesis an Dublin – average is an XXXX. back of both and Chase prime trading prime with continues to bought excessive Dublin office rent The on of at

to rent leased the building The Following to is Google, space a reception a XXX% continue of majority the €XX rise. the bringing we and average and of vacant foot. the to occupied per the redesign a building rents building, re-launch area of

to rent at for In increases the creating or significant in a evidence good review building and rent €XX we renewal Increasing foot. completed per the square per and XX% €XX acquisition further QX rent and in foot about rents XXXX. above average

this unsigned million, Hotel end winning offering, Portmarnock Golf the facilities. rooms, spa and course. and for Also Links the improving hotel award in the golf an and & golf acquiring we hotel sold XX-hole resort fully we post links the guest quarter luxury €XX upgrading banqueting XXX XXXX, After championship refurbished conferencing comprehensively a adding

by our helping ownership on contributing with XX% at investment the of a to sale, increased During XX% asset. XX% increase ADR occupancy us significant this return all achieve in NOI and a at

Now in Ireland once with from Clancy looking to making at at Clancy X the units, XXXX largest main Quay Quay, XXX growth XXX units to development project near-term contributors the complete. totaling NOI Phase residential

Dock market We office quarter. QX to foot on Hanover are to end unique and is is budget, to in on square our industrial the the started Quay, completed Capital of time the this XX adjacent – At are construction XXXX. conversion, directly to progress work by great our which making bring and demolition on and be track XX,XXX campus, development budget the

office We’re complete XX expecting St. our at Street, Stephen’s near interest. completion the Green tenants of potential development demolition marketing leasing prospects. the work Quay practical XX,XXX Kildare early XXXX and to with good in good and started is has XX Shelbourne, the Both seen early to almost by foot and Kildare begin And XX leasing very construction reach this square year. and it set have we’re Hanover end to

commercial Cross. commercial resi We the which component the Phase have foot of X XXX,XXX also and submitted Grange resi and of our units mixed-use XXX Coopers includes Leisureplex, applications assets, for our planning square

August, planning the great units of component residential Coopers for in we Thus XXX Additionally continue to across Cross. secured European progress our we development. for make full

our businesses. growing management investment Europe, Our in a billion productive our fee in bearing commingled both with U.S. and the up through end, fee XX% XXXX. $X.X continue discretionary raise capital capital fee account to and at separate had our second key funds growing business global our bearing quarter We initiative is we quarter and to

our $XXX we Post expect generate bearing which quarter million recurring our an to stream end, excess KW of ultimately capital. of invested, benefit we billion where security deployed yields platform on mid-teen This capital will in announced – a fee to in upsizing its fee with leverage leverage of and return completely is able manner being total grow is of when investment. $X.X assets,

million in the In expecting fee addition, capital pipeline we to global currently our grow have in further of management another business our $XXX and bearing fourth new investment quarter. are

turn And to Bill. with that, to the like over call I’d back

William McMorrow

Thanks Mary. very much,

and saw meaningful during turning to a Recycling quarter. pickup Sale So the our program. Capital in activity We Asset

completed front, our which our acquisition acquisitions of XX%. the of completed Year-to-date, share On we million we $XXX new investments, is of share have $XXX XX%. was which million

benefit purchased that quarter for Sunset in foot in high $XXX new This million. square XXX,XXX our was Bellevue, platform asset the targeting Western the a opportunities in we the acquisition in acquired office North, venture U.S. quality largest that investment is campus joint first was security we The with Washington

sold share also of million QX, our which XX%. assets In we of $XXX was

We a quality versus these XXXX million annual from was almost the County, $X afternoon of XX%. of share million have the NOI the in a expect close QX. in significant expected that Francisco to which which Year-to-date, will to of our campus high sales X $XXX into San This portion we sold a tax-deferred we this purchase recycle million by assets produced is apartment sold proceeds cash Marin into assets generate of $X office to exchange of KW NOI suburb.

we Looking QX out close the active very expect year. ahead, a to

investment we over to $XXX of million $X.X own We XX% in transactions expect currently million which we approximately under of are which of contract $XXX XX%. dispositions of almost own acquisitions and including on billion

as Additionally, currently that are that currently other other dispositions of well several that we have have we – acquisitions number evaluating. a we are market we on as

deleveraging in full as we credit to into our Industries, our Turning stock. we to markets, of by form preferred through fund further into I off line million loan providing the the more in of to development post us proceeds and convertible which and strengthen announced quarter We a transaction head as our Eldridge came pipeline. The capital term as $XXX pay as liquidity use sheet well end these a XXXX. helps investment to intend balance mentioned,

historical we milestone Finally, Kennedy-Wilson. midst the are in a at of here reaching

to Next and to years we’ve month XXth to public parts we completed dispositions. including reflect on celebrate $XX with pleased like a the I’m We’ve progress of gross investment a substantially of as our all ago, public company Since and moment transactions made. our how business. we’ve pause take that year able billion grow been during period XX of going I’d $XX quick billion

in Assets of gross a have to bought XX% generated and weighted IRR sold average the last Kennedy-Wilson. decade

units in has Back XX,XXX Our XXX%. multifamily in globally. from supported we’re our we million, $XXX XXXX, about XX,XXX dividend million an has $XX to on NOI growth in of ownership interest which and had closing today grown units

million $XXX grown after market to billion transaction. has approximately Eldridge cap the including from Our $X.X

million employees basis. we In over we a high $XXX million generating approximately approximately has a Dublin now primarily and to trailing on London EBITDA Europe and no have presence XXXX, in very had million European NOI. $XX $XXX and quality portfolio in XXX adjusted Our annual from in grown XX-month

like take all helping work for of results. KW team moment a I’d thank achieve their to to these us hard fantastic our members in

together to real who global capital to have milestones thank we also achieved and help to work and these to shareholders would our without one kind continues of We’re these estate historic a take proud this are results. and major our I’d grateful global team of our a a to reaching providers, other moment like build company. never

our our in the head a quarter, fourth what and we I’m into and today so, active with prospects very optimistic is positioned growth way will very pleased are continued as we for business be And beyond. XXXX

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

Operator

sir. now begin Thank [Operator comes Tony question-and-answer go with and you. first Please JP we Instructions] will our ahead, question All Morgan. And the from session. Paolone right,

Anthony Paolone

there has relates into seeing the reason question activity you. for you just quarter fourth that to picking that matter another? it timing? in like Okay, that’s a different of changed or you thank some Is Or out better you or areas first the that market My something mentioned. the are deal up

William McMorrow

timing, year quarter It’s – this I last but in a Tony. think in of that really we And of lot quarter call varies really – just said year it a particularly function activity underway closing. that from to year-to-year fourth in I quarterly really the of terms the this the second back-weighted the have was

timing the and went I now. would through, say right sound in that that are issue. the And operating so, Mary just it’s basic all But markets I that, extremely we’re

Anthony Paolone

States strength the your at given been some there capital the those Mountain still by Okay. opportunities or there to deals talked size which about this of smaller tougher And some and in getting Are the of markets, to other in that commentary. do have you seem of earlier relatively point? is discovered institutional

William McMorrow

over XX-plus-years sourcing because I’ve tend I thing mean, I here, one script Yeah, units in find and mentioned should was for And we – that to that, been under the have X,XXX almost have our now together always capability. we it’s construction. of Boise opportunities in I think the Mary example, the

in though it’s Ireland. same it there so, And that dynamic the is

to cap higher are able than actually build Those we what those could buyout. We’re rates. considerably to properties

in have to will didn’t you always And very very, everything what opportunities. under opportunities. great have globally. your on cap happened find has to – globally, that under scrutiny, But said be find but that think with harder today, we the to you before, the we’re it in put look I not given call prior to markets I has you rates

Anthony Paolone

you’re think picked decision Do pent you Is level a in comfortable can forward this talk the decisions a activity bit? it as to on you Mary, maybe up? a or have up Okay. a more makers about what for bit feel what ground little happening bit there? UK, seems with moving And is the then, seeing question more do

Mary Ricks

from, the we’ve materialized. there. the I will. headquarters, city needing if other beneficiary of and XXXX, we’ve seen the another concern seen after leaving has continue you to just things a occupiers the which bank companies of in have of hasn’t They you of in have sort actually mean, Ireland of lot obviously. just seen decisions And announcements EMEA won June that sort I have like make of banks think I to referendum XX that been vote headquarter, that London, every mean,

in decision-makers they continue in a global But live London remains really, it want city. little with strong. we’ve companies, It’s seen a there. QX. London to to And be to actually People up London. just bit in want pick really

In have you of invest terms investment UK. of still to looking amount volumes, around mass and capital the a in

So long-term we about prospects. good feel the

William McMorrow

at I might you Mary, beginning or than Brexit the I here, would jobs but the was XXX,XXX looked, United And time services Kingdom. call, hysteria that to me dislocation XX,XXX I in are of just last less job people. mean, correct The too, dramatically. financial was shrink that this, I relocation there was the there going

to always headline is to in an call So what there overreaction tends these of be happen what tends news. sets somewhat to of circumstances that I

Mary Ricks

Yeah.

William McMorrow

it of everybody movement where about the places is capital. very freedom one on got of still the complete the too, one prior feels Mary, there’s you Kingdom. in the world investing hubs fact people But I said that a it of capital capital, the million be is of the comfortable because in And, freedom in the world. fundamental living financial XX think of you’ve major when continues as And flows, to call, United those

Anthony Paolone

me, Page done look last that expect All how at basically on to of unstabilized pre-leased has point? supplemental as question schedule of is NOI. if you sense your XX, then Any $XX.X been the much that million right. I And from this assets, in

William McMorrow

that Tony, answer question. I’m going to let Matt

Matt Windisch

additional the Yeah. it The activity. There’s take tenants that leasing for occupancy. of – roughly is and leased XX% balance will just we’re waiting of require to

Anthony Paolone

Thank you. Okay.

Operator

Thank you.

Mitch Group. from JMP with Germain comes question next sir. ahead, Please Our go

Mitchell Germain

and commingled Good balance fund benefit you’ve security sheet. you’ve buy on got morning. I you know and stuff that now got

agreements use through work for what how a various to investment? capital you do you specific pocket regards with So of

Mary Ricks

these clear, commingled timing terms return funds pretty It’s because there’s of of parameter our in the Mitch. holding Hey, of asset. and those, different just a of in that for platforms different each

really, when So really that it door – becomes in – there’s an where how that how asset the clear go. should an actually and comes opportunity

Mitchell Germain

element invest? people terms is of included to timing, Besides risk that’s is also a there in willing

Mary Ricks

our mean, take. I yeah, for what kind of example, can have funds development on, limit they a risk

there’s So investment as guidelines to guidelines. certain and certain the limitation

I So say, would yes.

Mitchell Germain

schedule, like there? Difficulty] a of know the it about [Technical should pushed couple that we Development needs anything stabilization seems

Matt Windisch

looks its It’s to Matt. going issue. nothing QX that’s There’s And QX get Mitch, going was to in just timing some be Yeah, we XXXX. it of thought an of specifically and it’s done stuff XXXX. like

months couple in a of getting completed. just and beyond things nothing So delay stabilized

Mitchell Germain

Okay.

your preferred? Lastly, Bill, investor the the around what an of the thoughts why – get it bringing to on kind in And structure convertible capital? fold as investment, I’d that into as type thoughts Eldridge love them of the your are

William McMorrow

I would a some first And and them, major really shareholder I Well, would the platform would like think we’re convert. are, Fairfax, value think our you is call investors. Eldridge all, very, honored about when I they of once the shareholders to which it them major have testament both of as say, to I say,

with its where XXXX. and actually I like Fairfax, can aligned are a transaction you’re have – time Fairfax in of the beginning in that side the when always if just them so of like first I’ve the in And you with was think we shareholder to that terms on the we back did doing felt things investing you did upsize with

Matt Windisch

XXXX.

William McMorrow

XXXX.

to at in separate shares are guess, $X the accounts That million million. million have grew we valued them. that so $XXX today, over gave XX we But investment them separate to us convertible a account. almost of billion. that close stock almost million with a alongside to And did time which $XXX plus with they grew And $XXX I

you long-term kind shareholder on got is alignment. invest perfect alongside also both willing helping a with And on how capital that to of fees looked so that have earn can returns Eldridge you that we is at alignment the Then investment where that’s returns. and transaction. the you’ve you you have when And

Mitchell Germain

Thank you.

Operator

Thank [Operator Please go Sheila Evercore. now We’ll to you. Instructions] with go McGrath ahead.

Sheila McGrath

morning. Good Yes.

assets life I security life wondered seeing that’s what types On annuity or just to And generally right that capital are companies where will looking transaction, yields you commercial to more venture bond guess benefit target? picture, an estate the bigger company, real given now? are of target

William McMorrow

both is and team Good Matt question, when now The that you biggest together Mary’s – we’ve know morning. separate this our that in Fairfax, think don’t Sheila. in with I platforms in benefits. Yeah, said I’ll but that platform answer with AXA with prior or calls not, Europe and that now put coincidental very right security about large it’s accounts our

that to – They a lending insurance MetLife, particularly there’s previously a companies. of some the all but yield. the we’ve for, globally, all with and it’s industries have have guess, activity a need common announced generate And threat threat they common I

for So it has been of capital great a source us.

of this more address really, really that. road going security of what the doing kind Matt But outcome started months create and it than ago, relationships. for benefit, a company I’d it been wasn’t to has we about in to the great so terms And these be down we’re XX to a with like year-ago,

Matt Windisch

Bill. Thanks,

QX. in North Sunset bought we obviously So

other that that’s under with have So including acquisitions with high them type contract. a a going asset evaluating office a quality several we in, multifamily property. good portfolio we’re yield now, core a suburban And plus

return flexibility office it it’ll think and types I the multifamily so be product perspective. a but if in do other Western and to from primarily a makes sense And risk with U.S.,

Sheila McGrath

Okay. research business. cover decrease the bearing capital Great. business a the the corporate think additional there which what’s at third-party fee Is fee meaningful capital the And adding And outlook capital amount your the you you exiting did platform? of then from G&A? for just will to on point theme, streams G&A, a that that

William McMorrow

no correct, but of basically capital, more question. personnel been the as our meaningful side stream. the was and good becoming G&A, Yeah, so from – the by the hope, guarantee, year and on we the I you Yeah. you’re X we had of this mean, positive. goals reduce add year we year. It’s should script, said we costs fee And hope have, be up to billion expense bearing obviously, it’s XX% beginning those around numbers, when as very a both up $X very what body in of which our income of those the to of of our reduce part have and our close

also would don’t add personnel we that expect minimal any needs. talking you’re And I to then say of amounts overhead. significant

not grow categories to our to bearing of those as see continue either you’re So grow really going base. we fee capital

Sheila McGrath

of Okay. And last NOI. in kind And – question. acquisition how Bill, you County in asset? capital of rents million $X Marin with that market? what of was mentioned an do kind What place compared to

William McMorrow

you calls. in rates. we’ve We’ve at I think on question. higher I mean But strategy, as talked I about prior newer and income streams. and trying cases many upgrade younger to that the will It’s assets, been our the Mary answer of – cap think that when By Yeah. both quality about assets

older buildings is joint them one XX-XX. But ventures what’s probably was at called to and that significant going of in apartment we age And sold sold years the hopefully XX, around X We it afternoon. we XX put But this owned were profits. that of age. Landing exchange of close account took both so Hamilton was those an assets into this where all gains, bought those

grow rate rate of a we X.X% fully X%. actually taxes, to X.X%, up say, cap over time. X.X% of And a expect an and cap million you We X%. at to around that that when range sold We Landing to NOI rate had $X in load at of, cap into those X% the bought Hamilton

both it but To last house has in that I tenants, mid-sized has high-quality business a some would separate part and Landing answer too. it, park mean, tenants Hamilton X I a is very the buildings of call it

XXX Fortune companies this business are park. based in

– could one of those of get to, Matt, entitled irreplaceable never land that it’s pieces So it’s today. – and you it’s

couldn’t this You replicate asset.

entry. high quality to barrier Whereas the So terms there as we of I entry. probably houses as said, high very sold, two and almost XX-years-old not in that barriers a are very, were apartment to

Matt Windisch

I’d rent at provide of where perspective, is I for is a the thing you environment tenants. kind the XX% think just below look the on right if Francisco are a the really great rents And San from bay. campus you’ve and property last rents add a got proposition it’s in value here

So very this later today. about acquisition excited we’re closing

Sheila McGrath

Okay, Thank great. you.

Operator

sir. And Thank Bank. Hennessy question ahead, Deutsche final from with come our go will you. Please Tom

Tom Hennessy

Good morning.

my mean, So growth and West Coast revenue Could rent impact you just hot quantify I California view next first quarter NOI, topic the both NOI the how control on multifamily, been this side I of the strong question, residential has generally year’s law. I guess, on from in perhaps new on it? continued and the the but light you mean,

Matt Windisch

Sure. Yeah, of XX% apartments company. background, give to sense of you the so over NOI of just the California little a represent a

overall X% been We But So it’s meaningful, already it’s have for you of have really of that at years. NOI. the those obviously, particular increase. control a many was look of – maximum but bill that minority form it’s some plus a undergoing CPI rent if XX% are this apartments and passed,

very minimal we So expected to for portfolio. our a impact us, have in

generally was decontrol a we kept year. Additionally, look units XX% XX% portfolio, turn if place. still at you our And our in vacancy to

can So back market. to leaves, a rents raise we amount. Once the tenant rents to only those the certain extent, move to able we’re

very a all, portfolio impact year. in our we minimal expect on next all So

Tom Hennessy

generally, WeWork I portfolio any But continued guess, tenants I That’s in between between the comfortable the Brexit UK, chatter be any distinguish And between Okay, the I total over the potential you I to How the mean, guess, on and, UK? and difficult after leasing mean And then, to great. view and differ tone WeWork two. did then, shared fallout notice the space? change maybe fallout, much would or that the helpful. of does you from generally, up? impact U.S. leasing really

Mary Ricks

of I going in we any haven’t seen what’s in the mean, on UK fallout WeWork. terms with

of enterprise any type performing saying I think that’s of a not with London, in done that most well profitable, best I one So has we’re tenants. lot WeWork sort locations, impact. their very there’s of mean,

don’t a markets as that issue we we’re U.S. well in So And we any see difference there. that don’t see the in. I think

really not any we’re there. So issues seeing

William McMorrow

Right going so far all and now for the XXX year. we Brexit X that, about think, you too, is this now did when noise Mary on I leases think years,

Mary Ricks

going Yeah, UK record to be and a the actually. in is QX

William McMorrow

Right.

Mary Ricks

a lot come. to more There’s

William McMorrow

so, world prior varied her Mary think too, of headlines, that these the leasing are be one investment been still actually above significantly in as team And to leases activity. were. out the that that is has gets I and what for investment new doing markets And of think the the London rents I in top what continues all pointed Tom,

our And a of are so, well. is the Brexit extremely takes property lot reality but performing the of level, properties all that the headlines,

Tom Hennessy

Okay, great. Thanks.

William McMorrow

Thanks.

Operator

the Thank this Bill. back conference session. I you. would turn like question-and-answer over And to to concludes our

William McMorrow

So thanks, everybody, appreciate a for forward close listening. And looking support. out XXXX. to in as my we’re great we you. I remarks, Thank of said And everybody’s

Operator

today’s for conference attending has And Thank you presentation. now concluded. the

Kennedy-Wilson (KW) 3 Nov 192019 Q3 Earnings call transcript