KW - Earnings call transcript Q3 2020 | Kennedy-Wilson Holdings, Inc.

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Operator

Good morning, and welcome to the Kennedy-Wilson Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this event is being record. I would now like to turn the conference over to Daven Bhavsar, Vice President of Investor Relations. Please go ahead.

Daven Bhavsar

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

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

Bill McMorrow

morning, in capital the our our key progress portfolio for management the touching period today. quarter. we of we thank deploying your start to our time we're on this everybody. NOI. growing on much. our for I'd joining healthy you lease-up And and made and us debt is families Daven very successfully call either and thanks do to highlights investment positively We continued in well Good that's QX, everybody by or hope And this business you development by you like continue in. platform. great to grow

what Across third XX% and continued saw our strong volumes investment to collection XX%. the suburban high quarter our remain QX low to together real largely fell saw in XX% of our sales multifamily in assets, also between we Q. which in comprise occupancy stabilized similar transactions our rent office markets, portfolio. We across estate and markets

market our temporarily paused As result sale of in these changing and a program dynamics, QX. QX we asset

by Kennedy-Wilson, $XX seen $XXX of Mountain cash the and generated million Plaza, of to Friday. an of million a last million, as State the of gain and XXX which of acquisition However, both disposition portfolio, were announced Baggot unit $XXX

discuss the We expect just where in in to in will our higher the these detail transactions of transactions fourth majority I'll have we of both levels greater complete XXXX asset quarter, of moment. a sales.

EBITDA QX, results $XX financial million looking of net of and income adjusted produce our So at adjusted we million. in $XX

year, we the transaction which lower gains produce income make we the to and For impacted slower market on on million $XXX course The the of our net results of adjusted in expect fourth $XX up sale million. quarter. quarter, with adjusted the EBITDA

$X our billion I'd like million quarter $XXX of maintain update to on total Kennedy-Wilson a balance in $XXX strong availability line to and with have liquidity, discretionary end. our of continue position purchasing a credit currently in across Now, cash you we our funds. million We at sheet liquidity power on and discretionary of and

also interest We strong Kennedy-Wilson. in a partnering were partners liquidity ample remain and various well positioned have with strategic with that

unsecured we non cost X% we All with end maturity improve coupon XXXX, carrying and a of reduce maturity X.XX%. and a offer our tender quarter helped financings, Only million We cash Our in in a $XX of $XXX the these rate recourse KWE final This which remains year. of maturing our schedule maturity million financings, level and property retired tender anticipate $XXX profile next utilize through $XXX favorable. million and debt. property of Post maturities XXXX. secured level refinance. existing maturing from debt date new very million each maturing bonds, are two of QX successfully XXXX via

Since next share March under of initial authorized us XX.X repurchase $XXX has maturities X/XX. $XX of And expanding only and debt million limited $XXX approved that plan year, company our result, repurchase weighted shares purchased XXXX. hand XX, million. keeps Board Directors our share on in and The the was $XX.XX, repurchase so, with yesterday of financial million to as plan $XX million a plan liquidity the a price million existing at with through on $XXX remaining position. very The strong average

sheets of May. billion investment origination with high the Quarter, we $XXX in million signed million robust, interest $X launch Our for we on near on opportunities investing of is secured strong in United evaluating. in platform debt billion is investment. for this resulted loan to short track in $XXX the Kennedy-Wilson XX% term. deals has first in currently that loans and debt, opportunities brings in coupled pipeline track targeting we're with time portfolio. our future record a $XXX hit platform in to Platform debt of western own a States, In more yield very period in United the in our term have many extremely $X The ownership estate That's our real the that approximately completed the of the total Kingdom. institutional platform by mortgage which and quality investments demand million, loan Ireland

in As fee X% million is now since a $XXX capital, XXX% and beginning the far to of thus growth up QX, our from bearing representing a XXXX. we added This XX% XXXX. of result,

our over joint fee in $X.X capacity bearing efforts the platform our in capital Europe, ongoing $X with we to have our and capital fundraising Ireland to security in billion add of pipeline years. family fee Given debt our AXA the with additional in next existing real bearing debt approximately and our Fairfax, venture estate benefit, with our in platforms two multi billion

portfolio. over Now collections I'd Mary President, to rent and our to discuss Mary? the Ricks turn multifamily like our our to call and office

Mary Ricks

Bill. Thanks,

XXX,XXX last iconic we've seen Shelbourne the that with reopening. collections, our is the for XXX to at square and XXXX. share to And permitted Ireland the hotel. its to profitable A to looks further domestic of five reopened rent gone into social have end, over itself market strong I'm operations. more hotel to quarter promising. delve speaks rent quality I good achievement for and the our we that on since has and our I'd collections, restrictions Nevertheless, Under remains feet XXth back you competitor I'm pleased has level to hotel's successfully portfolio. since Asset outperforming Shelbourne's end a spacious continue of been report update big we Before across of see business services the of lock hotels. level its The better strong subject Star March. Five than down facilitate and on December our QX. that set that into of solid early a to restriction portfolio like for benefit room the through distancing hotel QX, further direct come has the this December, I quarter reported competing happy the the Post engage hotel a adding doors business across until reoriented pipeline book closing This Shelbourne of to we board. Management the business intensive collections the report

Pacific classes XX% globally QX. the levels for We these over in as Mountain where and multifamily Northwest an Mountain rate largest been States Northern the Northwest, two some our of global states and two account the our materially to rents assets, California, Nevada, XX.X% as of only quarter of in having we collection last asset QX. suburban, their assets such the few NOI, This compared office QX. asset in we strong monthly years two we the across resulted in our now, growing strategically department are and and market significantly billed of Idaho, suburban, Utah where areas we the portfolio our and fastest XX% years. XX.X%, saw at $X,XXX States multifamily has Our as past classes that a our average of Suburban grow in States the the and account own for opportunity XX% NOI. US remained to of of portfolio Pacific rents two have out have which Maintaining shifted collected top expanded XX% US, Washington three the In few with apartment occupancy as saw were such QX regions. portfolio rents. over solid our during the is

active population with in continue continuing who in of only the property trend committed but quarter. across affordable by as strong these to been seek occupancy an announcements saw States see the QX, supported have metric cost are structural to Our Amazon, prospects who PRS X.X% to rate headcount end the of on now to this entire XX% complete more and strong decrease of and results portfolio their lower also by the headquarters, to apartments. first virtual Dublin, indeed and companies collections a portfolio significantly by for benefit were term property leasing of versus same continue than in of a large average with at apartments Also living market very particular Both young by US as new vintage expect multifamily very at their influx our over X.X% our portfolio XX% sustained companies well QX, for XX% in and for and long in and analyze area. Rent rollout property from countries communities now average in We by of Not the believers In the Mountain expect Dublin who of X% in QX, entire flat, bodes shortage Less multifamily NOI portfolio. in same as And taxes. looking European property EU and total, and growth our of an lower remain which quarter demand portfolio NOI seen growing are NOI resident than with saw recent XXXX. of and revenue renters, has in remained of had our same the is same XX% multinational continues signing the well QX, our QX. growing these perform are Irish market, fundamentals, given a product. Bytedance, In current X%. strong of population Dublin us, such at in is expand outperformed a Irish and our of for which lives multifamily the a to half the choosing portfolio saw we line app peers across we as have over strong QX.

with amenity home from work offering, environment. Our residents looking lifestyle draw our Irish portfolio to for which who are better upgrade allows continues to high their also

at the office at to of attractive the XX.X%; of income turning of X.X Now of provides compared high QX, global quality XX% an at end term our lease credit stable years, roster remained portfolio, to average tenants. end a QX weighted secure from occupancy

XX% XX and office quality Costco, State high Italian global for name roll, Street, few. rent UK and our include top Our and Microsoft account of a to Indeed, companies KPMG, governments tenants like the

collected quarter, rents. of For XX% office we the our

Looking head XX% start office on lease office in ahead features of quarterly majority one of tenants tenants of collected rents a European we the our advance. our European their QX that already over for is a structures attractive Thus, have rents pay rents. and of billed office have

worth of while office space commercial is tenant completing leasing NOI include and generated a low office to years, local predominantly the space, or for changing is to park. XX% what from either Benefits competitively related high either lower and are rise QX a towards the logistical square our substantial of Our is is mid positioned COVID in of which new mid that XXX,XXX occupied in control, and million properties X.X a with that and office and of buildings. total rise looking NOI by world. lease feet single XX% square a are suburban needs in mostly building strong brings or hub an feet from XXXX. leasing issues had noting portfolio post market, are shorter discounts leases of the commute, It buildings commercial X.X we avoiding spoke in generated our density move COVID Globally, WALT rents a to companies that meet the rise activity faced by more of extensions across CBD low

locations. uptick the assets the London, in Over an on outskirts seen in have two and inquiries months, park last of for business we

a are seeing another technology from remains also are looking tenants lease-ups. the We pipeline for expansion square upgrade requirements handful where to space. their XXX,XXX lease in of The strong sector, feet transactions with

XXXX. for transactions lease these complete strong with to And turn over a to to us call hard to Bill. working are give the that, We momentum like I'd back

Bill McMorrow

Many multifamily you are expected very on to our to update initiatives like by X.X which X,XXX in our portfolio. be square strategic ventures of partners. million are XXXX much. all of leasing joint And with a have development commercial our feet completed and Mary total, ownership one and and interest in units, projects I'd projects we hotel. development our thanks XX% lease-up and currently XX:XX include

progress the the year. make the development lease-up entire asset in Park, to foot our XX,XXX square we projects initiatives great office continued and completed throughout have at We in QX, Stockley a suburban United Kingdom. construction

leasing the of of degrees Santa in units located units XX first in called north. with phase first XX% the very phase development months. almost We is the also completed Rosa, leased That XXX three up quickly,

an this XX units, where community a to acres add XX adjacent additional when We North going we XXX degree completed. are XXX units to acquire under total the to to bringing contract property of

finished in total stabilized Rosewood, at existing a three XXX of These XX is property which pro and XXX% above added our well units Rosewood XX community schedule, to total Boise, multifamily an in occupied leasing units. months of construction now forma. also our rents after were and Idaho, now unit lease-up We ahead

Clancy in of Finally, rents seeing strongly. final of That development. Quay units our quality third the At part of JV very is management. X.X%. will variety is to new community our largest our expectations. quickly Grange and we with Grange, began this interest grow track with quarter. quarter. of the plan. by phase This yield is space, now a And the outdoor three complete, perform Quay the of the Irish of on leasing add in a units. on institutional XXXX multifamily offering our At multifamily multifamily assets, leased XX% at professional we're the community by of We're units XX% in end ahead AXA and continues as strong performing XXX business plenty Lease-up of cost one stabilized on XXX We phase at amenities it units ahead number Ireland, site Clancy XXX the to phase to when

units in to the contract begin we During AXA XXXX, and attractive place the X,XXX to financing. to signed venture quarter, by are X,XXX under including They're the construction works approximately successfully main units sites track grow put the construction on joint successfully from that development.

add XXX phase XX in completed annual currently developments that complete square Boise, the XXX,XXX Looking which and next to total year; track development construction once ahead We've million is expected The office on XXX% two track is Idaho. to the we're to expected US, of of our portfolio and Kildare, now leased. Lisa finish our already a feet. multifamily KW of unit which property to currently to Quay we're Dublin, active are on $XXX our units, combined The projects, first deliver to Hanover over Clara, NOI Both completed. estimated

start as our the had properties mentioned, pick market Mountain XXX units under which the $XXX multifamily to business. that one fourth the Springs, Denver I totaling quarter. transactional total, are Colorado, in end, in off Two portfolio acquired previously XX% this up seller done X,XXX portfolio, for State Post these we a at in Tempe, We acquired have portfolio grows activity and of properties from seeing interest units, of and this three Arizona. ownership we in Colorado located quarter including mentioned As we million. multifamily In Robin development. and units a call, we're

development X% disposition to the rate, the cap Plaza performing office our team completed in mentioned, approach part of Plaza, we and generating a in non Baggot That side, Baggot in a at The an of KW. was as post I significant Ireland, and at Dublin. lifecycle $XXX as acquired sold story property KW. million cash On asset quarter, full originally loan represents This XXXX. was portfolio larger a first

parts of the The participated in of obsolete. we strategy, time taking capital loan-to-own functionally ultimately the asset asset. was structure, the of part various As ownership the

million. cash extended gain million asset creating remaining Our XX,XXX of transaction On rates down asset for time Ireland. institutional we've times combined The additional feet of period a year capital. redevelopment, for $XX supports that on the this our of unlevered team taking friend square Bank it yield the of of result existing generating of through $XXX of lease the an XX,XXX by also delivered added XX The completion interest to a a this development square this that globally our an the and management call view the of sale redevelopment for Irish oversaw feet. extensive hunt team about many asset, talked as low to

to brokerage type compression in we continue And of assets and October, a in and compensation property with core our the million Wilson our anticipate overhead sale simplify finally, of Combined management two for and help XXXX; our two properties. cap Kennedy transactions interest by our annual own. $XX business in This million in We businesses. Research rates annually. sold we and business $XX KW costs reduce the by reduced our sale will these Meyers into

our there shareholders are And Our high continue well in a growth. business, unique today. constrained, company portfolio quality growing diverse the in one to assets quality I in opportunistically are environments look to DNA like we management for high estate XXXX, seeing to shareholders. which located real significant of create respond ahead is investment are as changing It to our rapidly to very both executing term great long markets, our capital We want partners, our and opportunities value believe of across everyone anticipate of our and levels thank the of balance Directors have and of partners, the all to take well strategic us our and capital our on else and for KW, transactions investment and we positions our members network, commitment at higher at next our the Board We continued sheet your liquidity months. team structure. with relationship future over support Kennedy-Wilson. own advantage I to XX

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

Operator

The Paolone question come Instructions] JPMorgan. from will first Anthony [Operator of

AnthonyPaolone

to you've Yes, well. first question the but allocation, made is up everybody, just thanks. you like my -- that some investments, buyback. seems like But Hi, relates going stuff to it capital also because

So a you're you you can where through capital just of walk prioritizing how us go? if little want your wondering to bit

BillMcMorrow

we levels priority, down around basically that and four but our right both new at are deploy paying the stock of you say it's continue the maintain Tony, properties, investments, maintain, of I portfolio, are on to unit transaction. down $XXX the debt; of repurchases. have and unsecured going we we And also I'm you any saw, that, XXX lastly, there of CapEx rehabbing we're can to we to existing from Well, oversimplifying in buckets lastly, liquidity saw that that now. would paid would capital want I investments, order million almost course, not new slightly, and course, apartment into, as of and And, debt. the the levels we say, roughly as

constraints so we're operating the set that that's within. And of

deploy We're very first we to to to price Our the grow we lot have because that extent are an we feel high can quality to have that assets we receive both of generating an cash course, opportunity where of priority business, sell. that really or that very; we're attractive is to to going to have opportunities our And capital we the continue that's into. extent fortunate business. grow the the a

of along, terms say And investments we're So to other course, months. come the we're really CapEx. the spend priority XX committed any to the next wouldn't over how any in going money that, than I that to new put of

somewhat attractive reasons. during in a belief have more that the has obvious market for be investment than this XXXX it year, will been We

an So over, and the think to it's repurchase, stock as going extended of we period about time. be handled

right So on We're debt. want of long level where liquidity paying down now. that's a levels secured we we're one the says that the keep at that, to

platform. of obligated we construction have the years. And We amount very now investment the to over construction, right we've ourselves our of great to complete that the opportunities, debt particularly have couple next large in

AnthonyPaolone

in at I term Okay. know In post you quarter was disposition four Ireland the long a there. cap, there that made a lease

So circumstances? generally that there? do think you maybe but you redeploying money the more And rates are to think positive Just more to get there. a bit there's seem that with apartments, it think lower do was you into a Western be to something do right. sort to that cap of spread, Or able swap? I Is unique, unique

BillMcMorrow

and time, I income very Well, these growing we're the finish the you're on conceive a years they I the circumstances that NOI to I see on opportunity. construction of projects depends long the of just made period the the take mean, business. and that and a to up time very we can think would five And net can focused and say the take of doing by to you stabilization. idea decision,

particularly thing other assets some year. we that roughly brand live we're Both we And have, it basically, Plaza I Street, to think when space the about be for have as so more both the small people Baggot the size XXX learned, of that clearly finishing today, the those in I quality And Hanover interesting over same we new. ownership interests and the the multifamily is the two higher this assets, some think have own you slightly thing, attractive Quay very the in sold we Kildare that will was -- think you obviously asset there. the large,

been fluctuating So States, have near these the though even you three particularly on this bond interest saying two lows. that of these rates. in where for in going knows, And a it's year it's be period the do XX days, and negative United think of at now I an some I've interest zero. cases look extended of are and up Europe, down as when in everybody rates calls And clearly low we they're or belief, course, there, historical here near rate, time to are I years

we very the so in -- realizations particularly assets. to higher these And us for position, puts on that want attractive extent a quality to that us have

AnthonyPaolone

question lot potential debt Is of for quickly. it just and Okay, size this last me, the pretty seems like you deployed increase into platform to then a that? there a

BillMcMorrow

Well, doing time, have platform, already and the is basically on debt yes, in we same think on depending staying markets would market that ownership in. I we interests I what I mean, will we over circumstances, say are the

And so earlier, said various us as platforms. that then I the United great Ireland utilize skill in people the Western have the and allows do sets, to those that what States, existing we the is Kingdom, United

And so even though Western Matt Windisch team has team loan the direct responsibility to dedicated to for that own doing the extent, multifamily diligence. for do debt the platform, in underwrite and States, example, and and we us we're help have our the platform, debt we apartment United due utilize that

add, is So, whether want right opportunity fits grow in collateral But that be the the what think that there's the the during of and opportunity, framework. quality or rate to last business. that billion crisis, involved an through the of Tony, I find the almost depends either to not only it $X of would originations, purchases we we were we just And quality of that again, on but the whether thing interest are within and sponsorship, debt transactions. in attractive, yes, we credit terms wise,

a we've transactions. so doing of very had of long types And history these

materialize to opportunities if fit see So we'll just our requirements. continue the that

MaryRicks

a was add debt out up; Baggot CMBS in that it's bought. came multiple And deal think business very thing was we European noting to roughly assets And other it. of a Plaza I debt the portfolio really EUR was worth the started that is that million deal. back broken it a XXX with large transactions our where ended we Bill, on of

when KW which coming of we opportunity. can those more I ability see performing to, as that will XXXX loans non an pointing seize out, think you so think has And excellent there's that we

BillMcMorrow

And good clear thing we very of Mary. good building ownership a interests have we other the markets, Tony, say equity Really and these in; all Those And have would we're that we, markets. these of are I also I points. lending picture. we're is thin, all points, because

would have that we know, have investors we so is the interesting almost in of our all very And kind markets. appraisal player thing we all And various a the, picture a in in I personally, way, costs. of those within company. clear the last system built of own cases some And say

So that the of of they've our underwriting tight trying was basic markets. we locations, standard but that and terms in quality got really to the was to reference assets have what I in be a very sponsorship,

Operator

The next question from Evercore. Sheila of comes McGrath

SheilaMcGrath

Hi, yes, good morning, are if money the on include the at? just again, I to you are out could platform And comment that wondering loan they putting like What fees kind the KW? coupons you if you what of what was returns? do look

BillMcMorrow

like answer you to question. that I'd Matt,

MattWindisch

Sure. Hi, Sheila.

end as own in So have third yes, the quarter so in loans if the currently we markets space, assets different you US the we expertise. three mentioned, three in look invested all the western at Bill that quarter, six in multifamily space and in office the

X%. coupon around overall right the So was

in first higher structure cases, will with loss loans, position take On an AB the a whole but where a we're some structure Kennedy-Wilson get these we and coupon.

investments. you right, on receiving, annual six XX.X% that or the fee. loans, if So we're achieving around we're servicing that's is just the to KW all when plus And is repo This the any you return unlevered. We're cash doing combine not lines, financing. servicing this the using with fees combine those all we're coupon with;

SheilaMcGrath

on then office And Mary a platform? plan in purchase mentioned is value loans just historically the something from wondering at know, loan situation. doing that I has to Okay, in you the great. that if where own Dublin created was building your KW a own discount, loan to

MattWindisch

date strategy. so doesn't although a in That future. Nothing we've loan we've discounts. bought to a the own I that in done I'd platform, doesn't at mean, say we mean couple wouldn't has Sure, do it small yes. say been loans far the to

Just today, we haven't.

and and expertise, they've but to to I we're got be capability certainly going They've and certainly, office we're it were make like. criteria. product extent the something fit to for we're outside we get at discounts really on we be sense. and the to investments the that of And opportunities, our we considering. those multifamily, for and But pretty think have have we to to So the those markets looking know is specific types, Sheila, got going in going significant to are looking

MaryRicks

Sheila, we've with multiple I on that, financial cycles, add Kennedy-Wilson transacting our built and just businesses say really is institutions. to Sheila, would over

have And really really you whole of what did obviously, dislocation, also the real create all to But and in if we so or price we that that executives did Europe. that have distressed, going just every everything also Matt business, own able piece transact last debt estate, sub if to at estate. non running performing a performing team, and downturn two the estate were you was that real if loans, with we first alongside Europe business, or of dedicated as to expertise we're have look is we that real in years Buying that we our in institutions. in just financial we we

in most for I that institutions, in the So there the more think we plentiful financial one, and if you relationships did in given opportunities will that have the KW you what just this look last the be recently space. of history we dislocation at anticipate KW, with can

BillMcMorrow

of relationship system. we KW, going and of the with our deep thing that is have I've been that relationships together have able And Mary last them, that streams we've create have call several the Sheila, our very would that, I course, at been able to may financial the this but think management we marketplaces one we've the been of calls, in because mentioned decades teams, on I three like. other that we we work say we institutions, over on, and

large these are sized. very of institutions. are But financial medium many some And

with And financial institutions very we've term long say, that that there maintaining partners us. would the or have seven very we're much to also it. very, to And very I And and but discounted for to been levels our with opportunities done I are there at would we're last, history, if buy that are And on other a basis, focused where eight Mary, I so Mary's partnerships, surface, opportunities earlier why the it's part well on out, they've outreaching said we're news months, institutions that as pointed is large the with that in our us. of at our of marketplace. are partnerships, we liquidity, say loans extent great

to these the with so present that got we've transactions extent to move ability the And themselves. speed great

SheilaMcGrath

just question, wondering and your Okay, if in comment versus already with sorry, all portfolio could are but Dublin, Dublin and just those I working there trend, last companies and going just how versus US things here. you tech mentioned in this, you and wondered on working the if remote mainland remote

BillMcMorrow

that? answer to want you Mary,

MaryRicks

permanent not okay, can I mean, more a on I from about October to tenants, on long remotely concerned X, good you Microsoft, like term they all of Sheila, really overly home as trend, workers, a work to basis. the Sure. the work announced we're use example opt

And due likely additional Sound have manager all past. their at event. approval. Business said, not their part feet distancing, workplaces by Ford, Okay, we're they'd be Puget had subject so more and in going same that millions day, in we've VP due to growth furthermore, started same the article will week would to on and his real he dense subject office the of the saying social the the to, employees square spoke some hybrid he Puget where likely that to to estate, Microsoft's to space Furthermore, that in computing Journal investment. would would global that the name's of Sound And model be need Michael that go significant will Microsoft the company go be cloud the of everyone to

think, on to ground. messaging what we're permanently. that -- the I their some home they're work from not seeing That's out tech there, going really employees companies So, can really, are while

existing mean a tenants computing I reports seen portfolio. great example. quite we've just experiencing huge investments. showing haven't example. driven a by they're a And and think in I Microsoft we transition it's it is across, cloud their their their and come senior that of in our leadership, growth Microsoft few a tremendous And ours,

and sustain in their the increase that employee thereby their supported by office must space. revenues increase in be So and operational to scale, headcount, correlated

portfolio which don't, office rise, have own to really And their mostly that, our suburban also very, it. portfolio, defensive low we've that a front add we or concerned are door, not we tenants Sheila, about office, company really very So got to is we wide. think

So strongly own. feel really we about what we

Operator

Derrick Johnson The Deutsche Bank. of is next question from

DerrickJohnston

But are And multifamily the multifamily the it can within add I on late specifically jumped any four so markets it value I the dense the this expect court within we six morning. then to you acquisitions I there you've Good portfolio? everybody. apologize at also to opportunities new to next when anything. and looking specifically properties if look three what Hi, when you dupe markets contribute over entered, quarters? away are diversify urban to and specific, from comes multifamily

BillMcMorrow

whether that Yes. other we're would Colorado, partner mentioned in new we acquisitions, own say the Tempe always, in just I granular apartment get partnership value property where portfolio, turns. a great there's Springs, one one done in more mean, ventures, bought a balance of Arizona in sheet. be think amenities, capacity. two to I on with earlier one the our that's three on Colorado some little our asset unit that upgrading And were has I add, that component will and almost doing upgrade that I

the we never last company enough time think idea think beachhead can a generally the and so where on mind. And mind rehabs is we are major these a of then a have the of over in markets our obviously thing, whole of that get developing had would I And we're into the quo example the say that too, I is and status grow buy opportunities multifamily space, very -- -- we implementing to these of never as scale. of has is, a kind to always the history on amenities so that with there And growth good NOI.

and you started platform. about market we're Idaho, we but started Seattle ago, multifamily both started probably XX XX got management better getting spent our Boise, and a people of in And And other very, the bought; structure, these Lake the focus. owners in might one the of. it acquisition cap we the largest on it down portfolio we we is And first into on property years close great today, higher, the well City, rate overhaul probably are today, think And that to Boise XX%. rehab, Boise, our markets implemented six and years very you and our we've think also City, even very, so dates, price, cost when that up XX ago, Salt big that be to on a to we've is there, early teams, in senior or it other very five years before allows XX% have bog what and that thing the based that little asset in rate better Salt learned for fired there ago, asset or about over was, management closer example, the or we we allows to affordable and you Lake

that to have a to were were based downtown many structures And of for these so ago get made product an we markets were lot years more we key Center very is about achieve, San to build markets, Los And urban City, say, the like to the answer long your these that Those question sustainable. rent we example, places to in just that not the built. awful being people felt decision, avoid an cost Francisco, to we going term upscale directly Angeles. markets, and just on saw

the So it's case. proven to be

a didn't say? And the it we just wasn't kind city going so from thought markets. is on was markets. of diversify Mary to say those we in what that economics the Would these Ireland. like centers, We had opposite of strategy would And I overall away you

MaryRicks

in Then park almost so also look thing largest multifamily and the now but lot That's dog adjacent is asset, Quay which say really everything parks. multifamily our we're Clancy is about portfolio, business outdoor We're in Yes, space, space, in creating got we're to in in and other we've gyms, the the Park, you you've a just I amenity I'd mean, Irish Ireland. of creating own have Phoenix Phoenix, all got our Ireland, of balconies the that city at I the centers. Ireland. asset think we people which are living largest there creating general, really in

So Irish critical all of to portfolio. I those think the things multifamily of are our success

DerrickJohnston

off dislocation Okay, Have this balance UK market? were and industrial? possibly KW great. that the understanding, capital avenues the then interesting, Thanks. theme, or forced in may property viewed markets is I seen a anything far leader opportunities have staying, and any given a where the you that as And both as are. Brexit of great the other in Or Ireland and opportunity, International clearly types, allocation on guess, next and as and is, sheet different

MaryRicks

the into seeing In lot we've a with European platform. that question, that's mean, UK, doing sizes UK, are in and smaller, high With this tripped I add the success a that IRRs round especially value in Yes, great the in And range, we're opportunities in had partners we've lot XX% of quite the growing our say lot smaller type of to our very space. where we're very, we've a going team, I'm have been, and few a industrial space. several we those where deals compiling done them assets.

in for space -- then we the combining Ireland, and priced really that's allocation we're cover competition there's there's we in getting and Spain; to to about small lot platform, to That levels of and we're the so not what trying names the lot look are for a making and effort that So seeing and to us what very portfolio Blackstone's a buy or where do but sizes, is those UK, now. a would don't big which into buy grow excited a to large right sure. that we're is to the looking the that portfolios, like, the where single big portfolios,

Operator

Lynch. America, Merrill The next question of of comes from Bank Jamie Feldman

JamesFeldman

just you. your in I to the different was behavior on get thoughts across regions portfolio. hoping your residential Thank tenant just

think the about, started, sure Just to get I'm the you cities, out States. of people uptick when pandemic wanted in and you when Mountain saw an the

thinking people are vaccine. Now

want if volume would are the to actually for this one a I guess that, people -- interest day think behavior, properties, where you cycle, maybe you go call pattern say So in terms do we it when you of back? of you the of but in your incoming thinking about

BillMcMorrow

even about of where seeing, and real are Well, maybe Where say, group ages some of XX that people early urban earlier, accelerating quality your big up it's urban, where markets. I a it's very I is And the not very in these a challenge. some just you're life XXs you're is grew that and talked Mary seeing of people. would in say a these that of would real the trend affordability between mobile of

you've income of lower state got quality got your taxes. you've So life,

of and is the of what's a And migration City, group these of seeing age to very very strong so Pacific Salt job then Mountain the Boise, also States. this key the States, against, Mountain Idaho, and all growth, growth job Northwest, And in that's Denver, into tremendous that was clear kind you're following systems. in all educational buttress Lake this the

terms we as well it our as are very what of much just at of look in leased like I they example, returns in for rents XXX% work mean that And rents, you that getting, us for would so And be the they half Rosewood but was California. although when we're this days. property finished, XX in

And so picking issues but are just there California real on I'm not afford here.

see all. And so this at trend I not diminishing

things owned, flag great over the just able the are the of last, that in States, the that hosted team months and of to we've a property Mary kind bought one XX Tempe we've Arizona. Albuquerque. only in in We, really but get do so Mountain not asset we is And been first in to actually bought her one our

terms non all both of so and population. to these that time, of going growers be continue over in terms are think jobs of to in markets And we California

JamesFeldman

over months, about, how because that too see, differentiate kind do cycles, market you values or not may really deep, have willing between you -- changes over risk secular a you rents you think declined property Okay, How and that's do when kind or And that distress that manage a longer and stuff be experience and -- then little of term next off looks actually the trends? XX XX there issue, the as have market helpful. it's really and recover? might of in digging your attractive, and/ of how types may or

BillMcMorrow

our might a people decades. and mean, think our answer together like that. strength is Mary others, company Matt's different been three teams teams, that I Mary, our together I great of the for said, Well, Matt to I these for, been you have XX and But have I've over years.

have And But clear, it we're extent is on other the of investors. value very, we're outlook. a so value we too long that investors have very think And term part I dealing to counterparty, do. a reputationally, is say we I with very of very, good we what a been financial work we're institution, mean, years we've do the viewed we're going over

So I too, we or whether just of a for recipe capital, look, it period and quarter, ever is we ever, much to a that deploy any it got -- is thing, never, say last year would the it start always say, this it's time, -- I we but we've know, just outcome. we bad if to don't capital have don't like for how always meet And but It's make We're Mary, anything of to a any, add having have got much like that our opportunities sense. to annual you looking to deploy. just would that. criteria, goals

MaryRicks

just, I this conservative it's assumptions, you we very in buy, would what mean, would strategies. as have market, to would exit would underwriting be is we I multiple I add our in always, just anything want that we and think

option talking But at. retail, you looking then that you're if a we'd on perhaps reuse for So about. depends be what there talking just, I you're it example, there's about, think, buying

I I years, very said, very will and will mean, been very, be Bill that careful; conservative continue our to disciplined we we'll be the think over we've as So underwriting. in be

JamesFeldman

Are wouldn't you you that markets the in before were there interested assets now? or COVID touch

BillMcMorrow

touch? wouldn't we That

JamesFeldman

Yes.

BillMcMorrow

I has us. the the proposition that. the don't would what steeper the Mary, know again, be the don't risk, depends I what it is. that. discount And always higher steeper for I on value to the know say that

are every estate. are we debt, of about equity capital direction, we operate because as buying earlier, the originating said in we And both, is of the in we so, we're And great things I Kennedy-Wilson also part we're debt. one -- Matt's investors. real And stack under

markets really rates we're outside we in in. feel that be the say have plans we in geographically in to these so opportunities constraint already we're plenty the exception that any would don't built footprint have is that And appraisal very already. only go systems of there's in. that markets the to going of really operate without we that I We the

JamesFeldman

see the where year the then question over last your you is trending next and do so? for or Okay, leverage me

BillMcMorrow

that answer Matt, So, want question? you to

MattWindisch

Sure.

As tendered XXXX of in successfully Bill part bonds Europe. mentioned, our we for

value levels to the produce So think in time. we will you'll come down. I developments the brought these cash create also continue start as business debt and online bring the that unsecured to over see and flow And down, leverage that

I is the down answer So it. debt. the the We developments think next those this couple years over trending with of it of completion repayment see the and unsecured of some

Operator

from The Elkhorn Parsow of Alan next question comes Partners.

AlanParsow

seeing sale States very rates both lower and selling United Europe good question here the morning. about in rates on JP little the low Morgan properties a sale much of you are also, the talk can cap a With the States the on they up between UK? cap they you can rate. bit Baggot albeit differences was are great rates, regard a in you're in than cap at the a X% buying United versus follow Obviously, are the interest elaborate? Hi, mean, obviously, to to I

BillMcMorrow

one? that Mary, you want to tackle

MaryRicks

what there's mean, space. real I Europe. relates estate investments. now rates, that at real I for for looked what's and going right about America, cap would North $XXX say powder billion some for so there's I as in billion research on much to estate it on And $XX mean, the Alan, We've dry we've

see the holding impact not you to across Europe go going positive negative. a going that's kind UK to as on have We and on negative negative, although rates. of barely rates So think could they cap

all real in. over And time capital markets look, we're the estate we values rates increase of of think are. just are amount So because where operating going to the that's across and

AlanParsow

not -- saying I'm I'm I what asking, guess

BillMcMorrow

Mary, little felt on made To Mary, built, strategic just new X% coming believe on years ago, one we five creator done decision that value we the that I as or we've that a to six the very and way wasn't by be finished stabilized time amplify is building at clear Baggot, this almost bit we've really cap rate a a demonstrated Baggot through it? over was we the that was

MaryRicks

Yes, X.X%

BillMcMorrow

on even so going are rates our cap be, underwrote. X.X% --sorry, once very though you and and generally conservative higher originally cap we returns telling achieved are to cash we we we've investment than these rates think construction, new where always we higher than stabilized we've

And way to it and and you into everybody pipeline, only once actually wants it's the is for think credit that value. though to built even of amount world so work your the financial even finished, development give getting started creating I on finishing really goes

the year next an we this year, more of virtually almost and be it's we the stabilize of and to construction some of of rate. following cap then going to attractive assembly up it's it, it more it's and very to all off by XXXX. end doing, roll But year, So line, going all the we're rolled going all like we're

AlanParsow

the than cap is rate what or because UK to, I'm untrue US of and the United actually in true cap States rates it want Europe asking just remain Europe? that I differentials in rates is, and will lower interest between the the

BillMcMorrow

very of the some is insurance with say, It's it the yield well I there year basis obviously, there institutions and need And mean, as of as whatever mean, out for much you hard business achieve points. years. XX to so XX they basis as points need out, think returns I bond driving the or know a I what's this, basic putting kind it's Baggot XX XX are say. pointed in at is think It's Mary particularly that for -- of money for their Alan, it's And that financial it's difficult saw you cap hard that just certain I logical too to sale to conclusion. from industry, the and form when that's investors today.

like X%, that's than that whole XX And started of even see. earning it. is we is we'll not, this opportunity. the in debt going And as a X%, obviously this to created to feels points. compression better Europe cap that's it Whether platform X%, a lot or have or earning way we'll for hell But stay basis see just somebody time, or rate so over

MaryRicks

in Yes, like yields in and class core asset and France I be think X% Paris like it's assets, seeing too you're the really about the core in range. Alan, Europe,

that buyers in look if the space deals the this buyers, the of core are Ireland, have done in So in Ireland, German you XX% year core been funds. the at

So attractive X% an interest is rates. for about yield negative given we've talking been as them,

Operator

This concludes I'd turn to and like Bill over for McMorrow, And our conference question the answer session. any closing remarks. to back

Bill McMorrow

everybody company. very much. of appreciate your at hope everybody's as behalf in great the day. and the Thanks everybody company I support I has on interest we said Well, Kennedy-Wilson, a And earlier, of

Operator

now The concluded. attending sir. conference Thank you, Thank today's presentation. you has all for

lines. a disconnect Have may now your day. You great

Daven Bhavsar	VP, IR
Bill McMorrow	Chairman & CEO
Mary Ricks	President & Director
Matt Windisch	EVP
Anthony Paolone	JPMorgan Chase & Co
Sheila McGrath	Evercore ISI
Derrick Johnston	Deutsche Bank
James Feldman	Bank of America Merrill Lynch
Alan Parsow	Elkhorn Partners

Kennedy-Wilson (KW) 8 Nov 202020 Q3 Earnings call transcript