Kennedy Wilson to Acquire Toll Brothers Apartment Living
The seller plans to exit the multifamily development business.
Kennedy Wilson has acquired Toll Brothers’ Apartment Living platform, which comprises the firm’s interests holdings in a portfolio of stabilized and in-development multifamily and student housing properties. The platform changed hands for $347 million. The transaction, set to close next month, will provide immediate scale to Kennedy Wilson’s investment management platform and its rental housing capabilities.
As a result of this sale, Kennedy Wilson will obtain Toll Brothers’ general partner interests in 18 multifamily and student housing assets worth approximately $2.2 billion, in addition to a 29-property development pipeline worth approximately $3.6 billion of investment post-completion. The buyer will also manage 20 multifamily and student housing communities on behalf of the seller, overseeing an additional $3 billion worth of assets. According to Toll Brothers, the firm plans to sell these remaining assets in the future, exiting the multifamily development business entirely.
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J.P. Morgan Securities LLC served as Kennedy Wilson’s exclusive financial advisor, while Latham & Watkins provided legal counsel. Goldman Sachs & Co. LLC and Vestra Advisors served the former role for Toll Brothers, and Fried, Frank, Harris, Shriver & Jacobson LLP served as the seller’s legal counsel.
Acquired expertise
Following the closing of the purchase, Kennedy Wilson will supplant Toll Brothers’ general partner role in the assets, planning to invest about $90 million. The funds will be sourced from the firm’s partners.
Kennedy Wilson will also acquire the expertise of the Toll Brothers Apartment Living management team. It is anticipated the entire executive team of Apartment Living will join Kennedy Wilson to manage the existing portfolio and additionally expand the development platform. The new portfolio owner expects to make offers to all non-executive team employees of Toll Brothers Apartment Living.
The transaction should create a new mutually beneficial pipeline of shared deal flow, with Kennedy Wilson referring prospective for-sale housing opportunities to Toll Brothers, and Toll Brothers reciprocating with rental housing opportunities for Kennedy Wilson.
It’s not the Kennedy Wilson’s first high-profile partnership this year, either. In April, the firm announced a $200 million preferred equity and mezzanine real estate investment partnership with Tokyu Land US Corp., designed to grow the firm’s credit holdings.
