Kennedy Wilson Gets the Majority

The company has acquired the majority interest of a large portfolio.

Beverly Hills, Calif.—Kennedy Wilson has acquired the majority interest in Vintage Housing Holdings, comprising 30 multifamily properties totaling 5,485 units in the Western United States.

For its 61 percent equity ownership in VHH, Kennedy Wilson invested approximately $78 million, valuing the underlying portfolio at approximately $486 million (including the assumption of property debt, third-party equity interests and unrestricted cash).

“It was an opportunity to significantly expand our portfolio and increase our unit count,” Kurt Zech, Kennedy Wilson Multifamily’s president, told MHN. “We really liked the Vintage team, who is remaining in place as manager, with its 15 years of solid experience managing tax credit affordable properties.”

The properties included in the deal were built on average in 2006, and located primarily in Washington (3,796 units), California (756 units) and Nevada (544 units). As of the end of April, the portfolio has produced year-to-date net operating income of approximately $12 million.

“We really liked all of the markets that the properties are in. The properties are heavily concentrated in Washington State, California and Nevada, and that’s where our existing portfolio is concentrated,” Zech said. “We’re huge owners in the Seattle suburbs and the vast majority of this portfolio is located in the secondary Washington submarkets and we really liked the economic trends of the greater Seattle area.”

Kennedy Wilson was able to acquire this large portfolio off-market through a direct relationship with the seller and according to Zech, expects to hold the portfolio long-term.

“The portfolio benefits from its ability to serve a much needed market segment with the majority of the units rented to independent seniors,” he said. “The VHH acquisition is an excellent complement to our existing market-rate multifamily portfolio and allows Kennedy Wilson to further expand its footprint in key West Coast markets.”

Overall, Kennedy Wilson’s multifamily portfolio totals more than 25,000 units, including over 9,000 units in the State of Washington.