Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations contains forward-looking statements within the meaning of the federal securities laws. See the discussion under the heading “Forward-looking Statements” elsewhere in this report. Unless specifically noted otherwise, as used throughout this Management’s Discussion and Analysis section, “we,” “our,” "us," "the Company" or “Kennedy Wilson” refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned subsidiaries. “Equity partners” refers to third-party equity providers and non-wholly-owned subsidiaries that we consolidate in our financial statements under U.S. GAAP. Please refer to “Non-GAAP Measures and Certain Definitions” for definitions of certain terms used throughout this Management’s Discussion and Analysis Section.
Company Overview
We are a real estate investment company as well as an investment manager with over $30.1 billion of Real Estate Assets Under Management (“AUM”) in high growth markets across the United States, the United Kingdom and Ireland. With an objective of generating strong long-term risk-adjusted returns for our shareholders and partners and drawing on over three decades of experience in identifying opportunities and building value through various market cycles, we primarily focus on (i) investing in the rental housing sector (both market rate and affordable units) and industrial properties; and (ii) originating, managing and servicing real estate loans (primarily senior construction loans secured by high quality multifamily and student housing properties that are being developed by institutional sponsors throughout the United States). We have recently focused on growing our investment management and co-investment platform whereby we invest a minority position (with the potential for carried interest) and earn our pro-rata share of income as well as asset management fees in our role as asset manager. During the six months ended June 30, 2025, our investment management platform generated a total of $61.4 million of asset management fees representing a growth of 30% over the same period in 2024.
For the six months ended June 30, 2025, our 244 employees managed our $30.1 billion of AUM, which includes a total of 68,986 multifamily units in which we hold ownership interest in (39,894 units and 1,177 single family units) or finance (27,914 units). Over the past several years, in line with our focus on the growth of our investments in housing and the continued execution of our capital recycling plan and our recent non-core asset disposition plan, our global investment portfolio has significantly evolved to be weighted heavily in equity and debt investments in the rental housing sector, specifically multifamily, both market rate and affordable, and student housing. The table below details key metrics and information of our global investment portfolio (in total and in each of our segments):
| | | | | | | | | | | | | | | | | | | | | | | |
| Total | | Consolidated | | Co-Investments | | Ownership(1) |
| AUM (billions) | $ | 30.1 | | | $ | 14.0 | | | $ | 16.1 | | | 32 | % |
| Rental Housing |
Multifamily units - market rate(2) | 27,199 | | | 8,250 | | | 18,949 | | | 52 | % |
Multifamily units - affordable(2) | 12,695 | | | — | | | 12,695 | | | 45 | % |
| Single family housing units | 1,177 | | | — | | | 1,177 | | | 10 | % |
| Real Estate Credit (primarily secured by Rental Housing Assets) |
| Real estate debt investments - 100% (billions) | $ | 10.1 | | | $ | — | | | $ | 10.1 | | | 4 | % |
| Industrial and Other Real Estate Investments |
Industrial square feet (millions)(2) | 12.2 | | | — | | | 12.2 | | 18 | % |
US Office square feet (millions)(2) | 5.3 | | | 1.3 | | 4.0 | | 34 | % |
Europe Office feet square feet (millions)(2) | 4.3 | | | 2.5 | | 1.8 | | 75 | % |
Retail square feet (millions)(2) | 2.7 | | | 1.1 | | 1.6 | | 43 | % |
Hotels(2) | 1 | | | — | | | 1 | | 35 | % |
(1) Weighted-average ownership percentages.
(2) Includes amounts for properties that are stabilized, under development and unstabilized.
As of June 30, 2025, our global team, managed $30.1 billion of AUM (as noted above) of which $29.3 billion is operating properties and real estate loans (excluding development properties) which produced total revenue of $1.0 billion ($370.1 million at KW's share) compared to $25.9 billion of operating properties as of June 30, 2024 with total revenue of $976.7 million ($368.3 million at KW's share). In addition, as of June 30, 2025, we held interests in 125 real estate loans in our global debt platform, 87% of which have floating interest rates, with an average interest rate of 8.6% per annum, an unpaid
principal balance of $4.8 billion ($228.6 million at KW's share) compared to 115 real estate loans, 84% of which had floating interest rates, with an average interest rates of 9.1% per annum, and an unpaid principal balance of $5.1 billion ($271.2 million at KW's share) during the same period in 2024. During the six months ended June 30, 2025, the Company also completed a total of $678.9 million of gross acquisitions and $1,961.2 million of loan investments (KW's ownership interest of 17.9% and 2.5%, respectively) and $685.2 million of gross dispositions and $802.7 million of loan repayments (KW's ownership interest of 77.9% and 5.0%, respectively).
Investment Approach
The following is our investment approach:
•Identify markets with an attractive investment landscape and the potential for growth
•Establish operating platforms in our target markets
•Develop local intelligence and create and maintain long-lasting relationships, primarily with financial institutions and the brokerage community
•Leverage relationships and local knowledge to drive proprietary investment opportunities with a focus on off-market transactions that we expect will result in above average cash flows and returns over the long term
•Acquire high quality assets, primarily through our investment management platform with strategic partners and funds that we manage
•Reposition assets to enhance cash flows post-acquisition
•Explore development opportunities or acquire development assets that fit within our overall investment strategy
•Continuously evaluate and selectively harvest asset and entity value through strategic realizations using both the public and private markets
In order to help the user of the financial statements understand our company, we have included certain five-year selected financial data. The following table shows selected financial items for the three and six months ended June 30, 2025 dating back to 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, |
| ($ in millions, except fee bearing capital and AUM which $ in billions) | 2025 | | 2024 | | 2023 | | 2022 | | 2021 |
| GAAP | | | | | | | | | |
| Revenues | $ | 135.7 | | | $ | 132.0 | | | $ | 146.5 | | | $ | 136.1 | | | $ | 108.4 | |
| Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders | (6.4) | | | (59.1) | | | 39.0 | | | (9.0) | | | 215.4 | |
| Basic (loss) earnings per share of common stock | (0.05) | | | (0.43) | | | 0.28 | | | (0.07) | | | 1.55 | |
| Diluted (loss) earnings per share of common stock | (0.05) | | | (0.43) | | | 0.28 | | | (0.07) | | | 1.53 | |
Non-GAAP(1) | | | | | | | | | |
| Adjusted EBITDA | $ | 147.1 | | | $ | 79.3 | | | $ | 195.1 | | | $ | 118.4 | | | $ | 410.2 | |
| % change | 85 | % | | (59) | % | | 65 | % | | (71) | % | | — | % |
| Adjusted Net Income | $ | 34.5 | | | $ | (16.8) | | | $ | 86.0 | | | $ | 41.4 | | | $ | 264.6 | |
| Adjusted Net Income percentage change | (305) | % | | (120) | % | | 108 | % | | (84) | % | | — | % |
| Non-cash fair value gains | $ | (7.1) | | | $ | (11.8) | | | $ | (15.1) | | | $ | 15.9 | | | $ | 26.8 | |
| Non-cash carried interests (decreases) increases | $ | (2.0) | | | $ | (12.3) | | | $ | (7.7) | | | $ | (8.7) | | | $ | 16.2 | |
| Consolidated NOI | $ | 55.9 | | | $ | 58.9 | | | $ | 71.7 | | | $ | 76.3 | | | $ | 60.6 | |
| % change | (5) | % | | (18) | % | | (6) | % | | 26 | % | | — | % |
| JV NOI | $ | 53.1 | | | $ | 46.5 | | | $ | 41.7 | | | $ | 39.8 | | | $ | 27.0 | |
| % change | 14 | % | | 12 | % | | 5 | % | | 47 | % | | — | % |
| Fee-bearing capital | $ | 9.2 | | | $ | 8.7 | | | $ | 7.9 | | | $ | 5.3 | | | $ | 4.5 | |
| % change | 6 | % | | 10 | % | | 49 | % | | 18 | % | | — | % |
| AUM | $ | 30.1 | | | $ | 27.1 | | | $ | 25.1 | | | $ | 22.6 | | | $ | 18.5 | |
| % change | 11 | % | | 8 | % | | 11 | % | | 22 | % | | — | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, |
| ($ in millions, except fee bearing capital and AUM which $ in billions) | 2025 | | 2024 | | 2023 | | 2022 | | 2021 |
| GAAP | | | | | | | | | |
| Revenues | $ | 264.0 | | | $ | 268.4 | | | $ | 278.7 | | | $ | 260.8 | | | $ | 207.8 | |
| Net (loss) income attributable to Kennedy-Wilson Holdings, Inc. common shareholders | (47.2) | | | (32.2) | | | (1.8) | | | 25.8 | | | 209.8 | |
| Basic (loss) earnings per share of common stock | (0.34) | | | (0.23) | | | (0.01) | | | 0.19 | | | 1.51 | |
| Diluted (loss) earnings per share of common stock | (0.34) | | | (0.23) | | | (0.01) | | | 0.19 | | | 1.50 | |
Non-GAAP(1) | | | | | | | | | |
| Adjusted EBITDA | $ | 245.3 | | | $ | 282.5 | | | $ | 286.0 | | | $ | 278.5 | | | $ | 537.8 | |
| % change | (13) | % | | (1) | % | | 3 | % | | (48) | % | | — | % |
| Adjusted Net Income | $ | 33.8 | | | $ | 53.7 | | | $ | 91.3 | | | $ | 126.8 | | | $ | 311.6 | |
| Adjusted Net Income percentage change | (37) | % | | (41) | % | | (28) | % | | (59) | % | | — | % |
| Non-cash fair value gains (loss) | $ | 1.8 | | | $ | (9.9) | | | $ | (12.7) | | | $ | 72.5 | | | $ | 32.1 | |
| Non-cash carried interests (decreases) increases | $ | (10.2) | | | $ | (28.7) | | | $ | (18.4) | | | $ | 18.5 | | | $ | 15.8 | |
| Consolidated NOI | $ | 112.9 | | | $ | 118.6 | | | $ | 142.5 | | | $ | 145.7 | | | $ | 113.8 | |
| % change | (5) | % | | (17) | % | | (2) | % | | 28 | % | | — | % |
| JV NOI | $ | 104.3 | | | $ | 90.7 | | | $ | 83.2 | | | $ | 78.5 | | | $ | 53.4 | |
| % change | 15 | % | | 9 | % | | 6 | % | | 47 | % | | — | % |
| Fee-bearing capital | $ | 9.2 | | | $ | 8.7 | | | $ | 7.9 | | | $ | 5.3 | | | $ | 4.5 | |
| % change | 6 | % | | 10 | % | | 49 | % | | 18 | % | | — | % |
| AUM | $ | 30.1 | | | $ | 27.1 | | | $ | 25.1 | | | $ | 22.6 | | | $ | 18.5 | |
| % change | 11 | % | | 8 | % | | 11 | % | | 22 | % | | — | % |
(1) Please refer to "Certain Non-GAAP Measures and Reconciliations" for a reconciliation of certain non-GAAP items to U.S. GAAP.
The following tables show selected financial items as of June 30, 2025 and as of December 31, 2024 through 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, | | December 31, |
| (in millions) | 2025 | | 2024 | | 2023 | | 2022 | | 2021 |
| Cash and cash equivalents | $ | 309.1 | | | $ | 217.5 | | | $ | 313.7 | | | $ | 439.3 | | | $ | 524.8 | |
| Total assets | 6,796.9 | | | 6,961.1 | | | 7,712.1 | | | 8,271.8 | | | 7,876.5 | |
| Mortgage debt | 2,385.2 | | | 2,597.2 | | | 2,840.9 | | | 3,018.0 | | | 2,959.8 | |
| KW unsecured debt | 1,884.4 | | | 1,877.9 | | | 1,934.3 | | | 2,062.6 | | | 1,852.3 | |
| KWE unsecured bonds | 352.7 | | | 309.8 | | | 522.8 | | | 506.4 | | | 622.8 | |
| Kennedy Wilson equity | 1,563.0 | | | 1,601.2 | | | 1,755.1 | | | 1,964.0 | | | 1,777.6 | |
| Noncontrolling interests | 33.3 | | | 34.8 | | | 43.3 | | | 46.4 | | | 26.3 | |
| Total equity | 1,596.3 | | | 1,636.0 | | | 1,798.4 | | | 2,010.4 | | | 1,803.9 | |
| Common shares outstanding | 137.9 | | | 137.4 | | | 138.7 | | | 137.8 | | | 138.0 | |
The following table shows the historical U.S. federal income tax treatment of Company’s common stock dividend for the years ended December 31, 2024 through 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, |
| 2024 | | 2023 | | 2022 | | 2021 | | 2020 |
| Taxable Dividend | 100.00 | % | | — | % | | 37.81 | % | | — | % | | 27.14 | % |
| Non-Taxable Return of Capital | — | % | | 100.00 | % | | 62.19 | % | | 100.00 | % | | 72.86 | % |
| Total | 100.00 | % | | 100.00 | % | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Quarter to Date Highlights
During the three months ended June 30, 2025, we achieved the following:
•Completed a recapitalization transaction with respect to a hotel property that the Company owns through a joint venture. This transaction resulted in the Company receiving $125 million of cash and reducing the Company's ownership interests in the joint venture from 50% to 35%. The underlying joint venture secured an increase in the loan amount under its existing mortgage by an additional $150 million (inclusive of a $25 million reserve) and the entirety of the $125 million initial proceeds were used by the joint venture to redeem a portion of the Company's ownership interests as described above.
•Repaid $178.7 million on the Company's revolving line of credit.
•Originated $1,237.1 million ($30.9 million at our share) of new senior construction loans through our debt investment platform.
•Generated total investment management fees of $36.4 million, an increase of 39% from the first quarter of 2024, including a $7 million development completion fee related to the completion of a development project.
•Continued to see strength in our stabilized multifamily portfolio which saw same-property revenue growth of 2.9% and same-property NOI growth of 3.5%.
For the three months ended June 30, 2025, we had net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders of $6.4 million as compared to $59.1 million for the same period in 2024. These results include $49.8 million and $62.9 million of non-cash items for the three months ended June 30, 2025 and June 30, 2024, respectively, which primarily consist of depreciation and amortization and changes in fair value (depreciation and amortization of $34.5 million and $36.4 million and fair value decrease of $8.9 million and $20.6 million, respectively). For the three months ended June 30, 2025 we had Adjusted EBITDA of $147.1 million as compared to $79.3 million for the same period in 2024. The increase in net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for the three months ended June 30, 2025 as compared to the same period in 2024, was primarily due to (i) the recapitalization and deconsolidation of a 1,008 unit wholly-owned multifamily property in which the Company's ownership was reduced from 100% to 10%, (ii) the sale of two non-core office buildings in Ireland with minimal sales activity in the prior period; (iii) higher investment management fees relating to a development completion fee related to the completion of a Southern California multifamily development project and an increase in acquisition fees in our construction loan business due to more loan closings compared to the prior period; and (iv) fair value gains on real estate and foreign exchange movements within unconsolidated investments in the current period compared to fair value losses and higher reversals of carried interest accruals in the prior period.
Year to Date Highlights
During the six months ended June 30, 2025, we achieved the following:
•Originated $1,961.2 million ($49.0 million at our share) of new senior construction loans through our debt investment platform
•Generated total investment management fees of $61.4 million, an increase of 29.5% from the first six months of 2024
•Continued to see strength in our stabilized multifamily portfolio which saw same-store occupancy grow by 0.1% to 94.6%, same-property revenue growth of 3.0%, and same-property NOI growth of 3.9%
•Acquired an industrial development site in the United Kingdom for $48 million, which we expect to recapitalize with a partner in Consolidated portfolio and six multifamily properties in the Mountain West and an industrial property in the Pacific Northwest for $493.7 million. KW has a 12.1% ownership interest in these acquisitions in the Co-Investment Portfolio. Acquired three additional sites for our UK single family platform.
•Recapitalization of Bella Vista which generated $39.5 million in cash and a gain of $32.2 million and sold non-core office assets in Ireland, Italy and the United Kingdom and residential lots in Hawaii for $216 million. The dispositions generated $92.5 million of cash to KW and a gain on sale of $22.4 million.
For the six months ended June 30, 2025, we had net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders of $47.2 million as compared to $32.2 million for the same period in 2024. These results include $86.8 million and $116.6 million of non-cash expenses for the six months ended June 30, 2025 and June 30, 2024, respectively, which primarily consist of depreciation and amortization and changes in fair value (depreciation and amortization of $68.6 million and $75.3 million and fair value decreases of $5.8 million and $30.7 million, respectively). For the six months ended June 30, 2025 we had Adjusted EBITDA of $245.3 million as compared to $282.5 million for the same period in 2024. The decrease in net income attributable to Kennedy-Wilson Holdings, Inc. common shareholders for the six months ended June 30, 2025 as compared to the same period in 2024, was primarily due to (i) the sale of the Shelbourne hotel in first quarter of 2024 and the sale of an office building that is part of a larger office park in Issaquah, Washington which led to higher gains on sales than the sales activity in the current period as discussed above; (ii) lower NOI from hotel operations due to the sale of the Shelbourne hotel in the prior period and (iii) lower interest income on loans we own less of newly originated loans in our debt investment business. These factors that contributed to the resulting decrease in net income attributable to Kennedy-Wilson Holdings, Inc.
common shareholders for the six months ended June 30, 2025 as compared to the same period in 2024, were offset by a $36.0 million positive changes in the Company’s income from unconsolidated investments as a result of lower fair value decreases in the current period and lower carried interests reversals on unconsolidated investments and an increase in investment management fees due to the growth of our investment management platform.
Recently announced tariffs in the United States have contributed to significant and ongoing uncertainty and volatility of debt and equity markets. There is significant uncertainty as to the outcome of ongoing global trade negotiations, the extent of retaliatory measures taken by other countries and the ultimate impact on the U.S. and global economies. A prolonged period of policy-driven uncertainty and continued market volatility increases the likelihood of a slowdown in the U.S. and global economies and could impact the ongoing recovery in the real estate market, which could adversely affect, amongst other things, our business (including the value of our investments and our ability to secure debt and equity capital at attractive terms or at all), partners, tenants and borrowers.
Business Segments
Our operations are defined by two primary business segments: our consolidated investment portfolio (the "Consolidated Portfolio") and our co-investment portfolio (the "Co-Investment Portfolio"). In addition to our two primary business segments, we have among other things, corporate overhead and unsecured corporate debt and preferred stock that is not allocated to either of our segments.
Consolidated Portfolio
Our Consolidated Portfolio consists of the investments in real estate and real estate-related assets that we have made and consolidate on our balance sheet, primarily multifamily communities. We typically wholly-own these assets, which have longer hold periods and accretive asset management opportunities.
The non-GAAP table below represents a summarized balance sheet of our Consolidated Portfolio, which is held at historical depreciated cost as of June 30, 2025 and December 31, 2024. This table does not include non-segment amounts such as corporate cash and the KWI Notes.
| | | | | | | | | | | |
| ($ in millions) | June 30, 2025 | | December 31, 2024 |
Cash(1) | $ | 147.3 | | | $ | 117.4 | |
| Real estate | 4,078.8 | | | 4,290.4 | |
| Accounts receivable and other assets | 86.7 | | | 99.7 | |
| Total Assets | $ | 4,312.8 | | | $ | 4,507.5 | |
| | | |
| Accounts payable, accrued expenses and other liabilities | 149.5 | | | 118.7 | |
| Mortgage debt | 2,385.2 | | | 2,597.2 | |
| KWE bonds | 352.7 | | | 309.8 | |
| Total Liabilities | 2,887.4 | | | 3,025.7 | |
| | | |
| Equity | $ | 1,425.4 | | | $ | 1,481.8 | |
(1)Excludes $161.8 million and $100.1 million as of June 30, 2025 and December 31, 2024, respectively, of corporate non-property level cash.
Co-Investment Portfolio
In addition to investing our shareholder's capital, we invest capital on behalf of our partners in real estate and real estate-related assets, primarily construction loans, through our Co-Investment Portfolio. We invest alongside our partners and typically have a 5% to 50% ownership interest in the assets in our Co-Investment Portfolio and through our ownership positions, we have the potential to earn carried interest as further discussed below. As of June 30, 2025, we have a weighted average ownership of 38% in our Co-Investment Portfolio. We also earn fees for managing our fee-bearing capital (total third-party committed or invested capital that we manage in our joint ventures and commingled funds), including, without limitation, asset management fees, construction management fees, acquisition and disposition fees and origination fees.
The non-GAAP table below represents the carrying value of our Co-Investment Portfolio balance sheet which is primarily at fair value (approximately 90% and 92%, respectively), at our share of the underlying investments as of June 30, 2025 and December 31, 2024. The Co-Investment Portfolio consists of our unconsolidated investments as well as our loan purchases and originations.
| | | | | | | | | | | |
| ($ in millions) | June 30, 2025 | | December 31, 2024 |
| Cash | $ | 134.3 | | | $ | 137.5 | |
| Real estate | 4,854.2 | | | 4,564.9 | |
| Loans | 215.5 | | | 243.2 | |
| Accounts receivable and other assets | 138.1 | | | 236.9 | |
| Total Assets | $ | 5,342.1 | | | $ | 5,182.5 | |
| | | |
| Accounts payable and accrued expenses | 119.9 | | | 151.5 | |
| Mortgage debt | 2,977.6 | | | 2,757.5 | |
| Total Liabilities | 3,097.5 | | | 2,909.0 | |
| | | |
| Equity | $ | 2,244.6 | | | $ | 2,273.5 | |
As of June 30, 2025, our fee-bearing capital was $9.2 billion and we recognized $61.4 million in base investment management fees and had $17.4 million in net accrued carried interests receivable (allocated amounts to us on co-investments we managed based on the cumulative performance of the underlying investment), which included a non-cash write down of $10.2 million of carried interests during the six months ended June 30, 2025.
Co-Investment Portfolio Investment Platforms
We have a number of platforms through which we invest in alongside our partners and manage in our Co-Investment Portfolio. For each specific investment opportunity, we evaluate various investment parameters, primarily the asset type, risk return profiles and other parameters against the defined investment parameters of the applicable platforms.
Separate accounts
We have several high-quality institutional equity partners that we invest alongside with and for whom we act as the general partner and receive investment management fees. Our separate account platforms have defined investment parameters such as asset types, leverage and return profiles and expected hold periods. As of June 30, 2025, our weighted average ownership interest in the various joint ventures that we manage was 42%.
Commingled funds
We currently have four closed-end funds that we manage and through which we receive investment management fees and potentially carried interests. We focus on sourcing investors in the U.S., Europe, Japan and Middle East and target investments in the U.S. and Europe with respect to our commingled funds. Each of our funds have, among other things, defined investment guidelines, investment hold periods and target returns. Currently our U.S.-based funds focus on value-add properties in the U.S. that have an expected hold period of 5 to 7 years. Our European fund focuses on value-add commercial properties in the United Kingdom, Ireland and Spain that also have expected hold periods of 5 to 7 years. As of June 30, 2025, our weighted average ownership interest in the commingled funds that we manage was 13%.
VHH
Through our Vintage Housing Holdings ("VHH") partnership we acquire and develop income and age restricted properties. See a detailed discussion of this business in the Multifamily section below.
Investment Types
The following are the product types we invest in through our Consolidated Portfolio and Co-Investment Portfolio segments:
Rental Housing
We pursue multifamily acquisition opportunities where we can unlock value through a myriad of strategies, including institutional management, asset rehabilitation, repositioning and recapitalization. We focus primarily on apartments in supply-constrained, infill markets.
As of June 30, 2025, our global rental housing portfolio consisted of 39,894 units and 1,177 single family housing units.
| | | | | | | | | | | |
| Total | Consolidated | Co-Investments |
Multifamily units - market rate units(1) | 27,199 | | 8,250 | | 18,949 | |
Multifamily units - affordable rate units(1) | 12,695 | | — | | 12,695 | |
| Single family housing units | 1,177 | | — | | 1,177 | |
(1) Includes 2,158 units that are under development or undergoing lease up.Our largest Western United States multifamily regions are the Mountain West region (which includes our investments in Idaho, Utah, Nevada, Arizona and New Mexico) and the Pacific Northwest (primarily the state of Washington). The remainder of the Western United States portfolio is located in Northern and Southern California. In Europe, we focus on Ireland, particularly Dublin city center and its immediately surrounding suburbs.
Our asset management strategy entails installing strong property management teams to drive leasing activity and upkeep of the properties. We also seek to add amenities designed to promote health and wellness, celebrate local and cultural events and enhance the lives of residents living in our communities. We also incorporate spaces for rest and socialization across our global multifamily portfolio, including clubhouses, fitness centers, business suites, outdoor play areas, pools and dog parks.
In addition to traditional multifamily units, during the fourth quarter 2024 we launched a new UK single-family rental housing joint-venture with the Canada Pension Plan Investment Board ("CPPIB"), targeting £1 billion in real estate. Under this arrangement, CPPIB will own 90% of the ownership interests, initially committing £500 million in equity and we will own 10% of the ownership interests initially committing £56 million in equity. This joint venture will look to acquire single-family rental properties throughout the UK, targeting areas with strong and growing local economies. As of June 30, 2025 this joint venture has acquired ownership interest in 12 sites which consists of 1,177 single family rental units.
Multifamily - Affordable Housing
Through our VHH platform we focus on affordable units based on income and in some cases age restrictions. With homes reserved for residents that make 50% to 60% of the area’s median income, VHH provides an affordable long-term solution for qualifying working families and active senior citizens, coupled with modern amenities that are a hallmark of our traditional multifamily portfolio. Fundamental to VHH’s success is a shared commitment to delivering quality affordable homes and building communities that enrich residents’ lives, including providing programs such as social support groups, after-school programs, transportation assistance, computer training, and wellness classes.
As of June 30, 2025, we hold an approximate 50% interest in VHH which acts as the general partner ("GP interest") (developer/asset manager) of 60 affordable housing projects totaling 12,695 units (48 investments held with a tax credit limited partner ("tax credit LP") and 12 investments held fee simple which does not have any outside tax credit LPs. Included in the portfolio are 10,825 operating units and 1,870 units that are under development or lease up. When we acquired VHH in 2015, the portfolio consisted of a total of 5,485 units. These units are included in our multifamily unit count discussed throughout this report.
With respect to the assets that are held with tax credit LPs, VHH generally sells 99.9% of the legal ownership interest in the applicable asset to the tax credit LPs, in exchange for cash that is used to build and/or rehabilitate the property. Although legal ownership interests in these assets are sold to the tax credit LPs, VHH continues to receive a majority of the cash flow generated from these assets through deferred developer fees and other fee arrangements and profit splits agreed to between VHH and the tax credit LPs (a commonly used structure by peer companies with similar businesses). This structure results in VHH maintaining on average 75% of the economic ownership interests in the assets across the portfolio.
Our VHH platform also has a development component where we find suitable sites and develop properties from the ground up and then lease up the property upon the completion of construction. VHH is paid developer fees for its work as development manager and receive a conversion fee when the property is placed into operation.
Further, on properties where tax credits are sold, VHH typically utilizes tax-exempt bond financing to help finance its partnership investments. Typical financing includes a bridge to permanent financing solution, where a floating rate option is utilized during the construction and lease-up period and a permanent loan with a fixed rate locked at the time of closing becomes effective upon conversion/stabilization. The typical term for these loan facilities is 17 years.
During the six months ended June 30, 2025, we received $5.7 million of proceeds from VHH from recurring monthly distributions. On a trailing 12-month basis, we have received $15.0 million of proceeds from VHH, including $10.2 million from recurring monthly distributions and $4.8 million from paid developer fees at conversion and resyndications.
We acquired our ownership interest in VHH in 2015 for approximately $80.0 million. As of June 30, 2025 we have contributed an additional $187.2 million into VHH and have received $387.0 million in cash distributions. VHH is an unconsolidated investment that we account for using the fair value option which had a carrying value of $343.3 million as of June 30, 2025. Since our acquisition in 2015, we have recorded $365.2 million worth of fair value gains on our investment in VHH, including $8.8 million during the six months ended June 30, 2025.
The fair value of the real estate investments held through VHH is determined through a discounted cash flow analysis on a partnership-by-partnership basis. This methodology assumes ordinary distributions during the ownership period and the future sale of the underlying properties after the tax credit period has expired. Our methodology of estimating the fair value of such real estate investments assumes certain market inputs, including average capitalization rates at sale between 6.25% - 7.00% and discount rates ranging from 8.25% - 9.00%.
•With respect to investments held by VHH with tax credit LPs, the discounted cash flow analysis also factors in the distinct economic splits between VHH and its tax credit LPs. We also record an estimated fair value of our GP interests with respect to VHH ownership structures with tax credit LPs by taking the fair value of the underlying real estate utilizing the method described above and then factoring in (i) cashflow after debt service and then, (ii) discounting the net cashflow utilizing a levered discount rate that ranges between 17.00% to 18.50% (the "levered discount rates").
•With respect to investments held by VHH fee simple (without tax credit LPs), we also fair value the underlying secured loans on each of the properties, as described further below under “Fair Value Investments”.
In addition to completed projects, VHH holds certain investments that they are currently developing as described above. With respect to such investments VHH is paid developer fees for its work as development manager. Prior to the completion of the development, we estimate the fair value of these investments by applying the levered discount rate described above to the cashflow associated with the paid developer fees. Once complete, the property will be held by VHH with tax credit LPs and we will calculate and record the fair value of such investments utilizing the discounted cash flow methodology described in the previous paragraph.
Real Estate Credit
Our global credit platform, which includes institutional partners across insurance and sovereign wealth funds, invests across the entire real estate credit capital structure in the United States, United Kingdom and Europe and primarily targets loans secured by high-quality real estate located in such jurisdictions. In addition to interest income (which includes origination, exit and extension fees), in our role as asset manager, we earn customary fees for managing the platform. Currently, our global credit investment platform investments have been made without the use of any leverage and are invested through our Co-Investment Portfolio.
In the United States, we primarily focus on originating real estate construction loans that consist of variable rate senior loans secured by high-quality, institutional commercial real estate, primarily multifamily and student housing properties, located across the U.S. capitalized by experienced, well-capitalized real estate owners and operators ("the "Construction Loan Portfolio"). Our construction loan originations typically finance 50% to 65% of the cost to construct the underlying properties, with loan fundings typically occurring after sponsor capital has been invested. The terms are generally three years with short-term, performance-based extension options. Interest typically accrues into principal balance during the construction period, with principal and interest being paid at maturity. In addition to our Construction Loan Portfolio, we have originated and purchased bridge loans that consist of predominantly variable rate loans, with terms that are generally three-years with one or two 12-month extension options (the "Bridge Loan Portfolio"). Our bridge loans are secured by multifamily, office, retail, industrial and hotel assets in the Western United States or United Kingdom. We also invest in certain mezzanine loans that are fixed rate and tend to have maturities of 5 to 10 years and are secured by multifamily or office properties in the Western United States. In April 2025, we announced a $200 million preferred equity and mezzanine real estate investment platform with Tokyu Land Corporation.
As of June 30, 2025, we held interests in 125 loans in our global debt platform, 87% of which have floating interest rates with an average interest rate of 8.6% per annum and an unpaid principal balance ("UPB") of $4.8 billion (of which our share was a UPB of $215.4 million). Some of our loans contain additional funding commitments that
will increase our loan balances if they are utilized. As of June 30, 2025, our loans had unfulfilled capital commitments totaling $5.2 billion (our share of which was $145.8 million).
We have stopped and may stop accruing for interest income if certain loans become non-performing and account for loans on a cash basis. In the event of a borrower defaulting on its obligations under any loan agreement, we will explore all of our remedies including, without limitation, pursuing a foreclosure action or deed in lieu of foreclosure to take control of the underlying collateral securing the loans, although there is no guarantee or assurance that we will be able to do so successfully. As of June 30, 2025, we had three loans (in our bridge loan portfolio) out of the 125 loans in our global debt platform with a $12.6 million carrying value at our share and net of any loan reserves that are not paying interest current on a contractual basis. Per the terms of the applicable loan agreements, however, we have implemented a full cash sweep of any cash flow that is generated from the collateral and are working on exercising our available remedies, which may include taking control of the underlying collateral. We are no longer accruing interest under these loans and accounting for them on a cash basis going forward.
Commercial
Our industrial portfolio consists of approximately 12.2 million rentable square feet of distribution centers located primarily in the United Kingdom, Ireland and the Mountain West and Northern California regions of the United States. All of the assets in our industrial portfolio are in our Co-Investment Portfolio and we have a weighted average ownership interest of 18% in such assets.
Our office portfolio consists of approximately 9.5 million rentable square feet of office properties located primarily in the United Kingdom, Ireland and the Western United States. Of the 9.5 million rentable square feet in our office portfolio, approximately 3.8 million rentable square feet (2.5 million rentable square feet of which is from assets located in the United Kingdom and Ireland) is in our Consolidated Portfolio and the remaining 5.7 million rentable square feet is in our Co-Investment Portfolio (which we have a weighted ownership interest of 29%). Office assets in our Consolidated Portfolio are typically large high-quality properties with high replacement costs. Office assets in our Co-Investment Portfolio range from suburban office buildings to office buildings located in central business districts of major cities. Some of our offices consist of flex space for medical lab work or light industrial use and many of our offices focus on tenants in the tech sector.
Our retail portfolio consists of approximately 2.7 million square feet of primarily suburban shopping centers located in the United Kingdom as well as Dublin and Western United States.
Residential, Hotel and Other
In certain cases, we may pursue for-sale housing acquisition opportunities, including land for entitlements, finished lots, urban infill housing sites and partially finished and finished housing projects.
As of June 30, 2025, we held 21 investments that are primarily comprised of 1,069 residential acres located in Hawaii and the Western United States and are primarily invested through our Co-Investment Portfolio. These investments are in various stages of completion, ranging from securing the proper entitlements on land positions to sales of units/lots. As of June 30, 2025, these investments had a Gross Asset Value of $274.5 million, and includes our investment in Kohanaiki a private club and residential community located in Kona, Hawaii. We have $122.9 million equity value in Kohanaiki which represents a 55% ownership interest. In addition to our ownership interest, we manage the Kohanaiki asset and develop residential lots and homes for sale.
We also hold ownership interests in the five-star, Rosewood flagged Kona Village Resort that consists of 150 rooms in Kona, Hawaii and which sits in our Co-Investment Portfolio. After we fully redeveloped the project over seven years, we fully opened the Kona Village Resort in July 2023. We currently expect the property to stabilize in 2026. We have $122.3 million equity value which represents an ownership interest of 35% in the Kona Village Resort.
We have a minority ownership interest in Zonda, a technology based real estate business that offers residential construction data providing insights and solutions for leaders in the home building industry. We account for our ownership interest at fair value and it is included within our unconsolidated investments.
This group also includes our investment in liquid non-real estate investments which include investment funds that hold marketable securities and private equity investments.
Development and Redevelopment
We have neared the completion of a 10-year development pipeline totaling $5 billion in 2024. As of June 30, 2025, we have 288 multifamily units we are actively developing and another project we are still in the planning phase.
On the project we are actively developing we currently expect to spend an additional $13 million to complete the project and expect this to be fully funded with a property level construction loan.
Fair Value Investments
The Company accounts for a number of unconsolidated investments under fair value accounting. The accuracy of estimating fair value cannot be determined with precision and cannot be substantiated by comparison to quoted prices in active markets and may not be realized in a current sale or immediate settlement of the asset or liability. Recently, there has also been a lack of liquidity in the capital markets as well as limited transactions which has had impact on the inputs associated with fair values. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including market-derived estimated capitalization rates, discount rates, liquidity risks, and estimates of future cash flows could significantly affect the fair value measurement amounts. All valuations of real estate involve subjective judgments.
Ongoing macroeconomic conditions, such as, but not limited to, elevated levels of inflation and interest rates, banks' ability and willingness to lend, including large-scale conflicts and warfare, and government responses to the same, continue to adversely impact the global economy and create volatility in the financial markets. Any prolonged downturn in the financial markets or a recession or continued volatility in the financial markets, either globally or locally in the United States or in other countries in which we conduct business, could impact the fair value of investments held by the Company. As a result of the rapid development, fluidity and uncertainty surrounding these situations, the Company expects that information with respect to fair value measurement may change, potentially significantly, going forward and may not be indicative of the actual impact on our business, operations, cash flows and financial condition for the six months ended June 30, 2025 and future periods.
As of June 30, 2025, $1.8 billion or 90% of our investments in our Co-Investment Portfolio (27% of total assets) were held at estimated fair value. As of June 30, 2025, there were cumulative fair value gains on investments held of $264.9 million, which comprises 14% of the $1.8 billion carrying value of fair value unconsolidated investments that are currently held. Our investment in VHH accounts for $365.2 million of the $264.9 million cumulative fair value gains. See discussion of VHH above for more detail. Fair value changes consist of changes in the underlying value of properties and associated mortgage debt as well as foreign currency fluctuations (net of any direct hedges) for non-dollar denominated investments. During the six months ended June 30, 2025, we recorded $1.8 million and $10.2 million, respectively, of net non-cash fair value gains and write downs of carried interests on Co-Investment portfolio investments.
In determining estimated fair market values, the Company utilizes two approaches to value real estate, a discounted cash flow analysis and direct capitalization approach.
Discounted cash flow models estimate future cash flows from a buyer's perspective (including terminal values) and compute a present value using a market discount rate. The holding period in the analysis is typically ten years. This is consistent with how market participants often estimate values in connection with buying real estate but these holding periods can be shorter depending on the life of the structure an investment is held within. The cash flows include a projection of the net sales proceeds at the end of the holding period, computed using a market reversionary capitalization rate. For our investment in VHH the Company fair values its general partner ("GP") interests net cash flows utilizing a levered discount rate.
Under the direct capitalization approach, the Company applies a market derived estimated capitalization rate to current and future income streams with appropriate adjustments for tenant vacancies or rent-free periods. These estimated capitalization rates and future income streams are derived from comparable property and leasing transactions and are considered to be key inputs in the valuation.
Other factors that we take into account under both approaches may include transaction structuring efficiencies, tenancy details, planning, building and environmental factors that might affect the property.
The Company also utilizes valuations from independent real estate appraisal firms on some of its investments ("appraised valuations"), with certain investment structures periodically (typically annually) requiring appraised valuations. All appraised valuations are reviewed and approved by the Company.
The Company's investment in Zonda is accounted for at fair value and is valued using a multiple on trailing twelve month EBITDA.
The methodology to determine the value of the Company’s investment in VHH is described above under "Multifamily-Affordable Housing."
The table below describes the range of inputs used as of June 30, 2025 for real estate assets:
| | | | | | | | | | | | | | |
| | Estimated Rates Used for |
| | Capitalization Rates | | Discount Rates |
| Multifamily - Affordable | Income approach - discounted cash flow | 6.25% —7.00% | | 8.25% — 9.00% |
| Multifamily - Affordable GP interest | Income approach - discounted cash flow | 6.25% —7.00% | | 17.00% — 18.50% |
| Multifamily - Market Rate | Income approach - direct capitalization | 4.50% — 6.90% | | N/A |
| Office | Income approach - discounted cash flow | 5.20% — 8.00% | | 7.50% — 9.50% |
| Income approach - direct capitalization | 5.30% — 10.70% | | N/A |
| Industrial | Income approach - discounted cash flow | 5.00% — 6.30% | | 6.30% — 7.80% |
| Income approach - direct capitalization | 4.00% — 9.00% | | N/A |
| Hotel | Income approach - discounted cash flow | 6.00% | | 8.30% |
In valuing indebtedness, the Company considers significant inputs to be the term of the debt, value of collateral, market loan-to-value ratios, market interest rates and spreads, and credit quality of investment entities. The credit spreads used by the Company to value floating rate indebtedness range from 2.00% to 3.80%, while the market rates used to value fixed rate indebtedness range from 3.90% to 9.30%.
There is no active secondary market for our development projects and no readily available market value given the uncertainty of the amount and timing of future cash flows. Accordingly, our determination of fair value of our development projects requires judgment and extensive use of estimates. Therefore, we typically use investment cost as the estimated fair value until future cash flows become more predictable. Additionally, the fair value of our development projects may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. If we were required to liquidate an investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized or incurred on these investments to be different than the unrealized gains or losses reflected in the currently assigned valuations.
Real Estate Assets Under Management (AUM)
AUM generally refers to the properties and other assets with respect to which we provide (or participate in) oversight, investment management services and other advice, and which generally consist of real estate properties or loans, and investments in joint ventures. Our AUM is principally intended to reflect the extent of our presence in the real estate market, not the basis for determining our management fees. Our AUM consists of the total estimated fair value of the real estate properties and other real estate related assets either owned by third parties, wholly-owned by us or held by joint ventures and other entities in which our sponsored funds or investment vehicles and client accounts have invested. Committed (but unfunded) capital from investors in our sponsored funds is not included in our AUM. The estimated value of development properties is included at estimated completion cost.
The table below details the changes in the Company's AUM for the six months ended June 30, 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| (in millions) | December 31, 2024 | | Increases | | Decreases | | June 30, 2025 |
| AUM | $ | 27,952.9 | | | $ | 3,531.5 | | | $ | (1,425.5) | | | $ | 30,058.9 | |
AUM increased 7.5% to approximately $30.1 billion as of June 30, 2025. The increase is due to new loan originations in our construction loan portfolio, acquisitions within our commingled fund and increases on foreign assets from rising foreign exchange rates. These were offset by repayments of construction and bridge loans and the sale of non-core assets.
Please also see "Fair Value Investments" listed above for a discussion of our fair value investments and accounting methodology and any limitations with respect to the same.
Foreign Currency and Currency Derivative Instruments
Please refer to item 3. Quantitative and Qualitative Disclosures About Market Risk for our discussion regarding foreign currency and currency derivative instruments.
Kennedy Wilson Consolidated Financial Results: Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2025 |
| | | | | |
| (Dollars in millions) | | Consolidated | | Co-Investments | | Total |
| Segment Revenue | | | | | | |
| Rental | | $ | 93.3 | | | $ | — | | | $ | 93.3 | |
| Investment management fees | | — | | | 36.4 | | | 36.4 | |
| Loans | | — | | | 5.7 | | | 5.7 | |
| Total segment revenue | | 93.3 | | | 42.1 | | | 135.4 | |
| | | | | | |
| Income from unconsolidated investments | | | | | | |
| Principal co-investments | | — | | | 1.8 | | | 1.8 | |
| Carried interests | | — | | | (2.0) | | | (2.0) | |
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments(1) | | | | 34.2 | | | 34.2 | |
| Income from unconsolidated investments | | — | | | 34.0 | | | 34.0 | |
| | | | | | |
| Gain on sale of real estate, net | | 55.1 | | | — | | | 55.1 | |
| | | | | | |
| Segment Expenses | | | | | | |
| Rental | | 35.4 | | | — | | | 35.4 | |
| Compensation and related | | 8.7 | | | 12.6 | | | 21.3 | |
| Carried interests compensation | | — | | | (0.6) | | | (0.6) | |
| General and administrative | | 3.6 | | | 3.7 | | | 7.3 | |
| Other loss | | 1.5 | | | 2.2 | | | 3.7 | |
Other segment items(1) | | 2.8 | | | (0.1) | | | 2.7 | |
| Total segment expenses | | 52.0 | | | 17.8 | | | 69.8 | |
| | | | | | |
| Segment Adjusted EBITDA | | 96.4 | | | 58.3 | | | 154.7 | |
| | | | | | |
| Reconciliation of Segment Adjusted EBITDA to net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | | | | | | |
| Other revenue | | | | | | 0.3 | |
| Compensation and related, corporate | | | | | | (11.0) | |
| General and administrative, corporate | | | | | | (1.5) | |
| Depreciation and amortization | | | | | | (34.5) | |
| Interest expense | | | | | | (62.5) | |
| Loss on extinguishment of debt | | | | | | (2.1) | |
| Other income, corporate | | | | | | (1.9) | |
| Provision for income taxes | | | | | | (4.4) | |
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments(1) | | | | | | (34.2) | |
| Income from unconsolidated investments excluded from Segment Adjusted EBITDA | | | | | | 2.7 | |
| Net income | | | | | | 5.6 | |
| Net income attributable to noncontrolling interests | | | | | | (1.1) | |
| Preferred dividends | | | | | | (10.9) | |
| Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | | | | | | $ | (6.4) | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2024 |
| | | | | |
| (Dollars in millions) | | Consolidated | | Co-Investments | | Total |
| Segment Revenue | | | | | | |
| Rental | | $ | 97.8 | | | $ | — | | | $ | 97.8 | |
| Investment management fees | | — | | | 26.1 | | | 26.1 | |
| Loans | | — | | | 8.0 | | | 8.0 | |
| Total segment revenue | | 97.8 | | | 34.1 | | | 131.9 | |
| | | | | | |
| Income from unconsolidated investments | | | | | | |
| Principal co-investments | | — | | | (5.8) | | | (5.8) | |
| Carried interests | | — | | | (12.3) | | | (12.3) | |
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments(1) | | — | | | 34.3 | | | 34.3 | |
| Income from unconsolidated investments | | — | | | 16.2 | | | 16.2 | |
| | | | | | |
| Gain on sale of real estate, net | | 0.2 | | | — | | | 0.2 | |
| | | | | | |
| Segment Expenses | | | | | | |
| Rental | | 37.0 | | | — | | | 37.0 | |
| Compensation and related | | 7.8 | | | 14.0 | | | 21.8 | |
| Carried interests compensation | | — | | | (4.5) | | | (4.5) | |
| General and administrative | | 3.3 | | | 4.5 | | | 7.8 | |
| Other (income) loss | | (0.5) | | | 3.2 | | | 2.7 | |
Other segment items(1) | | 2.0 | | | (0.4) | | | 1.6 | |
| Total segment expenses | | 49.6 | | | 16.8 | | | 66.4 | |
| | | | | | |
| Segment Adjusted EBITDA | | 48.4 | | | 33.5 | | | 81.9 | |
| | | | | | |
| Reconciliation of Segment Adjusted EBITDA to net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | | | | | | |
| Other revenue | | | | | | 0.1 | |
| Compensation and related, corporate | | | | | | (10.0) | |
| General and administrative, corporate | | | | | | (1.7) | |
| Depreciation and amortization | | | | | | (36.4) | |
| Interest expense | | | | | | (63.8) | |
| Loss on early extinguishment of debt | | | | | | (0.5) | |
| Other income, corporate | | | | | | 3.0 | |
| Benefit from income taxes | | | | | | 11.8 | |
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments(1) | | | | | | (34.3) | |
| Income from unconsolidated investments excluded from Segment Adjusted EBITDA | | | | | | 1.6 | |
| Net income | | | | | | (48.3) | |
| Net loss attributable to noncontrolling interests | | | | | | 0.1 | |
| Preferred dividends | | | | | | (10.9) | |
| Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders | | | | | | $ | (59.1) | |
Financial Highlights
GAAP net loss to common shareholders was $6.4 million and $59.1 million for the three months ended June 30, 2025 and 2024, respectively. The increase in GAAP net income to common shareholders is primarily due to higher gain on sale of real estate, net and improvements in fair value fluctuations in the current period.
Segment Adjusted EBITDA was $154.7 million and $81.9 million for the three months ended June 30, 2025 and 2024, respectively.
Operational Highlights
Same store property highlights for the three months ended June 30, 2025 include:
•For our 16,911 same property market rate multifamily units for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024:
◦occupancy increased 0.3% to 94.9%
◦net operating income increased by 3.1%
◦total revenues increased by 2.0%
•For our 10,367 same property affordable rate multifamily units for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024:
◦occupancy was down 1.2% to 93.7%
◦net operating income increased by 4.9%
◦total revenues increased by 6.2%
•For 3.3 million square feet of same property office real estate for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024:
◦occupancy decreased to 91.6% from 93.4%
◦net operating income increased by (5.7)%
◦total revenues increased by 2.7%
•Investment Transactions
◦Consolidated Portfolio:
•(i) Recapitalized and deconsolidated a 1,008 unit wholly-owned multifamily property which reduced the Company’s ownership interests in the asset to 10%; and (ii) sold non-core office assets in Ireland, Italy and the United Kingdom. These dispositions generated $123.1 million of cash to KW and a gain on sale of $52.4 million.
◦Co-Investment Portfolio:
•Completed $490.8 million in gross real estate acquisitions, which, the Company holds an 11.5% ownership interest.
•Originated $1,237.1 million in new construction loans, completed $523.8 million in additional fundings on existing loans, and realized $321.3 million in repayments, the Company’s share of which were $30.9 million, $16.0 million and $16.1 million respectively
Foreign Exchange - Results of Operations
A significant portion of our investments are located outside of the United States and denominated in foreign currencies. In order to reduce the impact of foreign currency exchange rates we hedge some of our exposure. However, we typically do not hedge future operations or cash flows and, therefore, changes in foreign currency rates will have an impact on our results of operations. We have included the table below to illustrate the impact these fluctuations have had on our revenues, net income and Adjusted EBITDA by applying the relevant exchange rates for the prior period. Please refer to the Currency Risk - Foreign Currencies section in Item 3 for a discussion of risks relating to foreign currency and our hedging strategy and the "Other Comprehensive Income" section below for a discussion of the balance sheet impact of foreign currency movements on our results of operations.
