Kennedy Wilson Grows Student Housing Construction Loan Portfolio to $850 Million With Three New University-Adjacent Real Estate Financings Totaling $184 Million

Rhea-AI Summary

Kennedy Wilson, a global real estate investment company, has expanded its student housing construction loan portfolio to $850 million with three new university-adjacent real estate financings totaling $184 million. The loans are for projects at the University of Wisconsin – Madison, University of North Texas, and University of California, Berkeley. These projects will develop approximately 8,800 beds, with an additional $1 billion of new student housing loans for 8,200 beds under evaluation.

The company's debt investment platform has originated over $2.3 billion in multifamily and student housing construction loans since acquiring a $4.1 billion construction loan portfolio in Q3 2023. Kennedy Wilson maintains a 2.5% average ownership in loans closed since then and earns customary management fees as asset manager.

Positive

• Expansion of student housing loan portfolio to $850 million
• Additional $1 billion of new student housing loans under evaluation
• Origination of over $2.3 billion in multifamily and student housing construction loans since Q3 2023
• 2.5% average ownership in loans closed since Q3 2023
• Earning customary management fees as asset manager

Negative

• None.

Insights

Financial Analyst

Kennedy Wilson's expansion of its student housing construction loan portfolio to $850 million with three new financings totaling $184 million is a significant development. This growth demonstrates the company's strong position in the student housing lending market and its ability to capitalize on the sector's robust fundamentals. The additional $1 billion pipeline of potential loans indicates further growth opportunities. The company's strategy of maintaining a 2.5% average ownership in loans closed since Q3 2023, along with earning management fees, provides a balanced approach to risk and revenue generation. The diversification into student housing lending complements Kennedy Wilson's existing real estate investment portfolio, potentially enhancing overall returns and stability. However, investors should monitor the risks associated with construction lending and the student housing market's performance in the context of changing higher education trends.

Real Estate Market Analyst

The student housing sector's outperformance relative to other asset classes is noteworthy, driven by strong operating fundamentals and new development in high-barrier markets near growing educational institutions. This trend supports Kennedy Wilson's strategic focus on this niche. The company's ability to close $2.3 billion in multifamily and student housing construction loans since acquiring a $4.1 billion portfolio a year ago demonstrates strong execution capabilities. The emphasis on institutional sponsors and high-quality projects with extensive amenities positions Kennedy Wilson to capture demand for premium student accommodations. This approach aligns with evolving student preferences and could lead to higher occupancy rates and potentially better loan performance. However, investors should consider the cyclical nature of real estate markets and the potential impact of remote learning trends on long-term student housing demand.

BEVERLY HILLS, Calif.--(BUSINESS WIRE)-- Kennedy Wilson, a leading global real estate investment company and active national student housing lender, has recently closed senior construction loans for the development of three student housing projects totaling $184 million at the University of Wisconsin – Madison, University of North Texas, and University of California, Berkeley. These recent deals, completed through Kennedy Wilson’s debt investment platform, expand the student housing loan portfolio to $850 million to develop approximately 8,800 beds, with an additional $1 billion of new student housing loans totaling 8,200 beds currently being evaluated.

Student Housing Financed by Kennedy Wilson - University of Wisconsin-Madison (Photo: Business Wire)

Currently in various stages of construction, the three projects offer proximity to university facilities and feature expansive amenity spaces, resort-style pools and spas, fitness centers, outdoor lounges, private study rooms, meditation space, and controlled garage access.

“We are seeing student housing continue to outperform many other asset classes due to strong operating fundamentals and the scarcity of new development in high-barrier markets adjacent to educational institutions that are continuing to grow enrollment,” commented Thomas Whitesell, Head of the Debt Investment Group at Kennedy Wilson. “We are pleased to build on our long track record of student housing loan originations to become one of the most active student housing lenders in the country. Our top-tier sponsors are raising the bar for these student-oriented projects and will be well-positioned to capture the growing demand for amenities and offerings more typical of new urban, multifamily communities.”

The new student housing loans are the latest in an active year for Kennedy Wilson’s debt investment platform. Q3 2024 marked the one-year anniversary of Kennedy Wilson’s acquisition of a $4.1 billion construction loan portfolio. Since the acquisition, Kennedy Wilson’s debt investment platform has originated over $2.3 billion in multifamily and student housing construction loans with institutional sponsors across the country.

The company has a 2.5% average ownership in loans closed since Q3 2023 and maintains a strong construction loan pipeline. The company earns customary management fees in its role as asset manager.

About Kennedy Wilson

Kennedy Wilson (NYSE: KW) is a leading real estate investment company with over $27 billion of assets under management in high growth markets across the United States, the UK, and Ireland. Drawing on decades of experience, our relationship-oriented team excels at identifying opportunities and building value through market cycles, closing more than $50 billion in total transactions across the property spectrum since going public in 2009. Kennedy Wilson owns, operates, and builds real estate within our high-quality, core real estate portfolio and through our investment management platform, where we target opportunistic equity and debt investments alongside our partners. For further information, please visit www.kennedywilson.com.

KW-IR

Special Note Regarding Forward-Looking Statements

Statements in this press release that are not historical facts are “forward-looking statements” within the meaning of U.S. federal securities laws. These forward-looking statements are estimates that reflect our management’s current expectations, are based on our current estimates, expectations, forecasts, projections and assumptions that may prove to be inaccurate and involve known and unknown risks. Accordingly, our actual results, performance or achievement, or industry results, may differ materially and adversely from the results, performance or achievement, or industry results, expressed or implied by these forward-looking statements, including for reasons that are beyond our control. Some of the forward-looking statements may be identified by words like “believes”, “expects”, “anticipates”, “estimates”, “plans”, “intends”, “projects”, “indicates”, “could”, “may” and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. We assume no duty to update the forward-looking statements, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240930549327/en/

Investors

Daven Bhavsar, CFA

Head of Investor Relations

+1 (310) 887-3431

dbhavsar@kennedywilson.com

Media

Emily Heidt

Vice President, Communications

+1 (310) 310-887-3499

eheidt@kennedywilson.com

Source: Kennedy Wilson

FAQ

What is the total value of Kennedy Wilson's (KW) recent student housing financings?

Kennedy Wilson recently closed $184 million in senior construction loans for three student housing projects at the University of Wisconsin – Madison, University of North Texas, and University of California, Berkeley.

How many beds will Kennedy Wilson's (KW) current student housing loan portfolio develop?

Kennedy Wilson's current student housing loan portfolio of $850 million will develop approximately 8,800 beds.

What is Kennedy Wilson's (KW) average ownership in loans closed since Q3 2023?

Kennedy Wilson maintains a 2.5% average ownership in loans closed since Q3 2023.

How much has Kennedy Wilson (KW) originated in multifamily and student housing construction loans since Q3 2023?

Since Q3 2023, Kennedy Wilson's debt investment platform has originated over $2.3 billion in multifamily and student housing construction loans.