Kennedy-Wilson Holdings, Inc. (NYSE: KW) announced the acquisition of three wholly-owned multifamily communities comprising 1,110 units for $418 million, minus closing costs, in three distinct off-market transactions. Kennedy Wilson makes an investment of $255 million of the total equity in the three communities, which are likely to generate around $15 million of initial annual net operating income for Kennedy Wilson.
The deals add 1,110 apartments to Kennedy Wilson's burgeoning multifamily presence in the Mountain West, which now stands at around 13,800 units, including those under construction. The new communities add to the company's total multifamily portfolio of about 37,600 units, which includes projects in the works.
Within markets where multifamily rent growth is expected to continue, the communities currently have a combined loss to lease of around 15%. Kennedy Wilson will start a $19 million value-add asset management plan right away, which will include remodeling over 65 percent of the existing apartments, updating common areas, and improving amenities in order to increase NOI.
The properties, which include Palms at Peccole Ranch in Las Vegas, Arizona, La Privada in Scottsdale, Arizona, and San Miguel del Bosque in Albuquerque, New Mexico, add to Kennedy Wilson's multifamily portfolio, which is focused on institutional-quality, garden-style apartments in fast-growing Mountain West markets.