Kennedy Wilson to Form Investment Partnership for $1B CRE Shopping Spree

Beverly Hills-based international real estate investment and services company Kennedy Wilson plans to capitalize on today's buyers' market via the establishment of a new partnership with Toronto-headquartered Fairfax Financial Holdings Ltd.

May 28, 2010
By Barbra Murray, Contributing Editor

Beverly Hills-based international real estate investment and services company Kennedy Wilson plans to capitalize on today’s buyers’ market via the establishment of a new partnership with Toronto-headquartered Fairfax Financial Holdings Ltd. As per terms of the agreement, Fairfax will make a capital commitment of as much as $250 million, which, when leveraged, will allow Kennedy Wilson to snap up between $500 million and $1 billion in commercial real estate assets.

Kennedy Wilson will acquire loans and real property in just about every commercial real estate sector, and while the real estate industry is currently saddled with a distressed asset pool valued at approximately $190 billion, the company does not plan to limit its focus to troubled assets. As for property locations, Kennedy Wilson will target California for the most part, but other West Coast cities and markets in Hawaii and Japan will also be on the radar.

Kennedy Wilson’s role in the partnership with Fairfax will be multifaceted. In addition to spearheading the sourcing and negotiation of investment opportunities, the company will oversee due diligence and financing activities. Once the acquisitions are made, Kennedy Wilson will also take on property management, asset management and disposition responsibilities.

The new joint venture is not Kennedy Wilson’s first endeavor with the financial services holding company. Earlier this month, the real estate concern announced that it had entered into an agreement in which Fairfax committed to purchasing up to $100 million of Kennedy Wilson convertible preferred stock.

“We are thrilled about this partnership,” William McMorrow, Chairman and CEO of Kennedy Wilson, told CPE. “As you can see, the total commitment from Fairfax is now up to $350 million, which includes investment in the company and commitment to this platform.”