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Mar 31, 2024
Kennedy-Wilson Q1 2024 Earnings Report
Reported excellent first quarter results with significant growth in adjusted net income and investment management business
Key Takeaways
Kennedy-Wilson reported a strong first quarter in 2024, marked by significant growth in adjusted net income and a 94% increase in investment management fee income. The company completed several large multifamily construction projects on schedule and is recycling capital from non-core asset sales to grow core businesses and reduce leverage.
Adjusted net income increased significantly, driven by strong performance in the investment management business.
Investment Management fees grew by 94% to $21 million, driven by higher levels of Fee-Bearing Capital and new originations from the Debt Investment Platform.
Fee-Bearing Capital reached a record $8.6 billion.
Completed construction of 814 multifamily units across Northern California, the Mountain West, and Dublin, with market-rate apartments on track to stabilize in Q2/Q3-24.
Kennedy-Wilson
Kennedy-Wilson
Kennedy-Wilson Revenue by Segment
Revenue by Segment
Rental Revenue
CapyFin.comHotel Revenue
CapyFin.comInvestment Management Fees Revenue
CapyFin.comLoan Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Kennedy Wilson expects near-term stabilization to add $25 million in Estimated Annual NOI by YE-24 and $39 million in 2025. The Vintage affordable housing platform has 1,604 multifamily units under development or in lease-up, expected to add $8 million to Estimated Annual NOI.
Positive Outlook
- Completed construction of the 172-unit 38° North Phase II community in Northern California.
- Completed construction of the 240-unit Dovetail multifamily project in the Mountain West.
- Completed construction of the 170-unit Vintage at Anacapa Canyon senior living community in Southern California.
- Completed construction of the 232-unit Cornerstone multifamily community in Dublin.
- Market-rate Apartments are on Track to Stabilize in Q2/Q3-24 and add $17 million in Estimated Annual NOI.
Challenges Ahead
- The company is subject to withholding taxes to the extent they repatriate cash from certain of their foreign subsidiaries.
- Under the KWE Notes covenants they have to maintain certain interest coverage and leverage ratios to remain in compliance.
- Due to these covenants, they evaluate the tax and covenant implications before they distribute cash, which could impact the availability of funds at the corporate level.
- Recently, there has also been a lack of liquidity in the capital markets as well as limited transactions which has had an impact on the inputs associated with fair values.
- All valuations of real estate involve subjective judgments.
Revenue & Expenses
Visualization of income flow from segment revenue to net income