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Kennedy-Wilson Boosts Calif. Reach

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The international real estate investment and services company, Kennedy-Wilson Holdings, Inc. (KW), along with its partners, acquired a Calif.-based multifamily community – Montelena Apartments – from a private investment group. This acquisition is in line with the company’s ongoing strategic move to boost its presence in Calif.

The total purchase price of the property was $34 million. Around $11 million of equity investment was made in the deal. In addition, $27 million of fixed rate funding was placed with Federal Home Loan Mortgage Corporation (FMCC). This was done through CBRE Capital Markets of CBRE Group Inc. (CBG) for 10 years at 3.5%.

Montelena Apartments, which comprises 188 units, is situated in Hayward in North Calif. Ideally placed adjacent to the South Hayward BART station, the asset is expediently connected to all major employment centers of the East Bay, South Bay, Silicon Valley and San Francisco. Kennedy-Wilson along with its partners intends to invest around $4 million for quality upgrade of Montelena Apartments.

In our view, Kennedy-Wilson’s ongoing acquisition activity adds quality to its portfolio, which is likely to augur well for its earnings growth going forward. Moreover, the acquired asset is expected to complement Kennedy-Wilson’s recently acquired 544-unit apartment community – The Bridge – located a few miles away in the Hayward area.

Kennedy Wilson offers a wide array of real estate services including auction, conventional sales, property services, and research and investment management with 24 offices in the U.S., U.K, Ireland and Japan. Since the beginning of 2010, Kennedy Wilson, along with its institutional partners, has acquired approximately $9 billion worth of real estate and real estate related debt.

Kennedy-Wilson currently carries a Zacks Rank #3 (Hold). Among the companies performing better than Kennedy-Wilson, one is E-House (China) Holdings Limited (EJ), carrying a Zacks Rank #1 (Strong Buy).

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