Kennedy Wilson, a global investment company specializing in real estate, has announced an exciting new agreement to acquire the Apartment Living platform of Toll Brothers. This platform encompasses not only an in-house development team but also interests in a diverse portfolio of completed properties and ongoing projects. The total cost of this acquisition is set at $347 million.
This significant move is designed to boost Kennedy Wilson’s investment management capabilities and enhance its rental housing options, while simultaneously allowing Toll Brothers to benefit financially from a substantial portion of its investments in rental properties. The transaction is expected to reach completion in October 2025, provided that certain conditions are met.
As part of this deal, Kennedy Wilson will take over Toll Brothers’ interests in 18 properties, which include both apartment buildings and student housing. This portfolio boasts a combined value of around $2.2 billion in assets. Additionally, Kennedy Wilson will inherit a pipeline of 29 development sites, which, if fully developed, could involve an investment of approximately $3.6 billion. Furthermore, Kennedy Wilson will take responsibility for the management of construction for these properties, ensuring that everything runs smoothly through to completion.
Moreover, while Kennedy Wilson will manage a variety of properties, there will still be 20 apartment and student housing properties that remain under Toll Brothers’ umbrella after the deal closes. These properties represent another $3 billion in assets under management, which Kennedy Wilson will eventually also manage, as Toll Brothers plans to sell them over time and eventually exit the multifamily development business.
An essential aspect of this acquisition is that Kennedy Wilson will benefit from the expertise of the managerial team from Toll Brothers’ Apartment Living sector. The company plans to offer new positions to all employees in this division and anticipates that the entire executive team will join Kennedy Wilson. This will not only help manage the current portfolio but also drive the growth of the development platform.
In addition to enhancing their operational capabilities, this transaction is expected to foster a long-term partnership between Kennedy Wilson and Toll Brothers. This relationship will open the door for future opportunities, allowing both companies to work together in the realms of rental and for-sale housing. Under this new partnership framework, Kennedy Wilson will send prospective for-sale housing opportunities to Toll Brothers, and in return, Toll Brothers will provide rental housing opportunities to Kennedy Wilson. This mutual exchange is designed to create a robust pipeline of shared business opportunities, benefiting both companies in the long run.
For this acquisition, Kennedy Wilson plans to make an initial investment of around $90 million in the properties and projects it is acquiring. Moreover, it will assume the general partner role for these assets. The remaining funds needed for the purchase will be sourced from existing partners within Kennedy Wilson.
The overall effect of this acquisition is expected to significantly enhance the scale and effectiveness of Kennedy Wilson’s investment management platform, paving the way for future growth and success in the real estate market.
Advisors: J.P. Morgan Securities acted as Kennedy Wilson’s exclusive financial advisor. Latham & Watkins served as Kennedy Wilson’s legal counsel. Goldman Sachs and Vestra Advisors acted as Toll Brothers’ financial advisors, and Fried, Frank, Harris, Shriver & Jacobson served as Toll Brothers’ legal counsel.
KEY QUOTES:
“We are thrilled to welcome the best-in-class team at Toll Brothers Apartment Living to Kennedy Wilson and to further accelerate the growth of our investment management business and multifamily development capabilities at a time when the country is in true need of new, high-quality housing. This purchase helps create an unparalleled national platform within the rental housing space that totals over 80,000 units we own, finance or manage, and solidifies Kennedy Wilson’s fully integrated capabilities across real estate development, acquisitions, and asset management along with a market-leading housing-focused credit platform.”
William McMorrow, Chairman and CEO of Kennedy Wilson
“We are proud of the value that has been created by our Toll Brothers Apartment Living business, and we are excited for the future of this team with Kennedy Wilson. This transaction will unlock significant capital for our stockholders, while allowing us to focus on our core homebuilding business and continue our transformation to a more asset-light homebuilder. We are pleased that our Toll Brothers Apartment Living employees have found a new home at Kennedy Wilson.”
Douglas C. Yearley, Jr., Chairman and CEO of Toll Brothers
