Thursday, February 25, 2010

Kennedy Wilson Venture Buys $342M Loan Portfolio

Last updated: February 24, 2010 05:25pm

By Bob Howard

BEVERLY HILLS, CA-A venture of locally based Kennedy Wilson and an international financial institution has acquired a $342 million portfolio of loans from a large regional bank.The portfolio is composed of residential, hotel, retail, office, land, multifamily and other assets predominantly located in Southern California.

The acquisition is the first by a newly formed investment platform that Kennedy Wilson has created with an international financial institution. The venture will focus on acquiring sub-performing and non-performing commercial real estate loans and originating commercial whole loans and bridge/permanent multifamily loans.

Mary Ricks, vice chair of Kennedy Wilson, calls the acquisition "a game-changing transaction for our company," which is sourcing deals through a proprietary network, including its existing banking relationships. According to William J. McMorrow, chairman and CEO of Kennedy Wilson,the company sourced and closed the deal in 30 days, start to finish.

The acquisition of the $342 million loan portfolio is the latest in a series of steps that Kennedy Wilson has taken in recent months with respect to the distressed asset markets. The company said in September, for example, that it would become a subsidiary of Naples, FL-based Prospect Acquisition Corp. under a reverse merger to combine new capital from Prospect with its existing capital to "support and acquire distressed assets" in a business plan designed to take advantage of market conditions created by the latest downturn in the real estate cycle.

Following the merger with Prospect, Kennedy Wilson reported that it raised $110 million in new equity via the merger. It said at the time that the merged company would have “significant capital to take advantage of distressed opportunities in the real estate market and grow its auction services and property management businesses.