KW — Kennedy-Wilson Holdings, Inc.

Summary of Kennedy-Wilson Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• GAAP EPS: Loss of $0.15 per share, improved from a loss of $0.56 per share in Q3 2024.
• Adjusted EBITDA: $125 million, nearly double from $66 million in Q3 2024; year-to-date adjusted EBITDA increased by 6% to $371 million.
• Fee-bearing Capital: Grew to $9.7 billion, up 10% year-over-year; total assets under management (AUM) reached $31 billion, an 11% increase.
• Capital Deployment: Approximately $900 million in Q3, totaling $3.5 billion year-to-date; $600 million in new rental housing construction loans originated.
• Cash Generation: $470 million from asset sales year-to-date, exceeding the target of $400 million.

2. Strategic Updates and Business Highlights

• Continued expansion of the investment management platform, including the acquisition of Toll Brothers Apartment Living, which will add $5 billion to AUM and includes a development pipeline of approximately $3.6 billion.
• Focus on rental housing-related investments due to strong demand and structural undersupply in housing markets.
• Growth in the U.K. single-family rental platform, with $585 million of committed capital against a $1.3 billion target.
• Successful monetization of noncore assets, generating significant cash and fee-bearing capital.

3. Forward Guidance and Outlook

• Anticipation of continued growth in investment management and capital deployment, supported by improving market conditions and liquidity in commercial real estate.
• Expectation to close the Toll Brothers transaction in Q4 2025, which will enhance scale and capabilities in the rental housing sector.
• Positive outlook on rental fundamentals due to ongoing housing supply-demand imbalances.

4. Bad News, Challenges, or Points of Concern

• Office Portfolio Performance: Same-property NOI in Europe decreased by 6%, with a decline in occupancy by 5%. However, management expects occupancy to improve as backfilling occurs.
• Loan Origination Volume: A slowdown in Q3 origination volume was noted, attributed to seasonality and increased competition, although the company maintains a strong pipeline.
• General Market Conditions: Challenges in capital raising for private equity firms may impact broader market dynamics, although Kennedy-Wilson has seen success in specific geographies.

5. Notable Q&A Insights

• Cap Rates: Multifamily cap rates are stable, ranging from high 4% to high 5%, depending on asset age and submarket conditions.
• Impact of Government Shutdown: No significant impact on the affordable multifamily portfolio was reported; NOI weakness was attributed to expenses rather than subsidy issues.
• U.K. Office Market: Recent occupancy declines are seen as temporary, with expectations for improvement as leasing agreements are finalized.
• Acquisition Strategy: Continued growth in the U.K. single-family rental platform is expected, with a strong pipeline for future acquisitions.

Overall, Kennedy-Wilson reported strong financial performance and strategic growth initiatives while navigating challenges in specific sectors, particularly in their office portfolio and loan origination activities.