Kennedy Wilson Holdings Inc.

02/27/2026 | Press release | Distributed by Public on 02/27/2026 05:09

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the financial statements and related notes and the other financial information appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled "Forward-Looking Statements" for more information. Actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including those discussed in the section titled "Risk Factors" and elsewhere in this report.
Unless specifically noted otherwise, as used throughout this Management's Discussion and Analysis section, "we," "our," "us," "the Company" or "Kennedy Wilson" refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned subsidiaries. "Equity partners" refers to the subsidiaries that we consolidate in our financial statements under U.S. GAAP (other than wholly-owned subsidiaries) and third-party equity providers. Please refer to "Non-GAAP Measures and Certain Definitions" for definitions of certain terms used throughout this report.
Overview
We are a real estate investment company as well as investment manager with over $36.4 billion of AUM in high growth markets across the United States, the United Kingdom and Ireland. With an objective of generating strong long-term risk-adjusted returns for our shareholders and partners and drawing on over three decades of experience in identifying opportunities and building value through various market cycles, we primarily focus on (i) investing in the rental housing sector (both market rate and affordable units) and industrial properties; and (ii) originating, managing and servicing real estate loans (primarily senior construction loans secured by high quality multifamily and student housing properties that are being developed by institutional sponsors throughout the United States). We also have investments in office assets and other investments which include hotel and retail properties.
2025 Highlights
During the year ended December 31, 2025, we achieved the following:
•Completed the first two phases of its acquisition of the Toll apartment development platform in December 2025, which included the in-house development team and equity interests in a portfolio of completed properties and assets under development. The third and final phase was completed in January 2026. The total purchase price across all three phases was $334 million of which Kennedy Wilson invested $131 million with the remainder funded by third-party fee-bearing equity.
◦The transaction added over $5 billion of AUM to Kennedy Wilson, including $1.9 billion of AUM from an 11% ownership in 18 apartment and student housing properties and $3.4 billion of AUM in 21 apartment and student housing properties that Kennedy Wilson will manage on behalf of Toll Brothers. The transaction also added $1.0 billion to Fee-Bearing Capital.
◦We also acquired a pipeline of 24 development sites which, if completed, would total approximately $2.9 billion in capitalization.
•Originated $3.6 billion of new senior construction loans through our debt investment platform
•Generated total investment management fees of $115.2 million, an increase of 16.5% from the year ended December 31, 2024
•Continued to see strength in our stabilized multifamily portfolio which saw same-store flat at 94.7%, same-property revenue growth of 2.5%, and same-property NOI growth of 2.7%
•Generated $566.5 million of cash from asset sales and $1.6 billion from loan repayments (our share of which was $565.7 million and $75.4 million) and redeployed capital to pay down indebtedness and to consummate new investment opportunities
•Grew Fee-Bearing Capital by 25% to $11.0 billion
•Repaid full balance of $352.0 million on the KWE Notes
•Line of credit balance increased $186.4 million primarily to help fund payoff of KWE Notes
For the year ended December 31, 2025, we had net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders of $38.8 million as compared to $76.5 million for the same period in 2024. For the year ended December 31, 2025 we had Adjusted EBITDA of $549.5 million as compared to $539.7 million for the same period in 2024. These results include $78 million and $214 million of non-cash items for the years ended December 31, 2025 and 2024, respectively, which primarily consist of depreciation and amortization and changes in fair values. For the year ended December 31, 2025, as described above, we recognized higher investment management fees primarily driven from our debt investment platform. These increases were offset by lower levels of NOI from our properties as we have been a net seller of assets.
In our Co-Investment portfolio, we had $43.3 million of realized operating results, $17.4 million realized gain on sale of an unconsolidated investment that was not accounted for at fair value and recorded non-cash unrealized fair value and carried interests increase of $82.1 million during the year ended December 31, 2025 as compared to $29.9 million of realized operating results, $32.6 million realized gain on sale of an unconsolidated investment that was not accounted for at fair value and $56.0 million of non-cash unrealized fair value and carried interest declines during the same period in 2024. During the year ended December 31, 2025, we had non-cash unrealized fair value gains primarily relating to (i) fair value increases on VHH due to increases in NOI and lower borrowing costs (ii) fair value increase at Zonda due to improvements in the underlying business (iii) non-cash fair value gains on multifamily assets in Western United States and Ireland from increased NOI at the properties and (iv) foreign exchange gains, net of hedges as euro and GBP increased in value in relation to the dollar in the current period. These fair value increases were offset by (i) fair value losses associated with the recapitalization of a multifamily portfolio consisting of nine (9) properties, totaling 2,809 units, reducing the Company's ownership from 51% to 10%, (ii) fair value decreases on U.S. office assets; (iii) fair value decreases associated with mortgages as lower cost mortgages move closer to maturity dates and (iv) costs associated with originating new mortgages.
Proposed Take-Private
On February 16, 2026, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Kona Bidco, LLC, a Delaware limited liability company ("Parent"), and Kona Merger Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, subject to the terms and conditions thereof, Merger Sub will be merged with and into the Company (the "Merger" and, together with the other transactions contemplated by this the Merger Agreement, collectively, the "Proposed Transactions"), and the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation and a subsidiary of Parent ("Surviving Company"). The Proposed Transaction would result in a take-private pursuant to which, as further detailed below, certain affiliates of Fairfax Financial Holdings Limited, a corporation organized under the laws of Canada ("Fairfax"), and certain stockholders of the Company, including William McMorrow, Matthew Windisch and In Ku Lee (collectively, the "Rollover Stockholders") will own 100% of the equity interests of the Company and the Company would no longer be publicly traded.
Pursuant to an equity commitment letter, dated February 16, 2026, Fairfax has, among other things, on the terms and subject to the conditions set forth in the equity commitment letter, committed to an aggregate equity commitment in the amount of $1,650,000,000 to (i) fund the payment of the aggregate Merger Consideration and certain other amounts required to be paid under the Merger Agreement (the "Equity Commitment"), or (ii) in the event Parent or Merger Sub is obligated to pay monetary damages to the Company in respect of a breach of the Merger Agreement by Parent or Merger Sub in accordance with the terms of the Merger Agreement, fund such damages and certain other amounts required to be funded under the equity commitment letter in an aggregate amount up to $400,000,000. The Equity Commitment, when funded in full in accordance with the equity commitment letter, will provide Parent and Merger Sub, prior to or concurrently with the Effective Time, an amount of cash that is sufficient to fund the payment of (i) the aggregate Merger Consideration, (ii) any other amounts required to be paid under Article III of the Merger Agreement (other than the Final Dividend (as defined in the Merger Agreement)) and (iii) the aggregate amount required to redeem or repurchase the 5.75% Series A Cumulative Perpetual Convertible Preferred Stock (the "Company Series A Preferred Stock").
Subject to the terms and conditions set forth in the Merger Agreement, upon the consummation of the Merger, each share of common stock of the Company, par value $0.0001 per share (the "Company Common Stock") (other than (i) each share (a) held in the treasury of the Company or owned by any wholly owned subsidiary of the Company or (b) held, directly or indirectly, by Parent or Merger Sub or any of their wholly owned subsidiaries, which shall automatically be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto; (ii) each Rollover Share (as defined below); and (iii) shares of Company Common Stock owned by stockholders of the Company who have validly demanded and not withdrawn appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) shall cease to exist and shall be converted automatically into the right to receive $10.90 in cash per share, without interest (the "Merger Consideration").
In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, each share of 4.75% Series B Cumulative Perpetual Preferred Stock (the "Company Series B Preferred Stock") and 6.00% Series C Cumulative Perpetual Preferred Stock (the "Company Series C Preferred Stock" and, together with the Company Series B Preferred Stock, the "Company Preferred Stock") shall remain outstanding in accordance with the terms and conditions of, as applicable, that certain Certificate of Designations Establishing the Company Series B Preferred Stock, dated as of March 8, 2022 (the "Series B Certificate of Designations") and that certain Certificate of Designations Establishing the Company Series C Preferred Stock, dated as of June 15, 2023 (the "Series C Certificate of Designations") and shall represent shares of Company Series B Preferred Stock or Company Series C Preferred Stock, as applicable, of the Surviving Company on the terms set forth in the Series B Certificate of Designations or the Series C Certificate of Designations, as applicable, unless Parent and the holders thereof elect to (A) transfer and contribute any such shares of Company Series B Preferred Stock or Company Series C Preferred Stock to
the Company as a contribution to the capital of the Company (and without the issuance of any additional shares of capital stock of the Company) or (B) cancel any such shares of Company Series B Preferred Stock or Company Series C Preferred Stock, in each case for no consideration prior to the closing of the Merger. In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, each warrant issued in connection with the Company Series B Preferred Stock pursuant to that certain Warrant Agreement, dated as of March 8, 2022 (collectively, the "Company Series B Warrants") and issued in connection with the Company Series C Preferred Stock pursuant to that certain Warrant Agreement, dated as of June 16, 2023 (collectively, the "Company Series C Warrants" and, together with the Company Series B Warrants, the "Company Warrants") shall remain outstanding in accordance with the terms and conditions of each such Company Warrant, unless Parent and the holders thereof elect to cancel any such Company Warrant for no consideration prior to the closing of the Merger. In addition, each share of Company Series A Preferred Stock shall be redeemed by the Company immediately prior to the closing of the Merger in accordance with the terms and conditions of that certain Certificate of Designations Establishing the Company Series A Preferred Stock, dated as of November 7, 2019.
The Merger Agreement and the Proposed Transactions were approved by the Board of Directors of the Company (the "Board") upon the unanimous recommendation of a special committee of the Board (the "Special Committee") consisting only of independent and disinterested directors that was established by the Board to, among other things, make a determination as to whether the Transactions are advisable and in the best interests of the Company and its Public Stockholders (as defined in the Merger Agreement), negotiate the Merger Agreement and make a recommendation to the Board with respect to the Transactions. The Board approved the Proposed Transaction upon the unanimous recommendation of the Special Committee.
The proposed transaction constitutes a "going-private transaction" under the rules of the SEC and is expected to close the second quarter of 2026. The closing of the Merger is subject to various conditions, including (i)(a) the approval of a majority of the outstanding voting power of (w) the Company Common Stock, (x) the Company Series A Preferred Stock (on an as-converted basis), (y) the Company Series B Preferred Stock (based on the number of Company Series B Warrants outstanding and in accordance with the Series B Certificate of Designations) and (z) the Company Series C Preferred Stock (based on the number of Company Series C Warrants outstanding and in accordance with the Series C Certificate of Designations), in each case entitled to vote on the proposal to adopt the Merger Agreement, voting as a single class, and (b) the approval by a majority of the votes cast by equity holders of the Company entitled to vote on the proposal to adopt the Merger Agreement, other than the Security Holders and their affiliates, voting as a single class (clauses (a) and (b), together, the "Company Stockholder Approvals"); (ii) the absence of any law that enjoins, restrains or otherwise prohibits or makes illegal the consummation of the Merger; (iii) the failure to obtain any required regulatory approvals for the proposed transaction, including the termination or expiration of any required waiting periods; (iv) the accuracy of the other party's representations and warranties (subject to customary materiality qualifiers); and (v) the other party's compliance in all material respects with its pre-closing covenants and agreements. Additionally, Parent's and Merger Sub's obligation to complete the Merger is subject to the condition that no Material Adverse Effect (as defined in the Merger Agreement) has occurred since the date of the Merger Agreement that is continuing as of the consummation of the Merger. The transaction is not subject to a financing condition. Following the closing of the transaction, shares of our common stock will no longer be traded or listed on any public securities exchange.
Please also see Part I. Item 1A. Risk Factors, Risks related to the Proposed Merger.
Results of Operations
The following tables summarize our results of operations by segment for the years ended December 31, 2025 and 2024 and is intended to be helpful in understanding the year over year explanations following the tables.
Our results of operations for 2024 and 2023 can be found under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, and is available on the SEC's website at www.sec.gov and our Investor Relations website at www.ir.kennedywilson.com (this website address is not intended to function as a hyperlink, and the information contained in, or accessible from, our website is not intended to be part of this filing).
December 31, 2025
(Dollars in millions) Consolidated Co-Investments Total
Segment Revenue
Rental $ 362.7 $ - $ 362.7
Investment management fees - 115.2 115.2
Loans - 22.3 22.3
Total segment revenue 362.7 137.5 500.2
Income from unconsolidated investments
Principal co-investments - 144.6 144.6
Carried interests - (1.8) (1.8)
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments - 137.2 137.2
Income from unconsolidated investments - 280.0 280.0
Gain on sale of real estate, net 94.7 - 94.7
Segment Expenses
Rental 140.9 - 140.9
Compensation and related 32.1 57.1 89.2
Carried interests compensation - (0.3) (0.3)
General and administrative 11.6 18.0 29.6
Other loss 2.8 4.1 6.9
Other segment items(1)
25.2 (0.3) 24.9
Total segment expenses 212.6 78.6 291.2
Segment Adjusted EBITDA $ 244.8 $ 338.9 $ 583.7
Reconciliation of Segment Adjusted EBITDA to Net Income attributable to Kennedy-Wilson Holdings, Inc. Common Shareholders
Other revenue 0.8
Compensation and related, corporate (47.0)
General and administrative, corporate (6.8)
Depreciation and amortization (133.0)
Interest expense (239.6)
Loss on early extinguishment of debt (2.3)
Other loss (6.1)
Provision for income taxes (13.6)
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments (137.2)
EBITDA adjustments to NCI 24.9
Net income 23.8
Net income attributable to noncontrolling interests (19.1)
Preferred dividends (43.5)
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders $ (38.8)
December 31, 2024
(Dollars in millions) Consolidated Co-Investments Total
Segment Revenue
Rental $ 390.6 $ - $ 390.6
Hotel 9.3 - 9.3
Investment management fees - 98.9 98.9
Loans - 31.2 31.2
Total segment revenue 399.9 130.1 530.0
Income from unconsolidated investments
Principal co-investments - 56.2 56.2
Carried interests - (49.7) (49.7)
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments - 135.4 135.4
Income from unconsolidated investments - 141.9 141.9
Gain on sale of real estate, net 160.1 - 160.1
Expenses
Rental 150.0 - 150.0
Hotel 7.6 - 7.6
Compensation and related 39.4 49.1 88.5
Carried interests compensation - (16.6) (16.6)
General and administrative 14.9 16.7 31.6
Other (income) loss (1.0) 11.0 10.0
Other segment items(1)
7.8 (0.9) 6.9
Total expenses 218.7 59.3 278.0
Segment Adjusted EBITDA $ 341.3 $ 212.7 $ 554.0
Reconciliation of Segment Adjusted EBITDA to Net Income attributable to Kennedy-Wilson Holdings, Inc. Common Shareholders
Other revenue 1.4
Compensation and related, corporate (46.3)
General and administrative, corporate (7.2)
Depreciation and amortization (148.3)
Interest expense (261.1)
Loss on early extinguishment of debt (1.7)
Other income 14.2
Provision for income taxes (10.2)
Company's share of interest, depreciation, and taxes included in income from unconsolidated investments (135.4)
EBITDA adjustments to NCI 6.9
Net loss (33.7)
Net loss attributable to noncontrolling interests 0.7
Preferred dividends (43.5)
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders $ (76.5)
Kennedy Wilson Consolidated Financial Results: Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Financial Highlights
GAAP net loss to common shareholders was $38.8 million and $76.5 million for the year ended December 31, 2025 and 2024, respectively.
Adjusted EBITDA was $583.7 million for the year ended December 31, 2025, was relatively flat from $554.0 million for 2024. The increase in GAAP net income to common shareholders is primarily due to (i) higher levels of investment management fees (16% increase) from our Co-Investment Portfolio as compared to the prior year; and (ii) higher levels of non-cash unrealized fair value gains and lower levels of write downs on carried interests on our investments in our Co-Investment Portfolio as compared to the prior year. Please see "Co-Investment Portfolio Segment" below for a discussion of the fair value movements during the current and prior periods.
Operational Highlights
Same property highlights for the year ended December 31, 2025 include:
•For our 12,015 same property market rate multifamily units for the year ended December 31, 2025 as compared to the prior period:
◦occupancy was flat at 95%
◦net operating income (net effective) increased 3%
◦total revenues increased 2%
•For our 10,367 same property affordable rate multifamily units for the year ended December 31, 2025 as compared to the prior period:
◦occupancy decreased 0.6% to 94%
◦net operating income (net effective) increased 3%
◦total revenues increased 5%
•For our 3.2 million square feet of same property office real estate for the year ended December 31, 2025 as compared to the prior period:
◦occupancy remained flat at 91%
◦net operating income (net effective) increased 3%
◦total revenues increased 1%
•Investment Transactions for the year ended December 31, 2025 include:
◦Consolidated Portfolio:
▪(i) Acquired two industrial development sites in the United Kingdom for $72.7 million, which we expect to recapitalize with a partner; (ii) acquired land on three projects as part of new KWMF development platform for $39.6 million; (iii) recapitalized and deconsolidated a 1,008 unit wholly-owned multifamily property which reduced the Company's ownership interests in the asset to 10%; (iv) sold a 300 unit multifamily property in Boise which generated cash of $15.2 million and a gain net of noncontrolling interest of $23.5 million and (v) sold non-core assets: a wholly-owned 88-unit multifamily property located in the Mountain West, office assets in Ireland, Italy and the United Kingdom. These transactions dispositions $176 million of cash to KW and a gain on sale of $55.1 million
◦Co-Investment Portfolio
▪Acquired 26 multifamily properties, including investments in the new KWMF development platform, in the United States and four industrial properties in the Pacific Northwest, Southeast United States and the United Kingdom for $1.7 billion. KW has a weighted-average 18% ownership interest in these acquisitions.
▪Completed dispositions of $838 million which generated $343 million in cash to KW.
▪Originated $3.6 billion in new construction loans, completed $1.9 billion in additional fundings on existing loans, and realized $1.6 billion in repayments, the Company's share of which were $83.7 million, $56.8 million and $76.2 million respectively.
Foreign Exchange - Results of Operations
A significant portion of our investments are in foreign currencies. We typically do not hedge future operations or cash flows so changes in foreign currency rates will have an impact on our results of operations. We have included the table below to illustrate the impact these fluctuations have had on our revenues, net income and Adjusted EBITDA by applying the relevant exchange rates for the prior period. Please refer to the section titled "Currency Risk - Foreign Currencies"in Item 7 for a discussion of risks relating to foreign currency and our hedging strategy and the "Other Comprehensive Income" section below for a discussion of the balance sheet impact of foreign currency movements on our results of operations.
Year Ended December 31, 2025
Consolidated Co-Investment Total
Revenues $ 6.6 2 % $ 1.2 - % $ 7.8 2 %
Net Income (5.3) (14) % 26.0 67 % 20.7 53 %
Adjusted EBITDA 0.9 - % 32.7 6 % 33.6 6 %
Year Ended December 31, 2024
Consolidated Co-Investment Total
Revenues $ 0.3 - % $ (0.2) - % $ 0.1 - %
Net Income 1.4 2 % 1.0 1 % 2.4 3 %
Adjusted EBITDA 1.7 - % 0.4 - % 2.1 - %
Consolidated Portfolio Segment
Rental income was $362.7 million for the year ended December 31, 2025 as compared to $390.6 million for the same period in 2024. The $27.9 million decrease is primarily due to the sale and deconsolidation of consolidated of assets which was offset by the stabilization of recently completed developments as well as rental growth of properties held period over period.
Hotel income was $9.3 million for 2024 with no comparable activity in the current period as we sold the Shelbourne hotel in the first quarter of 2024 (which was our only hotel in our Consolidated Portfolio).
Gain on sale of real estate, net was $94.7 million for the year ended December 31, 2025 as compared to $160.1 million in the prior period. The gains recognized during the year ended December 31, 2025 are primarily due to (i) recapitalizing and deconsolidation of a 1,008 unit wholly-owned multifamily property which reduced the Company's ownership interests in the asset to 10% which generated a $31.5 million gain and $39.5 million of cash to KW; and (ii) sold two multifamily properties located in the Mountain West and non-core office assets in Ireland, Italy and the United Kingdom. These transactions resulted in $176.4 million of cash to KW and a gain on sale of $58.5 million. The gain on sale of real estate, net includes an impairment loss of $3.0 million relating to non-core office building in Italy that was marketed for sale during such period. Gain on sale of real estate, net was $160.1 million for the year ended December 31, 2024. The gains recognized during the year ended December 31, 2024 are primarily due to (i) the Company's sale of the Shelbourne hotel which resulted in a gain of $99.1 million; (ii) the sale of a wholly-owned multifamily asset in Western United States for a gain of $56.1 million; (iii) the sale of a building in a wholly-owned office campus which resulted in a gain of $21.6 million; (iv) the deconsolidation of a previously wholly-owned multifamily property as a result of our sale of 90% of the ownership interest to a new partner which resulted in a gain of $8.1 million; and (v) the remainder of gain on sale of real estate, net relates to the sale of non-core retail in the United Kingdom and Spain which had a realized loss in addition to impairment discussed below. These sales generated total cash proceeds of $367.0 million during the year ended December 31, 2024. The gain on sale of real estate, net includes an impairment loss of $22.1 million relating to non-core office and retail buildings in the United Kingdom, Spain and Italy that were marketed for sale during such period.
Rental expenses decreased to $140.9 million for the year ended December 31, 2025 as compared to $150.0 million for the year ended December 31, 2024. The decrease is due to sale of properties as discussed above which were offset by inflationary increases on items like payroll, utilities and insurance.
Hotel expenses decreased to $7.6 million for the year ended December 31, 2024 with no comparable activity in the current period due to the sale of the Shelbourne hotel in the first quarter of 2024.
Compensation and related expenses decreased to $32.1 million for the year ended December 31, 2025 as compared to $39.4 million for the year ended December 31, 2024 due to a lower allocation of corporate expenses to the Consolidated segment in the current period due to the growth of the Co-Investments segment.
General and administrative expenses decreased to $11.6 million for year the ended December 31, 2025 as compared to $14.9 million for the year ended December 31, 2024. While general and administrative expenses were slightly higher overall
for the Company during the year ended December 31, 2024 as compared to the prior periods, there was a lower allocation of corporate expenses to the Consolidated segment in the current period due to the growth of the Co-Investments segment.
Other loss was $2.8 million for the year ended December 31, 2025 as compared to other income of $1.0 million for the year ended December 31, 2024. The difference period-over-period was primarily attributed to: (i) mark to market fair value losses of $2.1 million on the Company's undesignated interest rate caps and swap contracts for the year ended December 31, 2025 as compared to $14.0 million in the prior period; (ii) $9.2 million of cash proceeds received during the year ended December 31, 2025 on interest rate caps and swaps and $18.5 million in the prior period which offset the mark to market fair value losses discussed above; and (iii) $0.4 million of foreign exchange losses during the year ended December 31, 2025 as compared to a loss of $4.8 million in the prior period. In addition, during the year ended December 31, 2025 we had $1.2 million in interest income as compared to $4.4 million in the prior period, as a result of our higher cash balance in Europe from the sale of the Shelbourne hotel. In the prior period we had $3.1 million in expenses due to severance and acquisition related costs primarily in Europe with minimal activity in the current year.
Net income attributable to noncontrolling interests was $19.1 million for the year ended December 31, 2025 as compared to net loss attributable to noncontrolling interests of $0.7 million for the year ended December 31, 2024. The increase is due to allocation of gains from the sale of real estate, net on a consolidated multifamily property in Western United States and a non-core retail asset both in Ireland during the current period.
The following items are not in Adjusted Segment EBITDA above for Consolidated portfolio but are in net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders:
Depreciation and amortization decreased to $133.0 million for year ended December 31, 2025 the as compared to $148.3 million for the year ended December 31, 2024 as a result of the Company being a net seller of assets over the last year.
Interest expense was $139.4 million for the year ended December 31, 2025 as compared to $160.5 million for the year ended December 31, 2024. The decrease is primarily due to decreases in consolidated mortgage balance over 2025 due to asset sales over the current and prior periods which was offset by higher interest rates on mortgages in the current period.
Co-Investment Portfolio Segment
Investment Management
We receive fees, including asset management fees, construction management fees, and/or acquisition and disposition fees, for managing assets in our Co-Investment Portfolio on behalf of our partners. During the year ended December 31, 2025, fees recorded through revenues were $115.2 million as compared to $98.9 million for the same period in 2024. The increase in recorded fees for the year ended December 31, 2025 as compared to the same period in 2024 was primarily due to an increase in origination fees on loan originations in the construction loan portfolio and higher base management fees for the year ended December 31, 2025 as a result of having more AUM in our Co-Investment Portfolio.
Co-Investment Operations - Loans
Loan income from loan investments decreased to $22.3 million for the year ended December 31, 2025 as compared to $31.2 million for the same period in 2024. These amounts represent interest income on our share of loan investments within our global real estate credit platform and the decrease is due to the Company's lower ownership interests in newer originations than previously originated loans. The Company's share of the ownership interest in the loans in our construction portfolio is now typically 1.5% to 2.5% as compared to 5% in previously originated loans. As a result, as the loan platform continues to grow we expect to have lower interest income levels and higher management fee levels going forward.
We recognized $3.4 million of reserves against our loan portfolio in other loss during the year ended December 31, 2025 as compared to $11.0 million in the prior period. The reserves on our loan portfolio relate to our bridge loan portfolio as market conditions indicate that there could be potential credit losses due to the current interest rate environment and general market conditions.
Co-Investment Operations - Real Estate
In addition to our management of investments in the Co-Investment Portfolio, we generally have ownership interests in the properties. The table below represents a breakout of the amounts within income from unconsolidated investments which represents our share of underlying property investments in the Co-Investment Portfolio assets and any associated carried interests for the year ended December 31, 2025 and 2024:
Year Ended December 31,
2025 2024
Revenue
Rental $ 301.8 $ 289.9
Hotel 37.1 31.7
Sale of real estate 47.9 46.7
Total revenue 386.8 368.3
Fair value/other adjustments 82.4 (9.8)
Gain on sale of real estate, net 17.1 32.6
Carried interests (1.8) (49.7)
Expenses
Rental 98.2 94.8
Hotel 34.3 36.3
Cost of real estate sold 43.6 43.1
Depreciation and amortization 3.9 3.9
Total expenses 180.0 178.1
Interest expense (132.6) (131.0)
Other loss (29.1) (25.4)
Provision for income taxes - (0.4)
Income from unconsolidated investments $ 142.8 $ 6.5
The increase in income from unconsolidated investments is primarily due to the following:
Operating performance
During the year ended December 31, 2025, we recognized an increase in rental and hotel revenue compared to the same period in 2024 due to anincrease in rental operations due to the growth of our Co-Investment Portfolio and improved hotel operations at Kona Village as the property continues to progress towards stabilization. These increases were offset by interest expense due to the increase in assets in the Co-Investment portfolio.
We had a gain on sale of real estate, net of $17.1 million during the year ended December 31, 2025 due to the sale of the majority of our interest in a multifamily property in Western United States that was not accounted for under fair value and the sales proceeds were in excess of the basis of the investment. We had a $32.6 million gain on sale of real estate, net during the year ended December 31, 2024 due to the sale of majority interest in another multifamily property in the Western United States.
Fair Value
During the year ended December 31, 2025, the Company recorded fair value increases with respect to: (i) $39.2 million fair value increases with respect to our minority ownership interest in Zonda, a technology based real estate residential housing advisory business, as a result of growth in the underlying business and (ii) $58.0 million fair value increases associated with our investment in VHH due to increases in NOI at the underlying properties and lower cost of capital associated with the business as interest rates have moved down. These fair value increases were offset by (i) lower fair values with respect to office properties in the Western United States, Ireland and United Kingdom due to market assumptions of higher vacancy rates and lower rental growth with respect to the same; and (ii) non-cash fair value losses on mortgage debt and interest rate hedges as previous non-cash fair value gains unwind due to loans and hedges moving closer to maturity dates.
During the year ended December 31, 2025, we recorded a $5.4 milliondecrease in the accrual for carried interests in our Funds, primarily related to the fair value decreases that the Company recorded with respect to certain office assets within the Company's United States commingled fund. There was also a $3.6 millionincrease in carried interests on certain separate account platforms that hold multifamily assets in the Western United States. As of December 31, 2025 and 2024, the Company has $25.8 million and $27.6 million, respectively, of accrued carried interests recorded to unconsolidated investments that are subject to future adjustments based on the underlying performance of investments.
During the year ended December 31, 2024, the Company recorded fair value decreases with respect to: (i) lower fair values with respect to office properties in the Western United States, Ireland and United Kingdom due to lower market
assumptions of vacancy and rental growth with respect to the same; and (ii) non-cash fair value losses on mortgage debt and hedges associated with interest rates as previous non-cash fair value gains unwind as loans and hedges move closer to maturity dates. These fair value decreases were offset by (i) fair value increases with respect to our minority ownership interest in Zonda, a technology based real estate residential housing advisory business, as a result of its recent completion of a merger transaction; (ii) fair value increases associated with our investment in VHH due to increases in NOI at the underlying properties and lower cost of capital associated with the business as interest rates have moved down; and (iii) fair value increase on a recently completed multifamily development in the Western United States as operations ramp up.
During the year ended December 31, 2024, we recorded a $49.7 million decrease in the accrual for carried interests in our commingled funds primarily related to the fair value decreases that the Company recorded with respect to office assets in a United States commingled fund and on certain separate account platforms that hold multifamily assets in the Western United States.
Please also see "Part I. Item 1. "Fair Value Investments" for additional details.
Segment Expenses
Expenses increased to $78.6 million for the year ended December 31, 2025 as compared to $59.3 million for the same period in 2024. The increase compared to the prior period was primarily due to higher allocation of corporate expenses due to the growth of our real estate debt business.
Non-Segment Items
Compensation and related, corporate for the year ended December 31, 2025 were $47.0 million as compared to $46.3 million for the year ended December 31, 2024. The amounts were relatively flat with higher stock based compensation expense in the current period offset by lower discretionary expenses.
Non-Segment interest expense on our corporate unsecured debt was $102.4 million for the year ended December 31, 2025 as compared to $100.6 million for the same period in 2024. For the year ended December 31, 2025 we had interest expense on our unsecured debt due to higher balances on our revolving line of credit.
Other loss decreased to a loss of $6.1 million for the year ended December 31, 2025 as compared to other income of $14.2 million for the same period in 2024. The Company recorded realized foreign exchange losses of $2.8 million for the year ended December 31, 2025 as compared to realized gains of $6.5 million in the prior period primarily due to decreases in the euro exchange rate on portion of its line of credit that was drawn in euros during the first half of 2025. During the year ended December 31, 2025, we recorded $0.5 million of mark to market fair value losses on interest rate caps and swaps that the Company bought to hedge its variable rate interest rate exposure as compared to $5.5 million in year ended December 31, 2024. We received $1.0 million and $7.6 million in cash on interest rate caps and swaps during the year ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025 we received $1.4 million of interest income on bank deposits as compared to $2.5 million in the prior period the decrease was due to lower cash balances.
Provision for income taxes was $13.6 million for the year ended December 31, 2025 as compared to $10.2 million for the year ended December 31, 2024. The increase in income tax expense was primarily attributable to a $60.9 million increase in worldwide pre-tax book income in 2025 as compared to 2024, primarily as a result of non-cash fair value gains recorded in 2025.
Preferred dividends were $43.5 million for the year ended December 31, 2025 as compared to $43.5 million for the year ended December 31, 2024.
Comprehensive Income
The two major components that drive the change in other comprehensive income are the changes in foreign currency rates and the gains or loss of any associated foreign currency hedges. Please refer to the section titled "Currency Risk - Foreign Currencies"in Item 7 for a discussion of our risks relating to foreign currency and our hedging strategy. Below is a table that details the activity for the years ended December 31, 2025 and 2024.
Year Ended December 31,
(Dollars in millions) 2025 2024
Net loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders $ (38.8) $ (76.5)
Unrealized foreign currency translation gain (loss), net of noncontrolling interests and tax 61.5 (36.1)
Amounts reclassified out of accumulated other comprehensive loss during the period 3.0 5.1
Unrealized foreign currency derivative contract (loss) gain, net of noncontrolling interests and tax (42.0) 29.5
Comprehensive loss attributable to Kennedy-Wilson Holdings, Inc. common shareholders $ (16.3) $ (78.0)
The main currencies that the Company has exposure to are the euro and pound sterling. The table below represents the change in rates over the years ended December 31, 2025 and 2024 as compared to the U.S. Dollar:
Year Ended December 31,
2025 2024
Euro 13.4 % (6.2) %
GBP 7.5 % (1.7) %
Comprehensive loss, net of taxes and noncontrolling interests, for the year ended December 31, 2025 and 2024 was a loss of $16.3 million and $78.0 million, respectively. The Company experienced net unrealized gains on foreign currency through other comprehensive income for the period due to the EUR and GBP strengthening against the U.S. Dollar. Unrealized hedge gains were driven by hedges that the Company has on its GBP-denominated investments.
Liquidity and Capital Resources
Our liquidity and capital resources requirements include acquisitions of real estate and real estate related assets, funding development projects, loan draws (particularly on our construction loan business), capital expenditures for consolidated real estate and unconsolidated investments, working capital needs, interest and principal payments on our debt and dividends to our common and preferred shareholders. We finance these activities with internally generated funds through general operations including rental income, interest income, asset management fees, asset sales, borrowings under our revolving line of credit, sales of equity (common and preferred) and debt securities and cash out refinancings to the extent they are available and fit within our overall portfolio leverage strategy. Our investments in real estate are typically financed with equity from our balance sheet, third party equity and mortgage loans secured by such real estate. These mortgage loans are generally non-recourse in that, in the event of default, recourse will be limited to the mortgaged property serving as collateral, subject to limited customary exceptions. In some cases, we guarantee a portion of the loan related to a consolidated property or an unconsolidated investment, usually until some condition, such as completion of construction or leasing or certain net operating income criteria, has been met. We do not expect these guarantees to materially affect liquidity or capital resources. Please refer to the section titled "Off Balance Sheet Arrangements" for further information.
Our short-term liquidity requirements primarily consist of operating expenses and other expenditures associated with our properties and loan investments, dividend payments to our common and preferred shareholders, interest on our unsecured corporate debt, development, redevelopment and capital expenditures and, potentially, share repurchases and acquisitions. We currently expect to meet our short-term liquidity requirements through our existing cash and cash equivalents plus capital generated from our investments, and sales of real estate as well as availability on our current revolving lines of credit. Our need to raise funds from time to time to meet our capital requirements will depend on many factors, including the success and pace of the implementation of our strategy for strategic and accretive growth where appropriate. Additionally, we may opportunistically seek to raise capital (equity or debt) when we believe market conditions are favorable and when consistent with our growth and financing strategies. We may also seek third party financing to the extent that we engage in additional strategic investments, including in order to raise capital necessary to execute potential development or redevelopment strategies or acquire real estate, note portfolios, or other real estate related companies or real estate related securities. Similarly, we may from time to time seek to refinance our existing indebtedness opportunistically in order to reduce our overall cost of debt capital or optimize the maturity schedule of our outstanding indebtedness, or for other strategic reasons.
As of December 31, 2025, we and our consolidated subsidiaries had approximately $184.5 million ($56.3 million of which is in foreign currencies of GBP or EUR) of consolidated cash (as shown on our consolidated balance sheet), our share of cash held at unconsolidated Co-Investment Portfolio assets was $115.7 million and we had $265.3 million of availability under lines of credit. As of December 31, 2025, we have $88.6 million of restricted cash, which is included in cash and cash equivalents, that primarily relates to lender reserves associated with consolidated mortgages that we hold on properties and reserves held on loans in the Construction Loan Portfolio (as defined herein) on behalf of the borrowers under such loans.
These reserves typically relate to interest, taxes, insurance and future capital expenditures at the properties as well as reserves held on our loan investments.
Additionally, we are subject to withholding taxes to the extent we repatriate cash from certain of our foreign subsidiaries. We evaluate the tax implications before we distribute cash, which could impact the availability of funds at the corporate level.
As discussed throughout this report, ongoing macroeconomic conditions, such as, but not limited to, elevated levels of inflation and interest rates, banks' ability and willingness to lend, adverse developments affecting financial institutions and other geopolitical issues, including large-scale conflicts and warfare, and government responses to the same, continue to adversely impact the global economy and create volatility in our business results and operations, including our ability to access the capital markets at desired terms or at all. In addition to such market conditions, Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P"), a division of The McGraw-Hill Companies, Inc., rate our outstanding debt. These ratings are based on a variety of factors, including our current leverage and transactional activity. Our S&P rating is 'B+' and the KWI Notes has a rating of 'B' and our preferred stock is rated "CCC+". Moody's has Company's rating at "B2" with a stable outlook. Please also see "Part I. Item 1A. Risk Factors".
Development and Redevelopment
Kennedy Wilson has market rate development, redevelopment and entitlement projects that are underway or are in the planning stages. These initiatives, if completed, will result in market-rate income producing assets. As of December 31, 2025, we have 420 multifamily units we are actively developing. If these projects were brought to completion, the estimated share of the Company's total cost would be approximately $61.0 million, which we expect would be funded through our existing equity, third-party equity, project sales and secured debt financing. As of December 31, 2025, we have incurred $67.0 million of costs to date and expect to spend an additional $16.0 million to develop to completion or complete the entitlement process on these projects. Of the $16.0 million of remaining costs to complete, we currently expect it to be funded through secured mortgage financing. This represents total capital over the life of the projects and is not a representation of peak equity and does not take into account any distributions over the course of the investment. When development projects are completed, they typically move into our unstabilized category as they undergo lease up post-completion.
In addition to the market rate development and redevelopment projects described above, we have 1,955 affordable and/or age-restricted multifamily units within our VHH platform that we are currently developing or in the process of stabilizing. We expect to have no cash equity basis in these projects at completion due to the use of property level debt and proceeds from the sale of tax credits. If these projects are brought to completion, we expect to receive $19.4 million in cash from paid developer fees and proceeds from the sale of tax credits.
Our KWMF Development group acquired four assets where we are actively developing with limited partners that are committed and if completed our equity is $37.4 million. We also bought a pipeline of 24 assets that we would look to close and develop with limited partners and construction financing.
The figures described in this section are budgeted costs and are subject to change. There is no certainty that the Company will develop or redevelop any or all of these potential projects and the Company and its equity partners are under no obligation to complete these projects and may dispose of any such assets after adding value through the entitlement process. These are budgeted figures and are subject to change (increase or decrease) due to a number of factors (some of which are beyond our control), including, that these projects are being developed under construction management contracts with the general contractors and therefore we and our equity partners could be called upon to contribute additional capital in the event that actual costs exceed budgeted costs. The scope of these projects may also change. The estimated costs and amounts of cash to complete projects reflected in the table below represent management's current expectations and the total costs incurred to date include the land costs of these projects.
The table below describes the market rate development or redevelopment projects that the Company is undergoing or considering, and excludes the affordable and/or age-restricted multifamily units that it is developing in its VHH platform and its residential investments ($ in millions).
If Completed Current
Location Type Investment Status
Est. Completion Date(1)
MF Units
KW Est.
Total Cost(3)
KW Costs Incurred(3)
KW Est. Costs to Complete(2)
Mountain West Multifamily Cloudveil Under Construction 2026 288 46 40 6
Mountain West Multifamily Oxbow Phase II Under Construction 2027 132 15 5 10
Pacific Northwest Multifamily Bend In Planning TBD TBD TBD 22 TBD
Total 420 $ 61 $ 67 $ 16
(1) The actual completion date for projects is subject to several factors, many of which are not within our control. Accordingly, the projects identified may not be completed when expected, or at all.
(2) Figures shown in this column are an estimate of our remaining costs to develop to completion or to complete the entitlement process, as applicable, as of December 31, 2025. Total remaining costs may be financed with third-party cash contributions, proceeds from projected sales, and/or debt financing. These figures are budgeted costs and are subject to change. There is no guarantee that we will be able to secure the project-level debt financing that is assumed in the figures above. If we are unable to secure such financing, the amount of capital we will have to invest to complete the projects above may significantly increase. Our cost to complete differs from our share total capitalization as the latter includes costs that have already been incurred to date while the former relates to future estimated costs
(3)Includes land costs.
Unstabilized and Value Add Capital Expenditure Programs
We currently have seven assets that comprise 1.6 million commercial square feet and 150 hotel rooms that are currently unstabilized and are undergoing various stages of lease-up, value-add or development. In order to stabilize these assets we project our share of costs to complete to be $18.9 million. The cost to complete this work and the time frame described is subject to many uncertainties that are beyond our control, and the actual costs may be significantly higher than the estimates shown below.
The table below describes assets that are currently unstabilized ($ in millions):
Property Location Type KW Ownership % # of Assets Commercial Sq. Ft. Hotel Rooms/MF Units Leased %
KW Est. Costs to Complete(1)
Kona Village Hawaii Hotel 35% 1 - 150 N/A $ -
Coopers Cross
Ireland(2)
Office 50% 1 395,000 - 10 -
The Heights
United Kingdom(2)
Office 51% 1 356,000 - 64 -
H3, H4, and H7 at Hamilton Landing(3)
Northern California Office 100% 1 171,000 - 35 7.6
The Capitol Building
United Kingdom(2)
Office 51% 1 184,000 - 66 -
Scotscroft Building
United Kingdom(2)
Office 100% 1 57,000 - - 1.0
90 East Buildings Pacific Northwest Office 100% 1 410,000 - - 10.3
Total Lease-Up 7 1,573,000 150 28 % $ 18.9
(1) Figures shown in this column are an estimate of KW's remaining costs to develop to completion or to complete the entitlement process, as applicable, as of December 31, 2025. Total remaining costs may be financed with third-party cash contributions, proceeds from projected sales, and/or debt financing. These figures are budgeted costs and are subject to change. There is no guarantee that the Company will be able to secure the project-level debt financing that is assumed in the figures above. If the Company is unable to secure such financing, the amount of capital that the Company will have to invest to complete the projects above may significantly increase.
(2)Estimated foreign exchange rates are €1.00 = $1.17 and £1.00 = $1.35, related to NOI.
In addition to our development, redevelopment and stabilization initiatives, we regularly implement a value-add approach to our consolidated and unconsolidated investments, which includes rehabbing properties and adding or updating property amenities. The capital required to implement these value-add initiatives is typically funded with capital calls, refinancing or supplemental financings at the property level. We are not required to make these investments, but they are a key driver in our ability to increase net operating income at our properties post-acquisition.
Other Items
On November 3, 2020, the Company's board of directors authorized an expansion of its existing $250 million share repurchase plan to $500 million. Repurchases under the program may be made in the open market, in privately negotiated transactions, through the net settlement of the Company's restricted stock grants or otherwise, with the amount and timing of repurchases dependent on market conditions and subject to the Company's discretion. The program does not obligate the Company to repurchase any specific number of shares and, subject to compliance with applicable laws, may be suspended or terminated at any time without prior notice. As of December 31, 2025, we had $100.9 million remaining under the plan for stock repurchases. Please see the section titled "Purchases of Equity Securities by the Company"in Part II of this annual report on Form 10-K for additional information.
The Company maintains a deferred compensation program for certain employees of the Company (the "Deferred Compensation Program"). The named executive officers of the Company are not participants of the Deferred Compensation Program. The compensation committee of the Company's board of directors approves an amount annually to be allocated to certain employees of the Company in the United States and in Europe. The amount allocated to each employee vests ratably over a three-year vesting period, subject to continued employment with the Company. The amount allocated to each employee consists of Bonus Units. Under the Deferred Compensation Program, at the time of each vesting, the employees receive an amount equal to either the dividend yield of the Company's common stock or the actual amount of dividends paid on the
Company common stock (in the case of Bonus Units) during the immediately preceding year on the amount that is subject to such vesting. During the years ended December 31, 2025, 2024 and 2023 the Company recognized $8.6 million, $6.4 million and $8.2 million, respectively, under the Deferred Cash Bonus Program.
As discussed throughout this report, the Company also maintains a carried interests sharing program for certain employees of the Company (the "Carried Interests Sharing Program"). The compensation committee of the Company's board of directors recently approved, reserved and authorized increasing the pool available for the Company employees from thirty-five percent to fifty percent issue of any carried interests earned by certain commingled funds and separate account investments to be allocated to certain employees of the Company. Sixty percent of the award to each employee vests ratably over four years and the remaining forty percent vest upon the consummation of a liquidity event of the investment whereby the Company actually receives cash carried interests from its partner. The full carried interests earned by the Company will be recorded to income from unconsolidated investments and the amount allocated to employees is recorded as carried interests compensation. Not all of the Company's co-investment structures are included in the Carried Interests Sharing Program either because a structure does not incorporate carried interests that the Company is eligible to receive and/or a structure was an existing structure prior to the Board's approval of the Carried Interests Sharing Program. As of December 31, 2025, (i) of the 72 investments in the Company's co-investment portfolio, 11 of such investments are a part of the Carried Interests Sharing Program; (ii) the Company's total accrued carried interests in its financial statements is $25.8 million, of which $6.9 millionwas accrued as carried interests compensation expense as part of the Carried Interests Program. During the years ended December 31, 2025, 2024 and 2023, the Company recognized a reversal of $0.3 million, $16.6 million and $15.1 million respectively of previously recognized expenses, related to this program.
The Company also maintains a global employee co-investment program (the "Co-Investment Program"). The named executive officers are not participants of the Co-Investment Program. Under the Co-Investment Program, certain employees are provided the opportunity to invest alongside the Company in its investments (in all future investments and certain recently acquired transactions). The amount of funds that the employees, as a group, can invest in the Company's investments is capped at 1.5% of the Company's equity. Generally (with certain exceptions), participants in the Co-Investment Program will make commitments to the program on an annual basis and invest in every investment made by the Company (investments that such employee has an active role in acquiring and managing) in the applicable year.
Cash Flows
The following table summarizes the cash provided by or used in our operating, investing and financing activities for the years ended December 31, 2025 and 2024:
Year ended December 31,
(Dollars in millions) 2025 2024
Net cash provided by operating activities $ 11.4 $ 55.1
Net cash provided by investing activities 525.8 414.2
Net cash used in financing activities (560.0) (565.5)
Operating
Our cash flows from operating activities are primarily dependent upon operations from consolidated properties, the operating distributions and fees from our Co-Investment Platform, general and administrative costs, compensation and interest expense payments. For the years ended December 31, 2025 and 2024, cash flows provided by operations were $11.4 million and $55.1 million, respectively.
The decrease in cash provided by operations was primarily due to the receipt of restricted cash amounts relating to escrow amounts in the Construction Loan Portfolio during the December 31, 2024 as we took servicing of the debt platform in house.
Investing
Our cash flows from investing activities are generally comprised of cash used to fund property acquisitions, investments in unconsolidated investments, capital expenditures, purchases of loans secured by real estate, as well as cash received from property sales and return of capital from our co-investments.
Year Ended December 31, 2025
Net cash provided by investing activities totaled $525.8 million for the year ended December 31, 2025. During the year ended December 31, 2025, we received $565.7 million primarily from the sale and deconsolidation of a 90% interest in a wholly-owned multifamily asset in Northern California, a wholly-owned multifamily asset in Utah and Idaho, two non-core
office buildings in Ireland and non-core commercial assets in the United Kingdom and Italy. We received $367.6 million in investing distributions from our co-investments primarily from the recapitalization of our interest in Kona Village, the sale of 41% of our interest in a multifamily platform in the Western United States, excess proceeds from multifamily properties that were refinanced, the payoff of a loan in our European loan business and the redemption of our interests in hedge funds. Loan draws and our share of new loans issued as part of our global debt platform were $54.3 million. We received $68.8 million of proceeds from repayments on loans previously issued. The Company spent $99.3 million to acquire two industrial properties in the United Kingdom and consolidated assets that were part of the Toll Brothers acquisition and $29.4 million on the pipeline and platform value associated with Toll Brothers acquisition. We spent $66.6 million on capital expenditures on consolidated assets primarily relating to development properties as well as value add additions to our operating properties. We also contributed $208.2 million to unconsolidated investments that were primarily used to fund new acquisitions including those as part of the Toll Brothers acquisition, capital expenditures for new home construction at our Kohanaiki residential development and to pay down property debt held within unconsolidated investments.
Year Ended December 31, 2024
Net cash provided by investing activities totaled $414.2 million for the year ended December 31, 2024. During the year ended December 31, 2024, we received $589.5 million primarily from the sale of Shelbourne Hotel, a building at the 90 East office complex in Issaquah, Washington, and two multifamily properties in Western United States and non-core commercial assets in the United Kingdom and Spain. We received $86.6 million in investing distributions from our co-investments primarily from the sale of a multifamily property in the Western United States, excess proceeds from refinancing mortgage loans on unconsolidated investments, conversion of VHH assets and redemption of a hedge fund investment. Loan draws and our share of new loans issued as part of our global debt platform were $40.1 million. We received $49.8 million of proceeds from repayments on loans previously issued. We spent $131.6 million on capital expenditures on consolidated assets primarily relating to development properties as well as value add additions to our operating properties. We also contributed $125.0 million to unconsolidated investments that were primarily used to fund our share of new acquisitions made within our new commingled fund in the United States, capital calls on European developments, capital calls on the Kona Village hotel while we are working towards stabilization and a merger relating to our investment in Zonda.
Financing
Our net cash related to financing activities is generally impacted by capital-raising activities net of dividends and distributions paid to common and preferred shareholders and noncontrolling interests as well as financing activities for consolidated real estate investments.
Year Ended December 31, 2025
Net cash used in financing activities totaled $560.0 million for the year ended December 31, 2025. We drew $491.0 million on our revolving line of credit and repaid $317.2 million on our revolving line of credit during the year ended December 31, 2025. Kennedy Wilson received proceeds of $231.5 million from mortgage loans to finance and refinance consolidated property acquisitions. These proceeds were offset by the repayment of $469.3 million of mortgage debt, the $352.0 million repayment of KWE Notes, and $4.3 million of loan issuance costs primarily relating to the extension of our revolving line of credit. Additionally, we paid common dividends of $68.0 million and preferred dividends of $43.5 million, and we repurchased $9.2 million of our common stock under our share repurchase plan.
Year Ended December 31, 2024
Net cash used in financing activities totaled $565.5 million for the year ended December 31, 2024. We drew $170.0 million on our revolving line of credit and repaid $215.2 million on our revolving line of credit during the year ended December 31, 2024. Kennedy Wilson received proceeds of $360.7 million from mortgage loans to finance and refinance consolidated property acquisitions. These proceeds were offset by the repayment of $521.1 million of mortgage debt, the $181.1 million repayment of KWE Notes, and $13.9 million of loan issuance costs primarily relating to the extension of our revolving line of credit. Additionally, we paid common dividends of $100.2 million and preferred dividends of $43.5 million, and we repurchased $15.0 million of our common stock under our share repurchase plan.
Contractual Obligations and Commercial Commitments
At December 31, 2025, Kennedy Wilson's consolidated contractual cash obligations, including debt, lines of credit, operating leases and ground leases included the following:
Payments due by period(8)
(Dollars in millions) Total Less than
1 year 		1 - 3 years 4 - 5 years After 5 years
Contractual obligations
Borrowings:(1)(4)
Mortgage debt(2)
$ 2,452.4 $ 531.5 $ 943.8 $ 811.3 $ 165.8
Senior notes(3)
1,800.0 - 600.0 1,200.0 -
Credit facility 284.7 - 284.7 - -
Total borrowings(4)
4,537.1 531.5 1,828.5 2,011.3 165.8
Operating leases 9.5 3.0 2.2 1.6 2.7
Ground leases(7)
6.4 - 0.1 0.1 6.2
Total contractual cash obligations(5)(6)
$ 4,553.0 $ 534.5 $ 1,830.8 $ 2,013.0 $ 174.7
(1)See Notes 8-10 of our Notes to Consolidated Financial Statements. Figures do not include scheduled interest payments. Assuming each debt obligation is held until maturity, we estimate that we will make the following interest payments: Less than 1 year - $117.1 million; 1-3 years - $198.2 million; 4-5 years - $49.0 million; After 5 years - $9.5 million. The interest payments on variable rate debt have been calculated at the interest rate in effect as of December 31, 2025.
(2) Excludes $1.1 million net unamortized debt discount on mortgage debt.
(3) Excludes $2.2 million unamortized debt premium on senior notes.
(4) Excludes $30.7 million of unamortized loan fees.
(5)Kennedy Wilson's share of contractual obligations,(excluding amounts that are attributable to noncontrolling interests), including debt, lines of credit, operating leases and ground leases, consisted of the following: Less than 1 year - $534.5 million; 1-3 years - $1,829.9 million; 4-5 years - $1,984.1 million; After 5 years - $163.7 million.
(6)Table above excludes $270.9 million unfulfilled capital commitments to our unconsolidated investments and $146.6 million on loan investments.
(7) Ground leases on consolidated assets. Amounts are undiscounted and have leases that expire as far out as 2258.
(8) Principal debt payments include the effect of extension options.
Indebtedness and Related Covenants
The following describes certain indebtedness and related covenants.
KWI Notes
On February 11, 2021, Kennedy-Wilson, Inc., issued $500.0 million aggregate principal amount of 2029 Notes and $500.0 million aggregate principal amount of 2031 Notes (together with the 2029 Notes, the "initial notes"). On March 15, 2021, Kennedy-Wilson, Inc. issued an additional $100 million aggregate principal of the 2029 Notes and an additional $100 million of the 2031 Notes. These additional notes were issued as "additional notes" under the indentures pursuant to which Kennedy Wilson previously issued 2029 Notes and the 2031 Notes. On August 23, 2021, Kennedy-Wilson, Inc. issued $600.0 million aggregate principal amount of 2030 Notes (together with the 2029 Notes, the 2031 Notes and the additional notes, the "notes"). The notes are senior, unsecured obligations of Kennedy Wilson and are guaranteed by Kennedy-Wilson Holdings, Inc. and certain subsidiaries of Kennedy Wilson.
The notes accrue interest at a rate of 4.750% (in the case of the 2029 Notes), 4.750% (in the case of the 2030 Notes) and 5.000% (in the case of the 2031 Notes) per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021 for the 2029 Notes and 2031 Notes and March 1, 2022 for the 2030 Notes. The notes will mature on March 1, 2029 (in the case of the 2029 Notes), February 1, 2030 (in case of 2030 Notes) and March 1, 2031 (in the case of the 2031 Notes), in each case unless earlier repurchased or redeemed. At any time prior to March 1, 2024 (in the case of the 2029 Notes), September 1, 2024 (in the case of the 2030 Notes) or March 1, 2026 (in the case of the 2031 notes), Kennedy Wilson had the right to (with the respect to the 2029 Notes and 20230 Notes) and may redeem the 2031 Notes, in whole or in part, at a redemption price equal to 100% of their principal amount, plus an applicable "make-whole" premium and accrued and unpaid interest, if any, to the redemption date. At any time and from time to time on or after March 1, 2024 (in the case of the 2029 Notes), September 1, 2024 (in the case of the 2030 Notes) or March 1, 2026 (in the case of the 2031 Notes), Kennedy Wilson may redeem the notes of the applicable series, in whole or in part, at specified redemption prices set forth in the indenture governing the notes of the applicable series, plus accrued and unpaid interest, if any, to the redemption date. In
addition, prior to March 1, 2024 (for 2029 Notes and 2031 Notes) and September 1, 2024 (for 2030 Notes), Kennedy Wilson may redeem up to 40% of the notes of either series from the proceeds of certain equity offerings. No sinking fund will be provided for the notes. Upon the occurrence of certain change of control or termination of trading events, holders of the notes may require Kennedy Wilson to repurchase their notes for cash equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. The total amount of the 2029 Notes, 2030 Notes and 2031 Notes included in the Company's consolidated balance sheets was $1.8 billion at December 31, 2025.
The KWE Notes were fully redeemed at par value in October 2025.
Borrowings Under Line of Credit
On September 12, 2024, the Company, through a wholly-owned subsidiary, extended its existing revolving line of credit and increased the capacity to $550 million ("Third A&R Facility"). The Third A&R Facility has a maturity date of September 12, 2027. Subject to certain conditions precedent and at Kennedy-Wilson, Inc.'s (the "Borrower") option, the maturity date of the Third A&R Facility may be extended by a year.
The Company has $284.7 million outstanding on the Third A&R Facility as of December 31, 2025 with $265.3 million available to be drawn under the revolving credit facility.
Debt Covenants
The Third A&R Facility and the indentures governing the notes contain numerous restrictive covenants that, among other things, limit the Company and certain of its subsidiaries' ability to incur additional indebtedness, pay dividends or make distributions to stockholders, repurchase capital stock or debt, make investments, sell assets or subsidiary stock, create or permit liens, engage in transactions with affiliates, enter into sale/leaseback transactions, issue subsidiary equity and enter into consolidations or mergers.
The Third Amended and Restated Credit Agreement, dated as of September 12, 2024 (the "Credit Agreement") also contains financial covenants, which require the Company to maintain (i) a maximum consolidated leverage ratio (as defined in the Credit Agreement) of not greater than 65%, measured as of the last day of each fiscal quarter; (ii) a minimum fixed charge coverage ratio (as defined in the Credit Agreement) of not less than 1.60 to 1.00, measured as of the last day of each fiscal quarter for the period of four full fiscal quarters then ended; (iii) a minimum consolidated tangible net worth equal to or greater than the sum of $1,844,222,000 plus an amount equal to fifty percent (50%) of net equity proceeds received by the Company after the date of the most recent financial statements that are available as of September 12, 2024, measured as of the last day of each fiscal quarter; (iv) a maximum recourse leverage ratio (as defined in the Credit Agreement) of not greater than an amount equal to consolidated tangible net worth as of the measurement date multiplied by 1.5, measured as of the last day of each fiscal quarter; (v) a maximum secured recourse leverage ratio (as defined in the Credit Agreement) of not greater than an amount equal to 3.5% of consolidated total asset value (as defined in the Credit Agreement) and $313,054,000, measured as of the last day of each fiscal quarter; (vi) a maximum adjusted secured leverage ratio (as defined in the Credit Agreement) of not greater than 55%, measured as of the last day of each fiscal quarter; and (vii) liquidity (as defined in the Credit Agreement) of at least $75.0 million. As of December 31, 2025, the Company was in compliance with the foregoing financial covenants. The obligations of the Borrower pursuant to the Credit Agreement are guaranteed by the Company and certain wholly-owned subsidiaries of the Company.
The indentures governing the notes limit Kennedy-Wilson, Inc.'s ability to incur additional indebtedness if, on the date of such incurrence and after giving effect to the new indebtedness, Kennedy-Wilson, Inc.'s maximum balance sheet leverage ratio (as defined in the indenture) is greater than 1.50 to 1.00. This ratio is measured at the time of incurrence of additional indebtedness.
In addition, loan agreements that govern the Company's property-level non-recourse financings that are secured by its properties may contain operational and financial covenants, including but not limited to, debt yield related covenants and debt service coverage ratio covenants and, with respect to mortgages secured by certain properties in Europe, loan-to-value ratio covenants. Property-level non-recourse financings with such loan-to-value covenants require that the underlying properties are valued on a periodic basis (at least annually). As of December 31, 2025, the Company was in compliance with all property-level mortgages and was current on all payments (principal and interest) with respect to the same. The failure by the Company to comply with such covenants and/or secure waivers from lenders could result in defaults under these instruments. In addition, if the Company defaults under a mortgage loan and/or such loan is accelerated by the lender, it may automatically be in default under any of its property and corporate unsecured loans that contain cross-default and/or cross-acceleration provisions. Please also see Part I. Item 1A Risk Factors.
Off-Balance Sheet Arrangements
Guarantees
We have provided guarantees associated with loans secured by consolidated assets. At December 31, 2025, the maximum potential amount of future payments (undiscounted) we could be required to make under the guarantees was approximately $45.6 million at December 31, 2025. The guarantees expire through 2029 and our performance under the guarantees would be required to the extent there is a shortfall in liquidation between the principal amount of the loan and the net sale proceeds of the applicable properties. If we were to become obligated to perform on these guarantees, it could have an adverse effect on our financial condition.
Most of our real estate properties within our equity partnerships are encumbered by traditional non-recourse debt obligations. In connection with most of these loans, however, we entered into certain "non-recourse carve out" guarantees, which provide for the loans to become partially or fully recourse against us if certain triggering events occur. Although these events are different for each guarantee, some of the common events include:
•the special purpose property-owning subsidiary's filing a voluntary petition for bankruptcy;
•the special purpose property-owning subsidiary's failure to maintain its status as a special purpose entity; and
•subject to certain conditions, the special purpose property-owning subsidiary's failure to obtain lender's written consent prior to any subordinate financing or other voluntary lien encumbering the associated property.
In the event that any of these triggering events occur and the loans become partially or fully recourse against us, our business, financial condition, results of operations and common stock price could be materially adversely affected.
In addition, other items that are customarily recourse to a non-recourse carve out guarantor include, but are not limited to, the payment of real property taxes, liens which are senior to the mortgage loan and outstanding security deposits.
Capital Commitments
As of December 31, 2025, we have unfulfilled capital commitments totaling $270.9 million to our unconsolidated investments and $146.6 million to our loan portfolio. In addition to the unfunded capital commitments on its joint venture investments, has $83.7 million of equity commitments relating to unconsolidated development projects and $29.6 million at its share related to future ground lease payments that run through 2085 on Kona Village. As we identify investment opportunities in the future, we may be called upon to contribute additional capital to unconsolidated investments in satisfaction of our capital commitment obligations.
Impact of Inflation and Changing Prices
As discussed throughout this report, high inflation impacted the global economy during the year ended December 31, 2025 and continues to impact the global economy. Our exposure to market risk from changing prices consists primarily of fluctuations in rental rates of commercial and multifamily properties, market interest rates on investment mortgages and debt obligations and real estate property values. Rental rate increases are dependent upon market conditions and the competitive environments in the respective locations of the properties. To the extent that we engage in development activities, we may have exposure to changing prices in materials or cost of labor. The revenues of the investment management operations with respect to rental properties are highly dependent upon the aggregate rents of the properties managed, which are affected by rental rates and building occupancy rates. Employee compensation is the principal cost element of investment management.
We may be able to recoup all or a significant portion of any impact that we may suffer from rising costs through rental increases. To the extent that the rate of increase in expenses is greater than the rate of increase in rental rates, changing price will have an adverse impact on the Company. See also Inflation may adversely affect our financial condition and results of operations in Item 1A. Risk Factors for more detailed discussion on the impact of inflation on the Company.
Qualitative and Quantitative Disclosures about Market Risk
Our primary market risk exposure relates to changes in interest rates in connection with our short-term borrowings and fluctuations in foreign currency exchange rates in connection with our foreign operations.
Interest Rate Risk
We have established an interest rate management policy, which attempts to minimize our overall cost of debt while taking into consideration the earnings implications associated with the volatility of short-term interest rates. As part of this policy, we have elected to maintain a combination of variable and fixed rate debt. As of December 31, 2025, 78% of our consolidated debt is fixed rate, 15% is floating rate with interest caps and 7% is floating rate without interest rate caps. As such, fluctuations in interest rates may impact our floating rate debt (and floating rate debt with interest caps to a lesser extent)
and cause our consolidated interest expense and income from unconsolidated investments to fluctuate. Typically, these fluctuations do not give rise to a significant long-term interest rate risk because they generally have short maturities.
We hold variable rate debt on some of our consolidated and unconsolidated properties that is subject to interest rate fluctuations. These variable rates generally are based on the lender's base rate, prime rate, EURIBOR, GBP SONIA, SOFR, SIFMA plus an applicable borrowing margin. Additionally, in order to mitigate some of the risk associated with increasing interest rates, we have purchased interest rate caps that limit the amount that interest expense can increase with rate increases. However, some of our debt is uncapped and the mortgages that do have interest caps are subject to increased interest expense until rates hit the level of caps that have been purchased. If there was a 100-basis point increase or decrease, we would have a $11.3 million increase in interest expense or $14.8 million decrease in interest expense savings during 2026 on our current share of indebtedness. The weighted average strike price on caps and maturity of Kennedy Wilson's variable rate mortgages are 2.96% and approximately 0.9 years, respectively, as of December 31, 2025.
The table below represents contractual balances of our financial instruments at the expected maturity dates as well as the fair value as of December 31, 2025. The weighted average interest rate for the various assets and liabilities presented are actual as of December 31, 2025. We closely monitor the fluctuation in interest rates, and if rates were to increase significantly, we believe that we would be able to either hedge the change in the interest rate or refinance the loans with fixed interest rate debt. All instruments included in this analysis are non-trading.
Principal Maturing in: Fair Value
2026 2027 2028 2029 2030 Thereafter Total December 31, 2025
(Dollars in millions)
Interest rate sensitive assets
Cash equivalents $ 184.5 $ - $ - $ - $ - $ - $ 184.5 $ 184.5
Average interest rate 1.23 % - % - % - % - % - % 1.23 % -
Fixed rate receivables 28.0 10.0 5.3 - 2.5 3.7 49.5 48.1
Average interest rate(1)
3.98 % 6.80 % 6.00 % - % 6.35 % 6.58 % 5.08 % -
Variable rate receivables 116.8 41.1 12.9 5.4 0.5 - 176.7 176.7
Average interest rate 8.11 % 7.91 % 8.96 % 7.47 % 6.94 % - % 8.10 % -
Total $ 329.3 $ 51.1 $ 18.2 $ 5.4 $ 3.0 $ 3.7 $ 410.7 $ 409.3
Weighted average interest rate(1)
3.91 % 7.69 % 8.09 % 7.47 % 6.45 % 6.58 % 4.65 %
Interest rate sensitive liabilities
Variable rate borrowings $ 368.2 $ 248.3 $ 337.5 $ - $ - $ 61.7 $ 1,015.7 $ 977.5
Average interest rate 5.67 % 5.92 % 5.64 % - % - % 5.33 % 5.70 %
Fixed rate borrowings 159.8 102.0 335.8 1,407.1 261.9 1,254.8 3,521.4 3,372.9
Average interest rate 5.16 % 3.86 % 4.68 % 4.79 % 5.26 % 4.36 % 4.65 % -
Total $ 528.0 $ 350.3 $ 673.3 $ 1,407.1 $ 261.9 $ 1,316.5 $ 4,537.1 $ 4,350.4
Weighted average interest rate 5.52 % 5.32 % 5.16 % 4.79 % 5.26 % 4.41 % 4.88 %
(1) Interest rate sensitive assets' weighted average interest rates are exclusive of non-performing receivables.
Currency Risk - Foreign Currencies
A significant portion of our business is located outside the United States. As such, we have foreign currency fluctuation risk with respect to those investments and business units. In certain instances, we utilize foreign currency hedging derivatives to mitigate the impact of this risk on our equity.
The financial statements of Kennedy Wilson's subsidiaries located outside the United States are measured using the local currency, as this is their functional currency. The assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date and income and expenses are translated at the average monthly rate. The foreign currencies include the euro and the British pound sterling. Cumulative translation adjustments, to the extent not included in cumulative net income, are included in the consolidated statement of equity as a component of accumulated other comprehensive income. Currency translation gains and losses and currency derivative gains and losses will remain in other comprehensive income unless and until the Company substantially liquidates underlying investments.
Approximately 42% of our investment account is invested through our foreign platforms in their local currencies. Investment level debt is generally incurred in local currencies and therefore we consider our equity investment as the appropriate exposure to evaluate for hedging purposes. Additionally, the costs to operate these businesses, such as compensation, overhead and interest expense are incurred in local currencies. We typically do not hedge future operations or cash flows of operations denominated in foreign currencies, which may have a significant impact on the results of our operations for both the Consolidated and Co-Invest segments. In order to manage the effect of these fluctuations, we generally
hedge our book equity exposure to foreign currencies through currency forward contracts and options. As of December 31, 2025, we have hedged 96% of the gross asset carrying value of our euro-denominated investments and 83% of the gross asset carrying value of our GBP-denominated investments.
Our investment management businesses typically do not require much capital, so foreign currency translation and derivative activity primarily relates to the investments segment as that has greater balance sheet exposure to foreign currency fluctuations.
If there was a 5% increase or decrease in foreign exchange rates on the currencies we invest to the U.S. Dollar our net asset value would increase by $19.2 million or decrease by $19.5 million. If rates moved 10%, we would have an increase of $38.0 million and a decrease of $39.4 million.
Financial Measures and Descriptions.
Rental- Rental income is comprised of rental revenue earned by our consolidated real estate investments.
Hotel - Hotel income is comprised of hotel revenue earned by our consolidated hotels.
Investment Management Fees- Investment management fees are primarily comprised of base asset management fees and acquisition fees generated by our investment management division. Fees earned from consolidated investments are eliminated in consolidation with the amount relating to our equity partners being recognized through income attributable to noncontrolling interests.
Loans - Interest income earned on consolidated loans.
Income from unconsolidated investments - principal co-investments- Income from unconsolidated investments - principal co-investments consists of the Company's share of income or loss earned on investments in which the Company can exercise significant influence but does not have control. Income from unconsolidated investments includes income or loss from ordinary course operations of the underlying investment, gains or losses on sale and fair value gains and losses.
Income from unconsolidated investments - carried interests - Carried interests relate to allocations to the general partner, special limited partner or asset manager of Kennedy Wilson's co-investments it manages based on the cumulative performance of the fund and are subject to preferred return thresholds of the limited partners.
Gain on sale of real estate, net - Gain on sale of real estate, net relates to the amount received over the carrying value of assets sold. Impairments on consolidated real estate assets are also recorded to this line to the extent that do not require separate presentation.
Rental- Rental expenses consist of the expenses of our consolidated real estate investments, including items such as property taxes, insurance, maintenance and repairs, utilities, supplies, salaries and management fees.
Hotel - Hotel expenses consist of expenses of our consolidated hotel investments, including items such as property taxes, insurance, maintenance and repairs, utilities, supplies, salaries and management fees.
Compensation and related- Employee compensation, comprising of salary, bonus, employer payroll taxes and benefits paid on behalf of employees.
Carried interests compensation- Compensation associated with up to thirty-five percent (35%) of any carried interests earned by certain commingled funds and separate account investments to be allocated to certain non-NEO employees of the Company.
General and administrative- General and administrative expenses represent administrative costs necessary to run Kennedy Wilson's businesses and include items such as occupancy and equipment expenses, professional fees, public company costs, travel and related expenses, and communications and information services.
Depreciation and amortization- Depreciation and amortization is comprised of depreciation expense which is recognized ratably over the useful life of an asset and amortization expense which primarily consist of the amortization of assets allocated to the value of in-place leases upon acquisition of a consolidated real estate asset.
Interest expense - Interest expense represents interest costs associated with our senior notes payable, revolving credit facility, mortgages on our consolidated real estate, and unsecured debt held by KWE.
Other income (loss)- Other income (loss) includes the realized foreign currency exchange income or loss relating to the settlement of foreign transactions during the year which arise due to changes in currency exchange rates, realized gains or losses related to undesignated derivative instruments, interest income on bank deposits, commission expenses on property services and transaction related expenses related to unsuccessful deals.
Income taxes- The Company's services business operates globally as corporate entities subject to federal, state, and local income taxes and the investment business operates through various partnership structures to acquire wholly-owned or
jointly-owned investments in multifamily, commercial, residential and development properties. The Company's distributive share of income from its partnership investments will be subject to federal, state, and local taxes and the related tax provision attributable to the Company's share of the income tax is reflected in the consolidated financial statements.
Accumulated other comprehensive income (loss)- Accumulated other comprehensive income (loss) represents the Company's share of foreign currency movement on translating Kennedy Wilson's foreign subsidiaries from their functional currency into the Company's reporting currency. These amounts are offset by Kennedy Wilson's effective portion of currency related hedge instruments that have been designated.
Non-GAAP Measures and Certain Definitions
"KWH," "KW," "Kennedy Wilson," the "Company," "we," "our," or "us" refers to Kennedy-Wilson Holdings, Inc. and its wholly-owned subsidiaries. The consolidated financial statements of the Company include the results of the Company's consolidated subsidiaries.
"KWE" refers to Kennedy Wilson Europe Real Estate Limited.
"Adjusted EBITDA" represents net (loss) income before interest expense, loss (gain) on early extinguishment of debt, our share of interest expense included in unconsolidated investments, depreciation and amortization, our share of depreciation and amortization included in unconsolidated investments, preferred dividends, provision for (benefit from) income taxes, our share of taxes included in unconsolidated investments, share-based compensation expense for the Company, and EBITDA attributable to noncontrolling interests. Please also see the reconciliation to GAAP in the Company's supplemental financial information included in this release and also available at www.kennedywilson.com. Our management uses Adjusted EBITDA to analyze our business because it adjusts net income for items we believe do not accurately reflect the nature of our business going forward or that relate to non-cash compensation expense or noncontrolling interests. Such items may vary for different companies for reasons unrelated to overall operating performance. Additionally, we believe Adjusted EBITDA is useful to investors to assist them in getting a more accurate picture of our results from operations. However, Adjusted EBITDA is not a recognized measurement under GAAP and when analyzing our operating performance, readers should use Adjusted EBITDA in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not remove all non-cash items or consider certain cash requirements such as tax and debt service payments. The amount shown for Adjusted EBITDA also differs from the amount calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges and are used to determine compliance with financial covenants and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.
"Adjusted Net Income (Loss)" represents net income (loss) before depreciation and amortization, Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments, share-based compensation, and excluding net income attributable to noncontrolling interests, before depreciation and amortization.
"Carried interests" relates to allocations to the Company of Kennedy Wilson's co-investments it invests in and manages based on the cumulative performance of the fund or investment vehicle, as applicable, and are subject to preferred return thresholds of the limited partners.
"Carried interests compensation" - the compensation committee of the Company's board of directors approved and reserved between twenty percent (20%) and thirty-five percent (35%) of any carried interests earned by certain commingled funds and separate account investments to be allocated to certain non-NEO employees of the Company.
"Cap rate" represents the net operating income of an investment for the year preceding its acquisition or disposition, as applicable, divided by the purchase or sale price, as applicable. Capitalization ("Cap") rates discussed in this report only include data from income-producing properties. The Company calculates cap rates based on information that is supplied to it during the acquisition diligence process. This information is not audited or reviewed by independent accountants and may be presented in a manner that is different from similar information included in the Company's financial statements prepared in accordance with GAAP. In addition, cap rates represent historical performance and are not a guarantee of future net operating income ("NOI"). Properties for which a cap rate is discussed may not continue to perform at that cap rate.
"Co-Investment Portfolio NOI" refers to the Company's share of NOI that is generated from the properties in which the Company has an ownership interest and that are held in the Company's Co-Investment Portfolio business segment. Please also see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Certain Non-GAAP Measures and Reconciliations" for a reconciliation of Co-Investment Portfolio NOI to net income as reported under GAAP.
"Consolidated Portfolio NOI" refers to the NOI that is generated from the properties that the Company has an ownership interest in and are held in the Company's Consolidated Portfolio business segment. Please also see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Certain Non-GAAP Measures and Reconciliations" for a reconciliation of Consolidated Portfolio NOI to net income as reported under GAAP.
"Equity partners" refers to non-wholly-owned subsidiaries that we consolidate in our financial statements under U.S. GAAP and third-party equity providers.
"Fee Bearing Capital" represents total third-party committed or invested capital that we manage in our joint ventures, commingled funds, and debt platform that entitle us to earn fees, including without limitation, asset management fees, construction management fees, acquisition and disposition fees and/or carried interest, if applicable.
"Gross Asset Value" refers to the gross carrying value of assets, before debt, depreciation and amortization, and net of noncontrolling interests.
"Net operating income" or "NOI" is a non-GAAP measure representing the income produced by a property calculated by deducting certain property expenses from property revenues. The Company's management uses net operating income to assess and compare the performance of its properties and to estimate their fair value. Net operating income does not include the effects of depreciation or amortization or gains or losses from the sale of properties because the effects of those items do not necessarily represent the actual change in the value of the Company's properties resulting from its value-add initiatives or changing market conditions. Management believes that net operating income reflects the core revenues and costs of operating its properties and is better suited to evaluate trends in occupancy and lease rates. Please also see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Certain Non-GAAP Measures and Reconciliations" for a reconciliation of Net Operating Income to net income as reported under GAAP and a reconciliation of Net Operating Income (Net Effective) (with respect to same property) to net income as reported under GAAP.
"Noncontrolling interests" represents the portion of equity ownership in a consolidated subsidiary not attributable to Kennedy Wilson.
"Principal co-investments" consists of the Company's share of income or loss earned on investments in which the Company can exercise significant influence but does not have control. Income from unconsolidated investments includes income from ordinary course operations of the underlying investment, gains on sale, fair value gains and losses.
"Real Estate Assets under Management" ("AUM") generally refers to the properties and other assets with respect to which the Company provides (or participates in) oversight, investment management services and other advice, and which generally consist of real estate properties or loans, and investments in joint ventures. AUM is principally intended to reflect the extent of the Company's presence in the real estate market, not the basis for determining management fees. AUM consists of the total estimated fair value of the real estate properties, total loan commitments made through out debt investment platform, inclusive of both currently outstanding loan amounts and contractual future fundings, and other real estate-related assets either owned by third parties, wholly-owned by the Company or held by joint ventures and other entities in which its sponsored funds or investment vehicles and client accounts have invested. The estimated value of development properties is included at estimated completion cost. The accuracy of estimating fair value for investments cannot be determined with precision and cannot be substantiated by comparison to quoted prices in active markets and may not be realized in a current sale or immediate settlement of the asset or liability (particularly given the ongoing macroeconomic conditions such as, but not limited to recent adverse developments affecting regional banks and other financial institutions, and ongoing military conflicts around the world and uncertainty with respect to fluctuating interest rates continue to fuel recessionary fears and create volatility in Kennedy Wilson's business results and operations). 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. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including capitalization rates, discount rates, liquidity risks, and estimates of future cash flows could significantly affect the fair value measurement amounts. All valuations of real estate involve subjective judgments.
"Same property" refers to stabilized consolidated and unconsolidated properties in which Kennedy Wilson has an ownership interest during the entire span of both periods being compared. This analysis excludes properties that during the comparable periods (i) were acquired, (ii) were sold, (iii) are either under development or undergoing lease up or major repositioning as part of the Company's asset management strategy, (iv) were investments in which the Company holds a minority ownership position, and (v) certain non-recurring income and expenses. The analysis only includes Office, Multifamily and Hotel properties, where applicable. To derive an appropriate measure of operating performance across the comparable periods, the Company removes the effects of foreign currency exchange rate movements by using the reported period-end exchange rate to translate from local currency into the U.S. dollar, for both periods. Amounts are calculated using Kennedy Wilson's ownership share in the Company's consolidated and unconsolidated properties. Management evaluates the performance of the operating properties the Company owns and manages using a "same property" analysis because the population of properties in this analysis is consistent from period to period, which allows management and investors to analyze (i) the Company's ongoing business operations and (ii) the revenues and expenses directly associated with owning and operating the Company's properties and the impact to operations from trends in occupancy rates, rental rates and operating costs. Same property metrics are widely recognized measures in the real estate industry, however, other publicly-traded real estate companies may not calculate and report same property results in the same manner as the Company. Please also see
"Management's Discussion and Analysis of Financial Condition and Results of Operations - Certain Non-GAAP Measures and Reconciliations" for a reconciliation of "same property" results to the most comparable measure reported under GAAP.
We use certain non-GAAP measures to analyze our business, including Adjusted EBITDA and Adjusted Net Income. We use these metrics for evaluating the success of our company and believe that they enhance the understanding of our operating results. A reconciliation of net income to Adjusted EBITDA and Adjusted Net Income is presented below:
Years Ended December 31,
(Dollars in millions) 2025 2024 2023 2022 2021
Net income (loss) $ 23.8 $ (33.7) $ (281.4) $ 101.9 $ 336.4
Non-GAAP adjustments:
Add back (less):
Interest expense 239.6 261.1 259.2 220.8 192.4
Loss (gain) on early extinguishment of debt 2.3 1.7 1.6 (27.5) 45.7
Kennedy Wilson's share of interest expense included in unconsolidated investments 132.5 131.0 99.1 60.2 40.2
Depreciation and amortization 133.0 148.3 157.8 172.9 166.3
Kennedy Wilson's share of depreciation and amortization included
in unconsolidated investments 		3.9 4.0 3.2 3.5 5.3
Provision for (benefit from) income taxes 13.6 10.2 (55.3) 36.2 126.2
Kennedy Wilson's share of taxes included in unconsolidated investments - 0.4 0.1 2.7 -
Share-based compensation 25.7 23.6 34.5 29.0 28.7
EBITDA attributable to noncontrolling interests(1)
(24.9) (6.9) (29.0) (8.2) (13.3)
Adjusted EBITDA(2)
$ 549.5 $ 539.7 $ 189.8 $ 591.5 $ 927.9
(1) (2) See "Non-GAAP Measures and Certain Definitions" for definitions and discussion of Adjusted EBITDA.
Years Ended December 31,
(Dollars in millions) 2025 2024 2023 2022 2021
Net income (loss) $ 23.8 $ (33.7) $ (281.4) $ 101.9 $ 336.4
Non-GAAP adjustments:
Add back (less):
Depreciation and amortization 133.0 148.3 157.8 172.9 166.3
Kennedy Wilson's share of depreciation and amortization included in unconsolidated investments
3.9 4.0 3.2 3.5 5.3
Share-based compensation 25.7 23.6 34.5 29.0 28.7
Net income attributable to the noncontrolling interests, before depreciation and amortization(1)
(23.1) (4.4) (27.4) (13.5) (10.5)
Preferred dividends (43.5) (43.5) (38.0) (28.9) (17.2)
Adjusted Net Income (Loss)(2)
$ 119.8 $ 94.3 $ (151.3) $ 264.9 $ 509.0
(1) (2) See "Non-GAAP Measures and Certain Definitions" for definitions and discussion of Adjusted Net Income.
Net Operating Income
Years Ended December 31,
2025 2024 2023
Consolidated Portfolio Co-Investment Portfolio Consolidated Portfolio Co-Investment Portfolio Consolidated Portfolio Co-Investment Portfolio
Net income (loss) $ 23.8 $ 142.8 $ (33.7) $ 6.5 $ (281.4) $ (252.8)
Add: Provision for (benefit from) income taxes 13.6 - 10.2 0.4 (55.3) 0.2
Less: Income (loss) from unconsolidated investments (142.8) - (6.5) - 252.8 -
Less: (Gain) loss on sale of real estate, net(1)
(94.7) (17.1) (160.1) (32.6) (127.6) -
Add: Interest expense 239.6 132.6 261.1 131.0 259.2 99.0
Add: Loss on early extinguishment of debt 2.3 - 1.7 - 1.6 -
Add: Other loss (income) 12.2 29.1 (4.2) 25.4 5.0 26.6
Less: Sale of real estate(1)
- (47.9) - (46.7) - (19.5)
Less: Interest income (22.3) - (31.2) - (26.1) -
Less: Investment management and property services (115.2) - (100.3) - (64.1) -
Less: Carried interests - 1.8 - 49.7 - 64.3
Add: Cost of real estate sold(1)
- 43.6 - 43.1 - 13.6
Add: Compensation and related 136.2 - 134.8 - 139.4 -
Add: Carried interests expense (0.3) - (16.6) - (15.1) -
Add: General and administrative 36.4 - 38.8 - 35.7 -
Add: Depreciation 133.0 3.9 148.3 3.9 157.8 3.2
Less: Fair value adjustments - (82.4) - 9.8 - 233.7
Less: NCI adjustments (7.0) - (8.1) - (7.6) -
Net Operating Income $ 214.8 $ 206.4 $ 234.2 $ 190.5 $ 274.3 $ 168.3
(1)The Company's joint ventures in its Co-Investment business segment predominantly acquire and hold and may ultimately dispose of operating properties which are presented by the Company as net gain or loss on disposition under ASC Topic 606, Revenue from Contracts with Customers("Topic 606") because the disposition is not considered an "output of the entity's ordinary activities." Certain joint ventures in the same business segment, however, dispose of non-operating properties (such as land and condominiums) from time-to-time, and such sales are an "output of the entity's ordinary activities" under Topic 606. Accordingly the sale of such real estate is presented by the Company on a gross basis (sale of real estate and cost of real estate sold), and, therefore, the portion of the same that is not attributable to the Company's ownership share is excluded from Co-Investment NOI.
Years Ended December 31,
2022 2021
Consolidated Portfolio Co-Investment Portfolio Consolidated Portfolio Co-Investment Portfolio
Net income $ 101.9 $ 178.4 $ 336.4 $ 389.0
Add: Provision for income taxes 36.2 2.7 126.2 -
Less: Income from unconsolidated investments (178.4) - (389.0) -
Less: (Gain) loss on sale of real estate, net(1)
(103.7) (4.9) (412.7) 3.1
Add: Interest expense 220.8 60.1 192.4 40.0
Add: (Gain) loss on extinguishment of debt (27.5) - 45.7 -
Add: Other (income) loss (36.1) 17.9 5.0 17.9
Less: Sale of real estate(1)
- (52.0) - (39.5)
Less: Interest income (11.7) - (8.6) -
Less: Investment management and property services (46.5) - (37.4) -
Add: Carried interests expense - 21.1 - (117.9)
Add: Cost of real estate sold(1)
- 40.7 - 36.8
Add: Compensation and related 140.3 - 162.6 -
Add: Carried interests expense (4.3) - 42.0 -
Add: General and administrative 37.2 - 33.3 -
Add: Depreciation 172.9 3.8 166.3 5.6
Less: Fair value adjustments - (110.2) - (210.6)
Less: NCI adjustments (6.9) - (6.4) -
Net Operating Income $ 294.2 $ 157.6 $ 255.8 $ 124.4
(1)The Company's joint ventures in its Co-Investment business segment predominantly acquire and hold and may ultimately dispose of operating properties which are presented by the Company as net gain or loss on disposition under ASC Topic 606, Revenue from Contracts with Customers("Topic 606") because the disposition is not considered an "output of the entity's ordinary activities." Certain joint ventures in the same business segment, however, dispose of non-operating properties (such as land and condominiums) from time-to-time, and such sales are an "output of the entity's ordinary activities" under Topic 606. Accordingly the sale of such real estate is presented by the Company on a gross basis (sale of real estate and cost of real estate sold), and, therefore, the portion of the same that is not attributable to the Company's ownership share is excluded from Co-Investment NOI.
December 31, 2025
($ in millions) Consolidated Co-Investment Non Segment Total
Cash $ 107.4 $ - $ 77.1 $ 184.5
Real estate 3,997.4 - - 3,997.4
Unconsolidated Investments - 2,047.7 - 2,047.7
Loan purchases and originations - 203.3 - 203.3
Accounts receivable and other assets 95.6 - 94.0 189.6
Total Assets $ 4,200.4 $ 2,251.0 $ 171.1 $ 6,622.5
Accounts payable and accrued expenses 106.4 - 435.2 541.6
Mortgage debt 2,437.7 - - 2,437.7
KW unsecured debt - - 2,069.8 2,069.8
Total Liabilities 2,544.1 - 2,505.0 5,049.1
Equity 1,656.3 2,251.0 (2,333.9) 1,573.4
Total liabilities and equity $ 4,200.4 $ 2,251.0 $ 171.1 $ 6,622.5
December 31, 2024
($ in millions) Consolidated Co-Investment Non Segment Total
Cash $ 117.4 $ - $ 100.1 $ 217.5
Real estate 4,290.4 - - 4,290.4
Unconsolidated Investments - 2,042.4 - 2,042.4
Loan purchases and originations - 231.1 - 231.1
Accounts receivable and other assets 99.7 - 80.0 179.7
Total Assets $ 4,507.5 $ 2,273.5 $ 180.1 $ 6,961.1
Accounts payable and accrued expenses 118.7 - 421.5 540.2
Mortgage debt 2,597.2 - - 2,597.2
KW unsecured debt - - 1,877.9 1,877.9
KWE Notes 309.8 - - 309.8
Total Liabilities 3,025.7 - 2,299.4 5,325.1
Equity 1,481.8 2,273.5 (2,119.3) 1,636.0
Total liabilities and equity $ 4,507.5 $ 2,273.5 $ 180.1 $ 6,961.1
Same property analysis
The tables below are reconciliations of non-GAAP measures included in the Company's same property analysis to their most comparable GAAP measures.
Same Property - Revenue(6)*
For the Year Ended December 31,
2025 2024
Total Revenue $ 501.0 $ 531.4
Less: Investment management fees
(115.2) (98.9)
Less: Other
(0.8) (1.4)
Less: Loans
(22.3) (31.2)
Less: NCI adjustments (1)
(11.4) (12.9)
Add:Unconsolidated investment adjustments (2)
164.9 159.9
Add:Above/below market rents (6)
(0.4) (1.1)
Less:Reimbursement of recoverable operating expenses
(32.2) (31.4)
Less: Properties bought and sold (3)
(22.5) (71.4)
Less: Other properties excluded (4)
(40.1) (25.7)
Other Reconciling Items (5)
0.4 (2.1)
Same Property $ 421.4 $ 415.2
Same Property - Revenue(6)*
For the Year Ended December 31,
Same Property (Reported) 2025 2024
Office - Same Property $ 111.9 $ 113.1
Multifamily Market Rate Portfolio - Same Property 230.6 226.8
Multifamily Affordable Portfolio - Same Property 78.9 75.3
Same Property $ 421.4 $ 415.2
(*)This is a Non-GAAP financial measure. Please see our "Common Definitions" for a further explanation and discussion .
(1)Represents rental revenue and hotel revenue attributable to non-controlling interests.
(2)Represents the Company's share of unconsolidated investment rental revenues, as applicable, which are within the applicable same property population.
(3)Represents properties excluded from the same property population that were purchased or sold during the applicable period.
(4)Represents properties excluded from the same property population that were not stabilized during the applicable period, or retail or industrial properties.
(5)Represents other properties excluded from the same property population that were not classified as a commercial or multifamily property within the Company's portfolio. Also includes immaterial adjustments for foreign exchange rates, changes in ownership percentages, and certain non-recurring income and expenses.
(6)Excludes above/below market rents from the same property population, as they are representative of non-cash purchase price accounting income.
Same Property - NOI (Net Effective)(6)*
For the Year Ended December 31,
2025 2024
Net Income $ 23.8 $ (33.7)
Less: Investment management fees
(115.2) (98.9)
Less:Other
(0.8) (1.4)
Less: Loans
(22.3) (31.2)
Less: Total Income from unconsolidated investments
(142.8) (6.5)
Less: Gain on sale of real estate, net
(94.7) (160.1)
Add: Compensation and related
136.2 134.8
Add:Carried interests compensation
(0.3) (16.6)
Add: General and administrative
36.4 38.8
Add: Depreciation and amortization
133.0 148.3
Add: Interest Expense
239.6 261.1
Add: Gain (loss) on early extinguishment of debt
2.3 1.7
Less: Other income (loss)
13.0 (4.2)
Add: Provision for income taxes
13.6 10.2
Less: NCI adjustments (1)
(6.5) (8.1)
Add:Unconsolidated investment adjustments (2)
117.0 114.1
Add:Straight-line and above/below market rents (6)
(0.4) (1.1)
Less: Properties bought and sold (3)
(13.2) (41.9)
Less: Other properties excluded (4)
(19.2) (7.5)
Other Reconciling Items (5)
3.2 2.5
Same Property NOI (Net Effective)* $ 302.7 $ 300.3
Same Property - NOI (Net Effective)(6)*
For the Year Ended December 31,
Same Property (Reported) 2025 2024
Office - Same Property $ 92.4 $ 95.6
Multifamily Market Rate Portfolio - Same Property 159.7 155.7
Multifamily Affordable Portfolio - Same Property 50.6 49.0
Same Property NOI (Net Effective)* (Reported) $ 302.7 $ 300.3
(*)This is a Non-GAAP financial measure. Please see our "Common Definitions" for a further explanation and discussion.
(1)Represents rental revenue and operating expenses and hotel revenue and operating expenses attributable to non-controlling interests.
(2)Represents the Company's share of unconsolidated investment rental revenues and net operating income, as applicable, which are within the applicable same property population.
(3)Represents properties excluded from the same property population that were purchased or sold during the applicable period.
(4)Represents properties excluded from the same property population that were not stabilized during the applicable period, or retail or industrial properties.
(5)Represents other properties excluded from the same property population that were not classified as a commercial or multifamily property within the Company's portfolio. Also includes immaterial adjustments for foreign exchange rates, changes in ownership percentages, and certain non-recurring income and expenses.
(6) Excludes above/below market rents from the same property population, as they are representative of non-cash purchase price accounting income.
Critical Accounting Policies
A critical accounting policy is one that involves an estimate or assumption that is subjective and requires judgment on the part of management about the effect of a matter that is inherently uncertain and is material to an entity's financial condition and results of operations. Estimates are prepared using management's best judgment, after considering past and current economic conditions and expectations for the future. Changes in estimates could affect our financial position and specific items in our results of operations that are used by stockholders, potential investors, industry analysts and lenders in their evaluation of our performance. Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have been identified by us as meeting the criteria to be considered critical accounting policies. Refer to Note 2 for more information on these critical accounting policies.
Fair Value Investments
Kennedy Wilson records its investments in certain commingled funds it manages and sponsors (the "Funds") that are investment companies under the Accounting Standards Codification ("ASC") Topic 946, Financial Services - Investment Companies, based upon the net assets that would be allocated to its interests in the Funds assuming the Funds were to liquidate their investments at fair value as of the reporting date. Thus, the Funds reflect their investments at fair value, with unrealized
gains and losses resulting from changes in fair value reflected in their earnings. Kennedy Wilson has retained the specialized accounting for the Funds as discussed in ASC Topic 323, Investments - Equity Method and Joint Venturesin recording its equity in joint venture income from the Funds.
Additionally, Kennedy Wilson elected the fair value option for 73 investments in unconsolidated investment entities. Due to the nature of these investments, Kennedy Wilson elected to record these investments at fair value in order to report the value in the underlying investments in the results of our current operations.
The use of different assumptions to fair value these investments could have material impact on the consolidated statements of income.
See Item 1. Business "Fair Value Investments" for detail on fair value methods and range of inputs that are used as part of valuations.
Carried Interests
Carried interests are allocated to the general partner, special limited partner or asset manager of Kennedy Wilson's real estate funds and fair value option unconsolidated investments based on the cumulative performance of the fund or underlying investments and are subject to preferred return thresholds of the limited partners and participants. At the end of each reporting period, Kennedy Wilson calculates the carried interests that would be due as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interests to reflect either (a) positive performance resulting in an increase in the carried interests to the general partner or asset manager or (b) negative performance that would cause the amount due to Kennedy Wilson to be less than the amount previously recognized, resulting in a negative adjustment to carried interests to the general partner or asset manager. To the extent that a fund or investment has a carried interests sharing program, a portion of carried interests will be recorded to carried interests compensation.
The Company has concluded that carried interests to the Company from equity method investments, based on cumulative performance to-date, represent carried interests. Consequently, in following the guidance set forth in ASC Topic 606, Revenue from Contracts with Customersand Topic 323, Investments - Equity Method and Joint Ventures, these allocations are included as a component of the total income from unconsolidated investments in the accompanying consolidated statements of income."
Real Estate Acquisitions
The purchase price of acquired properties is recorded to land, buildings and building improvements and intangible lease value (value of above-market and below-market leases, acquired in-place lease values, and tenant relationships, if any). The ownership of the other interest holders in consolidated subsidiaries is reflected as noncontrolling interests. Real estate is recorded based on cumulative costs incurred and allocated based on relative fair value.
The valuations of real estate are based on management estimates of the real estate assets using income and market approaches. The indebtedness securing the real estate is valued, in part, based on third party valuations and management estimates also using an income approach.
The use of different assumptions to value the acquired properties and intangible assets and assumed liabilities could affect the future revenues and expenses we recognize over the estimated remaining useful life or lease term.
Recently Issued Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements.
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