Beverly Hills-based real estate investment company Kennedy Wilson has secured a $300 million equity investment from affiliates of Eldridge Industries.
Kennedy Wilson will use the money to pay debt and fund its development pipeline.
“This transaction will help expedite the execution of our initiatives, including completing our development projects, while also reducing our overall leverage,” Kennedy Wilson Chairman and Chief Executive William McMorrow said in a statement.
Eldridge, which is based in Greenwich, Conn., and has offices in Beverly Hills, New York and London, is purchasing $300 million in Kennedy Wilson stock with a 5.75% annual dividend rate.
Kennedy Wilson also announced that the joint venture platform between Eldridge Industries affiliate Security Benefit and Kennedy Wilson will increase its target to $1.5 billion, up from $500 million. The partnership is targeting commercial real estate in the Western United States.
Kennedy Wilson and Eldridge affiliates have already invested in two office properties totaling 509,000 square feet in the region, including 9350 Civic Center Dr. in Beverly Hills. Kennedy Wilson purchased the property in 2015 for $38 million, according to CoStar Group Inc.
Kennedy Wilson and Cain International have also invested in the 309,000-square-foot office portion of a development in Dublin.
J.P. Morgan was the placement agent for the investment, and Latham & Watkins advised Kennedy Wilson. Morgan Stanley & Co. was the financial advisor to Eldridge Industries, and Sidley Austin acted as its legal advisor.
In the second quarter, Kennedy Wilson reported net income of $141.2 million, down from the previous quarter. Once its development projects are completed, the company expects $105 million of net operating income. Third-quarter earnings for the company will be released Oct. 30.
Kennedy Wilson isn’t the only real estate group expanding its offerings. Downtown-based CBRE Group Inc. added an arm called Hana last year. Hana offers flexible office space.
In June, Savills Inc. added a flexible office space group called Pivot, and Newmark Knight Frank is an investor in flex office provider Knotel Inc.
