Kennedy Wilson Continues Multifamily Bets With $176M Buy in San Jose
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Kennedy Wilson, in recent months, has been busy with investments across high-quality multifamily properties in areas with favorable economic dynamics. Now it's expanding in California, teaming up with Hulic Co., Ltd. and Fuyo General Lease in a three-party joint venture to acquire a community in San Jose for $176 million.
The property, One South Market, expands Kennedy Wilson's multifamily portfolio by 312 units, with the community also consisting of 6,534 square feet of ground-floor retail that's fully leased.
This marks the first time Kennedy has partnered with Fuyo and the fifth time it has entered a joint venture with Hulic.
For Kennedy, this move follows its strategy of acquiring high-quality assets in limited multifamily supply areas that are in or near employment centers.
Economic Upside
According to Kennedy, One South Market in Downtown San Jose is near major tech employers including Nvidia, Broadcom, Cisco, Samsung, Adobe and Zoom.
"One South Market offers exceptional long-term fundamentals, driven by its prime downtown location, strong employment base and limited new multifamily supply," Kurt Zech, president of Kennedy Wilson's multifamily division, said in a statement.
"With its proximity to major employers, transit and the broader Silicon Valley technology ecosystem, the property provides a unique opportunity to invest in a high-quality asset in one of the country's most dynamic markets."
Other Recent Multifamily Investment
For Kennedy, this marks just one recent bet it's made on multifamily. Also, in California, the real estate firm is partnering with Jamison to build 4,000 affordable housing units across Los Angeles.
In July, it made another move with Hulic. The two paid $237 million for a Class A 421-unit multifamily property in Westchester County, New York. Importantly, rents over the past year at the property have risen by more than five percent.
Additionally, Kennedy bought out Toll Brothers' Apartment Living platform for $347 million. The interests include 18 student housing and apartment assets, as well as Kennedy agreeing to manage 20 additional residential properties on behalf of Toll Brothers.
Going forward, Japanese-based Hulic said it plans to continue boosting its international investment where it can forecast economic and population growth.
Meanwhile, Fuyo, also headquartered in Japan, hinted that the new joint venture serves as a foundation to partner again with the trio on future moves.
For Kennedy, it remains to be seen what areas it will target next time for multifamily — but quality and high growth have remained the focus.
In its core plus joint venture with Fuyo, Kennedy held a 10 percent interest as of July.
Source: GlobeSt/ALM