Kennedy Wilson to acquire Toll Brothers’ Apartment Living platform for $347M

Kennedy Wilson (KW) has agreed to acquire Toll Brothers’ (TOL) Apartment Living platform, including its in-house development team and its interests in a portfolio of completed properties and assets under development, for a total purchase price of $347M. The transaction is expected to close in October and is subject to certain closing conditions. As part of the transaction, Kennedy Wilson will acquire Toll Brothers’ general partner interests in 18 apartment and student housing properties with AUM of $2.2B. Kennedy Wilson will also acquire a pipeline of 29 sites in various stages of development which, if completed, would total approximately $3.6B of invested capital, with Kennedy Wilson to assume construction management responsibilities. As part of the transaction, Kennedy Wilson will also manage 20 apartment and student housing properties that will remain with Toll Brothers following closing, representing another $3.0B of AUM for Kennedy Wilson. It is Toll Brothers’ intention to dispose of these remaining assets over time and exit the multifamily development business. Kennedy Wilson also expects to make offers to all employees of Toll Brothers Apartment Living and anticipates the entire Apartment Living executive team will join Kennedy Wilson. Kennedy Wilson will refer prospective for-sale housing opportunities to Toll Brothers, and Toll Brothers will reciprocate with rental housing opportunities. Kennedy Wilson expects to make an initial investment of approximately $90M in the acquired interests and will assume Toll Brothers’ general partner role in such acquired assets.