Q4 2024 Kennedy-Wilson Holdings Inc Earnings Call

February 27, 2025

Conference specialist by pressing the Starkey followed by zero.

Good day and welcome to the Kennedy Wilson fourth quarter in 2024 earnings conference call and webcast. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone and to withdraw your question. Please press Star then two please.

Note that this event is being recorded.

Speaker Change: I would now like to turn the conference over to Devin Bhavsar head of Investor Relations. Please go ahead. Thank you. Thank.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone and to withdraw your question. Please press Star then two.

Speaker Change: Thank you and good morning. Thank you for joining US today today's call will be webcast live and will be archived for replay the replay will be available by phone for one week and by webcast for three months. Please see the Investor Relations website for more information with me today are Bill Mcmorrow, CEO, Matt Windisch, President, Justin and body, CFO and Mike <unk> President of Europe.

Please note that this event is being recorded.

Speaker Change: I would now like to turn the conference over to Devin Bhavsar head of Investor Relations. Please go ahead. Thank you. Thank.

Speaker Change: On this call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income you can find a description of these items along with a reconciliation of the most directly comparable GAAP financial measure and our fourth quarter 2024 earnings release, which is posted on the Investor Relations section of our website state.

Speaker Change: On this call we will work to refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income you can find a description of these items along with a reconciliation of the most directly comparable GAAP financial measure and our fourth quarter 2024 earnings release, which is posted on the Investor Relations section of our website state.

Speaker Change: That's made during this call may include forward looking statements actual results may materially differ from forward looking information discussed on this call due to a number of risks uncertainties and other factors indicated in reports and filings with the Securities and Exchange Commission I would now like to turn the call over to our chairman and CEO Bill Mcmorrow.

Speaker Change: Thank you Devin and thank you everybody for joining the call today.

Speaker Change: Yesterday, we reported our results for the fourth quarter, which represented a strong ending to a solid year of executing on our strategic initiatives, including increasing our baseline EBITDA growing our investment management business disposing of non core assets, reducing unsecured debt.

Bill McMorrow: Thank you Devin and thank you everybody for joining the call today.

Yesterday, we reported our results for the fourth quarter, which represented a strong ending to a solid year of executing on our strategic initiatives.

Speaker Change: And finding meaningful ways to deploy new capital with our many institutional partners.

Bill McMorrow: <unk>, increasing our baseline EBITDA growing our investment management business disposing of non core assets, reducing our unsecured debt.

Speaker Change: We saw great momentum in our earnings this quarter with improvements across all key components of adjusted EBITDA, which nearly tripled from $190 million in 2000 $23 million to $540 million in 2024.

Bill McMorrow: And finding meaningful ways to deploy new capital with our many institutional partners.

We saw great momentum in our earnings this quarter with improvements across all key components of adjusted EBITDA, which nearly tripled from $190 million in 2000 $23 million to $540 million in 2024.

Speaker Change: On today's call I'll start by reviewing the progress made on our key initiatives in 2024, followed by a discussion of our priorities for 2025 before turning it over to Justin and body to discuss our financial results.

Speaker Change: The overall market environment is showing steady improvement that markets are strengthening with lower base rates and tighter spreads while transaction volume is clearly rebounding.

Speaker Change: Against this backdrop, our investment activity accelerated in 2024 with over $4 billion of capital deployed.

Speaker Change: Putting $3 5 billion and our debt originations and $800 million in rental housing and industrial acquisitions, an increase of over 50% from 2023 levels.

Speaker Change: Against this backdrop, our investment activity accelerated in 2024 with over $4 billion of capital deployed.

Speaker Change: Coding $3 $5 billion, and our debt originations and $800 million of rental housing and industrial acquisitions, an increase of over 50% from 'twenty to 'twenty three levels.

Speaker Change: Strengthening liquidity and improving market sentiment supports the continued expansion of our investment management business.

Speaker Change: Investment management fees grew by 60% euro over year to approximately $100 million in 2024 reached.

Speaker Change: Strengthening liquidity and improving market sentiment supports the continued expansion of our investment management business.

Speaker Change: Reaching a major milestone for the company.

Speaker Change: Fees have grown from $25 million in 2019 to the previously mentioned $100 million in 2024.

Speaker Change: Investment management fees grew by 60% euro over year to approximately $100 million in 2020 for reaching.

Speaker Change: We reached a major milestone for the company.

Speaker Change: Significant driver of this growth has been our credit platform, which has seen moment huge momentum in the last year.

Speaker Change: Fees have grown from $25 million in 2019 to the previously mentioned $100 million in 2024.

Speaker Change: We completed a record $1 $4 billion of new loan originations in Q4, and $3 5 billion for the year.

Speaker Change: The significant driver of this growth has been our credit platform, which has seen momentum huge momentum in the last year.

Speaker Change: All focused on construction of high quality market rate multifamily and student housing.

Speaker Change: We completed a record $1 $4 billion of new loan originations in Q4, and $3 5 billion for the year.

Speaker Change: This momentum has carried over into 2025 with $1 $5 billion in new originations and closing or already completed year to date.

Speaker Change: All focused on construction of high quality market rate multifamily and student housing.

Speaker Change: Additionally, we have seen meaningful growth in the interest to deploy capital into real estate equity farmer institutional partners.

Speaker Change: This momentum has carried over into 2025 with $1.5 billion in new originations and closing or already completed year to date.

Speaker Change: I'm example of this is the launch of the new UK single family rental strategy with.

Speaker Change: Additionally, we have seen meaningful growth in the interest to deploy capital into real estate equity farmer institutional partners.

Speaker Change: The Canadian pension plan CPP.

Speaker Change: One of the world's largest global investors with approximately 500 billion and assets under management.

Speaker Change: I'm example of this is the launch of the new U K single family rental strategy with <unk>.

Speaker Change: We are off to a strong start in this new platform with total committed capital of $361 million.

Speaker Change: The Canadian pension plan C. P P.

Speaker Change: One of the world's largest global investors with approximately 500 billion and assets under management.

Speaker Change: Approximately 30% of the strategies current target of $1 3 billion.

Speaker Change: Further highlighting our growth in investment management, we successfully closed fund raising on our seven.

Speaker Change: We are off to a strong start in this new platform with total committed capital of $361 million.

Speaker Change: Discretionary co mingled fund securing $400 million.

Speaker Change: We're approximately 30% of the strategies current target of $1 3 billion.

Speaker Change: Discretionary capital for U S investments.

Speaker Change: Further highlighting our growth in investment management, we successfully closed fund raising our seven discretionary co mingled fund securing $400 million discretionary capital for U S investments.

Speaker Change: We remain focused on attracting capital from leading institutional investors across North America Asia, Europe, and the Middle East, who we expect to be increasingly active in the equity markets.

Speaker Change: In total we believe we continue to grow our investment management fees by approximately 20% to 25% per annum.

Speaker Change: A second important initiative has been recycling capital through our non core asset sales.

Speaker Change: In total we believe we continue to grow our investment management fees by approximately 25% per annum.

Speaker Change: In Q4, we generated $122 million in cash proceeds from noncore sales, bringing our 2024 total to $475 million of cash.

Speaker Change: A second important initiative has been recycling capital through our non core asset sales.

Speaker Change: In Q4, we generated $122 million in cash proceeds from noncore sales, bringing our 2024 total to $475 million of cash.

Speaker Change: And $200 million of gains generated from asset sales.

Speaker Change: With our Q4 activity, we have successfully achieved our $550 million asset sale target set last year.

Speaker Change: And $200 million of gains generated from asset sales.

Speaker Change: Looking ahead capital recycling remains a core focus within expected generation of over $400 million of cash.

With our Q4 activity, we have successfully achieved our $550 million asset sale target set last year.

Speaker Change: 25% through asset sales recapitalization.

Speaker Change: Looking ahead capital recycling remains a core focus with an expected generation of over $400 million of gas 2025 through asset sales recapitalizations or using assets. We currently own to seed new investment platforms.

Speaker Change: Or using assets, we currently own to seed new investment platforms.

Speaker Change: We intend to deploy this capital into higher return opportunities, particularly within our investment management platform, while we continue to reduce the company's unsecured debt.

Speaker Change: Which is our third key initiative for the year.

Speaker Change: In December we repaid $185 million of our KWE bombs.

Speaker Change: Leaving $310 million maturing in November the only remaining unsecured maturity until 2028.

Speaker Change: Which is our third key initiative for the year.

Speaker Change: In December we repaid $185 million of our KWE bombs.

Speaker Change: We also made significant progress on our revolving credit facility repaying $78 million in Q4.

Speaker Change: Leaving $310 million maturing in November the only remaining unsecured maturity until 2028.

Turning to our portfolio.

Speaker Change: Our real estate equity and credit investments total $28 million $28 billion in assets under management.

Speaker Change: We also made significant progress on our revolving credit facility repaying $78 million in Q4.

<unk>, an estimated annual NOI of $467 million for the company.

Speaker Change: Turning to our portfolio.

Speaker Change: Our real estate equity and credit investments total $28 million $28 billion in assets under management are producing.

Speaker Change: Our fee bearing capital stands at a record $8 8 billion.

Speaker Change: Over the last several years, we have meaningfully repositioned our portfolio.

Speaker Change: Producing an estimated annual NOI of $467 million or the company.

With approximately two thirds of our stabilized assets now concentrated in rental housing.

Speaker Change: Our fee bearing capital stands at a record $8 8 billion.

Speaker Change: Pricing was 60000 units, we either own or are currently financing.

Over the last several years, we have meaningfully repositioned our portfolio.

Speaker Change: With approximately two thirds of our stabilized assets now concentrated in rental housing.

Speaker Change: The outlook for our apartment portfolio, which ended the quarter with 95% occupancy continues to improve.

Speaker Change: Prizing 60000 units, we either all in or are currently financing.

Speaker Change: Same property NOI grew by a solid five 6% in Q4.

Speaker Change: The outlook for our apartment portfolio, which ended the quarter with 95% occupancy continues to improve.

Speaker Change: Supply headwinds in most of our markets are easing.

Speaker Change: Which will allow us to continue to grow.

Speaker Change: Same property NOI grew by a solid five 6% in Q4.

Speaker Change: <unk>.

Speaker Change: This dynamic should provide a very favorable backdrop for rental housing fundamentals going forward.

Speaker Change: Supply headwinds in most of our markets are easing.

Speaker Change: As market conditions continue to recover we remained well positioned to capitalize on new opportunities.

Speaker Change: Which will allow us to continue to grow.

Speaker Change: NOI.

Speaker Change: This dynamic should provide a very favorable backdrop for rental housing fundamentals going forward.

Speaker Change: A continued focus on rental housing and industrial assets.

Speaker Change: With over three decades of experience navigating.

Speaker Change: As market conditions continue to recover we remain well positioned to capitalize on new opportunities with a continued focus on rental housing and industrial assets.

Speaker Change: Various interest rate environments, we have the flexibility now to deploy capital across the entire real estate capital structure.

Speaker Change: We anticipate a very active year and remain committed to execute on our previously mentioned key initiatives in 2025.

Speaker Change: With over three decades of experience navigating.

Speaker Change: <unk> interest rate environments, we have the flexibility now to deploy capital across the entire real estate capital structure.

Speaker Change: While continuing to strengthen our balance sheet and growing our recurring cash flow.

Speaker Change: We anticipate a very active year and remain committed to executing on our previously mentioned key initiatives in 2025.

Speaker Change: I'd now like to turn the call over to our CFO, Justin and body.

Speaker Change: Phil I'll start by reviewing our financial results and then discuss our balance sheet.

Speaker Change: While continuing to strengthen our balance sheet and growing our recurring cash flow.

Speaker Change: GAAP EPS totaled <unk> 24, a share for Q4 compared to a loss of $1 78 in Q4 23.

Justin Body: I'd now like to turn the call over to our CFO, Justin adding bodies.

Speaker Change: Management revenue grew by 83% to $30 million in Q4, driven by completing another one 4 billion in new debt originations.

Justin Body: Thanks, Phil I'll start by reviewing our financial results and then discuss our balance sheet GAAP.

Justin Body: GAAP EPS totaled <unk> 24 cents a share for Q4 compared to a loss of $1 78 in Q4 23.

Speaker Change: Adjusted EBITDA totaled $191 million in Q4 with improvements across the board in all key components. This includes baseline EBITDA, which totaled $98 million in Q4 and has increased by 4% year to date to $407 million.

Justin Body: Investment management revenue grew by 83% to $30 million in Q4, driven by completing another $1 4 billion in new debt originations.

Justin Body: Adjusted EBITDA totaled 191 million in Q4 with improvements across the board in all key components. This includes baseline EBITDA, which totaled $98 million in Q4 and has increased by 4% year to date to $407 million.

Speaker Change: We also saw a meaningful improvement in the results from our co investment real estate portfolio.

Speaker Change: This portfolio totals roughly $14 billion in assets and which we have an ownership of approximately 35%.

Speaker Change: Valuations in that portfolio saw a slight increase in Q4. Additionally, estimated annual NOI from our co investment portfolio totaled $217 million of which 90% is comprised of either multifamily industrial or loan investments.

Justin Body: We also saw a meaningful improvement in the results from our co investment real estate portfolio.

Justin Body: This portfolio totals roughly $14 billion in assets and which we have an ownership of approximately 35%.

Justin Body: Valuations in that portfolio saw a slight increase in Q4. Additionally, estimated annual NOI from our co investment portfolio totaled 217 million of which 90% is comprised of either multifamily industrial or loan investments.

Speaker Change: Turning to our balance sheet and debt profile, an important priority for us has been to reduce our unsecured debt as Phil mentioned during Q4, we repaid a total of $262 million of unsecured debt, including repaying $184 million of kw KWE bonds or 175 million euros as Bill mentioned.

Justin Body: Turning to our balance sheet and debt profile, an important priority for us has been to reduce our unsecured debt as bill mentioned during Q4, we repaid a total of $262 million of unsecured debt, including repaying $184 million of kw KWE bonds or 175 million euros as Bill mentioned.

Speaker Change: And $78 million on our revolving credit facility.

Speaker Change: With that we ended the quarter with $218 million of consolidated cash and $452 million of Undrawn availability on our $550 million line of credit.

Justin Body: And $78 million on our revolving credit facility.

Speaker Change: We also continue to monitor our exposure to potential interest rate volatility.

Justin Body: With that we ended the quarter with $218 million of consolidated cash and $452 million of Undrawn availability on our $550 million line of credit.

Speaker Change: Our share of total debt is 97% fixed or hedged with a weighted average maturity of four nine years and a weighted average effective interest rate of four 6%.

Justin Body: We also continue to monitor our exposure to potential interest rate volatility our share of total debt is 97% fixed or hedged with a weighted average maturity of 4.9 years and a weighted average effective interest rate of four 6%.

Speaker Change: The effective rate includes the benefit from our interest rate hedging strategy, which produce cash benefit of $8 million in Q4 and $41 million.

Speaker Change: In 2024.

Speaker Change: It's worth noting this is not shown as an offset to interest expense on our P&L.

Justin Body: The effective rate includes the benefit from our interest rate hedging strategy, which produced cash benefit of $8 million in Q4 and $41 million.

Speaker Change: Our interest rate hedges on average have a strike rate that is approximately 100 basis points below todays rates as well.

In 2024.

Speaker Change: Looking at our debt maturities in 'twenty five as we mentioned earlier, we have 300 million euros remaining on our KWE bonds, which represents the final legacy tranche of what was originally $1 3 billion of unsecured debt at KWE across two separate bond issuances.

Justin Body: It's worth noting this is not shown as an offset to interest expense on our P&L.

Justin Body: Our interest rate hedges on average have a strike rate that is approximately 100 basis points below todays rates as well.

Justin Body: Looking at our debt maturities in 'twenty five as we mentioned earlier, we had 300 million euros remaining on our KWE bonds, which represents the final legacy tranche of what was originally $1 3 billion of unsecured debt at KWE across two separate bond issuances.

Speaker Change: On the secured side, we have $535 million of debt at share that matures in 2005 with approximately 70% relating to our high quality assets in Ireland.

Speaker Change: In particular, our Irish apartment portfolio has approximately $210 million of debt that we are in the process of refinancing.

Justin Body: On the secured side, we have $535 million of debt at share that matures in 'twenty five with approximately 70% relating to our high quality assets in Ireland in particular, our Irish apartment portfolio has approximately $210 million of debt that we are in the process of refinancing.

And with rates expected in the mid fours.

Speaker Change: The balance of our remaining 25 maturities largely related to our U S apartment and commercial properties.

Speaker Change: With that I'd now like to turn the call over to Matt Windisch to discuss our investment portfolio. Thanks, Justin I'd like to take a moment to review the key components of our real estate portfolio before diving into our investment management business today.

Justin Body: And with rates expected in the mid force the.

Justin Body: The balance of our remaining twenty-five maturities largely relate to our U S apartment and commercial properties.

Matt Windisch: Today, our stabilized portfolio generates estimated annual NOI of $467 million with an additional $65 million expected from our lease up and development portfolio upon stabilization.

Matt Windisch: The shift in our portfolio away from office and retail has continued to progress with our current stabilized portfolio, 72% concentrated in our high conviction sectors of rental housing both equity and credit as well as industrial.

Speaker Change: Today, our stabilized portfolio generates estimated annual NOI of $467 million with an additional $65 million expected from our lease up and development portfolio upon stabilization.

Speaker Change: The shift in our portfolio away from office and retail has continued to progress with our current stabilized portfolio, 72% concentrated in our high conviction sectors of rental housing both equity and credit as well as industrial this is up from 49% five years ago.

Matt Windisch: This is up from 49% five years ago.

Matt Windisch: Our apartment portfolio is the cornerstone of this strategy contributing $300 million.

Matt Windisch: Of NOI to kw with another $16 million expected from assets that are currently in development and lease up.

Matt Windisch: In the U S rental fundamentals continue to strengthen.

Speaker Change: Our apartment portfolio is the cornerstone of this strategy contributing $300 million of NOI to kw with another $16 million expected from assets that are currently in development and lease up.

Matt Windisch: Demand for our apartment portfolio remained strong driven in part by the high cost of homeownership, which continues to push many towards rental options.

Matt Windisch: At the same time, we're seeing a reduction in supply pressures in many of our markets.

Speaker Change: In the U S rental fundamentals continue to strengthen.

Speaker Change: Demand for our apartment portfolio remained strong driven in part by the high cost of homeownership, which continues to push many towards rental options.

Matt Windisch: Trend, we expect to ease further in the second half of the year and into 2026.

Matt Windisch: During the fourth quarter, we maintained a sharp focus on occupancy, which increased by one 1% to 95% on a same property basis.

Speaker Change: At the same time, we're seeing a reduction in supply pressures in many of our markets.

Speaker Change: Trend do we expect to ease further in the second half of the year and into 2026.

Matt Windisch: Leasing spreads totaled 50 basis points with renewal spreads remaining strong at approximately 4%.

Speaker Change: During the fourth quarter, we maintained our sharp focus on occupancy, which increased by one 1% to 95% on a same property basis.

Matt Windisch: As a result same property revenue grew by two 7% with NOI up six 2%.

Matt Windisch: These results underscore the strong operational execution by our asset management team.

Speaker Change: Leasing spreads totaled 50 basis points with renewal spreads remaining strong at approximately 4%.

Matt Windisch: Turning to our regional highlights our strongest performance in Q4 came from the mountain West which remains our largest department region.

Speaker Change: As a result same property revenue grew by two 7% with NOI up six 2%.

Speaker Change: These results underscore the strong operational execution by our asset management team.

Matt Windisch: Occupancy grew by 1% while revenue grew by a solid 3% on a same property basis. In addition to the topline growth we benefited from a decline in operating expenses drew.

Speaker Change: Turning to our regional highlights our strongest performance in Q4 came from the mountain West which remains our largest apartment region.

Matt Windisch: Driven by favorable adjustments in real estate taxes in Idaho and lower delinquencies.

Speaker Change: Occupancy grew by 1% while revenue grew by a solid 3% on a same property basis. In addition to the top line growth. We benefited from a decline in operating expenses driven by favorable adjustment in real estate taxes in Idaho and lower delinquencies.

Matt Windisch: These factors combined to deliver impressive same property NOI growth of seven 3%.

Matt Windisch: In the Pacific Northwest occupancy grew by one 5% with revenues up three 9% while operating expenses remained flat.

Speaker Change: These factors combined to deliver impressive same property NOI growth of seven 3%.

Matt Windisch: Adding to six 6% NOI growth.

Matt Windisch: We remain optimistic about our Pacific northwest portfolio in 2025 as return to office mandates has started this year for many large employers in the region.

Speaker Change: In the Pacific Northwest occupancy grew by one 5% with revenues up three 9%, while operating expenses remained flat leading to six 6% NOI growth.

Matt Windisch: Our California apartment portfolio has recovered from the delinquency challenges, we saw a year ago.

Speaker Change: We remain optimistic about our Pacific northwest portfolio in 2025 as return to office mandates have started this year for many large employers in the region.

Matt Windisch: We saw solid occupancy growth and lower delinquency related legal expenses, which resulted in NOI growth of 2% in southern California, and 4% in Northern California.

Speaker Change: Our California apartment portfolio has recovered from the delinquency challenges, we saw a year ago we.

Matt Windisch: Our vintage housing affordable portfolio delivered strong performance this quarter generating an impressive 10, 5% growth in NOI.

Speaker Change: We saw solid occupancy growth and lower delinquency related legal expenses.

Speaker Change: Which resulted in NOI growth of 2% in southern California, and 4% in Northern California.

Matt Windisch: This growth was driven primarily by revenue increases that closely aligned to changes in area median income.

Speaker Change: Our vintage housing affordable portfolio delivered strong performance this quarter generating an impressive 10, 5% growth in NOI.

And with improved levels of bad debt, reflecting the strength and resilience of our affordable housing strategy.

Matt Windisch: As our vintage portfolio approach is 13000 stabilized affordable units, we remain focused on identifying opportunities to scale, our affordable housing footprint, ensuring we continue to meet the growing demand for high quality accessible housing.

Speaker Change: This growth was driven primarily by revenue increases that closely aligned to changes in area median income.

Speaker Change: And with improved levels of bad debt, reflecting the strength and resilience of our affordable housing strategy.

Speaker Change: As our vintage portfolio approaches 13000 stabilized affordable units, we remain focused on identifying opportunities to scale, our affordable housing footprint.

Matt Windisch: Turning to our Irish apartment portfolio demand remains robust with our assets ending the quarter at a strong 97% occupancy.

Speaker Change: Ensuring we continue to meet the growing demand for high quality accessible housing.

Matt Windisch: We have one remaining apartment asset currently in lease up which is on track to reach stabilization by this summer.

Speaker Change: Turning to our Irish apartment portfolio demand remains robust with our assets ending the quarter at a strong 97% occupancy.

Matt Windisch: The significant and ongoing structural under supply of housing and the Dublin market combined with continued employment growth reinforces the sustained demand we expect for our high quality rental communities.

Speaker Change: We have one remaining apartment asset currently in lease up which is on track to reach stabilization by this summer.

Matt Windisch: Now turning to our office portfolio of which approximately 80%.

Speaker Change: The significant and ongoing structural under supply of housing and the Dublin market combined with continued employment growth reinforces the sustained demand we expect for our high quality rental communities.

Matt Windisch: Of the estimated annual NOI is derived from our investments in Europe.

Matt Windisch: We saw 2% same property NOI growth in 2024 stable.

Matt Windisch: Our stabilized occupancy remains healthy at 93% with a weighted average lease term of seven years to exploration and for four years to break.

Speaker Change: Now turning to our office portfolio of which approximately 80%.

Speaker Change: Of the estimated annual NOI is derived from our investments in Europe.

Matt Windisch: In the U K, our stabilized office portfolio remains well leased at 88% with a wealth of five four years to exploration and four one years to break.

Speaker Change: We saw 2% same property NOI growth in 2020 for stabilized occupancy remains healthy at 93% with a weighted average lease term of seven years to exploration and 4.4 years to break.

Matt Windisch: In Q4, we completed leasing transactions across 123000 square feet.

In the U K, our stabilized office portfolio remains well leased at 88% with a Walt a 5.4 years to exploration and four one years to break.

Matt Windisch: With both existing and new tenants, representing a 49% increase above previous in place rents.

Matt Windisch: In Dublin, where our stabilized occupancy exceeds 96%.

Speaker Change: In Q4, we completed leasing transactions across 123000 square feet.

Matt Windisch: Our high quality sustainable properties continued to benefit from a flight to quality.

Speaker Change: With both existing and new tenants, representing a 49% increase above previous in place rents.

Matt Windisch: <unk> saw a strong recovery in leasing demand with gross leasing activity in the last two quarters of 2024.

Speaker Change: In Dublin, where our stabilized occupancy exceeds 96%.

Matt Windisch: Surpassing the total leasing activity for all of 2023.

Speaker Change: Our high quality sustainable properties continued to benefit from a flight to quality.

Matt Windisch: This positive momentum is an encouraging sign for our Coopers cross asset.

Speaker Change: Dublin saw a strong recovery in leasing demand with gross leasing activity in the last two quarters of 'twenty 'twenty four surpassing the total leasing activity for all of 2023.

Matt Windisch: Which recently welcomed wells Fargo has its first tenant and where we see a healthy pipeline of continued leasing interest.

Matt Windisch: Switching gears over to our investment management business, reaching nearly $100 million in fees.

This positive momentum is an encouraging sign for our Coopers cross asset.

Matt Windisch: And a record $8 8 billion in fee bearing capital, where major milestones for kw in 2024.

Speaker Change: Which recently welcomed wells Fargo has its first tenant and where we see a healthy pipeline of continued leasing interest.

Matt Windisch: We believe we have laid the foundation to continue deploying capital on behalf of our institutional partners across both equity and debt opportunities with the goal of continuing to grow our fees at over 20% per year.

Speaker Change: Switching gears over to our investment management business, reaching nearly $100 million in fees.

Speaker Change: And a record $8 8 billion in fee bearing capital, where major milestones for kw in 'twenty 'twenty four.

Speaker Change: We believe we have laid the foundation to continue develop deploying capital on behalf of our institutional partners across both equity and debt opportunities with the goal of continuing to grow our fees at over 20% per year.

Matt Windisch: The expansion of our credit team in 2023, and the rise of private credit investment has allowed us to scale our fee bearing capital in Q4, we completed $1 4 billion of originations.

Matt Windisch: As our platform continues to game gained momentum.

Speaker Change: The expansion of our credit team in 2023, and the rise of private credit investment has allowed us to scale our fee bearing capital in Q4, we completed $1 4 billion of originations.

Matt Windisch: We also completed over $300 million in new fundings and received approximately $500 million of repayments in the quarter.

Matt Windisch: Our credit business has $4 1 billion of future fundings, which we anticipate to start picking up within the next 12 months as an offset to future repayments.

Speaker Change: As our platform continues to game gained momentum.

Speaker Change: We also completed over $300 million in new fundings and received approximately 500 million of repayments in the quarter.

Matt Windisch: As the private credit markets continue to remain very active we are evaluating a number of ways to capitalize on this dynamic and grow our credit platform.

Speaker Change: Our credit business has $4 1 billion of future fundings, which we anticipate to start picking up within the next 12 months as an offset to future repayments.

Matt Windisch: In the U K, we see a compelling opportunity through our single family rental platform to acquire housing in bulk from U K homebuilders and create vibrant new rental communities.

Speaker Change: As the private credit markets continue to remain very active we are evaluating a number of ways to capitalize on this dynamic and grow our credit platform.

Matt Windisch: With the ongoing demand and supply imbalance in the U K residential market, particularly in the single family rental sector. We believe there is a significant opportunity to build an institutional quality portfolio of scale in a market that has historically been highly fragmented.

In the U K, we see a compelling opportunity through our single family rental platform to acquire housing in bulk from U K homebuilders and create vibrant new rental communities.

Speaker Change: With the ongoing demand and supply imbalance in the U K residential market, particularly in the single family rental sector. We believe there is a significant opportunity to build an institutional quality portfolio of scale in a market that has historically been highly fragmented.

Matt Windisch: We're excited about the growth potential of this platform and the value we can deliver over the long term.

Matt Windisch: We also anticipate further growth from our European industrial platform, which totaled 9 million square feet and is 98% occupied.

Speaker Change: We're excited about the growth potential in this platform and the value it can deliver over the long term.

Matt Windisch: We completed 390000 square feet of leasing, which delivered a 23% increase in rents in Q4, and we are evaluating a number of ways to continue to grow this platform.

Speaker Change: We also anticipate further growth from our European industrial platform, which totaled 9 million square feet and is 98% occupied.

Matt Windisch: Thus it is the expansion of these as well as our other initiatives underway that will support further growth in our investment management business.

Speaker Change: We completed 390000 square feet of leasing, which delivered a 23% increase in rents in Q4, and we are evaluating a number of ways to continue to grow this platform.

Matt Windisch: In closing I believe the improvements we made as a company. During these last few years have positioned kw for solid growth in 2025 and beyond we remain confident.

Speaker Change: Thus it is the expansion of these as well as our other initiatives underway that will support further growth in our investment management business.

Matt Windisch: Confident in our strategy, our portfolio and our team's ability to deliver long term value for all of our stakeholders.

Speaker Change: In closing I believe the improvements we made as a company. During these last few years have positioned kw for solid growth in 2025 and beyond we remain confident in our strategy our portfolio and our team's ability to deliver long term value for all of our stakeholders.

Speaker Change: With that operator, we can open it up to any questions.

Matt Windisch: Thank you.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If you are using a speakerphone. Please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: So with that operator, we can open it up to any questions.

Speaker Change: Yes.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.

And your first question today will come from Anthony <unk> with JP Morgan. Please go ahead.

Anthony: Yes, Thanks, and hi, everybody.

Speaker Change: My first question is maybe just clarify I think it may.

Maybe bill you mentioned $400 million of the incremental proceeds from some dispositions in 2025, I guess did I hear that right yes, okay.

Speaker Change: And your first question today will come from Anthony Polone with J P. Morgan. Please go ahead.

Anthony Polone: Yeah, Thanks, and hi, everybody.

Speaker Change: Any.

Anthony Polone: My first question is maybe just clarify I think it maybe bill you mentioned $400 million of incremental proceeds from some dispositions in 2025, I guess did I hear that right yes, okay.

Speaker Change: Areas, where there is a particular shift or for.

Speaker Change: Our group of assets that are to be sold or is it just pretty broad continued recycling.

Speaker Change: Tony This is Matt So I think it'll be a similar strategy to what we deployed in 24. So in particular, we really want to focus in on our core competencies, which are really <unk>.

Anthony Polone: Any.

Areas, where there's a particular shift or or or group of assets that are to be sold or is it just pretty broad continued recycling.

Speaker Change: Housing related investments as well as our investment management business, so assets that don't fit in those parameters so whether it's.

Speaker Change: Tony This is Matt So I think it'll be a similar strategy to what we deployed in 24. So in particular, we really wanted to focus in on our core competencies, which are really.

Speaker Change: Wholly owned office retail assets, we've talked about exiting markets like Italy, and Spain, Spain of which we now have exited those will continue to be the focus for us on our noncore disposition strategy.

Housing related investments as well as our investment management business the assets that don't fit in those parameters. So whether it's wholly owned office retail assets, we've talked about exiting markets like Italy, and Spain, Spain of which we now have exited those will continue to be the focus for us on our noncore disposition strategy.

Speaker Change: Then in terms of how we use those proceeds we're going to continue to pay down unsecured debt and we're going to fund. Some of these co investment platforms, where we get really great return on equity for our investments.

Speaker Change: Okay, Great and then.

Speaker Change: Then in terms of how we use those proceeds we're going to continue to pay down unsecured debt.

Speaker Change: With regards to the to the debt platform you have a lot of commitments and I was just wondering if.

Speaker Change: And we're going to fund some of these co investment platforms, where we get really great return on equity for our investments.

Speaker Change: A lot of committed capital to that I guess.

Speaker Change: If that construction lending environment gets more competitive, particularly in the residential space like what's the latitude you all have to cover those commitments and just go elsewhere, either for existing mortgages or the property types et cetera.

Speaker Change: Okay, Great and then.

Speaker Change: With regards to the to the debt platform you have a lot of commitments and just wondering if.

Speaker Change: Committed capital to that I guess.

If that construction lending environment gets more competitive, particularly in the residential space like what's the latitude you all have to two car windows commitments and just go elsewhere either for existing mortgages other property types et cetera.

Speaker Change: Yes, Tony So I think some of those commitments, we're talking about we've already made.

Speaker Change: <unk> made the loans and we just have future funding obligations under those so those are obviously arent going anywhere those are loans, we have already signed up.

Speaker Change: Look we think the construction lending space within the areas. We operate right now continue to be extremely compelling.

Yeah, Tony So I think some of those commitments, we're talking about we've already.

Speaker Change: Made the loans and we just have future funding obligations under those so those are obviously arent going anywhere those are loans, we have already signed up.

Speaker Change: We're a market leader in this space both for.

Speaker Change: Apartment construction as well as student housing construction the pipeline remains robust. So we think we're going to have a very successful year in that space.

Speaker Change: Look we think the construction lending space within the areas.

Speaker Change: We operate right now continue to be extremely compelling.

Speaker Change: That being said there are other opportunities that we're evaluating.

Speaker Change: We're a market leader in this space both for.

Speaker Change: For different product types and other <unk>.

Speaker Change: Apartment construction as well as student housing construction the pipeline remains robust. So we think we're going to have a very successful year in that space.

Speaker Change: A financing that our existing team can execute on and so we do expect over time here to expand the offerings and grow the credit platform in different ways.

Speaker Change: That being said there are other opportunities that we're evaluating.

Speaker Change: Okay, and if we think about fee bearing <unk> and the growth of that as we look ahead. How important do you think it has to also add just.

Speaker Change: For different product types and other.

Speaker Change: Types of financing that our existing team can execute on and so we do expect over time here to expand the offerings and grow the credit platform in different ways.

Speaker Change: No more equity capital into the mix that maybe has a bit longer duration to it.

Speaker Change: Okay, and if we think about fee bearing <unk> and the growth of that as we look ahead you know how important do you think it is to also add just.

Speaker Change: But it's a really good question, Tony I think the.

Speaker Change: What might not be completely evidence is the amount of institutional partners. We've been cultivating over the last couple of years.

Speaker Change: Yeah more equity capital into the mix that maybe has a bit longer duration to it.

Speaker Change: Yes.

Anthony Polone: But it's a really good question, Tony I think the.

Speaker Change: That primarily want to invest in the United Kingdom, and the United States and they want to invest in the asset classes that we have the most expertise in which is the rental housing and the credit business and the industrial business, but we have very very significant institutional.

Speaker Change: What might not be completely evidence is the amount of institutional partners. We've been cultivating over the last couple of years.

Speaker Change: That primarily want to invest in the United Kingdom, and the United States.

Speaker Change: And they want to invest in the asset classes that we have the most expertise which is the rental housing and the credit business and the industrial business, but we we have very very significant institutional capital partners.

Speaker Change: <unk> capital partners.

Speaker Change: Arent really yet reflect and as you well know the biggest piece of R.

Speaker Change: Our capital we use to deploy really comes from separate accounts.

Speaker Change: Not necessarily discretionary funds and.

Speaker Change: Arent really yet reflect and as you as you well know the biggest piece of our.

Mike: As you saw in the United Kingdom, Mike.

Mike: Together, the partnership with CPP, but theres new new.

Speaker Change: Our capital we use to deploy really comes from separate accounts.

Mike: A big number of those going on that arent yet.

Speaker Change: Not necessarily discretionary funds.

Mike: Finished.

Mike: And so when you think about this year or as I said in my <unk>.

Speaker Change: And as you saw in the United Kingdom, Mike Good put together the partnership with CPP, but theres, new new big.

Mike: Part of the.

Mike: Formal part of this we expect to deploy more capital this year than we did last year and when you look at last year, roughly 80% to 85% of the capital that we deployed within the credit space.

Speaker Change: A big number of those going on that arent yet.

Speaker Change: Finished.

Speaker Change: And so when you think about this year or as I said in my.

Speaker Change: Part of the.

Mike: But I expect that this year, although the credit space will continue to be.

Speaker Change: Formal part of this we expect to deploy more capital this year than we did last year and when you look at last year, roughly 80% to 85% of the capital that we deployed was in the credit space.

Mike: Big portion of it.

Mike: Going to see more equity opportunities.

Mike: And the reason we didn't invest in the equity opportunities last couple of years as we just didn't see anything that we felt was really compelling.

Speaker Change: But I expect that this year, although the credit space will continue to be.

Speaker Change: <unk> portion of it we're going to see more equity opportunities.

Mike: But we're starting to see.

Mike: I'd say more realistic pricing.

Speaker Change: And the reason we didn't invest in the equity opportunities last couple of years as we just didn't see anything that we felt was really compelling.

Mike: Pricing, we like to see to generate the kind of returns that we want to see.

Mike: So.

Mike: Youre going to Youre going to see more equity deployed into that business and the other part of it is that we are very focused on growing our construction management capabilities where were.

Speaker Change: But we're starting to see.

Speaker Change: I'd say more realistic pricing.

Speaker Change: The kind of pricing that we like to see to generate the kind of returns that we want to see.

Speaker Change: So.

Mike: Smaller part of the capital structure.

Speaker Change: Youre going to Youre going to see more equity deployed into that business and the other part of it is that we are very focused on growing our construction management capabilities where were.

Mike: In the past if you remember in Ireland. For example, we're 50 50 partners with Axa.

Mike: But we've got great expertise in the construction management business, both here in the United States and in Europe.

Speaker Change: It was smaller part of the capital structure.

Mike: And we expect over time that we're going to find.

Speaker Change: In the past if you remember in Ireland. For example, we're 50 50 partners with Axa, but we've got great expertise in the construction management business both here in the United States and in Europe.

Mike: More opportunities to build new multifamily assets were a smaller part of our capital structure and earning construction management fees. So.

Speaker Change: And we expect over time that we're going to find.

Speaker Change: I think the point that Matt made was really important.

Speaker Change: More opportunities to build new multifamily assets were a smaller part of the capital structure and earning construction management fees. So.

Speaker Change: When you talk about selling these non core assets, it's really with the intent to increase our exposure to the asset classes that we really like.

Speaker Change: I think the point that Matt made was really important.

Speaker Change: The rental housing business.

Speaker Change: The equity and credit in the industrial business and I think over time, you're going to see that grow up to 85% to 90% of our investment activity every year.

Speaker Change: When you talk about selling these non core assets, it's really with the intent to increase our exposure to the asset classes that we really like.

Speaker Change: The rental housing business, both equity and credit in the industrial business and I think over time, you're going to see that grow up to 85% to 90% of our investment activity every year.

Okay great.

Speaker Change: That's real helpful.

Speaker Change: One last one if I can.

Speaker Change: Curious you mentioned refinancing some of the debt in Ireland in the mid fours.

Speaker Change: Whats the in place that it will be replacing him just trying to get a sense as to where were those debt markets are now versus kind of what's what was in place before.

Speaker Change: Okay, Great. That's that's real helpful. Just one last one if I can.

Speaker Change: She mentioned refinancing some of the the the debt in Ireland in the mid fours.

Speaker Change: I'm going to let Matt answer part of the question, but I think the interesting thing and I think it kind of validates.

Speaker Change: What was the what's the in place that it will be replacing him just trying to get a sense as to where where theres debt markets are now versus kind of what's what was in place before.

Speaker Change: What we're talking about we're closing the financing, which is almost 500 million U S dollars in April we.

Speaker Change: I'm going to let Matt answer part of the question, but I think the interesting thing and I think it kind of validates.

Speaker Change: We had 35 banks and lenders that proposed to us on that.

And we've selected two financial institutions to do the 500 million that as we've mentioned is going to be around.

Speaker Change: What we're talking about we're closing the financing, which is almost $500 million U S dollars and in April.

Speaker Change: We had 35 banks and lenders that proposed to Walsall maps.

Speaker Change: In the mid fours at the end of the day for five year fixed rate debt.

Speaker Change: And we've selected two financial institutions to do the 500 million that as we've mentioned is going to be around.

Speaker Change: <unk>.

Matt Windisch: But I'll, let Matt now.

Matt Windisch: Talked about the differential in interest rates.

Matt Windisch: The in place rate was just under 3%.

Speaker Change: In the mid fours at the end of the day for five year fixed rate debt.

Matt Windisch: And we're going to be like we said in the mid fours, but we will have the ability.

Speaker Change: <unk>.

Matt Windisch: To float down on that so if rates do come down we will have an ability to participate in but we will be locked in so the rate one rates will not go much higher than the mid fours.

Matt Windisch: But I'll, let Matt now.

Matt Windisch: Talked about the differential in interest rates, yes. So the in place rate was just under 3%.

Speaker Change: Yes, I think to Mount and Youre going to correct me here, but last year, Tony when you look at it.

Matt Windisch: And we're gonna be like we said in the mid fours, but we will have the ability.

Matt Windisch: Float down on that so if rates do come down we will have an ability to participate in but we will be locked in so the rate one rates will not go much higher than the mid force.

Matt Windisch: Either financed refinanced.

Matt Windisch: On our existing assets, almost $1 billion and $300 million of property level debt.

Matt Windisch: And the differential in interest rates.

Matt Windisch: Yes, I think to Matt and he's going to correct me here, but last year, Tony when you look at it.

Matt Windisch: <unk> hold dollar differential was it was very very minimal.

Matt Windisch: We either financed or refinanced.

Matt Windisch: On our existing assets almost $1.300 billion of property level debt.

Matt Windisch: Right. Okay. Thank you for the color.

Matt Windisch: And the differential in interest rates.

Speaker Change: And your next question today will come from Tayo Okusanya with Deutsche Bank. Please go ahead.

Matt Windisch: It'll hold dollar differential was it was very very minimal.

Matt Windisch: Yes.

Speaker Change: Yes, hi, good afternoon, everyone.

Matt Windisch: Right. Okay. Thank you for the color.

Speaker Change: The <unk> platform could you talk a little bit about what you.

Speaker Change: And your next question today will come from Tayo Okusanya with Deutsche Bank. Please go ahead.

Speaker Change: Expected kind of yields and margins are.

On that note also around the operating platform you will have in place to run it.

Matt Windisch: Yes.

Tayo Okusanya: Yes, hi, good afternoon, everyone.

Tayo Okusanya: The <unk> platform could you talk a little bit about what you.

Mike: Mike do you want to take that one.

Mike: Yes, I'll take that one.

Tayo Okusanya: Expected kind of yields and margins are.

Speaker Change: We're really excited about growing this.

Tayo Okusanya: On that and also around the operating platform you will have in place to limit.

Mike: This platform.

Mike: We've got a really good pipeline of has is that we've got.

Speaker Change: Mike do you want to take that one.

Mike: They were trying to acquire at discounts from the house builders and create these new rental communities.

Mike Good: Yeah, I'll take that one.

Speaker Change: We're really excited about growing this.

Mike: We think the yields that we can set up to probably a little bit higher than we've seen in UK residential in recent years, we're probably talking about stabilizing in the high fives towards 6%.

Speaker Change: This platform.

Speaker Change: We've got a really good pipeline of has is that we've got.

Speaker Change: They were trying to acquire at discounts from the house builders and create these new rental communities.

Mike: Over the course of <unk>.

Mike: Our whole period.

Speaker Change: We think the yields that we can set up to probably a little bit higher than we've seen and U K residential in recent years, we're probably talking about stabilizing in the high fives towards 6%.

Mike: In terms of the operations, we've got a great team in place with a lot of experience that we can capture from around the world. What we've been doing this in Ireland and the U S. So we think this is absolutely part of Kennedy Wilson's core skill set to manage and optimize these times create great communities in place with a lift.

Speaker Change: Over the course of our.

Speaker Change: Our whole period.

Speaker Change: In terms of the operations, we've got a great team in place with a lot of experience that we can capture from around the world. What we've been doing this in Ireland and the U S. So we think this is absolutely part of Kennedy Wilson's core skill set have had to manage and optimize these times create great communities in place for people to live.

Mike: So we're really excited about the prospect of growing this platform with a fantastic partner such as <unk>.

Mike: Got it.

Mike: Is it a third party property management platform.

Mike: The in house.

Mike: Okay.

Speaker Change: So we're really excited about the prospect of growing this platform with our fantastic partners such as <unk>.

Mike: We've got our in house asset management team, but we support that with that property management solution where appropriate.

Mike: And that's what.

Speaker Change: Got it.

Mike: But we'll reevaluate valuate had that best to upgrade that but initially we built <unk> third party property management.

Speaker Change: Is it a third party property management platform or actually in house.

Speaker Change: We got our in house asset management team, but we support that with an excess of loss property management solution where appropriate.

Mike: Supplement alright, and internal resources.

Mike: Gotcha.

Mike: And then on the on the debt.

Speaker Change: And that's.

Speaker Change: But we'll reevaluate valuate had that basketball afraid that but initially we believe that third party property management just to supplement our own internal resources.

Mike: Platform again really strong origination this quarter really strong pipeline places at all with $1 billion how.

Mike: How should we be thinking about what a run rate could look like for that business in terms of origination and also future funding just given you.

Speaker Change: Gotcha.

Speaker Change: And then on the on the debt.

Speaker Change: Platform again really strong origination this quarter really strong pipeline places at all with 1 billion how.

Mike: You probably at some point, we need more capital to keep growing at the current pace youre willing yet.

Speaker Change: How should we be thinking about what a run rate could look like with that business in terms of origination and also future funding just given you.

Mike: So last year, we did $3 5 billion of originations and I think we certainly would like to exceed that this year, assuming the opportunity set presents itself, which as of now.

Speaker Change: You probably at some point, we need more capital to keep growing at the pace you're building yet.

Mike: It feels like it is.

Mike: And then in terms of funding sources, we obviously have some great partners in this business, but there's a lot of demand from other investors we've been talking to.

Speaker Change: Yes, so last year, we did $3 5 billion of originations and I think we certainly would like to exceed that this year, assuming the opportunity set presents itself, which as of now.

Mike: Who want to continue to grow with us So we feel very very.

Speaker Change: It feels like it is.

Mike: Strong strongly that we've got the capital we need to continue to grow this platform over over the long run.

Speaker Change: And then in terms of funding sources, we obviously have some great partners in this business, but there's a lot of demand from other investors, we've been talking to them.

Mike: And assuming.

Mike: Assuming the opportunity set remains attractive.

Speaker Change: Who want to continue to grow with us So we feel very very.

Mike: Okay. That's helpful.

Mike: Two questions.

Speaker Change: Strong strongly that we've got the capital we need to continue to grow this platform over over the long run.

Mike: And some of the international portfolio again, Dublin.

Mike: Current.

Speaker Change: And.

Speaker Change: Assuming the opportunity set remains attractive.

Mike: Rent caps on multifamily they are about 2%.

Speaker Change: Okay. That's helpful.

Speaker Change: Two questions.

Mike: Curious, how you think that ultimately evolves with the new Irish governments and then also on the UK side with the autumn budget.

Speaker Change: On some of the international portfolio.

Speaker Change: In Dublin the current.

Mike: From late last year, any indication or kind of office demand in 2020.

Speaker Change: Rent caps on multifamily they are about 2%.

Speaker Change: Curious, how you think that ultimately evolves with the new Irish governments and then also on the UK side with the autumn budget.

Mike: Some of the budget calls for higher kind of costs of all the employees.

Mike: According to some of the new law.

Speaker Change: Late last year.

Speaker Change: <unk> or kind of office demand and swimming.

Mike: Mike you want to take that yes, I'll pick up I'll pick up.

Speaker Change: Five and some of the budget calls for higher kind of costs of all the employees.

Speaker Change: So firstly on rent caps.

Speaker Change: In Ireland the existing regime is due to expire at the end of 2025 now.

Speaker Change: According to some of the new law.

Speaker Change: Now we know the government are looking at that it's a little bit too early to say exactly what form any changes, we'll make but there remains a.

Speaker Change: Mike do you want to take that yeah, I'll pick up I'll pick a bias so firstly on rent caps.

Speaker Change: In Ireland the existing regime is due to expire at the end of 2025 now.

Speaker Change: Demand supply imbalance in the Irish market.

Speaker Change: And so we know the government is looking at the overall rent regime will comment more when we know more.

Speaker Change: Now we know the government are looking at that it's a little bit too early to say exactly what form any changes, we'll make but there remains a.

Speaker Change: But.

Speaker Change: He has an interest in demand for our portfolio.

Speaker Change: In terms of U K office demand.

Speaker Change: Demand supply imbalance in the Irish market.

Speaker Change: We haven't seen any weakness coming off of that.

Speaker Change: And so we know the government is looking at the overall rent regime, and we'll comment more when we when we know more.

Speaker Change: The national insurance changes.

Speaker Change: Come in place.

Speaker Change: But obviously, it's an interesting development for our portfolio.

Speaker Change: Later this year.

Speaker Change: We've seen the take up of good quality offices in London be improving we have seen that general trend. If you will coming back to the offices, particularly good quality offices and indeed, we've been seen rents rising across most major submarkets for best in class offices. So we have strong belief.

Speaker Change: In terms of U K office demand.

Speaker Change: We haven't seen any weakness coming off of that I mean, the the Nash insurance changes.

Speaker Change: Come in place.

Speaker Change: Later this year.

Speaker Change: We've seen the take up of good quality offices in London be improving yeah, we've seen that general trend of people coming back to the offices, particularly good quality offices and indeed, we've been seen rents rising across most major submarkets for best in class offices. So we have strong belief.

Speaker Change: That.

Speaker Change: The best in class offices that remains really strong occupational market.

Speaker Change: And we think our offices are very well positioned to take advantage of that and to capture rental growth over the medium and long term.

Speaker Change: That's helpful. One more if you could indulge me.

Speaker Change: That.

Speaker Change: The best in class offices that remains really strong occupational market.

Speaker Change: Co investment portfolio again positive fair value marks this quarter. That's the first time. This has happened in a long time.

Speaker Change: And we think our offices are really well positioned to take advantage of that and to capture rental growth over the medium and long term.

Speaker Change: If we think about a world where long term rates are stabilized and less Mondays and call for them to decline.

Speaker Change: That's helpful. One more if you could indulge me.

Speaker Change: <unk> investment portfolio again positive fair value marks this quarter. That's the first time. This has happened in a long time.

Speaker Change: But if you just kind of stabilizing over the next year or should.

Speaker Change: It should be kind of at.

Speaker Change: That continued trend of <unk>.

Speaker Change: If we think about a world where long term rates are stabilized. The net number you can call for them to decline.

Speaker Change: Positive fair value marks on the investment portfolio and positive implications for carried interest.

Speaker Change: But if you just kind of stabilizing over the next year or so should be kind of like that.

Speaker Change: Yes, I mean, it's always hard to predict the future, but I think if rates stay kind of where they are and stabilize given the operational improvements we're seeing in our assets.

Speaker Change: That continued trend of <unk>.

Speaker Change: Positive fair value marks on the investment portfolio.

Speaker Change: Positive implications for carried interest.

Speaker Change: Certainly our hope is certainly that values will continue to go up and that will be reflected in.

Speaker Change: Yes, I mean, it's always hard to predict the future, but I think if if rates stay kind of where they are and stabilize given the operational improvements we're seeing in our assets I mean, I certainly our hope is certainly that values will continue to go up and that will be reflected in.

Speaker Change: And the fair value and promotes assuming that happens and I think.

Speaker Change: It feels it feels that'll be the case, but again, it's you can't predict the future on these things.

Speaker Change: I would just add that I think the landscape around the carried interest or promotes will continue to grow as we grow our investment management business and deploy new capital.

In the fair value and promotes assuming that happens and I think.

Speaker Change: It feels it feels that'll be the case, but again, it's you can't predict the future on these things.

Speaker Change: So I think youre going to get both headwinds hopefully from what exists, but more importantly, as we meaningfully grow that business and we have more promote and carried infrastructures.

Speaker Change: I would just add that I think the landscape around the carried interest or promotes will continue to grow as we grow our investment management business and deploy new capital.

Speaker Change: Sounds good really solid execution this quarter well done guys.

Speaker Change: And so I think youre going to get both headwinds hopefully from what exists, but more importantly, as we meaningfully grow that business and we have more promote.

Speaker Change: Thank you. Thank you.

Speaker Change: Again, if you have a question. Please press star and then one.

Speaker Change: Carrying infrastructures.

Speaker Change: And your next question today will come from Jeff Spector with Bank of America. Please go ahead.

Speaker Change: Sounds good really solid execution this quarter well done guys.

Speaker Change: Great. Thank you.

Speaker Change: First question given you have such a great pulse on global institutional interest in U S real estate and other parts of the world, but specifically U S real estate.

Speaker Change: Thank you. Thank you.

Speaker Change: Again, if you have a question. Please press star and then one.

Speaker Change: And your next question today will come from Jeff Spector with Bank of America. Please go ahead.

Jeff Spector: Great. Thank you.

Speaker Change: Just wanted to confirm.

Jeff Spector: First question given you have such a great pulse on global institutional interest in U S real estate and other parts of the world, but specifically U S real estate.

Speaker Change: From your recent conversations are you seeing hearing from any of your relationships any change in tone, whether its concerns over tariffs or other various initiatives proposed by the new administration. It are you seeing any change in interest in U S real estate.

Jeff Spector: Just wanted to confirm.

Jeff Spector: From your recent conversations are you seeing hearing from any of your relationships any change in tone, whether its concerns over tariffs or other various initiatives proposed by the new administration. It are you seeing any change in interest in U S real estate.

Speaker Change: And maybe even in other parts of the world. Thank you.

Speaker Change: Yeah.

Speaker Change: Interesting question.

I just came back from a week in Asia I can tell you that.

Speaker Change: Sure.

People are.

Jeff Spector: And maybe even in other parts of the world. Thank you.

Speaker Change: Very very interested in investing in the United States.

Jeff Spector: It's interesting question.

Speaker Change: <unk>.

Speaker Change: I just came back from a week in Asia I can tell you that.

Speaker Change: I'm not passing any judgment I'm, just telling you that people have a very strong belief that the business environment in the United States is going to be really good over the next three to four years.

Speaker Change: People are.

Very very interested in investing in the United States.

Speaker Change: <unk>.

Speaker Change: And when you look at the size of the market here with almost 350 million people.

Speaker Change: The capital markets Capitalizations of Big.

Speaker Change: Big companies here is just really really attractive place to put capital.

Speaker Change: You know when you look at the size of the market here with almost 350 million people.

Speaker Change: And you've also got particularly.

Speaker Change: Canada.

Speaker Change: The capital markets Capitalizations.

Speaker Change: Where we've got some great relationships in Asia, where we have been now for 30 years in the Middle East you've got these very very large institutional partners that are are growing their their their own capital base, but they don't they can't deploy all of that cash.

Speaker Change: Big companies here is really really attractive place to put capital.

Speaker Change: And you've also got particularly.

Speaker Change: Canada.

Speaker Change: Where we've got some great relationships in Asia, where we've been now for 30 years in the Middle East you've got these very very large institutional partners that are growing their their their own capital base, but they don't they can't deploy all of that cash.

Speaker Change: Capital in the markets that they are there.

Speaker Change: Headquartered in.

Speaker Change: So all of the major Japanese companies.

Speaker Change: Want to take some portion of their capital.

Speaker Change: Capital in the markets that they are there.

Speaker Change: And then invest.

Speaker Change: Here, primarily here in the United States.

Speaker Change: Sure.

Speaker Change: Headquartered in.

Speaker Change: So all of the major Japanese companies.

Speaker Change: It's pretty much true.

Speaker Change: We're around the world and I would say that the.

Speaker Change: Want to take some portion of their capital and invest.

Speaker Change: Particularly Asia the other secondary market that they feel very very comfortable with is the United Kingdom and so one of the things that Matt said was we were selling noncore assets in Spain, and Italy, and the whole idea behind all about.

Speaker Change: Here, primarily here in the United States.

Speaker Change: And it's pretty much true everywhere around the world and I would say that the.

Speaker Change: Particularly Asia the other secondary market that they feel very very comfortable with is the United Kingdom and so one of the things that Matt said was you know we were selling noncore assets in Spain, and Italy, and the whole idea behind all of that out.

Speaker Change: It was really to focus our management team on our energy in the markets, where we really have real expertise.

Speaker Change: The United States.

Speaker Change: United Kingdom.

Speaker Change: In Ireland, and so we're really well positioned in all of these markets and I would say the other.

Speaker Change: It was really to focus our management team on our energy in the markets, where we really have real expertise.

Speaker Change: Right thing that's happened to us over the last couple of years is because of our credit business is a national business, it's given us an information base outside of the Western United States.

Speaker Change: The United States.

Speaker Change: The United Kingdom.

Speaker Change: In Ireland, and so we're really well positioned in all of these markets and I would say the other.

Speaker Change: To look at other equity opportunities in other markets.

Speaker Change: Great thing that's happened to us over the last couple of years is because our credit business is a national business, it's given us an information base outside of the Western United States.

Speaker Change: We're currently under contract right now to buy.

Speaker Change: Five apartment communities and the Arizona.

Speaker Change: The Arizona market.

Speaker Change: To look at other equity opportunities in other markets. We're currently under contract right now to buy.

Speaker Change: Texas market, where we really haven't had equity investments in the past.

Speaker Change: <unk>.

Speaker Change: I'm not ready to talk about it yet, but we're also looking at another opportunity.

Speaker Change: Fly a apartment communities in the Arizona market and the Texas market, where we really haven't had equity investments in the past.

Speaker Change: Well advanced.

Speaker Change: In the southern part of the United States and so.

Speaker Change: I'm not ready to talk about it yet, but we're also looking at another opportunity that.

Speaker Change: The biggest issue was asset managing what we all.

Speaker Change: Getting out of these non core assets, particularly the office assets in some cases that we own 100% of which we've been doing.

Speaker Change: Well advanced in.

Speaker Change: In the southern part of the United States.

Speaker Change: So.

Speaker Change: The biggest issue was asset managing what we all.

Speaker Change: In the United States, and we'll focus on that.

Speaker Change: Primarily in Europe this year.

Speaker Change: Getting out of these noncore assets, particularly the office assets in some cases that we own 100% of which we've been doing.

Speaker Change: And then finding.

Speaker Change: <unk>.

Speaker Change: Ways to deploy capital not new ways, but new markets to deploy capital into we've got significant amounts of capital that our reputation is really really strong.

Speaker Change: In the United States, and we will focus on.

Speaker Change: Primarily in Europe this year.

Speaker Change: And then finding.

Speaker Change: A lot of people trust us to invest their money.

Speaker Change: New.

Speaker Change: Ways to deploy capital not new ways, but new markets to deploy capital into we've got significant amounts of capital that our reputation is really really strong.

Speaker Change: So capital deployment really is really one of the key ways that we're going to continue to grow the business, particularly the investment management business.

Speaker Change: A lot of people trust us to invest their money.

Speaker Change: Thank you very helpful.

Speaker Change: So capital deployment really is really one of the key ways that we're going to continue to grow the business, particularly the investment management business.

Speaker Change: Follow up to your <unk>.

Speaker Change: <unk> to exit office, you did mentioned that you are seeing some benefits from.

Speaker Change: Return to office in the northwest So just to confirm nothing would change your view on office and I think also retail is the other area of shifting away from.

Speaker Change: Thank you very helpful.

Speaker Change: A follow up to your <unk>.

Speaker Change: Continuing to exit office you did mention that you are seeing some benefits from.

Speaker Change: Yes, I think.

Speaker Change: Return to office in the northwest So just to confirm nothing would change your view on office and I think also retail is the other area of shifting away from.

Speaker Change: In terms of our balance sheet investments were not looking to deploy balance sheet capital into those areas.

Speaker Change: Not to say we wouldn't.

Speaker Change: Opportunistically look at things in that space, using our investment management platform, there could be opportunities there, but for our balance sheet investments, where we're deploying our capital. We think it's better served focusing on rental housing and industrial and I would just add that the idea of growing the investment management business gives you a lot more flexibility around the return.

Yes, I think.

Speaker Change: In terms of our balance sheet investments, we're not looking to deploy balance sheet capital into those areas.

Speaker Change: Not to say we wouldn't.

Speaker Change: Opportunistically look at things in that space, using our investment management platform, there could be opportunities there, but for our balance sheet investments, where we're deploying our capital. We think it's better served focusing on rental housing and industrial I would just add that the idea of growing the investment management business gives you a lot more flexibility around the return.

Speaker Change: <unk> thresholds right, obviously, we have views on our own balance sheet, but in that business. You have partners that have different return thresholds that they can invest at different interest different product types. So really allows us to expand what we looked at.

<unk> thresholds right, obviously, we have views on our own balance sheet, but in that business. You have partners that have different return thresholds that they can invest at different interesting different product types. So really allows us to expand what we looked at.

Speaker Change: Thank you and then just my last question on supply apartment supply and you just were talking about.

Speaker Change: Some of the.

Speaker Change: Texas, Arizona Sunbelt.

Speaker Change: Or southern markets there is.

Speaker Change: Thank you and then just my last question on supply apartment supply and you just were talking about.

Speaker Change: Some concern that we could suddenly walk into 26, where supply is picking up one of your apartment peers believes.

Speaker Change: Some of the.

Speaker Change: Texas, Arizona Sun belt.

Speaker Change: Or southern markets there is.

Speaker Change: There's visibility through 2006 that there is really not going to be an increase in supply.

Speaker Change: Some concern that we could suddenly walk into 26, where supply is picking up one of your apartment peers believes.

Speaker Change: What are your views there on supply.

Speaker Change: The Sun belt as you are.

Speaker Change: And looking at the.

Speaker Change: Southern markets. Thank you.

Speaker Change: There's visibility through 'twenty six that there is really not going to be an increase in supply.

Speaker Change: Yes, we've definitely seen it really from our credit business, because we haven't invested to date, our equity in the sunbelt markets to speak of but.

Speaker Change: What are your views there on supply in the Sun belt as you are.

Speaker Change: Through our credit business, we're seeing it and what we're finding is only the.

Speaker Change: Looking at the SEC.

Speaker Change: Southern markets. Thank you.

Speaker Change: Really the best.

Speaker Change: Class developers are able to put together the capital stacks right now to build.

Speaker Change: Yes, we've definitely seen it really from our credit business, because we haven't invested to date, our equity in the Sun belt markets to speak of but.

Speaker Change: And so what Youre seeing is very high the stuff that's being built is best in class, but the volumes and the starts continued to be significantly below where they were several years ago.

Speaker Change: But through our credit business, we're seeing it and what we're finding is only the.

Speaker Change: Really the best in class developers are able to put together the capital stacks right now to build.

Speaker Change: So it doesn't feel like it from what we're seeing in our.

Speaker Change: And so what Youre seeing is very high the stuff that's being built is best in class, but the volumes on the starts continued to be significantly below where they were several years ago.

Speaker Change: Credit pipeline that volumes are substantially picking up and they are certainly not getting back to anywhere near where they were a few years ago I think youll see construction costs come down interest rates come down further.

Speaker Change: So it doesn't feel like it from what we're seeing in our.

Speaker Change: To have supply become a significant issue in these markets over the next few years.

Speaker Change: Credit pipeline that volumes are substantially picking up and they're certainly not getting back to anywhere near where they were a few years ago I think and we can see construction costs come down interest rates come down further.

Speaker Change: That being said, there's still supply coming and finishing projects that were financed two or three years ago. There is still some of that finishing up but if you kind of look 18 months ahead. It starts to definitely have a significant ramp down on deliveries.

Speaker Change: To have supply become a significant issue in these markets over the next few years.

Great. Thank you.

Speaker Change: Concludes our question and answer session I would like to turn the conference back over to Bill Mcmorrow for any closing remarks.

Bill McMorrow: Well, thank you very much everyone.

Speaker Change: One and.

Speaker Change: Great. Thank you.

Speaker Change: We're going to be next week at the city.

Speaker Change: Concludes our question and answer session I would like to turn the conference back over to Bill Mcmorrow for any closing remarks.

Speaker Change: Citigroup conference in Miami.

Speaker Change: And so there is anybody there we'll look forward to this on this call we'll look forward to seeing you there.

Bill McMorrow: Well, thank you very much everyone and.

Bill McMorrow: We're going to be next week at the city.

Speaker Change: Thank you.

Bill McMorrow: Citigroup conference in Miami.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Bill McMorrow: And so there is anybody there we'll look forward to on this call. We'll look forward to seeing you there.

Bill McMorrow: Thank you.

Bill McMorrow: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Bill McMorrow: [music].

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