Kennedy-Wilson Holdings Inc.

Hello and welcome to the Kennedy-Wilson third quarter 2024 conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw from the question queue, you may press star then two. As a reminder, this conference is being recorded. I would now like to hand the call to Davin Bhavsar, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today. Today's call will be webcast live on the archive for replay. The replay will be available for 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 Embody, CFO, and Mike Pegler, President of Europe. 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 the reconciliation, the most directly comparable GAAP financial measure, and our third quarter 2024 earnings release, which is posted on the investor relations section of our website. Statements made during this call may include forward-looking statements. Actual results may materially differ from forward-looking information discussed on this call. due to the 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.

Bill McMorrow Kevin, thank you, and thank you, everybody, for joining the call today. Yesterday, we reported our results for the third quarter, which highlighted improving operating fundamentals in our multifamily portfolio, continued growth of our investment management business, and further progress on our non-core asset sale program. Looking at our key portfolio metrics, AUM, assets under management, has grown to $28 billion versus $25 billion at 12-31-23. Estimated annual NOI has grown to $492 million, and fee-bearing capital grew to a record $8.8 billion. Rental housing continues to be our major focus. with our portfolio today comprised of 60,000 multifamily or student housing units that we either have an ownership interest in or are financing through our credit platform. Starting in 2014, we embarked on a $3 billion ground-up development program largely focused on multifamily communities. Since then, we have completed 9,000 units including approximately 3,000 market rate units and 6,000 affordable housing units through our vintage housing venture. Since 2020, we have invested a total of approximately $500 million of equity capital across our developments. Generally, in these developments, we are 50-50 partners with an institutional partner. Today, we're in the final stages of completing that development program. with only $3 million of KW equity remaining to be spent. We've stabilized two additional multifamily properties in Q3, adding $12 million to estimated annual NOI. For the year, we have added $29 million to estimated annual NOI from stabilizing approximately 2,000 multifamily units. And we currently expect an incremental $60 million from the stabilization of assets undergoing lease up. The expansion of our investment management business remains a key focus for us. Year to date in 2024, investment management fees have grown by 51% to $69 million. Fee bearing capital has grown by 132% over the last four years. And for the first time in our history, Our fees are on track to hit approximately $100 million in 2024, compared to $25 million generated in 2019. Matt will discuss this topic in more detail, but our Q3 growth was driven by the solid momentum we continue to see from our credit business. We've completed $2.1 billion in new loan originations in 2024, the strong pipeline of over 1.2 billion of new loan origination opportunities we are in the process of closing. Another important focus for us has been the generation of cash through the completion of selling non-core assets. In Q3, we disposed of another $234 million of assets, including our final wholly owned asset in Spain. We generated $63 million of cash from our Q3 sales, bringing our year-to-date total cash to KW to $375 million. In Q4, we have an additional planned asset sales that are expected to generate in excess of $150 million of cash to KW, and which puts us on track to achieve the $550 to $750 million target we laid out last year. Now I'd like to spend a moment and highlight two important recent strategic announcements we made this past quarter end. In October, we announced the launch of a new platform in the United Kingdom focused on the single-family rental housing market. We are partnering with the Canadian Pension Plan Investment Board, or CPPIB, one of the world's largest global investors with approximately $500 million of assets under management. In the last decade, the UK population growth was more than double the number of homes built. At the same time, there is a growing demand for high-quality rental homes in the United Kingdom, similar to what we have seen in the U.S., By leveraging our residential experience in the UK, Ireland, and the US, combined with partnering with CPPIB, we saw an opportunity to create a new platform at scale to address this structural undersupply of housing. The platform is initially targeting one billion sterling in asset purchases, and we're pleased to report that we closed our first two projects and have a meaningful pipeline of new opportunities. Yesterday, we also announced a $175 million euro redemption of our KWE bonds, which mature in November of next year. The redemption represents almost 40% of the remaining outstanding balance and will be funded using proceeds from completed and planned asset sales. As a reminder, this issuance was originally 550 million euros, 75 million of which was retired in 2022. This redemption will help us lower our overall unsecured leverage as the KW bonds represent our only unsecured maturity until 2028. Now turning to market conditions, We've seen an improvement in the overall real estate investment sentiment. As in Q3, we saw a long-awaited beginning of the rate-cutting cycle by central banks. Additionally, as Justin will describe in just a moment, debt capital markets have improved and liquidity remains robust today for high-quality real estate assets. The combination of improving liquidity, lower short-term rates, and borrowing spreads are supportive for our global business and a trend we expect to strengthen over the next year. Across our business, we have seen continued momentum in capital deployment. Through Q3, we have deployed a total of $2.4 billion in 2024, primarily into our investment management platform, including $2.1 billion of new loan originations for our credit platform and $350 million of equity purchases of rental housing and industrial acquisitions. Looking ahead with the lack of high quality and affordable housing affecting all our markets, we continue to seek both equity and credit opportunities in the rental housing space. Our direct real estate investments include our ownership, as I mentioned, in 39,000 market rate and affordable rental housing communities, which ended the quarter with a strong occupancy of 94% and generate property level NOI of over $500 million. We also have capacity for an additional 4,000 units through our newly formed UK single family platform. Our credit platform allows us to generate solid returns on invested capital. In a short period of time, we've become one of the US's largest lenders for the development of rental housing communities across the country. Since joining us in July of last year, our construction lending team has completed $2.3 billion in new loan originations, all related to either multifamily or student housing development. Our credit platform today totals $8 billion in total commitments, including $850 million in student housing loans, with developments near universities such as the University of California at Berkeley, the University of Michigan, and Texas A&M, to name a few. We have a strong origination pipeline, as I mentioned, of over $1 billion in new loans, which we expect to close prior to year end. Our business today remains in a great position with different engines of growth with a base of stable, well-capitalized institutional partners. As we see positive growing tailwinds for the real estate sector, including rates normalizing and liquidity continuing to improve. With that, I'd like to turn the call over to our CFO, Justin Embody, to discuss our financial results.