Kennedy-Wilson Holdings Inc.

Good day and welcome to the Kennedy Wilson second quarter 2025 earnings 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 a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Devin Bovsar, Head of Investor Relations.

Please go ahead. 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 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 of the most directly comparable GAAP financial measure and our second quarter 2025 earnings release, which will be 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.

Thank you, Devin, and thank you, everyone, for joining the call today. We're pleased to report solid results for the second quarter of 2025, which exceeded our business plan and reflected continuing strengthening in our operations and in the overall real estate investment market. We deployed or committed $1.7 billion of new capital in Q2, driving total capital deployment to 2.6 billion for the first half of 2025. We remain on track this year to exceed the 4.3 billion we deployed in 2024. Improving transaction levels within the commercial real estate space allowed us to successfully execute on over $600 million in non-core asset sales, generating $250 million in cash proceeds to KW, exceeding the $200 million target we set on our last call. We utilized $170 million to reduce our unsecured line of credit and allocated the remaining capital to new investments. We continue to see strong activity across our markets with clear evidence of sustained long-term demand for both rental housing and real estate credit solutions. On today's call, I'll review our portfolio and the progress we've made across our 2025 strategic initiatives, and in particular, our asset sales and unsecured debt reduction. Assets under management grew to a record $30 billion and has increased by 70% since the beginning of 2021. At the 100% ownership level, our stabilized investments generate $1.6 billion of revenue and $1.3 billion stabilized NOI. KW holds a 37% weighted average ownership interest in these assets. with the remaining 63% managed on behalf of partners generating via income for our platform. Rental housing, our core focus, represents 65% of our assets under management, comprised of approximately 70,000 units that we either have an ownership interest in or are financing in our credit platform. We expect this sector to grow to over 80% of our AUM over the next two years. In the second quarter, capital deployment was focused on rental housing equity and credit. We originated another $1.3 billion in new rental housing construction loans, which was our second largest quarter in originations to date. Since arriving to KW, our credit team is closing in on surpassing $6 billion in new loans, which are all focused on the development of high-quality, market-grade multifamily or student housing communities across the U.S. We also expanded our U.S. multifamily platform, acquiring four communities at significant discounts to replacement costs, totaling 1,200 units, for $387 million. These new investments were completed through our investment management platform, which included adding two new Japanese-based institutions to our growing group of high-quality institutional partners. In Europe, we continue to build up our single-family rental platform with CPPIB, one of Canada's largest pension funds. In Q2, we added $100 million in new sites, which brings our total portfolio to 13 sites, totaling 1,200 planned homes. We are under offer on new sites totaling over $200 million with an additional 500 homes, which, if closed, would take our venture to 1,700 homes within 12 months of formation. Capital deployment for the first half of the year was 96% directed toward the rental housing sector, with 74% into the construction loan originations and 22% into equity ownership of the Western United States and UK single-family rental investments. The higher levels of capital deployment have driven our investment management platform to record levels. Fee-bearing capital reached a record $9.2 billion. Our investment management fees grew by 39% in Q2 to a quarterly record of $36 million. Our fees for the first half of 2025 have increased by 30% year-over-year and have already reached the levels we generated in all of 2023, where our fees were $62 million. Over the past 15 years, we have expanded our network of strategic partners across North America, Asia, the Middle East, and Europe. These long-standing, well-capitalized partners remain highly engaged in deploying capital alongside KW, both in equity and in credit, which gives us strong momentum for continued growth in our fee-related earnings. We also made solid progress on our non-core asset sale program in the quarter. Our dispositions included the sale of three European office assets, the sale of an older Northern California multifamily asset built in 1988, and the reduction in our ownership interest in our only hotel asset. We generated $275 million of cash from asset sales for the year, which keeps us on track to hit our goal of $400 million by year end. The proceeds in the second half of the year will be used to further reduce our unsecured debt, including the final tranche of our KWE bonds that will be repaid in full in October, as we announced yesterday. With the total $350 million KWE repayment, we will have fully retired the original $650 million principal amount of the 2025 bonds. We also plan to continue recycling capital into higher return investment opportunities in our investment management platform. Turning to the market, real estate fundamentals continue to strengthen in Q2 and we believe there remains compelling risk-adjusted opportunities in the rental housing sector. A persistent housing shortage across all our markets coupled with affordability challenges in the single-family sector continues to fuel sustained rental demand. In the U.S. apartment sector, the bulk of new supply that began delivering in 2023 has largely been delivered and is being absorbed. With new starts falling sharply, the supply pipeline is thinning, setting the stage for strong rental growth going forward. With a portfolio of 40,000 apartment units, we are well positioned to capitalize on these favorable supply-demand dynamics over the next few years. We're confident that as we grow our NAV, and scale in our diversified investment management business, the value creating will increasingly be recognized in our share price. We are entering the second half of the year with an existing portfolio that is well positioned with a strong pipeline of activity centered around our strategic initiatives. Increasing free cash flow by growing our NOI and recurring fees harvesting realized gains from our asset sales and increasing our fee income. With our own capital and the support of the major global strategic partners, I remain very optimistic that in the remainder of 2025, we will see a record level of new capital deployment and benefit from KW's team's experience to make sound investment decisions together with our partners. With that, I'd like to turn the call over to Justin and Bonnie.