Kennedy Wilson, a global real estate investment company, has agreed to acquire the Toll Brothers Apartment Living platform, including its in-house development team and its interests in a portfolio of completed properties as well as assets under development, for $347 million. Subject to certain closing conditions, the transaction is expected to close in October.
As part of the transaction, Kennedy Wilson will acquire the national home builder’s general partner interests in 18 apartment and student housing properties with $2.2 billion of assets under management (AUM). These properties comprise over 6,000 units in nine states, expanding the California-based company’s East Coast presence. Kennedy Wilson also will acquire a pipeline of 29 sites in various stages of development, which would total approximately $3.6 billion of invested capital if completed; it will assume construction management responsibilities for these assets.
In addition, Kennedy Wilson will manage the 20 apartment and student housing properties remaining with Toll Brothers after the closing, representing another $3 billion of AUM. Toll Brothers is expected to dispose of these remaining assets over time, exiting the multifamily development business.
According to Kennedy Wilson, it also acquires the expertise of the Toll Brothers Apartment Living management team, with plans to make offers to all employees to join the team to oversee the existing portfolio and further grow the development platform.
“We are thrilled to welcome the best-in-class team at Toll Brothers Apartment Living to Kennedy Wilson and to further accelerate the growth of our investment management business and multifamily development capabilities at a time when the country is in true need of new, high-quality housing,” said Kennedy Wilson chairman and CEO William McMorrow. “This purchase helps create an unparalleled national platform within the rental housing space that totals over 80,000 units we own, finance, or manage, and solidifies Kennedy Wilson’s fully integrated capabilities across real estate development, acquisitions, and asset management along with a market-leading housing-focused credit platform.”
Kennedy Wilson anticipates making an initial investment of approximately $90 million in the acquired interests and will assume Toll Brothers’ general partner role in those assets. The balance of the purchase price will be funded from existing Kennedy Wilson partners.
For Kennedy Wilson, J.P. Morgan Securities acted as the exclusive financial adviser, while Latham & Watkins served as legal counsel. For Toll Brothers, Goldman Sachs & Co. and Vestra Advisors acted as financial advisers, and Fried, Frank, Harris, Shriver & Jacobson served as legal counsel.
Kennedy Wilson also noted the transaction paves the way for future investment opportunities across rental and for-sale housing. Under the arrangement, Kennedy Wilson will refer prospective for-sale housing opportunities to Toll Brothers, while the home builder will reciprocate on the rental housing side.
“We are proud of the value that has been created by our Toll Brothers Apartment Living business, and we are excited for the future of this team with Kennedy Wilson,” said Toll Brothers chairman and CEO Douglas C. Yearly Jr. “This transaction will unlock significant capital for our stockholders, while allowing us to focus on our core home building business and continue our transformation to a more asset-light home builder. We are pleased that our Toll Brothers Apartment Living employees have found a new home at Kennedy Wilson.”
This is the second big portfolio sale by a national public home builder in the past year. In 2024, global investment firm KKR acquired a portfolio of 18 multifamily assets from a closed-ended fund sponsored by Quarterra Multifamily, the multifamily arm of Lennar, for approximately $2.1 billion.