Kennedy Wilson Nabs 544-Unit California Multi-Family Community for $87M

By Nicholas Ziegler, News Editor

Kennedy Wilson has cast its eyes across the San Francisco Bay, acquiring the 544-unit Waterford multi-family complex in Hayward, Calif., for $86.5 million.

Calling the purchase an excellent opportunity for us to employ our long-term experience in repositioning and managing large multi-family communities, Robert Hart, president of KW Multi-Family Management Group, went on to characterize the community as a very attractive investment.

Waterford is in a strategic job centric infill location and situated in the East Bay near the entrance to the San Mateo Bridge, providing convenient access to residents commuting to the Silicon Valley, South Bay and San Francisco, he said.

The firm purchased the property with $68.1 million in financing from Freddie Mac at a 10-year-fixed, 3.69 percent rate. Waterford is comprised of 29 two and three-story residential buildings with a leasing center, fitness center, two swimming pools and spas and children’s playground. The company plans to enhance the property’s amenities and complete an aesthetic upgrade of the buildings with new paint and landscaping.

Kennedy Wilson is shaping up to have a busy year. Earlier this month, the firm partnered with Fairfax Financial to acquire a Dublin, Ireland, mixed-use property for $50.4 million — the first exercising of a $365 million European investment platform it created in March. Along with equity partners, the company also purchased a five-building office portfolio in Los Angeles for $143.5 million, adding 700,000 square feet of property to its holdings. And in perhaps its biggest news, Kennedy Wilson finished the second phase of a $1.8 billion portfolio acquisition of U.K. commercial real estate loans from the Bank of Ireland.

Nearby San Francsico is one of the hottest areas in the United States for CRE investment, thanks to a surge in job creation by the tech sector. According to a 2012 market outlook by Marcus & Millichap Real Estate Investment Services Inc., the city is seeing cap rates for core multi-family assets trade in the 4 percent range, and buyers — anticipating strong rent growth this year — are starting to push outward to seek other opportunities outside San Francisco proper.