Company: KW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001408100-25-000084
Chunk: 9

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 9
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 December 31, 2024, we received $27.4 million of proceeds from VHH, including $10.3 million from recurring monthly distributions, $6.8 million from paid developer fees at conversion and $10.3 million from sales and refinancings.

We acquired our ownership interest in VHH in 2015 for approximately $80.0 million. As of December 31, 2024, we have contributed an additional $186.2 million into VHH and have received $380.9 million in cash distributions. VHH is an unconsolidated investment that we account for using the fair value option which had a carrying value of $333.9 million as of December 31, 2024. Since we acquired our ownership interests in VHH, we have recorded $356.4 million worth of fair value gains on our investment in VHH, including $36.4 million during the year ended December 31, 2024. 

The fair value of the real estate investments held through VHH is determined through a discounted cash flow analysis on a partnership-by-partnership basis. This methodology assumes ordinary distributions during the ownership period and the future sale of the underlying properties after the tax credit period has expired. Our methodology of estimating the fair value of such real estate investments assumes certain market inputs, including average capitalization rates at sale between 6.25% - 7.20% and discount rates ranging from 8.25% - 9.20%.

•With respect to investments held by VHH with tax credit LPs, the discounted cash flow analysis also factors in the distinct economic splits between VHH and its tax credit LPs. We also record an estimated fair value of the our GP interests with respect to VHH ownership structures with tax credit LPs by taking the fair value of the underlying real estate utilizing the method described above and then factoring in (i) cashflow after debt service and then, (ii) discounting the net cashflow utilizing a levered discount rate that ranges between 16.0% to 19.5% (the "levered discount rates").

•With respect to investments held by VHH fee simple (without tax credit LPs), we also fair value the underlying secured loans on each of the properties, as described further below under “Fair Value Investments”.

In addition to completed projects, VHH holds certain investments that they are currently being developed as described above. With respect to such investments VHH is paid developer fees