Company: KW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001408100-25-000115
Chunk: 231

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 231
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 rate option is utilized during the construction and lease-up period and a permanent loan with a fixed rate locked at the time of closing becomes effective upon conversion/stabilization. The typical term for these loan facilities is 17 years.

39

During the three months ended March 31, 2025, we received $2.7 million of proceeds from VHH from recurring monthly distributions.  On a trailing 12-month basis, we have received $15.1 million of proceeds from VHH, including $10.6 million from recurring monthly distributions and $4.5 million from paid developer fees at conversion.

We acquired our ownership interest in VHH in 2015 for approximately $80.0 million. As of March 31, 2025 we have contributed an additional $186.4 million into VHH and have received $383.6 million in cash distributions. VHH is an unconsolidated investment that we account for using the fair value option which had a carrying value of $337.5 million as of March 31, 2025. Since our acquisition in 2015, we have recorded $359.7 million worth of fair value gains on our investment in VHH, including $3.3 million during the three months ended March 31, 2025. 

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% - 7.00% and discount rates ranging from 8.25% - 9.00%.

•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 16.00% to 19.50% (the "levered discount rates").

•With respect to investments held by VHH fee simple