Company: KW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001408100-25-000084
Chunk: 15

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 15
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 years.  This is consistent with how market participants often estimate values in connection with buying real estate but these holding periods can be shorter depending on the life of the structure an investment is held within. The cash flows include a projection of the net sales proceeds at the end of the holding period, computed using a market reversionary capitalization rate.

Under the direct capitalization approach, the Company applies a market derived estimated capitalization rate to current and future income streams with appropriate adjustments for tenant vacancies or rent-free periods. These estimated capitalization 

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rates and future income streams are derived from comparable property and leasing transactions and are considered to be key inputs in the valuation. 

Other factors that we take into account under both approaches may include transaction structuring efficiencies, tenancy details, planning, building and environmental factors that might affect the property.

The Company also utilizes valuations from independent real estate appraisal firms on some of its investments ("appraised valuations"), with certain investment structures periodically (typically annually) requiring appraised valuations. All appraised valuations are reviewed and approved by the Company.

The Company has an investment in a Zonda, a technology based real estate business that offers residential construction data that is accounted for at fair value which is valued at the Company's share of the business using a multiple on trailing twelve months EBITDA.   

The methodology to determine the value of the Company’s investment in VHH is described above under "Multifamily-Affordable Housing."

The table below describes the range of inputs used as of December 31, 2024 for real estate assets: 

Estimated Rates Used ForCapitalization RatesDiscount RatesMultifamily - AffordableIncome approach - discounted cash flow6.30% — 7.20%8.30% — 9.20%Multifamily - Affordable GP interestIncome approach - discounted cash flowN/A16.00% — 19.50%Multifamily - Market RateIncome approach - direct capitalization4.60% — 6.50%N/AOfficeIncome approach - discounted cash flow5.20% — 7.50%7.30% — 9.30%Income approach - direct capitalization5.30% — 10.30%N/AIndustrialIncome approach - discounted cash flow5.00% —6.30%6.30% — 7.80%Income approach - direct capitalization4.00% — 8.90%N/AHotelIncome approach - discounted cash flow6.00%8