Company: KW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001408100-25-000115
Chunk: 195

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 195
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 VHH the Company fair values its general partner ("GP") interests net cash flows utilizing a levered discount 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 rates and future income streams are derived from comparable property and leasing transactions and are considered to be key inputs in the valuation.

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Kennedy-Wilson Holdings, Inc.Notes to Consolidated Financial Statements(Unaudited)

Other factors that the Company takes 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 requiring appraised valuations periodically (typically annually). All appraised valuations are reviewed and approved by the Company.The Company's investment in Zonda that is accounted for at fair value and is valued using a multiple on trailing twelve month EBITDA.The table below describes the range of unobservable inputs for real estate assets as of March 31, 2025: Estimated Rates Used forCapitalization RatesDiscount RatesMultifamily - AffordableIncome approach - discounted cash flow6.30% —7.00%8.30% — 9.00%Multifamily - Affordable GP interestIncome approach - discounted cash flowN/A16.00% — 20.00%Multifamily - Market RateIncome approach - direct capitalization4.50% — 6.40%N/AOfficeIncome approach - discounted cash flow5.20% — 7.50%7.30% — 9.30%Income approach - direct capitalization5.20% — 10.30%N/AIndustrial Income approach - discounted cash flow5.00% — 6.30%6.30% — 7.80%Income approach - direct capitalization4.00% — 8.80%N/AHotelIncome approach - discounted cash flow6.00%8.30%     In valuing indebtedness, the Company considers significant inputs such as the term of the debt, value of collateral, credit quality of investment entities and market interest rates and spreads as well as market loan-to-value ratios relative to the Company's debt instruments. The credit spreads used by Kennedy Wilson to value floating rate indebtedness range from 2.10% to 3.80