UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                                   FORM 10-Q/A

                                 Amendment No. 2
                                   -----------


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended March 31, 1999

[_]  Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

     For the transition period from _________ to __________

                         Commission File Number 0-20418

                                  -----------

                              KENNEDY-WILSON, INC.
             (Exact name of registrant as specified in its charter)


                  Delaware                               95-4364537
          State or other jurisdiction of                (I.R.S. Employer
          incorporation or organization)              Identification No.)

           9601 Wilshire Blvd, # 220
           Beverly Hills, California                        90210
         (Address of Principal executive offices)         (Zip Code)

                                 (310) 887-6400
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes x No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable  date: Common stock, $.01 par value;
9,079,277 shares outstanding at September 28, 1999.



<PAGE>


                              KENNEDY-WILSON, INC.
                    INDEX TO QUARTERLY REPORT ON FORM 10-Q/A
                                 March 31, 1999




Page

Part I. Financial Information................................................. 3

    Item 1.Financial Statements:

               Consolidated  Balance Sheets as of March 31, 1999 (Unaudited)
               and December 31, 1998...........................................3

               Consolidated  Statements  of Income for the Three  Month
               Periods Ended March 31, 1999 and 1998 (Unaudited)...............4

               Consolidated Statements of Cash Flows for the Three Month
               Periods Ended March 31, 1999 and 1998 (Unaudited)...............5

               Notes to Consolidated Financial Statements (Unaudited)........  6

    Item  2.  Management's  Discussion  and Analysis of Financial
              Condition and Results of Operations.............................10

Part II. Other Information....................................................14

    Item 4.  Submission of Matters to a Vote of Security Holders............. 14

    Item 5.  Other Information............................................... 14

    Item 6.  Exhibits and Reports on Form 8-K................................ 14


                                      -2-
<PAGE>
<TABLE>
<CAPTION>

                                    PART 1
                             FINANCIAL INFORMATION
                     KENNEDY-WILSON, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


                                                                MARCH 31,     DECEMBER 31,
                                                                  1999           1998
                                                               (Unaudited)
                                                             -------------    -------------
<S>                                                           <C>              <C>

ASSETS
     Cash and cash equivalents                                 $ 7,699,000      $ 9,838,000
     Cash - restricted                                           7,978,000        8,168,000
     Accounts receivable                                         5,285,000        6,674,000
     Notes receivable                                           28,565,000       23,115,000
     Real estate held for sale                                 123,825,000      122,407,000
     Investments with related parties and non-affiliates        11,589,000        9,209,000
     Contracts, furniture, fixtures and
        equipment and other assets                               9,578,000        9,238,000
     Goodwill, net                                              16,033,000       16,167,000
                                                             -------------    -------------
TOTAL ASSETS                                                 $ 210,552,000    $ 204,816,000
                                                             =============    =============

LIABILITIES
     Accounts payable                                        $   2,981,000    $   1,752,000
     Accrued expenses and other liabilities                     11,151,000       15,721,000
     Deferred taxes                                                628,000          628,000
     Notes payable                                              14,286,000       14,291,000
     Borrowing under lines of credit                            20,640,000       13,514,000
     Mortgage loans payable                                    115,638,000      115,130,000
     Subordinated debt                                          21,000,000       21,000,000
                                                             -------------    -------------
        Total liabilities                                      186,324,000      182,036,000
                                                             -------------    -------------

STOCKHOLDERS' EQUITY
    Preferred stock, $.01 par value; shares
      authorized: 2,000,000 as of December 31,
      1998, 5,000,000 as of March 31, 1999
      none issued                                                        -                -
    Common stock $.01 par value; shares
      authorized: 10,000,000  as of December 31,
      1998, 50,000,000 as of March 31, 1999;
      shares issued: 6,597,075 as of December
      31, 1998, 6,757,662 as of March 31, 1999                      68,000           66,000
     Additional paid-in capital                                 29,159,000       28,888,000
     Accumulated deficit                                        (4,799,000)      (5,970,000)
     Notes receivable from stockholders                           (200,000)        (204,000)
                                                             -------------    -------------
       Total stockholders' equity                               24,228,000       22,780,000
                                                             -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 210,552,000    $ 204,816,000
                                                             =============    =============
</TABLE>


                 See notes to consolidated financial statements.

                                      -3-
<PAGE>


                      KENNEDY-WILSON, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                    UNAUDITED


                                                   Three Month Periods
                                                     Ended March 31,
                                                 -------------------------
                                                     1999          1998
                                                 -------------  ----------

 REVENUES:
      Property management  and leasing fees       $ 6,528,000   $  592,000
      Commission income                             1,841,000    1,140,000
      Sales of residential real estate              4,964,000      183,000
      Equity in income of investments with
        related parties and  non-affiliates           455,000      268,000
      Income on restructured notes receivable       1,002,000      798,000
      Rental income, net                            1,686,000      679,000
      Interest income and other                      3481,000      296,000
                                                 -------------  ----------
      TOTAL REVENUE                                16,857,000    3,956,000
                                                 -------------  ----------

 OPERATING EXPENSES:
      Commissions and marketing expenses               52,000      105,000
      Cost of residential real estate sold          4,801,000      131,000
      Compensation and related expenses             3,352,000      779,000
      General and administrative                    3,036,000      992,000
      Depreciation and amortization                   611,000      164,000
      Interest expense                              3,232,000    1,013,000
                                                 -------------  ----------
      TOTAL OPERATING EXPENSES                     15,084,000    3,184,000
                                                 -------------  ----------

 INCOME BEFORE PROVISION FOR INCOME TAXES           1,773,000      772,000

 PROVISION FOR INCOME TAXES                           603,000       98,000
                                                 -------------  ----------
 NET INCOME                                      $  1,170,000   $  674,000
                                                 =============  ==========

      Basic net income per share                        $0.17        $0.11
      Basic weighted average shares                 6,707,284    5,924,800

      Diluted net income per share                      $0.16        $0.11
      Diluted weighted average shares                       0            0


                 See notes to consolidated financial statements.

                                      -4-
<PAGE>


                      KENNEDY-WILSON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                     Three Month Periods Ended
                                                            March 31,
                                                   -----------------------------
                                                         1999           1998
                                                     ------------  -------------
   CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                         $1,170,000   $    674,000
   Adjustments to reconcile net income to
     net cash used in operating activities:
     Depreciation and amortization                       611,000        164,000
     Equity in income of investments with related
       parties and non-affiliates                       (455,000)      (268,000)
     Gains on sales of real estate                             -        (52,000)
     Gains on restructured notes receivable
        - non-cash                                      (684,000)      (449,000)
   Change in assets and liabilities:
     Accounts receivable                                1,389,000    (1,136,000)
     Other assets                                        (290,000)     (186,000)
     Accounts payable                                   1,229,000       335,000
     Accrued expenses and other liabilities            (4,570,000)   (1,764,000)
                                                      ------------ -------------
         Net cash used in operating activities         (1,600,000)   (2,682,000)
                                                      ------------ -------------

   CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchase of contract, furniture, fixtures and
     equipment                                           (441,000)            -
   Dispositions of contracts, furniture, fixtures
     and equipment                                          2,000             -
   Purchase and additions to real estate
     held for sale                                     (6,607,000)  (50,578,000)
   Proceeds from sales of real estate held
     for sale                                           5,101,000       183,000
   Additions to notes receivable                       (5,773,000)   (2,731,000)
   Principal repayment on from notes receivable         1,007,000             -
   Notes receivable repayments from stockholders            4,000             -
   Distributions from joint ventures                       86,000       762,000
   Contributions to joint ventures                    (2,011,000)    (3,997,000)
                                                     ------------  -------------
       Net cash used in investing activities          (8,632,000)   (56,361,000)
                                                     ------------  -------------

   CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of mortgage loans payable                  1,836,000     46,141,000
   Repayment of mortgage loans payable                (1,328,000)       (33,000)
   Borrowings under lines of credit                    7,476,000      3,057,000
   Repayment of lines of credit                         (350,000)             -
   Borrowings under notes payable                              -      4,000,000
   Repayment of notes payable                             (5,000)      (932,000)
   Cash - restricted decrease (increase)                  190,000      (446,000)
   Issuance of common stock                               274,000        18,000
                                                     ------------  -------------
       Net cash provided by financing activities        8,093,000     51,805,000
                                                     ------------  -------------

   Net decrease in cash                                (2,139,000)   (7,238,000)
   Cash, beginning of year                              9,838,000    10,448,000

                                                     ------------  -------------
   Cash, end of year                                  $7,699,000   $  3,210,000
                                                     ============  =============

                                      -5-
<PAGE>


                      KENNEDY-WILSON, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                    UNAUDITED

Note 1 - Financial Statement Presentation

      The above financial statements have been prepared by Kennedy-Wilson,  Inc.
  a Delaware  corporation,  and  subsidiaries  (the "Company")  without audit by
  independent  public  accountants,   pursuant  to  the  Rules  and  Regulations
  promulgated  by the Securities  and Exchange  Commission  under the Securities
  Exchange Act of 1934. The statements,  in the opinion of the Company,  present
  fairly the  financial  position  and results of  operations  for the dates and
  periods  indicated.  The results of  operations  for  interim  periods are not
  necessarily  indicative  of  results to be  expected  for full  fiscal  years.
  Certain  information and footnote  disclosures  normally included in financial
  statements   prepared  in  accordance  with  generally   accepted   accounting
  principles  have  been  condensed  or  omitted   pursuant  to  the  Rules  and
  Regulations of the Securities and Exchange  Commission.  The Company  believes
  that the  disclosures  contained in the financial  statements  are adequate to
  make the  information  presented not misleading.  These  financial  statements
  should be read in  conjunction  with the  financial  statements  and the notes
  thereto  included  in the  Company's  Annual  Report on Form 10-K for the year
  ended  December 31, 1998.  Certain  reclassifications  have been made to prior
  period balances to conform to the current period  presentation.  In accordance
  with SFAS No. 130, Reporting  Comprehensive  Income, the Company does not have
  any material comprehensive income.

Note 2 - Notes Receivable

      Notes receivable  consists  primarily of non-performing  notes and related
  assets  acquired from  financial  institutions.  A majority of these notes are
  typically  collateralized  by real estate,  personal  property or  guarantees.
  Notes receivable also includes  mezzanine loans to real estate  developers for
  new single-family residential developments.

      In January  1999,  the Company  executed a mezzanine  loan  agreement  for
  $750,000  bearing an interest rate of 10% per annum secured by two third trust
  deeds, a pledge of the borrower's  cash  distribution in a non related project
  and a  personal  guarantee  by the  borrower.  The  Company is  entitled  to a
  participation in any profits from the development.

      In February  1999 the  Company  executed a mezzanine  loan  agreement  for
  $342,122  bearing an  interest  rate of 10% per annum with a maturity  date no
  later than July 31,  2000.  The Loan is  secured by a deed of trust,  security
  agreement and fixture filing encumbering the project and a repayment guarantee
  by members of the  borrower.  Also in February  1999,  the Company  executed a
  mezzanine  loan  agreement  for $300,753  bearing an interest  rate of 10% per
  annum with a maturity date no later than July 31, 2000. The loan is secured by
  a deed of trust, security agreement and fixture filing encumbering the project
  and a repayment guarantee by members of the borrower.  The Company is entitled
  to a participation in any profits from both projects.

      In March  1999 the  Company  executed a  mezzanine  loan  agreement  for a
  maximum  sum of  $5,760,000,  bearing an interest  rate of 12% per annum.  The
  amount outstanding as of March 31, 1999 was $3,465,030. The Note is secured by
  a construction  deed of trust,  assignment of leases,  security  agreement and
  fixture filing encumbering the property.

                                      -6-
<PAGE>
Note 3 - Investments with Related Parties and Non-Affiliates

      In January 1999,  the Company  acquired a 2.5% interest in a joint venture
  ("First Colony KW") with Colony Capital Inc., an affiliate of Thomas  Barrack,
  Jr.,  a  current  director,   which  purchased  a  commercial   property  with
  approximately  244,000  square feet of net rental space,  located in Kawasaki,
  Japan. The Company's investment at March 31, 1999 was approximately $756,000.

      In March 1999, the Company  acquired a 5% interest in a joint venture ("KA
  Capital") with Cargill Japan, to purchase distressed loans and properties from
  Japanese financial  institutions.  The Company's  investment at March 31, 1999
  was approximately $742,000.

Note 4 - Earnings per Share

      The following  table  reconciles the  denominator  used in calculating the
  earnings per share for the periods ending March 31, 1999 and 1998.

                                                   Three Month Periods
                                                      Ended March 31,
   BASIC EARNINGS PER SHARE                          1999        1998
   ------------------------                       ----------- -----------

   Net Income Available to Common Stockholders     $1,170,000 $   674,000
                                                  =========== ===========

   Weighted Average Shares                          6,707,284   5,924,800
                                                  =========== ===========

   Basic per Share Amount                          $    0.17    $    0.11
                                                  =========== ===========

   DILUTED EARNINGS PER SHARE

   Net Income Available to Common Stockholders    $ 1,170,000   $ 876,000
                                                  =========== ===========

   Weighted Average Shares                          6,707,284   5,924,800
   Common Stock Equivalents                           622,525     441,489
                                                   ----------- ----------
   Total Diluted Shares                             7,329,809   6,366,289
                                                   =========== ==========

   Diluted per Share Amount                         $    0.16   $    0.11
                                                  =========== ===========

Note 5 - Segment Information

  The Company's business  activities  currently consist of property  management,
  commercial  and  residential  brokerage,  and  various  type  of  real  estate
  investments.   The   Company's   segment   disclosure   with  respect  to  the
  determination  of segment  profit or loss and segment assets is based on these
  services and its various investments:

  Property  Management  - As a result of recent  acquisitions,  the  Company has
  become a nationwide commercial and residential property management and leasing
  company,  providing a full range of services relating to property  management.
  The Company  also  provides  asset  management  services for some of our joint
  ventures.

                                      -7-


<PAGE>
  Brokerage - Through it's various  offices,  the Company  provides  specialized
  brokerage  services  for both  commercial  and  residential  real  estate  and
  provides other real estate services such as property  valuations,  development
  and  implementation  of  marketing  plans,  arranging  financing,  sealed  bid
  auctions and open bid auctions.

  Investments - With joint venture  partners and on its own, the Company invests
  in commercial and  residential  real estate and purchases and manages pools of
  distressed  notes.  The  Company's  current real estate  portfolio  focuses on
  commercial  buildings and multiple and single family  residences.  The Company
  has entered into joint ventures with large international  investors, to invest
  in Japanese real estate and note pools. The Company also makes mezzanine loans
  to real estate developers for new single-family, residential developments.

  The following  tables  reconcile the Company's income and expense activity for
  the three months  March 31, 1999 and balance  sheet data as of March 31, 1999.
  The Company did not  generate  material  intersegment  revenues  for the three
  month  period  ended March 31, 1999 and 1998.  The Company  does not  disclose
  based on geographic segments due to immateriality.

<TABLE>
<CAPTION>

                   1999 Reconciliation of Reportable Segment Information


                               Property
                              Management     Brokerage     Investments    Corporate       Consolidated

<S>                           <C>            <C>           <C>             <C>            <C>

Equity in income of
  investments with
  related parties and
  non-affiliates                                              $455,000                     $455,000
Interest income                                                202,000       $99,000        301,000
Other revenues                 $6,528,000    $1,841,000      7,732,000                   16,101,000
                             -------------   -----------  ------------   -----------     ----------
TOTAL REVENUES:                 6,528,000     1,841,000      8,389,000        99,000     16,857,000

Depreciation and amortization     507,000         4,000         88,000        12,000        611,000
Interest expense                  741,000         3,000      2,112,000       376,000      3,232,000
Other expenses                  2,644,000     1,223,000      5,990,000     1,384,000     11,241,000
                             -------------  -----------   ------------   -----------     ----------
TOTAL OPERATING EXPENSES:       3,892,000     1,230,000      8,190,000     1,772,000     15,084,000
                             -------------  -----------   ------------   -----------     ----------
Income before provision
  for income taxes              2,636,000       611,000        199,000    (1,673,000)     1,773,000

Provision for income taxes              -             -              -       603,000        603,000
                             -------------  -----------   ------------   -----------     ----------

NET INCOME                     $2,636,000      $611,000       $199,000   $(2,276,000)    $1,170,000
                             =============  ===========   ============   ===========     ==========


Total assets                  $32,276,000    $2,273,000   $159,233,000   $16,770,000   $210,552,000
                             =============  ===========   ============   ===========   ============

Total liabilities              $5,054,000      $253,000   $126,531,000   $54,486,000   $186,324,000
Stockholders' equity           27,222,000     2,020,000     32,702,000   (37,716,000)    24,228,000
                             -------------  -----------   ------------   -----------   ------------

Total liabilities and
stockholders' equity          $32,276,000    $2,273,000   $159,233,000   $16,770,000   $210,552,000
                             =============  ===========   ============   ===========   ============
</TABLE>

                                      -8-

<PAGE>
  The following  tables  reconcile the Company's income and expense activity for
  the months ended March 31, 1998 and the balance  sheet data as of December 31,
  1998.
<TABLE>
<CAPTION>

                   1998 Reconciliation of Reportable Segment Information

                                   Brokerage    Investments   Corporate     Consolidated
<S>                               <C>           <C>           <C>           <C>
  Equity in income of
    investments with related
    parties and non-affiliates                     $268,000                  $268,000
  Interest income                                   225,000     $26,000       251,000
  Other revenues                   $2,142,000       851,000     444,000     3,437,000
                                   -----------  ------------ -----------   ----------
  TOTAL REVENUES:                   2,142,000     1,344,000     470,000     3,956,000

  Depreciation and amortization         8,000       148,000       8,000       164,000
  Interest expense                                  883,000     130,000     1,013,000
  Other expenses                    1,158,000       375,000     474,000     2,007,000
                                   -----------  ------------ -----------   ----------
  TOTAL OPERATING EXPENSES:         1,166,000     1,406,000     612,000     3,184,000
                                   -----------  ------------ -----------   ----------

  Income before provision
      for income taxes                976,000      (62,000)   (142,000)       772,000
  Provision for income taxes                -             -      98,000        98,000
                                   -----------  ------------ -----------   ----------

  NET INCOME                         $976,000     $(62,000)  $(240,000)      $674,000
                                   ===========  ============ ===========   ==========

                        Property
                       Management     Brokerage     Investments     Corporate      Consolidated
<S>                    <C>            <C>           <C>             <C>            <C>
Total assets           $33,774,000    $4,374,000    $155,955,000    $16,042,000    $210,145,000
                      =============   ===========   ============    ===========    ============

Total liabilities       $4,400,000    $1,484,000    $123,027,000    $38,058,000    $166,969,000
Stockholders' equity    29,374,000     2,890,000      32,928,000    (22,016,000)     43,176,000
                      -------------   ----------    ------------    -----------     -----------

Total liabilities
and stockholders'
equity                 $33,774,000    $4,374,000    $155,955,000    $16,042,000    $210,145,000
                       ===========    ==========    ============    ===========    ============

</TABLE>


Note 6 - Subsequent Events

      In  April  1999,  the  Company  acquired  all of  the  assets  of  Coastal
   Commercial Real Estate  Services Inc.,  which does business as R&B Commercial
   Real Estate  Services,  a Los Angeles based company that manages and leases a
   portfolio of  approximately  6 million  square feet of real estate  primarily
   located in Arizona,  Texas and  throughout  California for  approximately  $1
   million,  plus up to an  additional  $1.2  million to be paid in three yearly
   installments  provided  that a  specified  pretax  net  operating  income  is
   achieved in each of the three years. This transaction was accounted for using
   the purchase  method of  accounting.  The purchase price was allocated to the
   fair values of contracts and furniture  and  fixtures,  any residual  amounts
   were allocated to goodwill.

     In April  1999,  the  Company's  line of  credit  with  East  West Bank was
  increased from $21 million to approximately $22.5 million with a maturity date
  of June 6, 2000,  and interest due monthly at a rate of three month LIBOR plus
  2%.

     In  April  1999,  the  Company  issued  and sold  convertible  subordinated
  debentures in the aggregate  principal amount of $7.5 million.  The debentures
  have a term of seven years and an interest rate of 6%,  payable  monthly.  The
  debentures  are  presently  convertible  into 750,000  shares of the Company's
  common stock at any time by the holders at a conversion price of $10 per share
  (subject to  adjustment).  The proceeds were used to pay down a portion of the
  Company's  subordinated  debt with Colony K-W,  LLC,  an  affiliate  of Colony
  Capital, Inc.

     In May 1999, the Company completed a public offering of 2,300,000 shares of
  its common  stock in an  underwriters  public  offering.  The new shares  were
  priced  at  $9.00  per  share,   resulting  in   aggregate   net  proceeds  of
  approximately  $18  million.  The  shares  were  registered  with the SEC by a
  Registration Statement on Form S-1 (Registration No. 333-74391).  The proceeds
  of the offering were used to pay down existing debt.

                                      -9-

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

  Overview

     We are an  international  real estate services and investment  company.  We
  provide property management and leasing services, asset management, commercial
  and residential  brokerage,  and auction services to clients  primarily in the
  U.S.  and  Japan.   Our  clients   include   financial   institutions,   major
  corporations,  real estate  developers,  insurance  companies and governmental
  agencies. We also invest in commercial and residential real estate, as well as
  individual and pools of distressed notes both in the U.S. and Japan.

  Comparison of the Three Months Ended March 31, 1999 and 1998

  Total revenues.

     Total  revenue for the three months ended March 31, 1999 was  approximately
  $16.9  million  representing  a 283%  increase over total revenue for the same
  period in 1998 of  approximately  $4.4  million.  Revenues  increased in every
  category  with the  largest  increase  occurring  in property  management  and
  leasing  fees.  We acquired our  property  management  and leasing  subsidiary
  Kennedy-Wilson Properties Ltd., in July 1998.

     Property management and leasing fees. The acquisition of KW Properties Ltd.
  increased  property  management and related fees by approximately $5.8 million
  and additional fees of $709,000 were earned by our commercial  brokerage group
  relating to the leasing and asset management of commercial  buildings in Japan
  and New York in which we hold an equity interest of 2% and 15%, respectively.

     Brokerage. Commission income during the first quarter of 1999 decreased 14%
  from the first quarter of 1998 due to an  additional  $592,000 of leasing fees
  earned in the first  quarter of 1998 which is offset by an increase  number of
  brokerage  closings in 1999 including two hotels  located in Washington,  D.C.
  and San  Francisco,  California  and a  commercial  office  building  in Santa
  Monica, California.

     Investments.  For the three months  ended March 31, 1999,  revenue from the
  sales of residential  real estate of  approximately  $5.0 million reflects the
  sales  of 15  homes,  which  are part of a  project  located  in Palm  Desert,
  California.  Sales  revenue of $183,000 in the same period in 1998  represents
  the sale of one condominium unit in a project in Corona Del Mar, California.

     Equity in income of  investments  with related  parties and  non-affiliates
  increased  70% in the  first  quarter  of 1999  over the same  period  in 1998
  primarily due to our investment in a ski resort.

     Rental  income,  net for the three  months  ended  March 31, 1999 was $1.69
  million  equating to a 148.3%  increase  compared to $679,000 during the first
  quarter in 1998. This was due to the addition of two large  commercial  office
  buildings  purchased in the second half of 1998, as well as, the effects of an
  intensified leasing program.

     Gain on  restructured  notes  receivable  for the first quarter of 1999 was
  $844,000  compared to $655,000  during the same period in 1998  resulting in a
  29% increase.  This was due to the settlement of several large  non-performing
  notes.

     Other income increased 15% due to increased asset management and consulting
  fees earned in Japan.

                                      -10-


<PAGE>
  Total Operating Expenses.

     Operating  expenses  increased to approximately $15 million for the quarter
  ending  March 31, 1999 from  approximately  $3.6  million for the three months
  ended  March 31,  1998 due  primarily  to the  acquisition  of  Kennedy-Wilson
  Properties Ltd. and a larger commercial properties portfolio.

     Brokerage  commissions and marketing  expenses during the period  decreased
  50.4% from the same period in 1998 due to a decrease in  residential  auctions
  which typically results in higher brokerage commission and marketing expense.

     Cost of  residential  real  estate sold  increased  to  approximately  $4.8
  million from $131,000 for the same period in 1998  resulting from the sales of
  the 15 homes discussed above.

     Compensation and general and  administrative  expense  increased 174.8% due
  primarily to the acquisition of Kennedy-Wilson Properties Ltd.

     Depreciation   and   amortization   expense   increased  273%  due  to  the
  amortization  of  goodwill  and  other  assets  relating  to the  purchase  of
  Kennedy-Wilson Properties Ltd.

     Interest  expense on the debt we  incurred to finance  the  acquisition  of
  Kennedy-Wilson Properties Ltd., and our commercial property portfolio resulted
  in a 219% increase in interest expense over the same period in 1998.

     Provision  for taxes for the three  months  ending  March 31  increased  to
  $603,000 in 1999 from $98,000 in 1998.  The tax expense  during past years has
  been  significantly  less  than  the  statutory  rate due to  substantial  net
  operating  losses  carried  forward  which have been  utilized in reducing our
  federal tax liabilities.

                                      -11-

<PAGE>


  Liquidity and Capital Resources

     Our liquidity and capital resources  requirements  include expenditures for
  real estate held for sale, distressed notes pools, the acquisition of property
  management portfolios,  and working capital needs.  Historically,  we have not
  required significant capital resources to support our brokerage operations. We
  finance our operations  with internally  generated funds and borrowings  under
  our revolving  lines of credit as described  below.  Our  investments  in real
  estate are typically financed by mortgage loans secured primarily by that real
  estate.  These mortgage loans are generally  nonrecourse in that, in the event
  of a default,  recourse will be limited to the mortgaged  property  serving as
  collateral, subject to certain exceptions that are standard in the real estate
  industry.  Exceptions  where the lender may proceed  against  the  borrower or
  guarantor,  if any,  generally include the voluntary transfer of the mortgaged
  property by the borrower,  the voluntary initiation of bankruptcy  proceedings
  by the borrower,  fraud or  misrepresentation in obtaining the loan, and other
  similar acts. Cash used in operating  activities during the three months ended
  March 31 was about $1.6 million in 1999, compared to $2.7 million in cash used
  in operating  activities in 1998. The change  included an increase in accounts
  receivable  attributable  primarily  to  property  management  fees  which are
  received one month in arrears,  as well as leasing  commissions earned but not
  received  until the related tenant moves in, offset by the decrease in accrued
  expenses as payments were made for 1998 bonuses and deferred compensation.

     Cash used in  investing  activities  during the three months ended March 31
  was about $8.6  million  in 1999,  compared  to $56.4  million in cash used by
  investing  activities  during the same  period in 1998.  The  change  resulted
  primarily from no  acquisition of commercial  properties in 1999 compared with
  three in the first quarter of 1998.

     Cash  provided  by  financing  activities  was about $8.1  million in 1999,
  compared to cash used in financing  activities in 1998 of about $51.8 million.
  The change  resulted  from  issuance of about $46  million of  mortgage  loans
  payable in 1998 and $1.8 million in 1999.

     To the extent that we engage in additional strategic investments, including
  real estate,  note portfolio,  or  acquisitions  of other property  management
  companies,  we may need to obtain third party  financing  which could  include
  bank  financing  or the  public  sale or private  placement  of debt or equity
  securities.  We believe  that  existing  cash,  plus  capital  generated  from
  property  management  and  leasing,  brokerage,  sales of real  estate  owned,
  collections  from notes  receivable,  as well as our current  unsecured  $22.5
  million line of credit with East-West Bank,  which had an outstanding  balance
  as of May 11, 1999 of $12.7 million,  will provide us with sufficient  capital
  requirements for the foreseeable future.

     We intend to retain earnings to finance our growth and,  therefore,  do not
  anticipate  paying  any  dividends.  We  believe  that  funds  generated  from
  operations  together with existing cash and available  credit under our credit
  facilities  will be  sufficient  to finance  our current  operations,  planned
  investments,  acquisitions of the property management companies,  and internal
  growth.  Our  need,  if any,  to raise  additional  funds to meet our  working
  capital and capital  requirements will depend on numerous  factors,  including
  the success and pace of the  implementation  of our  strategy  for growth.  We
  regularly monitor capital raising alternatives to be able to take advantage of
  other available  avenues to support our working capital and investment  needs,
  including strategic partnerships and other alliances, bank borrowings, and the
  sale of equity or debt securities.

                                      -12-

<PAGE>




  Year 2000 Issue

  How Does The Year 2000 Issue Impact Us?

     We are not currently aware of any internal Year 2000 problems that could be
  reasonably expected to have a material adverse impact on our business, results
  of operations and financial condition.  The vendors from which we will acquire
  hardware and software for our new information technology system have indicated
  the products we plan to use are currently Year 2000 compliant. The majority of
  the  mechanical  systems  at the  properties  we own and  manage  have  manual
  overrides.  We plan to have a  management  team at each  building  immediately
  prior to January 1, 2000 who will be able to respond to any contingencies.  In
  addition, our team at Kennedy-Wilson,  Tech. will be assembled in their office
  ready to respond to any inquiries from the management  teams.  However,  there
  can  be no  assurance  that  we  will  not  discover  Year  2000  problems  in
  information  technology  systems  or  mechanical  systems  that  will  require
  substantial   revisions  or  replacement.   We  cannot  give  assurances  that
  third-party  software,  hardware or services  incorporated  into our  material
  systems or systems  upon which we are  reliant  will not need to be revised or
  replaced, which could be time consuming and expensive.

     In  addition,  we  cannot  give  assurances  that  governmental   agencies,
  utilities third-party service providers and others outside of our control will
  be Year 2000 compliant. The failure of such entities to become compliant could
  result  in  a  systemic   failure   beyond  our  control,   such  as  loss  of
  telecommunications  or electrical  failure,  which could adversely  impact our
  information  technology systems or would allow tenants at the buildings we own
  or manage to terminate leases if such failures persist.

  Forward Looking Statements

     Management's Discussion and Analysis of Financial Conditions and Results of
  Operations  contains  certain  forward-looking  statements that are subject to
  risk and  uncertainty.  Investors  and  potential  investors in the  Company's
  securities are cautioned that a number of factors could  adversely  affect the
  Company's  ability to obtain these results,  including but not limited to, (a)
  the inability to lease currently vacant space in properties; (b) the inability
  of tenants to pay  contractual  rent and other expenses;  (c)  bankruptcies of
  tenants; (d) increases in certain operating costs at properties; (e) decreases
  in rental  rate  available  from  tenants  leasing  space in  properties;  (f)
  unavailability of financing for acquisitions, development and redevelopment of
  properties;  (g)  increases  in  interest  rates;  and (h) a general  economic
  downturn  resulting in lower rents,  rent  delinquencies,  and other  downward
  pressure on commissions, occupancies and rents at properties.


                                      -13-

<PAGE>

                           PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

      On March 25, 1999, a special meeting of stockholders  was held to consider
and act upon proposed  amendments  to: (i) our 1992  Incentive and  Nonstatutory
Stock Option Plan to increase the number of shares  available for issuance under
the plan from 1,080,000 to 1,700,000 and (ii) our  Certificate of  Incorporation
to effect an increase  in the number of  authorized  shares of common  stock and
preferred  stock from  10,000,000  and  2,000,000 to 50,000,000  and  5,000,000,
respectively.  Both amendments were approved. In voting for the amendment to our
stock  option  plan,  4,975,383  votes  were cast for,  403,657  votes were cast
against and 2,061  abstained.  The amendment to our Certificate of Incorporation
was  approved  with  4,993,631   votes  for  385,293  votes  against  and  2,177
abstaining. No broker non-votes were recorded for either proposal.

Item 5. Other Information

      The Annual Meeting of Stockholders  is tentatively  scheduled for June 23,
1999.  Shareholders  proposals for  inclusion in this year's  Annual  Meeting of
Stockholders  are being accepted until June 1, 1999, one day before we expect to
mail proxy statements to our stockholders.

Item 6.  Exhibits and Reports on Form 8-K

      (a) Exhibits

           The following Exhibits are included herein:

                                  EXHIBIT INDEX

      ITEM                          DESCRIPTION

      3     1999  Amendment to Certificate  of  Incorporation  (Filed as Exhibit
            3.1.2  to  the  Registrant's  Registration  Statement  on  Form  S-1
            (Registration  No.  333-74391)  and  incorporated   herein  by  this
            reference).
      10.1  1999 Amendment to 1992 Incentive and Nonstatutory  Stock Option Plan
            (Filed as Exhibit 10.4.4 to the Registrant's  Registration Statement
            on Form S-1 (Registration No. 333-74391) and incorporated  herein by
            this reference).
      10.2  Convertible  Debenture Purchase Agreement dated as of April 15, 1999
            among the  Registrant,  William  McMorrow,  Lewis  Halpert,  Cahill,
            Warnock Strategic Partners Fund, L.P. and Strategic Associates, L.P.
            (Filed as Exhibit 10.31.1 to the Registrant's Registration Statement
            on Form S-1 (Registration No. 333-74391)
            and incorporated herein by this reference).
      10.3  Registration  Rights  Agreement dated as of April 15, 1999 among the
            Registrant,  Cahill,  Warnock  Strategic  Partners  Fund,  L.P.  and
            Strategic  Associates,   L.P.  (Filed  as  Exhibit  10.31.2  to  the
            Registrant's  Registration  Statement on Form S-1  (Registration No.
            333-74391) and incorporated herein by this reference).
      10.4  Form of  Convertible  Subordinated  Note issued by the Registrant on
            April 26, 1999 to Cahill,  Warnock Strategic Partners Fund, L.P. and
            Strategic  Associates,   L.P.  (Filed  as  Exhibit  10.31.3  to  the
            Registrant's  Registration  Statement on Form S-1  (Registration No.
            333-74391) and incorporated herein by this reference).
      10.5  First  Amendment to Credit  Agreement  and Note dated as of April 1,
            1999  between  the  Registrant  and East West Bank (Filed as Exhibit
            10.5 to the  Registrant's  Form  10-Q/A  filed  on May 18,  1999 and
            incorporated herein by this reference).
      11    Earnings  per  Share  Calculation   (Filed  as  Exhibit  11  to  the
            Registrant's  Form  10-Q/A  filed on May 18,  1999 and  incorporated
            herein by this reference).
      27*   Financial  Data  Schedule.

            -----------------
            *  Filed herewith.

      (b) Reports on Form 8-K

            On March  11,  1999,  we filed a report on Form 8-K  disclosing  the
            contents  of a  press  release  announcing  our  proposed  secondary
            offering of our Common Stock, which was subsequently  consummated on
            May 17, 1999.


                                      -14-

<PAGE>
                                    SIGNATURE


      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


Date:  October 18, 1999            KENNEDY-WILSON, INC.
                                   Registrant


                                   /s/ Freeman A. Lyle
                                   ---------------------------------
                                       Freeman A. Lyle
                                   Executive Vice President &
                                   Chief Financial Officer
                                   (Principal Financial and Accounting Officer)