Kennedy Wilson announced a $300 million perpetual preferred equity investment from affiliates of Eldridge Industries.
The real estate investment company expects to use the proceeds to pay down unsecured debt, including repaying its unsecured bank borrowings in full and to fund its development pipeline.
Along with the investment, a joint venture platform between Security Benefit and Kennedy Wilson will raise its investment target to $1.5 billion from $500 million. Kennedy Wilson plans to continue investing with Security Benefit and its affiliates with a 20% interest and will earn customary fees.
Under the terms of the agreement, Eldridge is purchasing $300 million in convertible perpetual preferred stock carrying a 5.75% annual dividend rate. Kennedy Wilson can call the preferred stock on and after Oct. 15, 2024.
Kennedy Wilson and Eldridge affiliates have invested together in two office properties totaling 509,000 square feet in the western U.S., while Cain International invested alongside Kennedy Wilson in the 390,000-square-foot office portion of the Coopers Cross mixed-use project in Dublin, Ireland, which is currently under development.
J.P. Morgan was the placement agent, and Latham & Watkins LLP was legal adviser to Kennedy Wilson. Morgan Stanley & Co. LLC was the financial adviser while Sidley Austin LLP was the legal adviser to Eldridge.
The transaction is subject to customary closing conditions.