Kennedy Wilson and the U.S. arm of a major Japanese developer are partnering to establish a $200M credit platform, targeting U.S. multifamily and industrial projects.
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The joint venture of Kennedy Wilson and Tokyu Land US Corp. will focus on preferred equity investments and mezzanine loans, with an investment size between $10M and $50M, according to an announcement by the companies.
Kennedy Wilson, a publicly traded real estate investment firm with more than $28B of assets under management, owns a 10% stake in the venture.
The firm will manage and earn fees from the investments. Kennedy Wilson operates in the U.S., UK and Ireland and has more than 60,000 rental units, either owned or financed through its credit platform, and approximately 12.4M SF of industrial space under management.
Each deal will be approved by Tokyu and Kennedy Wilson. The partnership is seeking markets with strong and growing local economies, attractive local amenities and proximity to employment prospects.
In a statement, Tokyu Land US Executive Vice President of Investments Ben Cherney called the partnership “a pivotal step in Tokyu’s accelerated expansion within the U.S. market.”
Since entering the country in 2012, Tokyu has deployed more than $1B of equity in multifamily, office and industrial. It targets large markets on the East and West coasts, according to its website.
“Our preferred equity program offers a compelling value proposition for Japanese investors like Tokyu, providing stable returns and cash flow with robust downside protection and attractive low to mid-teen yields,” Cherney said in a statement. “Given their established debt platform and deep roots in Japan, Kennedy Wilson is the ideal partner for us to drive the successful execution of this growth initiative.”
More firms have moved into the private credit space as pandemic-era floating-rate loans mature and refinancing options grow scarce, even as traditional lenders stabilize.
Earlier this month, Brookfield Asset Management bought Angel Oak Cos., which focuses on nonqualified residential mortgages, as part of BAM's push into the business.
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