Kennedy-Wilson Acquires 344-Unit Apartment Community for $65M; Shares Rise 1.6%

Global real estate investment company Kennedy-Wilson Holdings Inc. (KW) has announced the acquisition of Sombra del Oso, a 344-unit apartment community in Albuquerque city in New Mexico, for $65 million. The company’s shares closed 1.6% higher on Thursday.

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Kennedy-Wilson invests in commercial and multifamily properties situated in Ireland, the U.K., and the Western U.S.

For the acquisition, the company secured a $39 million loan for 10 years at a fixed interest rate of 2.85% and invested $28 million of proceeds generated from the recent sale of assets.

Spanning 16 acres in the Westside of Albuquerque, Sombra del Oso is likely to contribute around $3 million in initial annual net operating income.

Over the past six months, the company has acquired several large apartments, adding over 2,000 units to its portfolio. (See Kennedy-Wilson stock chart on TipRanks)

Senior Managing Director at Kennedy-Wilson Shem Streeter said, “We are encouraged by the region’s resilience this past year and believe there is significant upside in local multifamily as investment continues to flood into the area and residents seek out high quality rental opportunities.”

Evercore ISI analyst Sheila McGrath recently maintained a Buy rating on the stock with a price target of $24 (19% upside potential).

The analyst said, “Kennedy-Wilson is well-positioned for continued growth in 2021 as investment activity has accelerated and it continues to grow its investment management business.”

Overall, the stock has a Moderate Buy consensus rating based on 2 Buys. The average Kennedy-Wilson price target of $23.50 implies 16.5% upside potential from current levels. The company’s shares have gained 31% over the past year.

According to TipRanks’ Smart Score rating system, Kennedy-Wilson scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.