FORT WASHINGTON, PENN. — Toll Brothers (NYSE: TOL) has agreed to sell its portfolio of stabilized and in-development apartment and student housing properties to Kennedy Wilson (NYSE: KW) for $347 million. The transaction is expected to close in October. As part of the transaction, Kennedy Wilson will acquire Toll Brothers’ general partner interests in 18 apartment and student housing properties with a combined total asset value of $2.2 billion.
Kennedy Wilson also will acquire a pipeline of 29 sites in various stages of development which, if completed, would total approximately $3.6 billion of invested capital. Kennedy Wilson will assume construction management responsibilities for these properties.
As part of the deal, Kennedy Wilson will also manage 20 apartment and student housing properties that will remain with Toll Brothers following closing, representing another $3 billion worth of assets under management for Kennedy Wilson. It is Toll Brothers’ intention to dispose of these remaining assets over time and exit the multifamily development business. Kennedy Wilson will also acquire the Toll Brothers Apartment Living management division and is expected to make job offers to all existing Toll Brothers multifamily property-management employees.
Brothers Robert and Bruce Toll founded the company in 1967, focusing on for-sale, single-family-home development. The Apartment Living business was added in 2012. Last year, Toll Brothers Apartment Living was ranked 24th on the National Multifamily Housing Council’s Top 25 developers.
“This transaction will unlock significant capital for our stockholders while allowing us to focus on our core homebuilding business and continue our transformation to a more asset-light homebuilder,” said Douglas Yearley, chairman and CEO of Toll Brothers. “We are pleased that our Toll Brothers Apartment Living employees have found a new home at Kennedy Wilson.”
J.P. Morgan Securities LLC acted as Kennedy Wilson’s exclusive financial advisor. Latham & Watkins served as Kennedy Wilson’s legal counsel. Goldman Sachs & Co. LLC and Vestra Advisors acted as Toll Brothers’ financial advisors, and Fried, Frank, Harris, Shriver & Jacobson LLP served as Toll Brothers’ legal counsel.