Kennedy Wilson Seattle Property...

Seattle Property Day

July 2018(Information as of March 31, 2018 unless otherwise noted)

Seattle Property Day1

Disclaimer/Forward-Looking Statements

Statements made by us in this presentation and in other reports and statements released by

us that are not historical facts constitute “forward-looking statements” within the meaning of

Section 27A of the Securities Act of 1933, as amended,

and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-

looking statements are necessarily estimates reflecting the judgment of our senior

management based on our current estimates, expectations, forecasts and projections and

include comments that express our current opinions about trends and factors that may

impact future operating results. Some of the forward-looking statements may be identified

by words like “believes”, “expects”, “anticipates”, “estimates”, “plans”, “intends”, “projects”,

“indicates“, “could”, “may” and similar expressions. These statements are not guarantees

of future performance and involve a number of risks, uncertainties and assumptions.

Accordingly, actual results or the performance of Kennedy-Wilson Holdings, Inc. (the

“Company”) or its subsidiaries may differ significantly, positively or negatively, from forward-

looking statements made herein. Unanticipated events and circumstances are likely to

occur. Factors that might cause such differences include, but are not limited to, the risks

that the Company’s business strategy and plans may not receive the level of market

acceptance anticipated; disruptions in general economic and business conditions,

particularly in geographic areas where our business may be concentrated; the continued

volatility and disruption of the capital and credit markets, higher interest rates, higher loan

costs, less desirable loan terms, and a reduction in the availability of mortgage loans and

mezzanine financing, all of which could increase costs and could limit our ability to acquire

additional real estate assets; continued high levels of, or increases in, unemployment and a

general slowdown in commercial activity; our leverage and ability to refinance existing

indebtedness or incur additional indebtedness; an increase in our debt service obligations;

our ability to generate a sufficient amount of cash from operations to satisfy working capital

requirements and to service our existing and future indebtedness; our ability to achieve

improvements in operating efficiency; foreign currency fluctuations; adverse changes in the

securities markets; our ability to retain our senior management and attract and retain

qualified and experienced employees; our ability to attract new user and investor clients;

our ability to retain major clients and renew related contracts; trends in the use of large, full-

service commercial real estate providers; changes in tax laws in the United States, Europe

or Japan that reduce or eliminate our deductions or other tax benefits; future acquisitions

may not be available at favorable prices or with advantageous terms and conditions; and

costs relating to the acquisition of assets we may acquire could be higher than anticipated.

Any such forward-looking statements, whether made in this report or elsewhere, should be

considered in the context of the various disclosures made by us about our businesses

including, without limitation, the risk factors discussed in our filings with the U.S. Securities

and Exchange Commission (“SEC”). Except as required under the federal securities laws

and the rules and regulations of the SEC, we do not have any intention or obligation to

update publicly any forward-looking statements, whether as a result of new information,

future events, change in assumptions, or otherwise.

The information with respect to the projections presented herein is based on a number of assumptions about future events and is subject to significant economic and competitive uncertainty and

other contingencies, none of which can be predicted with any certainty and some of which are beyond the company’s control. There can be no assurances that the projections will be realized, and

actual results may be higher or lower than those indicated. Neither the company nor any of their respective security holders, directors, officers, employees, advisors or affiliates, or any

representatives or affiliates of the foregoing, assumes responsibility for the accuracy of the projections presented herein.

The modeling, calculations, forecasts, projections, evaluations, analyses, simulations, or other forward-looking information prepared by Property and Portfolio Research, Inc. (Licensor) and

presented herein (the “Licensor Materials”) are based on various assumptions concerning future events and circumstances, all of which are uncertain and subject to change without notice. Actual

results and events may differ materially from the projections presented. All Licensor Materials speak only as of the date referenced with respect to such data and may have changed since such

date, which changes may be material. You should not construe any of the Licensor Materials as investment, tax, accounting, or legal advice.


Agenda

Welcome1 Bill McMorrow, Chairman and CEO, Kennedy Wilson

Seattle overview2 Kurt Zech, President, Kennedy Wilson Multifamily

Vintage Housing Holdings3 Ryan Patterson, President, Vintage Housing Holdings

Asset tour4


1. Welcome

Overview

Bill McMorrow – Chairman and CEO, Kennedy Wilson


KW overview

Total employees

511No. of offices

24

Estimated Annual NOI2

$461m

Quarterly Dividend

$0.19

Carrying value of

real estate

$7.2bnNon-income producing

and unstabilized assets

$1.0bn

1 Information shown at share as of March 31, 2018.2 As defined in definitions section in the appendix.3 Based on annual dividend of $0.76 and share price of $21.15 on 6/30/18.

KENNEDY WILSON (NYSE:KW) AT A GLANCE1

Dividend Yield3

3.6%


Diversified portfolio and solid track record

SectorsMultifamily: 39%

Office: 33%

Retail: 18%

Hotel &

Industrial: 10%

Estimated Annual

NOI1

$461m

Multifamily units3

27,508Commercial area

(sq ft)2

19.0m

1 As defined in definitions section in the appendix.2 Includes 1.1m sq ft of unstabilized assets and 0.7m sq ft under development.3 Includes 418 unstabilized units and 2,530 units under development.

4 Approximate IRR on realized investments since going public through March 31, 2018. Disposition track record

excludes loan pools.

Transactions since going public

IRR on dispositions

to KW30%✓

Acquisitions: $20B

Dispositions: $10B

Disposition track record4

Investment

transactions

(gross)

$30bn

Global real estate portfolio


The Kennedy Wilson story

Global business is positioned to grow1

Unrivalled long-term relationships with major institutions2

30-year track record as global real estate investor and operator5

Local investment and service expertise to accretively allocate capital3

4 First-mover advantage from early entry in key target markets


Near-term strategic priorities

Development

Non-core

Asset Sales

• Additional $32mm of Estimated Annual NOI through

projects completed by YE-2019

• Generate $500mm of additional cash by YE-2019

1

Investment

Management• Raise $1bn in third-party capital by YE-2018

• Expand capital raising to Europe3

Balance Sheet• Strategically grow multifamily portfolio in the U.S.,

Ireland and the U.K. 2

4


2006First acquisition in WA

11,110Apartments

(incl.1,930 in development or

under contract)

1.4mOffice sq ft

$71mEstimated annual NOI(1)(3)

to KW

Washington is KW’s largest U.S. market; represents 35% of US portfolio NOI

1 As of March 31, 2018 and pro-forma for asset sales announced and completed subsequent to 1Q-2018. 3 As defined in definitions section in the appendix. 2 There can be no assurances that such units will be acquired and/or fully developed.

1

2


2. Seattle market overview

Overview

Kurt Zech – President, Kennedy Wilson Multifamily


Seattle by the numbers

Regional population

3.9mWage growth1

3.6% No state income tax

$0 Sq.ft. of office under

construction

5.1m

Unemployment rate

3.8%Committed to

transportation projects

$60bn

Source: JLL1 Meyers Research; U.S. Bureau of Labor Statistics. For the year ended March 2018.


Seattle’s diverse employer base

7k

9k

9k

11k

11k

16k

16k

18k

30k

43k

45k

64k

0k 10k 20k 30k 40k 50k 60k 70k

Sources: Puget Sound Business Journal; CoStar Portfolio Strategy

Numbers are representative of full-time employees.


Seattle is still a leader in job creation

Sources: U.S. Bureau of Economic Analysis; Moody’s Analytics; CoStar Portfolio Strategy. As of May-2018.

Year-over-year non-farm job growth

3.3% 3.3%

3.0%2.8%

2.4%2.1%

1.6% 1.6% 1.4% 1.4%

1.2%

0.9%0.7%

1.6%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

12-Month Employment Growth U.S. Average


Job growth exceeding multifamily supply

Sources: CBRE Research; JLL1 Includes South Lake Union, Denny Triangle, Capitol Hill/First Hill, Queen Anne/Magnolia/Ballard, University District/Greenlake/Fremont, North Seattle, and South Seattle.

8.4m

21,520

78%

48,000

Projected commercial

sq.ft. added by 2020

Pre-leased

Potential new jobs (175 sq ft per employee)

New apartments

delivered by 20201


Rising home prices make it cheaper to rent

KingCounty

Seattle

Eastside

May-18 May-17

$960,000+9.7%

$830,000+13.9%

$725,275+14.5%

Record median home prices

Sources: Northwest Multiple Listing Service; Seattletimes.com

Source: JLL


Greater Seattle is a preferred destination for Bay Area workers

10 Fortune 500 companies headquartered in the Bay Area with

a significant headcount in the greater Seattle

10 Fortune 500 companies headquartered in the greater Seattle

Source: JLL


Affordability case study: Seattle vs San Francisco

$135,000 $150,000

$0 $10,890

$33,660 $37,440

$27,86027%

of after-tax income

$45,29045%

of after-tax income

$73,480 $56,380

Seattle San Francisco

Average Software Engineer Salary

State Income Tax

Federal Income Tax

Class A, 1-Bedroom Apartment

Disposable Income

Source: JLL

30% more disposable income in Seattle


US Multifamily portfolio overview


Washington represents 38% of US multifamily NOI

Estimated Annual

NOI(1)(2)

$56m

No. of stabilized assets

38

No. of stabilized multifamily units

9,180Market Rate: 73%

Affordable: 27%

Product Type

Atlas, Issaquah, WA Vintage at Urban Center, Lynwood, WA

VHH units in development

or under contract

1,930

1 As defined in definitions section in the appendix. 2 As of March 31, 2018 and pro-forma for asset sales announced and completed subsequent to 1Q-2018.

2

2


Stable income with upside potential

15 / 4,971Communities / Units

Market rate portfolio1

Occupancy

Loss to lease 6%

93%

KW Ownership 61%

1 As of March 31, 2018 and pro-forma for asset sales announced and completed subsequent to 1Q-2018.

Estimated Annual NOI2

to KW $41m

2 As defined in definitions section.


Suburban assets outperforming

Same-property market-rate revenue growth comparison

1 As defined in definitions section in the appendix.

5.8%

6.7%

10.2%

8.5%

7.1%6.8%

7.6%7.1%

5.8%

4.5%

2,346 2,667

4,457

5,075 5,279

-

1,000

2,000

3,000

4,000

5,000

6,000

4%

5%

6%

7%

8%

9%

10%

11%

2014 2015 2016 2017 Q1'18

Kennedy Wilson Public Real Estate Company Average KW Same-Property Units1


KW’s suburban market-rate portfolio positioned for growth

$41m

Federal Way: 25%

Puyallup: 20%

Issaquah: 15%

South Lake Union: 12%

Bellevue/Redmond: 9%

Renton: 8%

Tacoma: 5%

Tumwater: 3%

Other: 3%

Submarket

Estimated Annual

NOI1$1,582

$2,194

Kennedy Wilson Public Real Estate Company Average

Washington average rents comparison

1 As defined in definitions section in the appendix.

1


Value creation through asset management

Before

Onyx – interior renovations

Before After

$7,600

$2,400

32%

Avg. unit renovation cost

Avg. increase in rent/yr

Return on cost

$11,500

$3,000

26% Return on cost

Avg. unit renovation cost

Avg. increase in rent/yr

After

Belara – interior renovations


3. Vintage Housing Holdings

Overview

Ryan Patterson – President, Vintage Housing Holdings


Vintage Housing: Growing our portfolio with minimal equity

YE-20211

44

$14m

30

Stabilized units

KW cash basis

Communities(stabilized)

Today

$78m

6,400

At acquisition

(2Q-15)

5,500

34

9,120

─

1 The figures below are projections. There can be no assurances that such projections will be realized, and actual results may be higher or lower than those indicated.

KW expects to have all invested equity returned by YE-2018


4,209Stabilized Units

1,930Units in development or

under contract1

97%Occupancy

$15mEstimated annual NOI2

to KW

Washington represents 71% of US affordable NOI

1 There can be no assurances that such units will be acquired and/or fully developed. 2 As defined in definitions section in the appendix.


Affordable housing 101

Low-Income Housing Tax Credits Program (LIHTC – “lie-tech”)

Enacted in 1986, it is an indirect Federal subsidy used to finance the construction and rehabilitation of affordable rental

housing for low-income households.

How it works Who qualifies

• Families with an income of 60% or

less of area median incomes (“AMI”)

• Seniors 55 years of age or older

with an income of 60% or less of

AMI

• Section 42 of the Internal Revenue Code allows for

two types of LIHTC’s based on the nature of project

• Provides an incentive for developers through

awarding tax-exempt bonds for qualified projects

• Bonds allow for creation of tax credits which can be

sold to raise capital for their projects

• Investors receive a dollar-for-dollar credit against

their Federal tax liability for a period of 10 years


Tax credit investment process

Federal Government allocates tax-exempt bonds and tax credits to states

State Housing

Agencies allocate

bonds and credits to

affordable housing

development

Affordable

Development

Limited Partners

(major financial

institutions)

TAX-EXEMPT BONDS

TAX CREDITS

TAX-EXEMPT BONDS

TAX CREDITS

TAX CREDITS

$


Mill Creek case study

$28.2m -Building & FFE

$5.7m - Developer Fee

$2.3m -Land

$2.4m - Permits

Key Stats

Units: 220 Close date: August 2016

Cost per door: $185K Construction completion: June 2018 $5.7m Total developer fee1

1 Remaining developer fee to the partnership to be paid from future cash flows.


Generating attractive cash flow through resyndication

Resyndication: Dissolve an existing partnership and recapitalize into a new partnership with tax-exempt bonds

and tax credits which are sold to a new tax credit limited partner.

11 completed resyndications generated $55m for rehab capex & $44m cash to KW

11 additional resyndications expected by 2022

Case Study – Timbers by Vintage

$2.2m $7.4mKW total proceedsKW equity at acquisition

2015• KW equity of $2.2m at acquisition

• Bought out original tax credit LP and secured bridge loan, resulting in

$0.8m of cash to KW

2016• Resyndicated the project into a new venture, generating $4.5m in proceeds to KW

• Began rehab totaling $36K per door

2017• Completed rehab and converted property, generating $2.1m in fees to KW


4. Seattle asset tour

Overview


Tour Map


KW top assets in Washington by NOI1

Represents asset on Seattle property tour $64.2 5877,324

1

2

3

4

5

6

7

8

9

10

90 East

Club Palisades

Atlas

Belara

Bella Sonoma

Harrington Square

The Onyx

Radius

Apex

Equinox

Vintage Housing

Asset nameIssaquah, WA

Federal Way, WA

Issaquah, WA

Auburn, WA

Fife, WA

Renton, WA

Redmond, WA

Seattle, WA

Tacoma, WA

Seattle, WA

Various

Location

Office

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

Multifamily

SectorKW share of est.

NOI1

($m)

$13.1

8.5

6.0

5.0

3.4

3.3

2.9

2.8

2.2

2.1

14.9

Commercial

(000 sq ft)

587

-

-

-

-

-

-

-

-

-

MF

Units

-

750

343

430

280

217

400

282

209

204$49.3

Acquisition

date

Jun-17

Jan-11

Nov-17

Jul-16

Nov-14

Nov-12

Jun-08

Feb-17

Apr-14

Oct-16

Various

587

-

3,115

4,209

1 As of March 31, 2018 and pro-forma for asset sales announced and completed subsequent to 1Q-2018. Please see appendix for definition of Estimated Annual NOI.

Bella SonomaBelaraClub Palisades


Appendix

Overview


AppendixDEFINITIONS:

Estimated Annual NOI: “Estimated annualized NOI" is a property-level non-GAAP measure representing the estimated annual net operating income from each property as of the date shown, inclusive of rent abatements (if applicable). The calculation

excludes depreciation and amortization expense, and does not capture the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements, and leasing commissions necessary to

maintain the operating performance of our properties. Any of the enumerated items above could have a material effect on the performance of our properties. Also, where specifically noted, for properties purchased in 2018, the NOI represents estimated

Year 1 NOI from our original underwriting. Estimated year 1 NOI for properties purchased in 2018 may not be indicative of the actual results for those properties. Estimated annual NOI is not an indicator of the actual annual net operating income that the

Company will or expects to realize in any period. Please also see the definition of "Net operating income" below. The Company does not provide a reconciliation for estimated annual NOI to its most directly comparable forward-looking GAAP financial

measure, because it is unable to provide a meaningful or accurate estimation of each of the component reconciling items, and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or

amount of various items that would impact estimated annual NOI, including, for example, gains on sales of depreciable real estate and other items that have not yet occurred and are out of the Company’s control. For the same reasons, the Company is

unable to meaningfully address the probable significance of the unavailable information and believes that providing a reconci liation for estimated annual NOI would imply a degree of precision as to its forward-looking net operating income that would be

confusing or misleading to investors.

Net Operating Income: "Net operating income" or " NOI” is a non-GAAP measure representing the income produced by a property calculated by deducting operating expenses from operating revenues. Our management uses net operating income

to assess and compare the performance of our properties and to estimate their fair value. Net operating income does not include the effects of depreciation or amortization or gains or losses from the sale of properties because the effects of those items

do not necessarily represent the actual change in the value of our properties resulting from our value-add initiatives or changing market conditions. Our management believes that net operating income reflects the core revenues and costs of operating our

properties and is better suited to evaluate trends in occupancy and lease rates.

Public Real Estate Company Average: Simple average of Essex Property Trust, Inc., AvalonBay Communities, Inc., UDR, Inc., and Equity Residential.

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