LandCap, Kennedy Wilson to scoop up US residential assets

The joint venture, capitalised with $100m, will acquire portfolios of residential properties including homes and condos from lenders and homebuilders.

Los Angeles-based LandCap Partners and Beverly Hills, California-based Kennedy Wilson have joined forces to acquire completed homes and condominiums in the US held by homebuilders and financial institutions.

The joint venture was capitalised with an initial equity commitment of $100 million.

The acquired properties will be taken off the hands of lenders and homebuilders, which are holding the properties in inventory, according to the firms. More than 1.5 million completed homes were estimated to be held by builders and lenders, it said. The joint venture also is targeting foreclosed US residential properties.

The assets will be resold – generally at auction through a Kennedy Wilson affiliate – to the public. Through the partnership, lenders and homebuilders would be able to clear “unwanted inventory” from their balance sheets, said Jeffrey Gault, LandCap Partners chief executive.
Earlier this year, LandCap – the real estate land company formed by a joint venture between Goldman Sachs’ Whitehall funds and NorthStar Realty – closed on a residential loan deal, acquiring a real estate loan portfolio backed by 2,900 finished and “paper” lots from Wachovia Bank.

Gault said at the time the deal marked LandCap’s intention of acquiring land, as well as land debt, on a national scale in what he described was a “challenged marketplace”. He added the deal would allow LandCap to purchase further loans from the bank.

Real estate investment firm Kennedy Wilson closed on a $84 million residential rental property in San Jose, California last week. The property comprised 324 residential units, a fitness center and 549 parking units. It partnered with insurer The Guardian Life Insurance Company of America on the deal.