Good morning and welcome to the Kennedy-Wilson Third Quarter 2021 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Daven Bhavsar. Please go ahead. Thank you and good morning. This is Daven Bhavsar. And joining us today from Kennedy-Wilson are Bill McMorrow, Chairman and CEO; Mary Ricks, President; Matt Windisch, Executive Vice President; and Justin Enbody, Chief Financial Officer. Today’s call will be webcast live and will be archived for replay. The replay will be available by phone for 1 week and by webcast for 3 months. Please see the Investor Relations website for more information. On this call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. You can find a description of these items, along with a reconciliation of the most directly comparable GAAP financial measure and our third quarter 2021 earnings release, which is posted on the Investor Relations section of our website. Statements made during this call may include forward-looking statements. Actual results may materially differ from forward-looking information discussed on this call, due to a number of risks, uncertainties, and other factors indicated in reports and filings with the Securities and Exchange Commission. I would now like to turn the call over to our Chairman and CEO, Bill McMorrow.

Thanks, Daven, and good morning, everybody, and thank you very much for joining the call today. I am very pleased with our strong third quarter results, which saw adjusted EBITDA increased over 165% compared to Q3 of 2020 and the record results we have posted for the first 9 months of the year. Adjusted EBITDA totaled $741 million thus far in 2021, compared to $261 million for the first 9 months of 2020. We have made tremendous progress this year on our two key initiatives: growing our in-place annual NOI and growing our fee-bearing capital. We had a very active quarter, completing $1.8 billion of investment transactions, bringing our year-to-date total to $4.4 billion. Our assets under management have grown by 17% in 2021 to a record $20.5 billion from $17.6 billion at the end of 2020. We have a strong pipeline of new transactions that we expect to close by the end of the year, which would further increase our AUM and result in a record year of capital deployment for KW. I’d like to start by providing some perspective on what we are seeing in our markets, as real estate fundamentals continue to improve in the quarter. Global transaction volumes remain healthy, with Q3 volumes in the U.S. increasing 150% from last year’s levels, according to Real Capital Analytics. Institutional demand for real estate remains high, with trillions of dollars of capital globally that continue to search for sound risk-adjusted returns. 2021 operating metrics continue to improve for us. In our U.S. market, we saw continued impressive apartment rent growth, with rents increasing at one of the fastest rates in recent memory across all our regions. Investor demand for high-quality rental housing remained very strong and has resulted in cap rate compression and further increases to the value of our real estate portfolio. Our Mountain West apartment portfolio, which is our largest region, with almost 11,000 units, outperformed once again, driven by very attractive migration trends and relative affordability. We also saw significant improvements in our Pacific Northwest and California portfolio, as pandemic-related moratoriums began to lift, and we expect meaningful rent growth in all of these areas over the next 15 months. In Europe, we saw outstanding performance in our UK and Dublin properties. On July 19, the UK removed all COVID restrictions. And in Dublin, essentially all travel reopened on July 26, and we saw a gradual return to office that we expect will accelerate over the next 6 months and have a positive impact on our portfolio. Strong leasing demand in our Dublin multifamily portfolio resulted in occupancy growing by over 400 basis points in Q3 to 96.6% occupancy. The key acquisitions in the quarter were three wholly owned multifamily assets totaling 879 units that we acquired for a total of $399 million. Two of these assets are located in suburban Seattle, and the third asset is located in suburban Denver. We look forward to implementing our value-add programs at these communities, which have consistently shown our ability to drive outsized returns. Our multifamily portfolio globally grew to a record 33,400 units at quarter end, including almost 5,000 units under development, which we expect to complete at yields well above current market cap rates. We’re on track to increase our global unit count to 35,000 by year end. Mary will speak later on the impressive growth of our European logistics portfolio. Our Q3 transactions grew estimated annual NOI to $413 million, an increase of $19 million in the year, and we increased our fee-bearing capital to $4.8 billion, representing a 23% growth year to date. I’m also pleased to announce that yesterday our Board of Directors authorized a 9% increase to our quarterly dividend, which now annualizes to $0.96 per share. Looking ahead, I believe the key drivers of our business will be well positioned with our multifamily portfolio, the reopening of our European markets, the growth of our investment management platform, and the completion of our development projects. Before we discuss these initiatives in more detail, I’d like to pass the call over to our CFO, Justin Enbody, to highlight our Q3 financial results.

Thanks, Bill. In Q3, we had GAAP EPS of $0.47 per diluted share, compared to a loss of $0.18 in Q3 of last year. Adjusted net income in the quarter grew to $112 million, compared to $27 million last year. And adjusted EBITDA grew to $203 million in the quarter, compared to $76 million in 2020. For the year, we’ve had GAAP EPS of $1.96 per share, adjusted net income of $424 million, and as Bill mentioned, adjusted EBITDA of $741 million, representing record results for the first 9 months of the year. In our co-investment portfolio, which includes our unconsolidated funds and joint ventures, we continue to see appreciating asset values, driven by strong NOI growth and further cap rate compression. This strong performance led to $79 million in gains and $46 million of accrued performance fees in the quarter. For the quarter, including promotes, total adjusted fees were $56 million, up from $8 million in Q3 of last year. Turning to our balance sheet, in August, we issued $600 million of unsecured bonds maturing in 2030. The proceeds were used to fully pay off our line of credit, as well as the remaining $296 million of our KWE bonds due in 2022, which was completed in October. We have significantly improved our maturity schedule, with no unsecured debt maturities until 2025 and nothing outstanding on our $500 million revolving credit facility. Our debt has a pro forma average interest rate of 3.6% and a weighted average maturity of 6.5 years, which has improved by 2.5 years since the beginning of the year. During the quarter, we bought back $25 million of stock at an average price of $21.55. Since the beginning of 2018, we’ve now returned $750 million, or approximately $5.40 per share, to shareholders in the form of dividends or share repurchases, which includes repurchasing 15.7 million shares or approximately 10% of our outstanding share count. We still have $213 million on our $500 million buyback authorization remaining, a portion of which was utilized in October. And with that, I’d now like to turn the call over to Matt Windisch to discuss our multifamily portfolio.

Thanks, Justin. Our global multifamily portfolio continues to outperform due to our market selection and our hands-on asset management style. Our assets are experiencing improving market conditions, lower delinquencies, and increasing rents. Positive migration trends and affordability continue to create outsized demand, in particular for our Mountain West portfolio, which saw same-property revenues grow by 11% and NOI grew by 15%. We think there remains strong upside in our Mountain West portfolio, where average rents are $1,366 per month, as people continue to seek a higher quality of life and migrate out of higher rent, higher tax states. We are also starting to see improving trends from our Pacific Northwest and our California assets. Offices began to reopen, which has been positive for renter demand. Rent concessions in the U.S. were down 63% in Q3 compared to Q3 of 2020, and we saw leasing spreads average a record 27% on new leases across our U.S. portfolio. We also continue to work with our tenants and take advantage of the rent relief measures that are available. The combination of these factors resulted in robust same-store revenue growth across our U.S. market rate multifamily portfolio of 8% and NOI growth of 12% versus Q3 of 2020. This represents our best quarter of NOI growth in the last 5 years. Sequentially, from Q2 of this year, revenues grew by an impressive 6% and NOI by 8%. In-place rents in our U.S. portfolio are now 6% above pre-pandemic levels. With an average loss to lease of 15%, we believe our portfolio is set up for strong growth in 2022 and beyond. Similarly, at our Dublin apartment portfolio, we continue to see strong demand as people begin returning to the city. This led to Clancy Quay being stabilized in Q2. Currently, Capital Dock is 77% leased and on track to be stabilized in Q4. Overall occupancy is now returning to pre-pandemic levels in Dublin. In addition to the mega-cap tech companies that have been large employers in Dublin for many years, other high-growth tech companies are looking to expand their presence in Dublin, such as Stripe, TikTok, ServiceNow, and First Data. We continue to believe in the long-term prospects of the Irish apartment market, driven by a young and growing population. Additionally, there are a large number of multinational companies with their European headquarters in Dublin, with a workforce that is more likely to rent than buy. Now I’d like to turn the call over to our President, Mary Ricks, to discuss our office portfolio and our investment management business.

Great. Thanks, Matt. Turning to our office portfolio, as tenants begin to return to the workplace, we are seeing improvements in the operational environment, including a growing number of firm requirements, requests for tours, and deals being executed. Quality in both design and construction and staff wellness continues to be an important factor as tenants are drawn toward amenity-rich buildings with ESG credentials. Thematically, we continue to focus on office tenants in high-growth and essential business sectors, including life sciences, media, and technology. When you include our suburban apartment and growing logistics assets, we believe this thematic approach positions our overall portfolio well for future cycles. A great recent example is at one of our largest office assets, 111 Buckingham Palace Road in London, where, by October, we transacted on approximately 100,000 square feet of lease transactions, including 20,000 square feet under offer, which in total represents 45% of the building. These transactions will improve the occupancy significantly, from 80% to 100% in Q4, deliver 26% growth above in-place rents, and 40% of the income at pre-COVID top rents in excess of £70 per square foot, compared to 15% in Q3 of 2020. Major tech firms represented 80% of the new leases, illustrating that top tenants are active in the market and willing to make decisions for the right space. 71% of our office NOI comes from our European portfolio, which saw Q3 same-property revenue grow by 4% and NOI grow by 5%. These results were driven by strong rent collections, lower bad debt, and the burn-off of free rent in the quarter. With an even larger focus on employee retention, large corporate tenants are taking advantage of the benefits of modern, low-rise suburban offices, such as affordability, shorter commute times, and outdoor amenities. We continue to see this play out in our own portfolio, with approximately 90% of the NOI coming from low- and mid-rise properties. We completed 585,000 square feet of leasing in the quarter, bringing our year-to-date total to 1.5 million square feet, with a WALT of 7.6 years. Our leasing pipeline remains strong, with 152,000 square feet of leasing completed thus far in Q4 and another 600,000 square feet in negotiations that we’re actively working on closing out, giving us good momentum heading into next year. Turning to our investment management platform, we continued to see strong growth in the quarter, with our fee-bearing capital growing to $4.8 billion. This has now increased over 160% since the beginning of 2018. Our fast-growing global credit platform continued to lead the charge in Q3. In July, we announced a new £500 million commitment focused on European loans, bringing total global commitments to $3 billion. In Q3, we completed $440 million of loan investments, including our first loans in Europe on a few large industrial portfolios. Our debt platform grew by 24% to $1.4 billion in loans outstanding, with $140 million in future unfunded commitments. We’ve been able to attract institutional-quality borrowers with high-quality assets to our debt platform, with an average loan size of $70 million and weighted average maturity of 4 years. We continue to see a strong macroeconomic environment in the European logistics sector. Occupational demand has driven vacancy to an all-time low in the UK of 3.4%, and yields continued to compress across Europe due to accelerating rent growth. Our thesis from the start when we launched this platform was that last-mile logistic properties in close proximity to transit centers would have strong demand, as they allow for companies to get their products to the end customer in an efficient manner. COVID has accelerated the thesis, as online sales penetration continues to grow, with online sales making up 28% of total retail sales in the UK. Our industrial portfolio has grown rapidly, and including assets under offer, our portfolio has a gross value of approximately $1.1 billion today across 59 assets, with KW’s share at approximately 20%. We look forward to further growing both our debt platform and our logistics platform in the fourth quarter and continued expansion of our investment management business, which has, in total, $2.1 billion in future commitments from our various strategic partners. Another important area of growth for KW will be the completion of our development and lease-up projects, where we continued to make progress throughout the pandemic. Our developments, totaling $2.7 billion at cost, are being delivered with strong sustainability credentials, with environmental improvements and tenant wellness at the center of our focus. Once these assets are completed and stabilized, we expect an incremental $105 million of estimated annual NOI to KW, which represents an initial yield on cost of approximately 6%. We are nearing completion of two office properties in the heart of Dublin, Hannover Quay and Kildare Street, which total 134,000 square feet that are expected to complete in Q4 and Q1, respectively. We remain on track to complete the majority of our construction projects in 2023 and 2024, on time and on budget. Last month, we announced a new project that we are extremely excited about in a public-private partnership with Cal State Channel Islands. We are going to develop 589 residential units as part of a master-planned community in Camarillo, California. The project will have 310 wholly owned market-rate units, 170 affordable units built through our vintage housing joint venture, and 109 for-sale townhomes sold by Comstock Homes. This development sits adjacent to a 386-unit wholly owned community, which we acquired in 2016. A project of this nature was a natural fit for KW, given our broad multifamily expertise in developing both market-rate and affordable units. We are aiming to complete construction in 2024 and look forward to breaking ground in Camarillo later this month. With that, I’d like to pass it back to Bill.

Thanks, Mary. As you can see, we have a combination of ways to further drive earnings and cash flow growth at Kennedy-Wilson. As I mentioned on the last call, we have a clear path to grow our stabilized NOI at the rate of 10% to 15% a year over the next 3 years, driven by strong organic NOI growth, new acquisitions, and the completion of our construction. We also plan to grow our fee-bearing capital and resulting fees by 15% to 20% per year over the next 3 years. The combination of these factors should lead to significant growth in both our net asset value per share and our assets under management. As we look ahead to 2022, I am very optimistic about our ability to continue expanding our business for a number of reasons. First, business conditions have rebounded as economies reopen, and we have a very healthy transaction and financing market, perhaps the strongest we’ve seen in the last decade. Second, over the last 18 months, we either grew or established new investment platforms with well-capitalized, extremely liquid, global strategic partners who have a keen desire to expand their relationship with Kennedy-Wilson. We can now creatively allocate capital across the entire capital structure and in a wide range of asset classes. Finally, our global investment team remains intact, and our global communication has never been better. I am very pleased with the progress our team has made not only in Q3 but over the course of 2021. I’m also reminded of the importance of long-term relationships, both internally and externally to KW. Although I’m biased, we have an exceptional global team that has been working together for decades, and our internal communication, as I mentioned, is the best it’s ever been. This fact, combined with very high-quality properties in the right product category, located in diversified and growing markets, has set up KW for excellent long-term growth. I’d like to thank our tremendous KW team, our shareholders, our board, and our partners for their continued support of Kennedy-Wilson. And with that, Daven, I’d like to open it up to any questions.

The first question will be from Anthony Paolone of JPMorgan. Please, go ahead.

Great. Thank you. My first question is for Bill. Given you’ve got a deep level of experience doing this for a long time, how are you thinking about inflation, or what does that kind of suggest you do from a real estate point of view, strategy, geography, property type, etcetera?

Yes. Well, I think there are many facets to that, Tony. As you’ve heard from Matt and Mary, the growth in our top line rents is really increasing at a very rapid pace, well ahead of any inflation rates. I think about it in terms of our own exposure. And really, when you think about it, it primarily relates to what we’d be doing in the construction and development area. When we started building 7 or 8 years ago, we made a decision that the vast majority of our projects were going to be handled through what we call GMP contracts, which is – it’s a fixed-price contract that you do with the general contractors. And so, I would say, into the 90% range, everything that we’re doing has a guaranteed maximum price on it. I think we’ve demonstrated over a long period of time between our two construction teams in the U.S. and in Ireland, which now total probably close to 35 people, we have the capacity to bring things in on time and on budget, so I’m not really concerned about inflation as it relates to KW. The only other question that really comes up in this whole discussion is what's happening with the supply chain issue in terms of really getting materials to the construction projects, and we really haven’t seen any impact in terms of our ability to get the raw materials, the lumber, the steel, furniture, whatever is needed at the properties. We have had very little impact. Not that it’s a bellwether here, but we see the supply chain issue as it relates to cargo moving as a temporary situation. We’re located here in Los Angeles, near one of the largest ports in the United States. The issue is not whether things are getting shipped. It’s just getting them off the ships and trucked. I believe by the middle of next year, this whole discussion will be less relevant. So that’s how we’re looking at everything.

Okay, got it. Thank you. And just my other question is, in the past, you’ve got experience in lodging and other property types outside of multifamily and office. Are you spending more time in any other areas, just given liquidity out there and need to go find returns in other places?

Well, I think that the multifamily is the biggest part of our business today, and that’s one that we really want to continue to grow. We think that’s really the best real estate asset class, but we also very much, as Mary pointed out, like the industrial space. Both in the U.S. and in Europe, particularly in the United Kingdom and Ireland, as well as Spain to a secondary degree, we want to see that business grow. The office business here in the United States has certain lease terms, which generally are in the 3 to 5-year range, that don’t present as attractive an option for us. Where we do find it attractive, however, is in markets in Europe, particularly the United Kingdom, because the lease terms there can be 10, 15, in some cases, 20 years. That provides income certainty for long periods, which means you’re not putting additional capital into those buildings every 3 or 4 years. So, we’re very focused on these three asset classes.

The next question comes from Derek Johnston with Deutsche Bank. Please go ahead.

Hi, everybody. Good morning. I just wanted to focus on multifamily and value-add. How substantial does the value-add opportunity in the multifamily book remain today? I believe some projects were slowed or halted during the pandemic. I’m wondering if they have been reignited and where you’re focusing your value-add spend as clearly, the IRR is a pretty solid use of capital, given today’s compressed cap rates? Any elaboration there would be helpful. Thanks.

Yes, Derek, thank you. The – just to be clear, we made a very conscious decision in March of 2020 that we were not going to stop any construction or capital spending on our development projects, unless mandated by the local jurisdiction. So we were able to hold true to that. The only place where we saw modest time delays was in Ireland, where they shut down construction sites for a couple of months. Everywhere else that we operated, we didn’t see any slowdowns. The result of that is that we’re finishing brand-new properties at a time where some competitors might have halted their capital spending, given the uncertainty in 2020. Now, as I think Mary pointed out, we’re continuing to roll off new finished properties. We just finished a large property up in Boise that’s running at full occupancy. We’re completing two high-quality office buildings in Ireland that we’ve received great leasing interest in. The key in our business, as long as you can, is really just to not stop unless there’s an external reason to stop. But I’m going to ask Matt to amplify on the other part of your question.

Thanks, Bill. Yes. Across the U.S. market rate multifamily portfolio, approximately 40% of the units that we have not yet renovated, so there is significant upside to doing renovations. The return on cost on those can range from 15% to 25% when we invest capital into these units. I would say, in the Northern West, we continued doing renovations throughout the pandemic. We were slower in California and the Pacific Northwest, just given that rents were flat. We are now re-implementing some value-add initiatives. We have a combination of a 15% loss to lease and 40% of the portfolio we can invest capital into. We believe there is good runway here to grow rents over the next couple of years.

Okay, great. Both comments, very helpful. The loan book was also pretty active in Q3 at over $400 million. Could you go into some detail on the types of loans you are seeing and what you are interested in funding?

Yes. I’m going to start and then turn it over to Matt, Derek. The key is that this will probably become the largest part of our fee-bearing capital, the loan business. We are transacting with people we’ve known for years. The other part of it is since we are active on the equity investing side and also the construction side, we know costs and values. Matt and his team are also leveraging the various parts of our company, like our multifamily group, where we have done several loans to multifamily developers. We’re not doing construction loans but transition-type loans. It’s a great information flow about what’s going on in various markets. We have seen significant growth since we started this in May of 2020. But Matt, do you want to add more?

Yes. As a starter, we’re really focused on institutional quality sponsors, very high-quality assets in geographies we already own and operate properties in. Our average loan size is $70 million, so we are doing relatively large loans. For the quarter, we did one loan that was secured by a hotel, one loan secured by a multifamily property, one loan secured by an office building, and a few loans secured by industrial. It’s across various product types. However, a majority of it is still multifamily and office, like our equity portfolio. But we have the flexibility to invest lower in the capital stack for hospitality and retail. While we have not invested in equity, we are still investing in the debt in those product types.

The next question will come from Sheila McGrath of Evercore ISI.

Yes. Good morning. Bill, your advantage in investing in the Mountain states a while ago was that there wasn’t much institutional investor competition. I’m just wondering if that’s still the case, and maybe you could describe the competitive landscape in Mountain states versus the Pacific Northwest and other markets?

Yes. Thanks, Sheila. It takes a long time to get established in any new markets. We started probably 16 or 17 years ago. We made a conscious decision to diversify our income streams into other Western geographies. Between Seattle, Salt Lake City, Boise, Idaho, and now Albuquerque, Denver, Colorado Springs, and so on, we have a great footprint in these markets. It’s not easy, and it does take time. We’re likely the largest multifamily owner now in Boise, and while I don’t have statistics for greater Seattle, we would be in the top five or potentially top two or three. It’s been competitive, but I believe we have a big advantage in these smaller markets because we have boots on the ground and assets in these markets. The relationships our team has built have made us a very good counterparty in every market we operate in. I believe this gives us a competitive advantage.

Okay. That’s helpful. And then on stock buyback, just curious about your thoughts with acquisition cap rates compressing meaningfully, particularly in multifamily. Does that make stock buyback more of a priority? Just your thoughts there?

Yes. Stock buybacks, like any company, it’s always been a capital allocation decision. For a growing business like we are, you have to make capital allocation decisions between new acquisitions and your development pipeline. We see the stock price as attractive, especially with the recent dividend increase. We feel that the overall total yield opportunity in our stock is very good. As mentioned on the call, even though it was past the quarter, we continued to pursue stock buybacks. It’s well-known that I have been a buyer of our stock over the last 9 to 12 months, which indicates how I feel about where the values lie.

Yes, Sheila. We are well aware of the legislation in Washington that will impact the available bond cap for affordable housing. We continue to have availability in several of our markets, but in certain areas the bond cap is shrinking, making it challenging to invest. We certainly need affordable housing, which is in high demand across the U.S. and particularly in our markets. We do have other means to deploy capital into affordable housing without the bond allocation, but support would certainly help.

Okay. Thank you.

The next question is from Jamie Feldman with Bank of America/Merrill Lynch.

Great. Thank you. As you take a step back and think about all the growth you have had over the last couple of years in terms of both partners and product type, what do you think you are still missing from the platform at this point?

I would say the main focus is that we’re in all the right businesses now, so it’s all about continuing to grow those businesses. This relates to your team and the people you have. We have attracted high-quality younger talent into the business over the last 12 to 20 months. Kennedy-Wilson has become a desirable place to work. We’ve had key senior additions, and we now need to ensure we have the right team to support growth.

That’s helpful. You announced a nice dividend increase. Can you discuss what drove the dividend increase and how you think about growth in the business tied to the growth of the dividend going forward?

We don’t have a formal dividend policy tied to some percentage or yield. The dividend increases relate to our view of future cash flows. We have achieved great success reducing our unsecured debt costs, leading us to perceive significant growth in assets under management over the next 3 to 5 years. We’re optimistic about future cash flows, which drove the dividend increase. Well, as I said in my closing remarks, I really appreciate everybody’s interest in the company. And as I always say, any of the four of us that were on the call today are always available to answer any questions that come up post this call. Thank you again and have a great day.

Thank you. The conference has now concluded. Thank you all for attending today’s presentation. You may now disconnect your lines. Have a great day.