Thomas Whitesell
Head of debt investment group at Kennedy Wilson
Kennedy Wilson acquired Pacific Western Bank’s $4.1 billion national construction lending portfolio last year. Since then, the combined team has completed a further $500 million in deals since the acquisition, and has another $1.3 billion in transactions in various stages of closing.
Thomas Whitesell, one of the PWB veterans who joined Kennedy Wilson last year as part of the acquisition, said Kennedy Wilson’s motive for the acquisition was twofold.
“One was to buy a big platform of construction real estate assets that were yielding above-market-rate returns,” said Whitesell. “The second was an opportunity to get hold of the team that had it so they could expand into this business and grow the construction platform.”
Whitesell also said that the company, currently primarily focused on nonrecourse senior construction financing for multifamily, student housing, and build-for-rent projects in major metropolitan areas throughout the U.S. and Canada, intends to evolve beyond just construction loans. It plans to expand into bridge loans and other types of lending as it grows into a $20 billion lending platform.
Kennedy Wilson is also having good fortune with office-to-residential projects, including a recently issued $96 million loan provided to a joint venture between Community Three and Whitaker Investment Corporation for the TideLock project in Alexandria, Va. The project involves the conversion of three office buildings into apartments, condos and retail space.
“We’ve done five or six conversions in the last five to six years, and they’ve all been successful,” said Whitesell. “However, they’re very difficult to do and you’re going to run into cost overruns. So you have to be very conservative and do a lot of due diligence upfront.”
The TideLock project happened to have several factors that steered the project toward success.
“TideLock is in North Alexandria, on the water. If you’re doing a deal in D.C. on the water, that’s huge, because there are very few waterfront apartment buildings because most of the waterfront is government-owned,” said Whitesell. “Also, [the property] has 10,000-square-foot floor plates. This particular building lays out perfectly so that you can maximize floor plans with wider units that work.”
Whitesell says he looks forward to continuing the evolution of Kennedy Wilson as the company further integrates the PWB team’s knowledge and expertise into its business.
“Being outside of a bank and pulling from Kennedy Wilson’s expertise has freed us to be able to do more creative lending while mitigating risk along the way,” said Whitesell. “That is the future growth of Kennedy Wilson.”
