The announcement by the two firms describes Guardian's investment as "a major interest in the real estate services and investment firm of Kennedy Wilson." Guardian purchased $30 million of convertible subordinated debt in Kennedy Wilson that, when converted, provides Guardian a 10% interest in the Beverly Hills-based company. Kennedy Wilson's management retains a 54.1% ownership.
Earlier this year, Kennedy Wilson raised $53 million in new equity through the issuance of convertible preferred shares. Among those investing in the previous offering were the LeFrak Organization, a major real estate, energy and investment company based in New York City. Another significant investor in the previous offering was the Royce Funds of New York City.
William McMorrow, chairman of Kennedy Wilson, notes that Guardian carries an AA+ Standard & Poor's rating. McMorrow says that the new capital "allows our company to take maximum advantage of the current opportunities in all sectors of the real estate investment, distressed debt and services businesses." Thomas Sorell, executive vice president and chief investment officer of Guardian, comments that the mutual life insurance firm's new relationship with Kennedy Wilson "will provide us with greater opportunities to build on our solid real estate portfolio and provide long-term value to our policyholders."
The other recent deal involving the two companies was their $84 million acquisition of Avalon at Blossom Hill, a 324-unit apartment complex in San Jose that the new owners have renamed Saybrook Pointe. The partnership of Kennedy Wilson and Guardian plans to invest an additional $4.5 million upgrading and rebranding the property, which it bought from publicly held AvalonBay Communities, which invested a total of $62 million in the property, according to SEC filings.
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