Kennedy Wilson Acquires Toll Brothers’ Multifamily Interests

Toll Brothers is pulling the plug on its multifamily ambitions.

Kennedy Wilson is acquiring the homebuilder giant’s Apartment Living arm in a $347 million deal, the companies announced Thursday. The move marks the end of the luxury homebuilder’s push into the rental game and a pivot back to its core business of for-sale housing.

Kennedy Wilson will take over Toll’s interests in 18 apartment and student housing properties, plus its in-house development team. The deal also hands Kennedy Wilson $2.2 billion of assets under management tied to those holdings and another $3 billion worth of assets under management in 20 multifamily assets it will oversee on Toll’s behalf.

Toll isn’t just cashing out of stabilized deals; it’s handing Kennedy Wilson the keys to 29 development sites across the country. If built out, those sites could total $3.6 billion in capitalization. Kennedy Wilson will assume construction management, effectively inheriting Toll’s ground-up pipeline at a time when few developers are breaking ground.

The transaction, expected to close next month, also transfers the Toll Apartment Living executive team and staff to Kennedy Wilson. The Beverly Hills-based firm says the addition solidifies a rental platform spanning more than 80,000 units it owns, finances or manages.

For Toll, the deal is about getting leaner. Chief executive officer Douglas Yearley called it a way to free up capital for shareholders and double down on the builder’s luxury home core. The company has been shifting to an asset-light model and this sale wipes multifamily development off its balance sheet.

Just last week, Toll Brothers paid $19.5 million for a site at Parkland’s long-closed Heron Bay Golf Course in South Florida, harboring plans for 52 single-family homes.

Over the summer, meanwhile, an affiliate controlled by Kennedy Wilson and Sacramento-based Pacific Housing bought Bella Vista at Hilltop, an apartment campus in Richmond, California, for $225 million.