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Justin Enbody

Thanks, Bill. I'll start by reviewing our financial results and then discuss our balance sheet. GAAP EPS totaled $0.24 a share for Q4 compared to a loss of $1.78 in Q4 '23. Investment Management revenue grew by 83% to $30 million in Q4, driven by completing another $1.4 billion in new debt originations.
Adjusted EBITDA totaled $191 million in Q4, with improvements across the board at all key components. This includes baseline EBITDA, which totaled $98 million in Q4 and has increased by 4% year-to-date to $407 million.
We also saw a meaningful improvement in the results from our co-investment real estate portfolio. This portfolio totals roughly $14 billion in assets in which we have an ownership of approximately 35%. Valuations in that portfolio saw a slight increase in Q4. Additionally, estimated annual NOI from our co-investment portfolio totaled $217 million, of which 90% is comprised of either multifamily, industrial, or loan investments.
Turning to our balance sheet and debt profile. An important priority for us has been to reduce our unsecured debt as Bill mentioned. During Q4, we repaid a total of $262 million of unsecured debt, including repaying $184 million of KWE bonds or EUR175 million as Bill mentioned, and $78 million on our revolving credit facility. With that, we ended the quarter with $218 million of consolidated cash and $452 million of undrawn availability on our $550 million line of credit.
We also continue to monitor our exposure to potential interest rate volatility. Our share of total debt is 97% fixed or hedged with a weighted average maturity of 4.9 years and a weighted average effective interest rate of 4.6%. The effective rate includes the benefit from our interest rate hedging strategy, which produced cash benefits of $8 million in Q4 and $41 million in 2024. It's worth noting this is not shown as an offset to interest expense on our P&L. Our interest rate hedges on average have a strike rate that is approximately 100 basis points below today's rates as well.
Looking at our debt maturities in 25. As we mentioned earlier, we have EUR300 million remaining on our KWE bonds, which represents the final legacy tranche of what was originally $1.3 billion of unsecured debt at KWE across two separate bond issuances.
On the secured side, we have $535 million of debt at share that matures in 25 with approximately 70% relating to our high-quality assets in Ireland. In particular, our Irish apartment portfolio has approximately $210 million of debt that we are in the process of refinancing and with rates expected in the mid-4s. The balance of our remaining 25 maturities largely relate to our US apartment and commercial properties.
With that, I'd now like to turn the call over to Matt Windisch to discuss our investment portfolio.

Matthew Windisch

Thanks, Justin. I'd like to take a moment to review the key components of our real estate portfolio before diving into our investment management business. Today, our stabilized portfolio generates estimated annual NOI of $467 million, with an additional $65 million expected from our lease-up and development portfolio upon stabilization.
The shift in our portfolio away from office and retail has continued to progress. With our current stabilized portfolio, 72% concentrated in our high-conviction sectors of rental housing, both equity and credit as well as industrial. This is up from 49% five years ago.
Our apartment portfolio is the cornerstone of this strategy, contributing $300 million of NOI to KW with another $16 million expected from assets that are currently in development and lease-up. In the US, rental fundamentals continue to strengthen. Demand for our apartment portfolio remained strong, driven in part by the high cost of homeownership, which continues to push many towards rental options. At the same time, we're seeing a reduction in supply pressures in many of our markets, a trend we expect to ease further in the second half of the year and into 2026.
During the fourth quarter, we maintained a sharp focus on occupancy, which increased by 1.1% to 95% on a same-property basis. Leasing spreads totaled 50 basis points, with renewal spreads remaining strong at approximately 4%. As a result, same-property revenue grew by 2.7% with NOI up 6.2%. These results underscore the strong operational execution by our asset management team.
Turning to our regional highlights. Our strongest performance in Q4 came from the Mountain West, which remains our largest apartment region. Occupancy grew by 1%, while revenue grew by a solid 3% on a same-property basis. In addition to the top line growth, we benefited from a decline in operating expenses driven by favorable adjustments in real estate taxes in Idaho and lower delinquencies. These factors combined to deliver impressive same property NOI growth of 7.3%.
In the Pacific Northwest, occupancy grew by 1.5% with revenues up 3.9%, while operating expenses remained flat, leading to 6.6% NOI growth. We remain optimistic about our Pacific Northwest portfolio in 2025 as return to office mandates have started this year for many large employers in the region.
Our California apartment portfolio has recovered from the delinquency challenges we saw a year ago. We saw solid occupancy growth and lower delinquency related legal expenses which resulted in NOI growth of 2% in Southern California and 4% in Northern California.
Our Vintage Housing affordable portfolio delivered strong performance this quarter, generating an impressive 10.5% growth in NOI. This growth was driven primarily by revenue increases that closely aligned to changes in area median income and with improved levels of bad debt, reflecting the strength and resilience of our affordable housing strategy. As our Vintage portfolio approaches 13,000 stabilized affordable units, we remain focused on identifying opportunities to scale our affordable housing footprint, ensuring we continue to meet the growing demand for high-quality accessible housing.
Turning to our Irish apartment portfolio. Demand remains robust with our assets ending the quarter at a strong 97% occupancy. We have one remaining apartment asset currently in lease-up, which is on track to reach stabilization by this summer. The significant and ongoing structural undersupply of housing in the Dublin market, combined with continued employment growth, reinforces the sustained demand we expect for our high-quality rental communities.
Now turning to our office portfolio, of which approximately 80% of the estimated annual NOI is derived from our investments in Europe. We saw 2% same-property NOI growth in 2024. Stabilized occupancy remains healthy at 93%, with a weighted average lease term of 7 years to exploration and 4.4 years to break.
In the UK, our stabilized office portfolio remains well leased at 88% with a vault of 5.4 years to expiration and 4.1 years to break. In Q4, we completed leasing transactions across 123,000 square feet with both existing and new tenants, representing a 49% increase above previous in-place rents.
In Dublin, where our stabilized occupancy exceeds 96%, our high-quality sustainable properties continue to benefit from a flight to quality. Dublin saw a strong recovery in leasing demand with gross leasing activity in the last two quarters of 2024, surpassing the total leasing activity for all of 2023. This positive momentum is an encouraging sign for our Coopers Cross asset, which recently welcomed Wells Fargo as its first tenant and where we see a healthy pipeline of continued leasing interest.
Switching gears over to our Investment Management business, reaching nearly $100 million in fees and a record $8.8 billion in fee-bearing capital were major milestones for KW in 2024. We believe we have laid the foundation to continue to deploying capital on behalf of our institutional partners across both equity and debt opportunities with a goal of continuing to grow our fees at over 20% per year.
The expansion of our credit team in 2023 and the rise of private credit investment has allowed us to scale our fee-bearing capital. In Q4, we completed $1.4 billion of originations and as our platform continues to gain momentum. We also completed over $300 million in new fundings and received approximately $500 million of repayments in the quarter. Our credit business has $4.1 billion of future fundings, which we anticipate to start picking up within the next 12 months as an offset to future repayments. As the private credit markets continue to remain very active, we are evaluating a number of ways to capitalize on this dynamic and grow our credit platform.
In the UK, we see a compelling opportunity through our single-family rental platform to acquire housing in bulk from UK homebuilders and create vibrant new rental communities. With the ongoing demand and supply imbalance in the UK residential market, particularly in the single-family rental sector. We believe there is a significant opportunity to build an institutional quality portfolio of scale in a market that has historically been highly fragmented.
We're excited about the growth potential of this platform and the value it can deliver over the long term. We also anticipate further growth from our European industrial platform, which totals 9 million square feet and is 98% occupied. We completed 390,000 square feet of leasing, which delivered a 23% increase in rents in Q4, and we are evaluating a number of ways to continue to grow this platform. Thus, it is the expansion of these as well as our other initiatives underway that will support further growth in our Investment Management business.
In closing, I believe the improvements we made as a company during these last few years have positioned for solid growth in 2025 and beyond. We remain confident in our strategy, our portfolio and our team's ability to deliver long-term value for all of our stakeholders.
So with that, operator, we can open it up to any questions.

Question and Answer Session

Operator

(Operator Instructions) Anthony Paolone, JPMorgan.

Anthony Paolone

My first question is maybe just to clarify, I think maybe, Bill, you mentioned $400 million of incremental proceeds from some dispositions in 2025. I guess, did I hear that right?

William Mcmorrow

Yes.

Anthony Paolone

Okay. Any areas where there's a particular shift or a group of assets that are to be sold? Or is this just pretty broad continued recycling?

Matthew Windisch

Tony, this is Matt. So I think it will be a similar strategy to what we deployed in '24. So in particular, we really want to focus in on our core competencies, which are really housing-related investments as well as our investment management business, so assets that don't fit in those parameters. So whether it's wholly owned office retail assets, we've talked about exiting markets like Italy and Spain, Spain, of which we now have exited. Those will continue to be the focus for us on our noncore disposition strategy.
Then in terms of how we use those proceeds, we're going to continue to pay down unsecured debt and we're going to fund some of these co-investment platforms where we get really great return on equity for our investments.

Anthony Paolone

Okay. Great. And then with regards to the debt platform, you have a lot of commitments. And just wondering if -- a lot of committed capital to that, I guess. If that construction lending environment gets more competitive, particularly in the residential space, like what's the latitude you all have to call in those commitments and just go elsewhere, either for existing mortgages, other property types, et cetera?

Matthew Windisch

Yes, Tony. So I think some of those commitments we're talking about, we've already made the loans and we just have future funding obligations under those. So those are obviously aren't going anywhere. Those are loans we've already signed up. Look, we think the construction lending space within the areas we operate right now continue to be extremely compelling.
We're a market leader in this space, both for apartment construction as well as student housing construction. The pipeline remains robust. So we think we're going to have a very successful year in that space. That being said, there are other opportunities that we're evaluating for different product types and other types of financing that our existing team can execute on. And so we do expect over time here to expand the offerings and grow the credit platform in different ways.

Anthony Paolone

Okay. And if we think about fee-bearing AUM and the growth of that as we look ahead, how important do you think it is to also add just more equity capital into the mix that maybe has a bit longer duration to it?

William Mcmorrow

It's a really good question, Tony. I think the what might not be completely evident is the amount of institutional partners we've been cultivating over the last couple of years. that primarily want to invest in the United Kingdom and the United States, and they want to invest in the asset classes that we have the most expertise in, which is the rental housing in the credit business and the industrial business. But we have very, very significant institutional capital partners that aren't really yet reflected.
And as you well know, the biggest piece of our capital we use to deploy really comes from separate accounts, not necessarily discretionary funds. And as you saw in the United Kingdom, might put together the partnership with CPP, but there's a big number of those going on that aren't yet finished. And so when you think about this year, as I said in my part of the formal part of this, we expect to deploy more capital this year than we did last year. And when you look at last year, roughly 80% to 85% of the capital that we deployed was in the credit space.
But I expect that this year, although the credit space will continue to be a big portion of it we're going to see more equity opportunities. And the reason we didn't invest in the equity opportunities the last couple of years is we just didn't see anything that we thought was really compelling. But we're starting to see, I'd say, more realistic pricing that we -- the kind of pricing that we like to see to generate the kind of returns that we want to see. So you're going to see more equity deployed into that business.
And the other part of it is that we are very focused on growing our construction management capabilities where we're a smaller part of the capital structure. In the past, if you remember, in Ireland, for example, we're 50-50 partners with AXA. But we've got great expertise in the construction management business, both here in the United States and in Europe. And we expect over time that we're going to find more opportunities to build new multifamily assets, but where we're a smaller part of the capital structure and earning construction management fees.
So I think the point that Matt made was really important that when you're talking about selling these noncore assets, it's really what the intent to increase our exposure to the asset classes that we really like, the rental housing business, both equity and credit and the industrial business. And I think over time, you're going to see that grow up to 85% to 90% of our investment activity every year.

Anthony Paolone

Okay. Great. That's real helpful. Just one last one, if I can. I'm curious, you mentioned refinancing some of the debt in Ireland in the mid-4s. What's the in place that it will be replacing? I'm just trying to get a sense as to where those that markets are now versus kind of what was in place before.

William Mcmorrow

I'm going to let Matt answer part of the question. But I think the interesting thing, and I think it kind of validates what we're talking about, we're closing the financing, which is almost USD500 million in April. We had 35 banks and lenders that propose to us on that. And we've selected two financial institutions to do the $500 million that, as we mentioned, is going to be around in the mid-4s at the end of the day for five-year fixed rate debt. I'll let Matt now talk about the differential in interest rates.

Matthew Windisch

Yes. So the in-place rate was just under 3%, and we're going to be, like we said, in the mid-4s, but we will have the ability to float down on that. So if rates do come down, we will have an ability to participate, but we will be locked in. So the rate rates will not go much higher than in the mid-4s.

William Mcmorrow

Yes. I think, Matt, you've got to correct me here. But last year, Tony, when you look at it, we either financed or refinanced on our existing assets, almost $1.3 billion of property level debt and the differential in interest rates, the actual whole dollar differential was very, very minimal.

Operator

Tayo Okusanya, Deutsche Bank.

Omotayo Okusanya

Yes. So good afternoon, everyone. The SFR platform, could you talk a little bit about what your expected kind of yield in margins are on that business and also around the operating platform you will have in place to run it?

Matthew Windisch

Mike, do you want to take that one?

Michael Pegler

Yes, I'll take that one. Look, we're really excited about growing this platform. we've got a really good pipeline of hazards that we've got that we're trying to acquire at discounts from the housebuilders and create these new rental communities. We think the yields we can set up to probably a little bit higher than we've seen in UK residential in recent years.
We're probably talking about we're stabilizing in the high 5s towards 6% over the course of our whole period in terms of the operations. We've got a great team in place. There's a lot of experience that we can capture from around the world where we've been doing this in Ireland and the US. We think this is absolutely part of Kennedy Wilson's core skill set of how to manage and optimize these homes and create great communities in place for people to live. So we're really excited about the prospect of growing this platform with a fantastic partners such as CPPIB.

Omotayo Okusanya

Got it. So is it a property management platform? Or it's actually in-house?

Michael Pegler

We've got our in-house asset management team, but we'd support that with an outsource property management solution where appropriate. And that's in scale and we'll reevaluate how best to operate that. But initially, we'll be looking at third-party property management to supplement our own internal resources.

Omotayo Okusanya

Got you. And then on the debt platform, again, really strong origination this quarter, really strong pipeline in place as well with $1 billion. How should we be thinking about what a run rate could look like for that business in terms of origination? And also future funding, just given you probably got some but we need more capital to keep growing at the current pace you're growing at?

Matthew Windisch

Yes. So last year, we did $3.5 billion of originations, and I think we certainly would like to exceed that this year, assuming the opportunity set presents itself, which, as of now, feels like it is. And then in terms of funding sources, we obviously have some great partners in this business, but there's a lot of demand from other investors we've been talking to who want to continue to grow with us. So we feel very, very strongly that we've got the capital we need to continue to grow this platform over the long run. And assuming the opportunity set remains attractive.

Omotayo Okusanya

That's helpful. And then two questions on some of the international portfolio. Again, Dublin, with the current rent caps on multifamily there of about 2%, curious how you think that ultimately evolves with the new Irish government? And then also on the UK side, with the autumn budget from late last year, any implications for kind of office demand? In 2025. I think some of the budget costs for higher kind of costs of employees according to some of the new loan.

Matthew Windisch

Mike, do you want to take that?

Michael Pegler

Okay. Yes. I'll pick up both of those. So firstly, on rent caps, in Ireland, the existing regime is due to expire at the end of 2025. Now we know the government are looking at that.
It's a little bit too early to say exactly what form any changes we'll make. But there remains a demand-supply imbalance in the Irish market. And so we know the government is looking at the overall rent regime, and we'll comment more when we know more. But it obviously is an interesting development for our portfolio.
In terms of UK office demand, we haven't seen any weakness coming off of that. I mean, the national insurance changes come in place a little bit later this year. we've seen the -- take up the good quality offices in London, be improving. We've seen that general trend, if you were coming back to the offices, particularly good quality offices.
And indeed, we've seen rents rising across most major submarkets for best-in-class offices. So we have a strong belief that the best-in-class offices, there remains a really strong occupational market. And we think our officers are really well positioned to take advantage of that and to capture rental growth over the medium and long term.

Omotayo Okusanya

That's helpful. One more if you could indulge me, the core investment portfolio, again, positive fair value mark this quarter. That's the first time this has happened in a long time. If we think about a world where long-term rates are stabilizing, less nondental for them to decline -- but if you just kind of stabilizing over the next year or so, should we kind of expect that continued trend of positive fair value marks on the core investment portfolio and positive implications for carried interest?

Matthew Windisch

Yes. I mean it's always hard to predict the future. But I think if rates stay kind of where they are and stabilize, given the operational improvements we're seeing in our assets. I mean, I certainly -- our hope is certainly that values will continue to go up and that will be reflected in the fair value in promotes assuming that happens. And I think it feels that will be the case. But again, it's -- you can't predict the future on these things.

Justin Enbody

And Tayo, I would just add that I think that the landscape around the shared interest or promotes will continue to grow as we grow our investment management business and deploy new capital. And so I think you're going to get bold headwinds hopefully from what exists, but more importantly, as we meaningfully grow that business, and we have more promote and carrying interest structures.

Omotayo Okusanya

Sounds good. Really solid execution this quarter. Well done, guys.

Operator

(Operator Instructions) Jeff Spector, Bank of America.

Jeffrey Spector

Great. First question, given you have such a great pulse on global institutional interest in US real estate and in other parts of the world, but specifically US real estate. I just want to confirm from your recent conversations, are you seeing hearing from any of your relationships, any change in tone, whether it's concerns over tariffs or other various initiatives proposed by the new administration. Are you seeing any change an interest in US real estate and maybe even other parts of the world?

William Mcmorrow

That's a good, interesting question. Look, I just came back from a week in Asia, I can tell you that people are very, very interested in investing in the United States. And I'm not passing any judgment. I'm just telling you that people have a very strong belief that the business environment in the United States is going to be really good over the next three to four years.
And when you look at the size of the market here with almost 35 million people, the capital markets, the capitalizations of the big companies here. It's just really, really attractive place to put capital. And you've also got particularly Canada where we've got some great relationships in Asia, where we've been now for 30 years. And in the Middle East, you've got these very, very large institutional partners that are growing their own capital base, but they don't -- they can't deploy all of that capital in the markets that they're headquartered in.
So all of the major Japanese companies want to take some portion of their capital and invest it here primarily here in the United States. And it's pretty much true everywhere around the world. And I would say that the -- particularly Asia, the other -- the secondary market that they feel very, very comfortable with is the United Kingdom. And so one of the things that Matt said was we were selling noncore assets in Spain and Italy and the whole idea behind all about was really to focus our management team and our energy in the markets where we really have real expertise.
The United States, the United Kingdom and Ireland. And so we're really well positioned in all of these markets. And I would say the other great thing that's happened to us over the last couple of years is because our credit business is a national business, it's given us an information base outside of the Western United States to look at other equity opportunities in other markets.
We're currently under contract right now to buy five apartment communities in the Arizona market and the Texas market, where we really haven't had equity investments in the past. I'm not ready to talk about it yet, but we're also looking at another opportunity that was well advanced in the southern part of the United States. And so the biggest issue was asset managing what we own. Getting out of these noncore assets, particularly the office assets, in some cases, that we own 100%, which we've been doing in the United States, and we'll focus on that primarily in Europe this year and then finding new ways to deploy capital, not new ways, but new markets to deploy capital into.
We've got significant amounts of capital that reputation is really, really strong. A lot of people trust us to invest their money. And so capital deployment really is really one of the key ways that we're going to continue to grow the business, particularly the investment management business.

Jeffrey Spector

Very helpful. follow-up to your continuing to exit office. You did mention that there seems some benefits from return to office in the Northwest. So just to confirm, nothing would change your view on office. And I think also retail is the other area you're shifting away from.

Matthew Windisch

Yes. I think in terms of our balance sheet investments, we're not looking to deploy balance sheet capital into those areas. That's not to say we wouldn't opportunistically look at things in that space using our investment management platform. There could be opportunities there. But for our balance sheet investments, where we're deploying our capital we think it's better served focusing on rental housing and industrial.

Justin Enbody

And I would just add that the idea on the investment management business gives you a lot more flexibility around the return threshold, right? Obviously, we have used our own balance sheet, but that business, you have partners that have different return thresholds that they can invest at, different interests and product types, so it really allows us to expand what we look at.

Jeffrey Spector

And then just my last question. on supply, apartment supply, and you just were talking about some of the Texas, Arizona, Sunbelt or southern markets. There is some concern that we could suddenly walk into 26 where supply is picking up. One of your apartment peers believes there's visibility through '26 that there's really not going to be an increase in supply. What are your views there on supply in the Sunbelt as you're looking at the southern markets?

Matthew Windisch

Yes, we've definitely seen it really from our credit business because we haven't invested to date our equity in the Sunbelt markets to speak of. But through our credit business, we're seeing it. And what we're finding is only the really the best-in-class developers are able to put together the capital stocks right now and Best-in-class volumes has continued to be significantly below where they were several years ago.
So it doesn't feel like it, from what we're seeing in our credit pipeline, that volumes are substantially picking up, and they're certainly not getting back to anywhere near where they were a few years ago. I think we could see construction costs come down, interest rates come down further to have supply become a significant issue in these markets over the next few years.
That being said, there's still supply coming and finishing, like projects that were financed two or three years ago. there's still some of that finishing up. But if you kind of look 18 months ahead, it starts to definitely have a significant ramp down on deliveries.

Operator

That concludes our question-and-answer session. I would like to turn the conference back over to Bill McMorrow for any closing remarks.

William Mcmorrow

Well, thank you very much, everyone. And we're going to be next week at the Group Conference in Miami. And so if there's anybody there. We'll look forward to -- that on this call, we look forward to seeing you there. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.