Institutional capital provided to homeless housing partner through two loans compresses timelines while combatting high pre-construction costs and development obstacles
Global real estate investment company Kennedy Wilson (NYSE: KW) is expanding its social impact investing initiatives on two new supportive housing developments, through a new partnership with Daylight Community Development, the recipient of a City of Los Angeles HHH Innovation Challenge award, which will deliver nearly 100 new units of housing for individuals experiencing homelessness over the next two years.
Kennedy Wilson has provided pre-development capital through two revolving loans that will enable the homeless housing developer to reduce costs and timelines, while avoiding the obstacles presented by securing restrictive public financing for the development of two new projects across Los Angeles set to be delivered by 2022. Oatsie’s Place in Lake Balboa is a 46-unit facility that will provide supportive housing for homeless women and victims of domestic violence in partnership with Downtown Women’s Center, and the 47-unit McDaniel House project in Koreatown will serve homeless seniors with services offered through The People Concern.
“Our new partnership with Daylight brings together our respective strengths to tackle challenges in developing new homeless housing in Los Angeles and to provide innovative solutions together,” said Phillip Wintner, Chief Financial Officer of Kennedy Wilson’s multifamily division. “We are pleased to extend our deep industry network and provide mentorship to Daylight alongside our funding to ensure their success. It is especially gratifying to help create a measurable, positive impact in our home city, where we have been doing business for over thirty years.”
Daylight, in partnership with Decro Corporation and Angelino Supportive Housing Partners, employs creative financing strategies and cost-effective modular construction technology to build this housing more efficiently. Oatsie’s Place and McDaniel House will be built using custom steel-frame modules created by the modular manufacturer IndieDwell in their Boise, Idaho and Pueblo, Colorado factories. Daylight was awarded $24 million of HHH funds from Mayor Eric Garcetti’s Prop HHH Housing Innovation Challenge, and both Oatsie’s Place and McDaniel House are funded through this program. These projects are faster and cheaper than a traditional HHH project, due to lower-cost modular construction and a more simplified capital stack with a single soft funding source. This pre-development capital from Kennedy Wilson will help to seamlessly transition these projects from pre-development to construction.
“Kennedy Wilson’s investment represents a rare example of traditional capital helping to create solutions to the city’s growing homeless housing crisis, and we are thrilled to have them involved as we scale our business and aim to create quality supportive housing projects as efficiently as possible,” said Greg Comanor, Partner at Daylight. “In helping us with low cost, flexible pre-development capital, Kennedy Wilson is enabling us to move forward to build our projects faster and cheaper, and to become the best possible custodian of taxpayer dollars.”