Kennedy-Wilson Closes Heitman Properties Deal

Santa Monica-based real estate marketing company Kennedy-Wilson Inc. has completed its acquisition of major property management firm Heitman Properties Ltd. from Chicago real estate investment giant Heitman Financial Ltd.

The merging of the Beverly Hills-based Heitman Properties operation into Kennedy-Wilson’s smaller property management group creates Kennedy-Wilson Properties Ltd., which currently manages a nationwide portfolio of office, residential and industrial properties valued at about $6.5 billion.

Financial terms of the acquisition weren’t disclosed, but sources familiar with the transaction valued the deal at about $20 million.

The combined operation should generate substantial investment brokerage and property management business from new and existing clients wishing to acquire properties domestically and overseas, said Heitman Properties’ former Chief Executive Barry Schlesinger, who will serve Kennedy-Wilson Properties as president.

The acquisition of Heitman Properties should help Kennedy-Wilson build a property management operation in Asia, where the company has a substantial investment and brokerage presence, said Bill McMorrow, Kennedy-Wilson’s chairman and chief executive.

Kennedy-Wilson also said that Los Angeles-based real estate investment powerhouse Colony Capital Inc. is investing some $26 million of subordinated debt and new equity in exchange for a 10% stake in the company (see related story on D1).

Kennedy-Wilson’s shares fell 25 cents to close at $13.25 on Nasdaq..