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Date
Thursday, August 7, 2025 at 4 p.m. ET
Call participants
Chairman and CEO — Bill McMorrow
President — Matt Windisch
Chief Financial Officer — Justin Enbody
President, Europe — Mike Pegler
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Takeaways
Capital deployment-- $1.7 billion in new capital was committed or deployed, bringing year-to-date deployment to $2.6 billion.
Asset sales-- Over $100 million in non-core assets sold generated $250 million in cash proceeds, exceeding the prior $200 million target set for the year; total year-to-date asset sales reached $275 million with a full-year target of $400 million.
Debt reduction-- $170 million repaid on the unsecured line of credit in Q2 2025, reducing the balance to $100 million at the end of Q2 2025, with the €300 million KWE bond to be fully repaid by October 3.
Assets under management (AUM)-- Assets under management reached $30 billion, a 70% increase since the beginning of 2021, with 65% of AUM in rental housing and plans to grow this to over 80% within two years.
Investment management fees-- Fees hit a quarterly record of $36 million, marking 39% growth in investment management fees with $9.2 billion in fee-bearing capital reported.
Rental housing platform-- 1,200 U.S. multifamily units were acquired for $387 million and $1.3 billion in new construction loans originated, with 96% of first-half capital deployment directed toward the rental housing sector.
Share repurchases-- Approximately 400,000 shares repurchased at an average price of $6.21, leaving $100 million authorized for repurchase of the original $500 million plan.
GAAP EPS-- GAAP net loss stood at $5 per share.
NOI growth-- U.S. same-store multifamily NOI increased 3.3%, and new lease spreads were 75 basis points; Pacific Northwest NOI growth led at 5.6%, Idaho NOI growth was 7.2%, and Southern California at 5% NOI growth.
Occupancy metrics--Kennedy-Wilson Holdings(KW 0.11%)'s diversified U.S. apartment portfolio reported 94% occupancy.
European office divestitures-- Two Irish office assets were sold for a combined $155 million at a 5.3% weighted average cap rate; total European office same-property NOI declined 3% due to UK asset occupancy dips.
Credit platform returns-- The construction loan portfolio generated a 27% deal-level IRR to Kennedy-Wilson Holdings, including fees, as of June 30, as $1.8 billion of $4.1 billion acquired loans have been repaid as of June 30, with fees included.
Shareholder liquidity-- $113 million in consolidated unrestricted cash and $450 million undrawn on the $550 million credit facility were available at quarter-end.
Future rental housing growth-- Anticipated expansion to 90,000-100,000 total rental housing units (owned or financed) in the next three to four years, from the current 70,000 units.
Irish apartment portfolio-- Same-property NOI in the Ireland apartment portfolio rose 2.4%, the final development stabilized in the quarter, bringing stabilized units to over 3,500; updates to rent control policy in Ireland may allow new leases to be brought to market rents from Q1 2026, pending government approval.
Summary
Management confirmed full repayment of €300 million in KWE bonds by October 3 and reported progress on deleveraging through non-core asset sales and share repurchases. Year-to-date gains on asset dispositions bolstered cash reserves, which are earmarked for additional debt retirement and reinvestment in fee-generative platforms. Regional U.S. multifamily metrics showed notable same-store NOI growth led by key Western markets, with same-store NOI growth including 5.6% in the Pacific Northwest, 7.2% in Idaho, and 5% in Southern California, while European office dispositions at premium cap rates evidenced continued portfolio reallocation. A 27% IRR (including fees, as of June 30) on construction loan repayments and significant remaining share buyback authorization point to ongoing efforts to balance growth, shareholder returns, and prudent balance sheet management.
CFO Enbody stated, "GAAP EPS for the quarter totaled a loss of $5 per share compared to a loss of $0.43 per share in Q2 of last year."
Management identified the rental housing focus, noting that 96% of first-half capital deployment was in that sector, and plans to transition to over 80% of AUM in rental housing within the next two years.
President Windisch noted Europe office NOI "declined by 3% and was impacted by a decline in occupancy at two UK assets," though new leases at higher rents are expected to reverse this trend going forward.
Future rent policy changes in Ireland could increase achievable rents for re-leased units, pending government action expected by year-end.
Industry glossary
NOI (Net Operating Income): A real estate metric representing income generated from property operations after operating expenses but before interest and taxes.
Cap rate: The implied yield on a real estate investment, calculated as net operating income divided by property value.
Fee-bearing capital: Third-party capital managed by the investment manager that generates management fees.
Loan-to-cost (LTC): The ratio of a loan amount to the total cost of a real estate project (cost of the land plus construction or property improvement costs).
IRR (Internal Rate of Return): The annualized rate of return earned on an investment, accounting for the timing and magnitude of cash flows.
Full Conference Call Transcript
Bill McMorrow: Thank you, Daven, and thank you everyone for joining the call today. We are pleased to report solid results for 2025, which exceeded our business plan and reflect the continuing strengthening in our operations and in the overall real estate investment market. We deployed or committed $1.7 billion of new capital in Q2, driving total capital deployment to $2.6 billion for 2025. We remain on track this year to exceed the $4.3 billion we deployed in 2024. Improving transaction levels within the commercial real estate space allowed us to successfully execute on over $100 million in non-core asset sales, generating $250 million in cash proceeds to Kennedy-Wilson Holdings, Inc., exceeding the $200 million target we set on our last call.
We utilized $170 million to reduce our unsecured line of credit and allocated the remaining capital to new investments. We continue to see strong activity across our markets, with clear evidence of sustained long-term demand for both rental housing and real estate credit solutions. On today's call, I will review our portfolio and the progress we have made across our 2025 strategic initiatives and in particular our asset sales and unsecured debt reduction. Assets under management grew to a record $30 billion and have increased by 70% since the beginning of 2021. At the 100% ownership level, our stabilized investments generate $1.6 billion of revenue and $1.3 billion stabilized NOI.
Kennedy-Wilson Holdings, Inc. holds a 37% weighted average ownership interest in these assets, with the remaining 63% managed on behalf of partners generating fee income for our platform. Rental housing, our core focus, represents 65% of our assets under management, comprised of approximately 70,000 units that we either have an ownership interest in or are financing in our credit platform. We expect this sector to grow to over 80% of our AUM over the next two years. In the second quarter, capital deployment was focused on rental housing equity and credit. We originated another $1.3 billion in new rental housing construction loans, which was our second largest quarter originations to date.
Since arriving at Kennedy-Wilson Holdings, Inc., our credit team is closing in on surpassing $6 billion in new loans, which are all focused on the development of high-quality market-rate multifamily or student housing communities across the U.S. We also expanded our U.S. multifamily platform acquiring four communities at significant discounts to replacement costs, totaling 1,200 units for $387 million. These new investments were completed through our investment management platform which included adding two new Japanese-based institutions to our growing group of high-quality institutional partners. In Europe, we continue to build up our single-family rental platform with CPPIB, one of Canada's largest pension funds.
In Q2, we added $100 million in new sites bringing our total portfolio to 13 sites totaling 1,200 planned homes. We are under offer on new sites totaling over $200 million with an additional 500 homes, which if closed would take our venture to 1,700 homes within twelve months of formation. Capital deployment for the first half of the year was 96% directed toward the rental housing sector, with 74% into the construction loan originations and 22% into equity ownership in The Western United States and UK single-family rental investments. The higher levels of capital deployment have driven our investment management to record levels. Fee-bearing capital reached a record $9.2 billion.
Our investment management fees grew by 39% in Q2 to a quarterly record of $36 million. Our fees for 2025 increased by 30% year over year and have already reached the levels we generated in all of 2023, where our fees were $62 million. Over the past fifteen years, we have expanded our network of strategic partners across North America, Asia, The Middle East, and Europe. These long-standing, well-capitalized partners remain highly engaged in deploying capital alongside Kennedy-Wilson Holdings, Inc., both in equity and in credit, which gives us strong momentum for continued growth in our fee-related earnings. We also made solid progress on our non-core asset sale program in the quarter.
Our dispositions included the sale of three European office assets, the sale of an older Northern California multifamily asset, built in 1988, and the reduction in our ownership interest in our only hotel also. We generated $275 million of cash from asset sales for the year which keeps us on track to hit our goal of $400 million by year-end. The proceeds in the second half of the year will be used to further reduce our debt, including the final tranche of our KWE bonds which will be repaid in full in October as we announced yesterday. With the total $350 million KWE repayment, we will have fully retired the original $650 million principal amount of the 2025 bonds.
We also plan to continue recycling capital into higher return investment opportunities in our investment management platform. Turning to the market, real estate fundamentals continue to strengthen in Q2, and we believe there remain compelling risk-adjusted opportunities in the rental housing sector. A persistent housing shortage across all our markets coupled with affordability challenges in the single-family sector continues to fuel sustained rental demand. In The U.S. apartment sector, the bulk of new supply that began delivering in 2023 has largely been delivered and is being absorbed. With new starts falling sharply, the supply pipeline is thinning, setting the stage for strong rental growth going forward.
With a portfolio of 40,000 apartment units, we are well-positioned to capitalize on these favorable supply-demand dynamics over the next few years. We are confident that as we grow our NAV and scale, in our diversified investment management business, the value creating will increasingly be recognized in our share price. We are entering the second half of the year with an existing portfolio that is well-positioned with a strong pipeline of activity centered around our strategic initiatives. Increasing free cash flow by growing our NOI and recurring fees, harvesting realized gains from our asset sales, and increasing our fee income.
With our own capital and the support of the major global strategic partners, I remain very optimistic that in the remainder of 2025, we will see a record level of new capital deployment and benefit from Kennedy-Wilson Holdings, Inc.'s team's experience to make sound investment decisions together with our partners. With that, I would like to turn the call over to Justin Enbody.
Justin Enbody: Thanks, Bill. I will begin with a review of our Q2 financial results and then discuss the balance sheet. GAAP EPS for the quarter totaled a loss of $5 per share compared to a loss of $0.43 per share in Q2 of last year. Baseline EBITDA for Q2 came in at $117 million, a 12% increase year over year. This brings our trailing twelve-month baseline EBITDA to $425 million. Adjusted EBITDA totaled $147 million and was up significantly from $79 million in Q2 of last year. As Bill mentioned, our asset sale activity picked up significantly in the quarter. Our consolidated asset dispositions in Q2 resulted in $55 million of gains on sale.
Our co-investment portfolio, which now totals $13 billion in assets held at fair value, is 75% comprised of rental housing and industrial investments that we own with partners. Kennedy-Wilson Holdings, Inc.'s ownership in this portfolio is approximately 32%. During the quarter, this portfolio saw minor net changes in value, with modest increases in real estate values offset by costs related to financing activities. Turning to our balance sheet, in Q2, we made solid progress on reducing our unsecured debt through the payoff of $170 million on our line of credit, which stood at $100 million as of the end of the quarter.
Our largest upcoming maturity is our KWE unsecured bonds totaling €300 million, which we announced we will be paying off by October 3. Our total debt is 98% fixed or hedged, with a weighted average maturity of 4.6 years, and a weighted average effective interest rate of 4.7%. We also have $113 million of consolidated unrestricted cash and $450 million of undrawn availability on our $550 million credit facility. Finally, we began utilizing our share repurchase plan in Q2, repurchasing approximately 400,000 shares at an average price of $6.21, with $100 million remaining on our $500 million share repurchase plan. And with that, I would now like to hand the call over to Matt Windisch for a portfolio update.
Matt Windisch: Thanks, Justin. Our stabilized real estate portfolio generates estimated annual NOI of $468 million to Kennedy-Wilson Holdings, Inc., with 70% related to rental housing or industrial. This is up from just 58% three years ago. We anticipate that these two sectors will continue to grow as we look to expand within these two asset classes while also disposing of non-core assets. Turning to our largest sector, multifamily, which represents 64% of our NOI, in Q2, we saw sustained apartment demand and strong retention from our diversified apartment portfolio, which was 94% occupied as of quarter-end.
In total, U.S. same-store NOI grew by 3.3% for our market-rate portfolio, which was driven by blended leasing spreads accelerating from 1.4% in Q1 to 2.1% in Q2. Renewal spreads totaled approximately 3.5%, and spreads on new leases improved to 75 basis points, the highest level in two years. At quarter-end, our loss to lease totaled 4.2%. I would like to highlight a few regional stats. Starting with our Pacific Northwest portfolio, once again, we saw the strongest NOI growth across the portfolio totaling 5.6%. The Seattle area continues to benefit from return-to-office mandates from companies like Amazon and Starbucks. We also saw favorable real estate tax savings in the quarter.
The Mountain West has begun to turn the corner on supply that is being absorbed. Our largest state in the region, Idaho, saw an impressive 7.2% NOI growth benefiting from higher rents, lower real estate taxes, and lower insurance costs. We believe the rest of this region is set up well over the next few years as supply decreases and the region continues to benefit from offering a high-quality, outdoor lifestyle that is much more affordable than higher-cost states. In Southern California, our low-density, mostly suburban portfolio generated 5% NOI growth and benefited from occupancy growth, rental growth, and lower bad debt.
And finally, in our smaller Northern California portfolio, results were largely flat as higher rents were offset by higher delinquency. At the end of the quarter, we sold a 90% stake in our largest asset in the region, which will come out of the same-store pool in Q3. That sale generated $40 million of cash to Kennedy-Wilson Holdings, Inc. Our vintage housing affordable portfolio, which utilizes low-income housing tax credits, saw solid same-property NOI growth of 5%. These results were driven as a result of rising area median incomes. We have another 1,900 units under development and lease-up, which will require minimum capital from Kennedy-Wilson Holdings, Inc., and are expected to add $10 million of NOI.
We are on track to reach 13,000 stabilized units while actively evaluating opportunities to further expand our affordable portfolio. In Ireland, same-property NOI in our apartment portfolio was up 2.4% driven by occupancy growth. We stabilized our final remaining Irish lease-up apartment asset, the Cornerstone, in Q2, which increased total stabilized units to over 3,500. The other key headline was the Irish government's proposed measures related to existing rent control, which is expiring at the end of the year. Starting in Q1 of next year, we expect that units that are leased to new tenants will likely be able to be brought to market rents.
The implementation of this change is still subject to government approval, which is expected later this year. Moving over to our office portfolio, we sold two Irish office assets in the quarter at attractive cap rates to core buyers who have started to return to the office market. We sold these two fully leased properties, Kildare Street and Hanover Quay, in separate transactions for a combined total of $155 million, reflecting a 5.3% weighted average buyer cap rate. These are both best-in-class assets that we built or comprehensively redeveloped and subsequently fully leased to prime tenants.
Seeing these assets successfully trade to core buyers marks the completion of our business plan and serves as strong validation of the high-quality assets that we have developed. We also completed the sale of our largest remaining asset in Italy. Combined, these sales generated $70 million of cash to Kennedy-Wilson Holdings, Inc. Roughly 75% of our stabilized office portfolio sits in Europe, where same-property NOI declined by 3% in the quarter and was impacted by a decline in occupancy at two UK assets. In both cases, we have now agreed to lease the space at significantly higher rents, which will positively impact our future results.
Our overall European results pro forma for these leases would have resulted in a 2.7% NOI increase. Turning to our investment management business, Q2 saw $36 million in fee revenue, while fee-bearing capital grew to a record $9.2 billion. Additionally, there is another $5.2 billion in future debt fundings that will impact our fee-bearing capital base over the next couple of years. Our credit portfolio continues to generate strong returns on invested capital, benefiting from favorable spreads and a deep pipeline of high-quality opportunities.
Since acquiring the $4.1 billion construction loan portfolio two years ago, of which Kennedy-Wilson Holdings, Inc. bought a 5% stake, as of June 30, $1.8 billion of the loans have successfully been repaid, which has generated a deal-level IRR of 27% to Kennedy-Wilson Holdings, Inc., including fees. We are also making strong progress on our UK single-family rental platform, which we launched in Q4, which now totals 1,200 planned homes. The initial homes delivered from developers have begun lease-up with encouraging progress on achieving our planned rents. We continue to look for opportunities to expand this portfolio and have been having active conversations with both new and repeat counterparties, which will seek to take the platform beyond 2,000 units.
In closing, we made significant progress on advancing our key initiatives in Q2, including monetizing non-core assets, reducing our unsecured debt, and streamlining our portfolio. Additionally, we have taken meaningful steps to position our capital-light investment management platform for long-term growth. So with that, we will open it up to Q&A.
Operator: We will now begin the question and answer session. Our first question will come from Anthony Paolone with JPMorgan. Please go ahead.
Anthony Paolone: Great. Thank you. My first question actually, we will start with the SFR business in The UK. I think we have some familiarity with it in The U.S. and where it is and the evolution here. But maybe can you talk a bit more about just where it is in The UK and whether it is purely a build-to-rent strategy or if there are existing rental homes that could also be purchased? And also maybe a little bit about the returns that you see and why it is so attractive?
Bill McMorrow: Mike, you want to go ahead with that?
Mike Pegler: Sure. Thanks, Bill. I will take that one. But the single-family rental housing business is really in its early days in The UK. This market has been growing significantly in the past couple of years, but the levels of penetration are way, way, way below what you would expect in The UK. In The U.S., something like a tenth of the market penetration used in The U.S. market. So it is really early days. There are a handful of parties creating, you know, this institution model of ownership which we think will become an established part of The UK rental housing market over the next few years. It really is a built-for-rent gate at the moment.
Or at least that is what we are doing in our strategy with CPPIB. To get what we are targeting, we are looking at buying from house builders at a discount. We are trying to buy maybe 100 units in each lot and trying to create these single-family rental communities on existing master plans as builders are bringing forward. We think there is a huge pipeline. We think this is really scalable, and we think it can generate great returns for our partner and for ourselves. In terms of the returns, we are targeting, we are probably looking at, let us say, mid-teens at the asset level.
And then with the fees that we are going to generate on top of that, that is going to push it in terms of the asset management fee, you will probably push it into the twenties. And then, hopefully, we are going to be returning significant promotes on top of that, which will send our returns up even higher over the course of our business plan. This is something that has got a lot of focus with the European team. As Bill and Matt said, we are pushing towards hopefully being in about 2,000 homes by the end of this year, potentially further. And this initial capital by CPPIB is going to take us up to 4,000 homes.
So, you know, we think then we will really be one of the most meaningful players in The UK market. And we think that could be further growth to go beyond that. We are excited about the prospects of the returns of this segment of the business can be generating over the short, medium, and long term.
Anthony Paolone: Okay. Thanks. That is a great overview. Just my second one relates more broadly. Bill, you have been pretty clear about just the skew towards residential and moving the company in that direction. Development? Or how are you thinking about the DApp platform maybe for Matt?
Matt Windisch: Continued to focus on residential construction lending. And I think our track record in terms of deployment and success on the realizations would demonstrate that we are best in class in that space. So we are going to continue to have that be the primary focus for what we do. I think I may have alluded to this on previous calls, but I think we have an opportunity to expand our lending capabilities within the residential sector to cover bridge lending, potentially some permanent lending solutions over the short to medium term. And so we do see the opportunity to expand in that space.
We did announce a partnership with Tokyo a couple of quarters ago, where we are going to focus as well primarily on residential investing within preferred equity and mezzanine solutions. That being said, I think we have the expertise and knowledge of other product types and the team that we brought over from Pacific Western Bank a couple of years ago historically has been a lender to other sectors, including hospitality and industrial. So I think over time, depending on where we are in the capital structure, we certainly have the capabilities and the knowledge to deploy capital outside of housing within the credit space.
I do think that housing will continue to remain the vast majority of what we do going forward, though.
Anthony Paolone: Okay. And just last one for me. Just you have been pretty active in selling non-core assets and producing cash back to Kennedy-Wilson Holdings, Inc. Just any order of magnitude of what might be planned for the balance of the year?
Bill McMorrow: Well, Tony, what I said in my remarks is that we had laid out $400 million at the beginning of the year was our goal, and we have done $275 million so far. And we are well on track now to do the last $125 million, and we may exceed that by some amount, but for sure we will finish the year at over $400 million.
Anthony Paolone: Okay, great. Sorry, I may have missed that. Thank you.
Operator: Our next question will come from Yana Gallen with Bank of America. Please go ahead.
Yana Gallen: Thank you. Good morning. Good morning. So on your plan to further increase the multifamily exposure, can you get into a little detail of your preferences between affordable versus market rate and U.S. versus Europe? And kind of what are maybe where the cap rates most attractive right now?
Matt Windisch: Sure, Yana. This is Matt. So I will answer that. Look, I think we are interested in expanding our exposure to that sector through both our credit business, as well as the equity business. We have certainly been more active geographically in The U.S., although depending on some changes in policy in Ireland, there could be an additional attraction to Irish assets going forward. But I would say, look, our credit business for the past year or so has been the majority of the capital deployment within the residential space. That did start to shift a bit in Q2.
You saw that we bought four apartment communities in the quarter, and there are several more that we are looking at here in the second half of the year. Our investment management platforms. So it all depends on the opportunity set, who the seller is, what the circumstances are. But we are actively pursuing residential opportunities across geographies and across the capital stack.
Bill McMorrow: Yes, Matt, if I could add on a little bit to that. I mean, of the metrics that I mentioned that we really focus on is the total number of units that we either have an ownership interest in or that we are financing. And we are now up to 70,000 units that we either have an ownership interest in 40,000 or that we are financing 30,000. And so as I mentioned, the shift in our total portfolio where we are at 65% now to going to 80% will mean that some of the other asset classes, particularly office, will decrease.
But over the next, I would say, three to four years, we hope to move that 70,000 up to somewhere between 90,000 to 100,000 units, depending on what the opportunities are.
Yana Gallen: Thank you. And then, maybe just for Justin, curious on the €300 million loan repayment on October 3, is that just when there is no longer a pre-penalty or I am just curious around the timing?
Justin Enbody: So the timing for us is correct. There is no prepayment penalty as well as just building the cash position to pay it down effectively. So we are in a great spot and we are looking forward to putting that behind us.
Yana Gallen: Great. Thank you.
Operator: Our next question will come from Omotayo Okusanya with Deutsche Bank. Please go ahead.
Omotayo Okusanya: Hi, yes. Good morning. In terms of the credit business, again, everywhere you turn, there seems to be a new kind of private credit platform. Just curious how competition is shaping up there and how that may potentially impact pricing in any way, shape, or form, if at all?
Matt Windisch: Yes. Good question, Tayo. I would say you are correct. There is obviously a lot of private credit capital out there. I think what is unique about our platform and what we have been doing the past couple of years and in particular the last couple of quarters, is we have been, as we have mentioned, we are focused really on residential construction lending within multifamily and student housing sectors. You know, we do not use any back leverage currently in our portfolio. So a lot of the private credit vehicles that have been raised are utilizing a lot of back leverage, and they are generally looking to do non-construction lending.
So we are not seeing a ton of impact within our specific area right now where we are seeing a lot of private credit solutions coming in. Competing. That being said, you know, the banks have definitely become more active in the market. So we are seeing a bit more competition there. And I would say if you look over the past year or so, spreads have probably come in, you know, between, you know, thirty and fifty basis points on construction lending. But we still think it is a pretty attractive space and we are continuing to deploy capital there at really attractive risk-adjusted returns for ourselves and for our capital partners.
Omotayo Okusanya: That is helpful. The only other thing, Tayo, that I would add to what Matt just said is that we are not doing any unsecured finance. We are doing all secured financing at generally 55% to 65% loans to cost with some of the best names in the country. And so even though the private credit market has grown substantially in these other asset classes, everything that we are doing is real estate secured financing. And the combination of our equity ownership business and the debt business gives us an incredible base of information across the entire country. And relationships.
When you look at our credit business, many of the ones that we are doing are multiple borrowers that we have had multiple loans to. And as I think Matt pointed out in his remarks, over 50% close to 50% of the loans that we bought in the Pac Western portfolio here a couple of years ago have already been paid off.
Omotayo Okusanya: Got you. That is helpful. Second question, again, great success on the asset sales side. I know your number one goal is to use proceeds to kind of pay down debt and delever. But just curious again, as you kind of take a look at the stock still trading at this very large discount to NAV, how you think about stock buybacks as part of your overall capital allocation decisions?
Justin Enbody: Yes. Well, we started in a small way in the second quarter. And I think you are making the right point. These are all just capital allocation decisions. We have $100 million left in the existing buyback program. And once we get past the bond payoff, which is slightly over $300 million, then we will be making decisions about where we want to deploy capital. But clearly, of the opportunities that we have, we see a big opportunity in our own stock.
Omotayo Okusanya: That is helpful. And then one for Justin. Again, as we start to think beyond 2025, kind of talk to us a little bit about kind of 2026 debt maturities and swap maturities and how you start thinking through addressing those?
Justin Enbody: Yes. I mean, I think similar to what we have done this year is we will continue to, you know, dispose of non-core assets to free up capital. To allow us to handle some of our debt maturities. In some instances, whether secured maturities, we are going to obviously go to the market and refinance them. But we will continue to execute on our plan of non-core asset sales to delever.
Matt Windisch: Yes. I would just add to that, that a handful of the larger maturities are on assets that we have in our disposition plans, either for this year or next year. And so we feel very good about the prospects for refinancing the loans we have. And the average rate on what we are maturing is close to 6%. So it is actually well above our average borrowing cost. And so incremental cost, to refinance do not expect to be significantly higher. In fact, we think it will be close to in line with the current rate we are paying.
Omotayo Okusanya: So you are not expecting a lot of earnings dilution as a result of that?
Matt Windisch: Correct.
Omotayo Okusanya: Great. Thank you very much. Great momentum here.
Operator: Thank you. With no further questions, this will conclude our question and answer session. I would like to turn the conference back over to Bill McMorrow for any closing remarks.
Bill McMorrow: Thank you everybody for joining the call. And as always, we are always available to answer any other questions that might come up. So thank you. Have a great day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.