Investment firm Kenedix has joined forces with fellow Japanese property company Hulic and U.S.-based Kennedy Wilson to acquire a multi-family property in Seattle for $173 million. The apartment complex, known as The Danforth, features 265 units and is situated in the bustling First Hill neighborhood, just east of downtown Seattle.
As part of the partnership, Beverly Hills-based Kennedy Wilson will contribute $6.6 million in equity for a 10 percent stake and will act as the asset manager for the venture, receiving standard management fees, the companies announced in a release on Friday.
The Danforth, anchored by a Whole Foods supermarket as its sole ground-floor tenant, offers a strategic opportunity to acquire a newly constructed community at a price below replacement costs, according to William McMorrow, chairman and CEO of Kennedy Wilson. McMorrow noted that the firm established Kenedix as its Japanese arm in 1995 and later spun it off as a Tokyo-listed entity in 2002.
“Given our 30-year history in Japan, we are proud to continue expanding our investment management platform in collaboration with these two esteemed companies, which align with our investment strategy and commitment to providing quality housing in the growing Pacific Northwest markets,” McMorrow stated.
Constructed in 2018 by Columbia Pacific Advisors, The Danforth was sold for $209.2 million in late 2019 to Manhattan-based Vanbarton Group, which held the property for five years before placing it on the market in 2024. The complex features rental units ranging from one to three bedrooms, with sizes between 582 and 2,503 square feet. The ground-floor retail space is fully leased to Whole Foods, a prominent organic grocery chain operating over 500 locations across North America and the UK.
Amenities at The Danforth include a fitness center, a rooftop solarium, and a dog run. Located at the intersection of Seattle’s First Hill and Capitol Hill neighborhoods, the area is experiencing strong demand and limited new construction, driven by a resurgence in office occupancy among tech employers, as noted by Kennedy Wilson, which manages 13,000 rental units throughout the Pacific Northwest.
The specific equity stakes of Kenedix and Hulic were not disclosed. Kenedix, which was acquired by Sumitomo Mitsui and ARA Asset Management in 2020, is actively enhancing its presence in the U.S. real estate market, according to a stock filing. Tokyo-listed Hulic, which expanded its portfolio by acquiring rival Raysum last year for $1.2 billion, is also increasing its international investments through partnerships in regions projected to experience ongoing population and economic growth.
The acquisition of The Danforth represents Kennedy Wilson’s latest collaboration with Japanese capital, following the announcement of a $200 million U.S. real estate debt platform with partner Tokyu Land Corporation. This venture aims to provide preferred equity investments and mezzanine loans to reputable multi-family and industrial project sponsors across the U.S., targeting deals ranging from $10 million to $50 million, as reported in April.
Kennedy Wilson manages over 60,000 rental housing units, in addition to 12.4 million square feet of industrial space. In Seattle, the state’s largest city, Japanese builder Sekisui House sold a luxury apartment complex to Kennedy Wilson’s sponsored REIT for $328 million in May of last year. This transaction involved the sale of the 406-unit Ivey on Boren, located less than a mile from The Danforth, just months after Sekisui House’s $4.95 billion acquisition of Colorado-based MDC Holdings, positioning it as the fifth-largest U.S. homebuilder by sales.
