Notes Receivable

12 Months Ended

Dec. 31, 2011

Receivables [Abstract]

Notes Receivable

NOTES RECEIVABLE

Notes receivable consists of the following:

	December 31,
	2011		2010
Notes receivable, fixed interest rate of 12%, with various maturities      secured by a 16-unit condominium in Los Angeles, California	$	6,076,000	$	—
Note receivable, fixed interest rate of 8%, interest only, due May 2012,      secured by personal guarantees of borrowers	1,000,000		1,000,000
Note receivable, fixed interest rate of 10%, interest only, due December      2011, secured by personal property	485,000		485,000
Note receivable, fixed interest rate of 12%, interest only, due September      2012	377,000		377,000
Note pool acquired with deteriorated credit quality consisting of loans secured      by collateral located in Southern California, and Las Vegas, Nevada      with various interest rates and maturities (see additional discussion below)	—		18,402,000
Total notes receivable	7,938,000		20,264,000
Note receivable from KW Property Fund II, LP, fixed interest rate of 15%,      principal and accrued interest interest due October 2013	22,674,000		—
Note receivable from KW Property Fund I, LP, fixed interest rate of 9%,      principal and accrued interest interest due August 2012	8,127,000		—
Note receivable from a joint venture investment, fixed interest rate of 9%,      principal and accrued interest due August 2012, secured by deed of      trust	2,468,000		2,898,000
Note receivable from a joint venture investment, fixed interest rate of 10%,      principal and accrued interest due December 2011	—		939,000
Total notes receivable from related parties	33,269,000		3,837,000
	$	41,207,000	$	24,101,000

In 2010, Kennedy-Wilson entered into an arrangement to purchase a pool of loans or notes receivable with deteriorated credit quality from a bank for $25.3 million. As of December 31, 2011, all the loans were either resolved through payoffs or foreclosued upon. During the year ended December 31, 2011 and December 31, 2010, Kennedy-Wilson accreted $1.1 million and $2.4 million, respectively, as interest income on the notes receivable in the accompanying consolidated statements of operations and comprehensive (loss) income.

During 2011, Kennedy-Wilson foreclosed on four assets in Las Vegas, Nevada and one asset in Palm Springs, California in the pool of loans discussed above. These assets served as collateral for loans within the loan pool. As a result of these foreclosures, the real estate was removed from the pool and recorded on Kennedy-Wilson's consolidated balance sheet at a fair value of $15.9 million. Kennedy-Wilson determined the fair value based on the income approach. The fair value was consistent with the carrying amount within the loan pool and, as such, no gain or loss was recorded. Due to the sale of one of the foreclosed properties , the total real estate included in the accompany consolidated balance sheet, related to the foreclosed properties was $9.3 million as of December 31, 2011 (see Note 5).

During 2011, Kennedy Wilson issued and advanced $22.7 million and $8.1 million, on unsecured notes, to KW Property Fund II, LP, and KW Property Fund I, LP, respectively, both equity method investments and related parties. The interest recognized on these notes are included in interest income - related party in the accompanying consolidated statements of operations and comprehensive (loss) income.