Real Estate and In-Place Lease Value

9 Months Ended

Sep. 30, 2020

The following table summarizes Kennedy Wilson's investment in consolidated real estate properties at September 30, 2020 and December 31, 2019:


	September 30,		December 31,
(Dollars in millions)	2020		2019
Land	$	1,310.9	$	1,330.6
Buildings	3,427.6		3,630.4
Building improvements	519.7		469.5
In-place lease values	333.7		352.9
	5,591.9		5,783.4
Less accumulated depreciation and amortization	(805.2)		(703.2)
Real estate and acquired in place lease values, net of accumulated depreciation and amortization	$	4,786.7	$	5,080.2

Real property, including land, buildings, and building improvements are included in real estate and are generally stated at cost. Buildings and building improvements are depreciated on a straight-line method over their estimated lives not to exceed 40 years. Acquired in-place lease values are recorded at their estimated fair value and depreciated over their respective weighted-average lease term which was 6.8 years at September 30, 2020.

Consolidated Acquisitions

There were no consolidated acquisitions during the nine months ended September 30, 2020. During the nine months ended September 30, 2019, Kennedy Wilson acquired a commercial property in the United Kingdom for $55.5 million and a commercial property in Ireland for $42.4 million.

Gains on Sale of Real Estate, Net

During the nine months ended September 30, 2020, Kennedy Wilson recognized gains on sale of real estate, net of $47.7 million. The net gains include the sale of properties in the United Kingdom: one multifamily property, thirteen retail properties, one industrial property, one office property and one retail property, one office property and a loan receivable secured by a multifamily property located in Dublin, Ireland. During the nine months ended September 30, 2019, Kennedy Wilson recognized gains on sale of real estate, net of $252.4 million of which $116.6 million was allocated to non-controlling interest. The net gains include the sale of six commercial properties in the United Kingdom, five retail properties in the Western United States, the Ritz-Carlton, Lake Tahoe hotel, and gain recognized on the deconsolidation of State Street office building, Capital Dock office buildings and Capital Dock residential tower in Dublin, Ireland that were previously held by the Company and different equity partners that was previously consolidated in the Company’s financial statements.

Leases

The Company leases its operating properties to customers under agreements that are classified as operating leases. The total minimum lease payments provided for under the leases are recognized on a straight-line basis over the lease term unless circumstances indicate revenue should be recorded on a cash basis. The majority of the Company's rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from the Company's tenants. The Company records amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in rental income in the consolidated statements of operations as the Company is the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk.

The following table summarizes the minimum lease payments due from the Company's tenants on leases with lease periods greater than one year at September 30, 2020:


(Dollars in millions)	Minimum
	Rental Revenues(1)
2020 (remainder)	$	89.0
2021	178.7
2022	169.0
2023	139.0
2024	115.0
Thereafter	523.8
Total	$	1,214.5

(1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases, rental increases that are not fixed and exclude reimbursements of rental expenses.