Real Estate

9 Months Ended

12 Months Ended

Sep. 30, 2011

Dec. 31, 2010

Real Estate [Abstract]

Real Estate

NOTE 5—REAL ESTATE

See note 3 for discussion of the acquisition of the approximate 200,000 square foot office portfolio in Oakland, California.

See note 4 for discussion of the additions to real estate related to the foreclosure of the real estate assets in our consolidated loan pool.

NOTE 5—REAL ESTATE

Kennedy-Wilson's investment in real estate includes the following:

	December 31,
	2010			2009
Office building in Japan	$	9,279,000		$	8,375,000
House in Kona, Hawaii		8,724,000			8,724,000
204-unit residential apartment complex in Lompoc, California		25,780,000			25,707,000
2,700 acres of ranch land in Oahu, Hawaii		36,726,000			—
Residential land in Kona, Hawaii		4,101,000			—
Other		2,097,000			845,000
		86,707,000			43,651,000
Less: Accumulated depreciation		(4,006,000	)		(3,070,000	)
Total	$	82,701,000		$	40,581,000

During 2010, Kennedy-Wilson acquired a controlling interest and assumed the debt of a 2,700 acre ranch in Hawaii. The purchase price of the controlling interest combined with previously capitalized investments made by Kennedy-Wilson and the $16.0 million payoff of debt at a discount resulted in the new basis consolidated in the amount of $36.7 million as of December 31, 2010. The ranch is currently being developed for its intended use. As such, $0.8 million of avoidable interest has been capitalized to the project.

During 2010, Kennedy-Wilson purchased a note from a bank for $5.3 million secured by a house in Kona, Hawaii. The borrower subsequently transferred the deed to Kennedy-Wilson in lieu of a foreclosure. In addition, the borrower paid Kennedy-Wilson $0.2 million and issued an unsecured promissory note in the amount of $1.0 million.

During 2008, Kennedy-Wilson sold its interest in an entity that owned an office building located in Glendora, California for $1,488,000. The sale resulted in a gain of $564,000, which is included in rental and other income in the accompanying consolidated statements of income and comprehensive income (loss). Kennedy-Wilson continues to provide management services to the property and therefore it is not included in discontinued operations.