Chairman & Chief Executive Officer, KENNEDY-WILSON HOLDINGS INC
Building Better Communities with Bob Hart - Episode 16: Bill McMorrow
Leadership, Legacy & Bold Moves with Kennedy Wilson's Bill McMorrow In this episode of Building Better Communities with Bob ...
About William Mcmorrow
In a July 2025 podcast, McMorrow discussed Kennedy Wilson's growth from a small auction company he purchased in 1988 into an international real estate firm. He highlighted the company's recent acquisition of a $5.7 billion loan portfolio, which he described as a transformative move that put the firm "back in banking in a big way." McMorrow also noted that Kennedy Wilson is one of the largest construction and bridge lenders in the country and is expanding its affordable and senior housing portfolio, which he called "the biggest issue in the world." McMorrow has been critical of the Federal Reserve's handling of interest rates, stating in a November 2024 interview that the Fed was "slow to react" and that he would have "started lowering rates early this year" based on ground-level data on rent growth. He has also expressed concern about rent control, arguing that it "discourages development and capital investment." McMorrow emphasized the importance of mentorship, contrarian thinking, and building a business on handshakes and long-term relationships, crediting his mentor George Graziadio for teaching him these principles.
Transcript (190 segments)
B
Bob Hart0:00
This episode is brought to you by True America Multifamily, one of the nation's leading multifamily investment firms with nearly 60,000 attainable rental housing units under management. This month, True America celebrates its 13-year anniversary with a commitment to building better communities. On today's episode, Bill McMorrow, chairman and CEO of Kennedy Wilson, joins Bob on the podcast. Well, welcome to Building Better Communities by none other than Bob Hart. My special guest today is my, I consider you a friend, a mentor, and an international real estate icon. Bill McMorrow, chairman of Kennedy Wilson, a job he bought himself into 37 years ago in 1988 when Kennedy Wilson had I think 11 people and a few partners and really started out as an auction company. So, Bill, let's talk a little bit about the history of Kennedy Wilson and how you transformed it into an international real estate company across continents and really returning to your roots in the banking industry now as well.
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William Mcmorrow1:10
Well, Bob, first of all, thank you for having me. I think Bob, you know, you and I have a lot of commonality in how we kind of grew up. And as you know, I'm one of nine kids. I had a really wonderful set of parents. So I got lucky. I had two great parents. And your interest has come from Boston. So we have that. I came from Boston. My roots are in Boston. My roots are in Ireland. But I think more than anything, it really taught me, my dad was a very disciplined person, but it taught me to work hard and have a job from the time I was eight years old. A real job. I know your grandfather was a policeman in Boston. My dad was a Navy fighter pilot in the Second World War. But I think more than anything, it really taught me how to work on a team. And I was very lucky because back in those days, Bob, there wasn't like optionality in terms of where you wanted to go to school and what you wanted. I've heard no stories from you. You do what your parents say. You were told what to do and that was it. And I got set on this great path of going to Catholic grade schools, but then there was only one school I could go to high school at, according to my dad, and we didn't debate it. I was going to school in Venice Boulevard. I was going to Venice Boulevard and since I was playing sports, I was going to live there.
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Bob Hart2:46
How'd you get there?
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William Mcmorrow2:48
How'd I get there? I got in a car. They drove me there and dropped me off and left me when I was 14 years old. And so that was really the beginning of the journey. And then USC played a very huge role in that early part of my life. But like you, Bob, I always had to do jobs to make money.
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Bob Hart3:14
Yes, I know one of the early ones was down in the meatpacking district and that's why you don't eat meat anymore.
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William Mcmorrow3:19
We had to do jobs. And so I think when I think back on my banking career, the early part of it was really just the 15 job interviews and one job offer. And everybody says, 'Well, what'd you do?' I said, 'I took it. I needed to get a job.' And so I started in the banking industry.
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Bob Hart3:42
Was that your job in Philadelphia?
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William Mcmorrow3:44
It was here in California.
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Bob Hart3:46
Okay.
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William Mcmorrow3:47
So I had graduated from graduate school at USC and thought I could stop over at Gonzaga, though. I stopped there, but when I graduated from USC, I thought I could get a job anywhere, but of course it was a bad time in the job market.
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Bob Hart4:05
Yeah.
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William Mcmorrow4:06
So I got one job late 60s, early 1970. But it turned out to be a blessing because I moved to San Francisco. I got out of LA for a while.
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Bob Hart4:16
What bank was that then?
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William Mcmorrow4:18
Crocker. Crocker bank that became owned by Wells.
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Bob Hart4:23
Yes.
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William Mcmorrow4:24
And so through a series of lucky events, luck plays such an important part in all of our lives. I met a guy when I was 25 who asked me if I wanted to move back to Philadelphia and run their corporate lending group when I was 25 years old with an MBA, but not enough experience to be, I had enough experience to be dangerous, but I had gained somewhat of a reputation of being able to bring in business and to do business with good clients. You know that was before real estate really.
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Bob Hart5:02
You were really, this was the, I was we were lending money to Fortune 500 companies, middle market companies. These were all unsecured loans primarily. This was corporate lending.
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William Mcmorrow5:12
Corporate lending. But I had never, I really never went on an airplane till I was 18 years old because of me. I have nine kids.
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Bob Hart5:21
Yeah.
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William Mcmorrow5:22
And so here I am. I'm now living in Philadelphia, but we owned a bank in New York City and we owned a bank in France. And I'm 25 years old. And now I'm getting to see that there's actually another place outside of California where there's real people. And Philadelphia has real people and there we had a big corporate base there. And so the experience I had of learning about New York, being in Philadelphia, seeing Europe, was such an eye opener to me. And so I'm telling you all this because it really is how Kennedy Wilson has evolved.
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Bob Hart6:07
Exactly. And you were banking John Wilson and Don Kennedy. Well, after you came back to California, they were helping me work out real estate problems in 1980 when Prime got to 21.
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William Mcmorrow6:17
I remember that. I wanted to move back to California.
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Bob Hart6:20
Yeah.
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William Mcmorrow6:21
And Imperial Bank, which was controlled by the Grazido family that Pepperdine Business School is named after, George met me and asked me to come and basically take over running the asset side of the bank.
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Bob Hart6:36
So that's when you left Fidelity.
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William Mcmorrow6:38
That's when I left Fidelity. I came back to California.
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Bob Hart6:42
And you were probably about 30 then.
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William Mcmorrow6:44
31.
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Bob Hart6:46
31. Yeah.
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William Mcmorrow6:47
And so he, but here we are in a war in 1980, 21% with 75% that high. 75% of our loans were to real estate people. Right? So you can imagine what that was like. But that was really where I learned real estate on the workout side. On the workout side, but we were taking it all back. Nobody could pay the interest. They were just handing you the keys. They were just handing the keys in. And I also the bank was under a regulatory agreement and so I had to learn how to work with the regulators. And so when you think about Kennedy Wilson that I was able to buy in 1988, it was a small auction company that was auctioning primarily residential real estate condos and European antiquities is how they started.
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Bob Hart7:50
Didn't Wilson start that way?
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William Mcmorrow7:52
That they, that was the separate business.
B
Bob Hart7:55
Oh, I see.
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William Mcmorrow7:56
And they had started this architectural antique auction company, right? That was doing really, really well and the real estate auction business was just kind of an afterthought and they sold it for $1 to Bill Stevenson who I bought the company from for a million dollars in 1988.
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Bob Hart8:16
Was he the Australian guy or is that?
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William Mcmorrow8:18
No, that was Ken. But Bill unfortunately has since passed away. But this is where luck happens to everybody in life. And a very small company. The second night I was at the company, I was going home and I said to one of the 11 people, I said, 'If you ever find any condominium projects in California that we can buy, I've got capital.' And the capital was coming from my mentor, George Grazadillo.
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Bob Hart8:51
But you left the bank to take over Kennedy Wilson.
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William Mcmorrow8:54
Kennedy Wilson. Second night I owned the company. That had to be a big scary thing to do to leave the comfort of the bank.
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Bob Hart8:58
It's hard to go out of an institutional environment and into an entrepreneur. It's very hard.
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William Mcmorrow9:04
Yeah. And so this is where luck plays such a part. I say to this guy, he comes in the next day. He says, 'I found two.' Really? Where are they? One's in Palm Springs, one's in Vallejo. And I called up George and I said, 'Hey, I need the capital to buy these two.' And he says, 'Fine. I want to look at the one in Palm Springs because I have a home out in the Palm Desert area.' Now, what are rates now? They probably moved down a little bit by then. This was 1988. Oh, this is all the way at 88 now. This is now all to 88. I'm out of the bank. I own Kennedy Wilson. We are doing a million dollars a year of revenue. And second day this guy comes in and George goes and sees the, George was in his 60s and I'm still in my 30s, right? Called me up and he says, 'Stupidest deal I've ever seen. I'm not giving you the money.' And I said, 'You got to give me the money. I'm buying it.'
B
Bob Hart10:07
What was the relative value then for these condos?
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William Mcmorrow10:10
60 condos with pools and we had proformed these to sell for $135,000 a piece.
B
Bob Hart10:15
My god.
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William Mcmorrow10:16
But he says, 'Stupid deal. Not giving you the money.' I finally convinced him. He said, 'I'll give you the money. I don't want to be your partner. You're going to lose your you know what.' But he gave you the money. He said, 'I'll loan you the money and you have to sign on the whole thing personally.' And I said, 'Okay, fine.' So on auction day there were 800 bidders.
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Bob Hart10:40
So, oh, because this was REO.
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William Mcmorrow10:42
This we bought it from a bank.
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Bob Hart10:44
Yeah. How many bids?
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William Mcmorrow10:45
800.
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Bob Hart10:46
800. Holy moly.
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William Mcmorrow10:48
First unit sold for 265,000. Remember I told you I proformed them at 135? First one sold for 265 and that was what happened that day.
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Bob Hart10:59
So you were not only the owner at that point, you were selling them through Kennedy Wilson.
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William Mcmorrow11:04
We were buying our own inventory, right? Fixing it up and running it back through the auction company. And we were doing this a lot. And so you would typically own these properties for six months. And so, not to get into too much detail, but it ended up being quite a success. And off of that I decided that the auction business really made sense and we needed to bring in more business development people and that's where really the eye grew to Kennedy Wilson International because you were starting to go global again at that point. But in 1990 there was a savings and loan crisis, right? The RTC and the federal government took over many, many savings and loans. And so I hired 64 people into our business development department in six months and the $1 million of revenue went to 30 in a year.
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Bob Hart12:05
Annual revenue.
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William Mcmorrow12:07
Yeah. But we were making good profit margins on this. And so it was kind of one thing after another, Bob. And where the international part came in was in 1994 I was asked by a Japanese company in Orange County to do an auction but they said you have to go to Japan to get the bank's approval. So I went to Japan by myself in 1994 and I decided since I was there I might as well talk to as many banks as I could. And honestly this was a period of time in the United States where the Japanese were buying every piece of real estate and there were bills floating around in the Congress to prohibit the Japanese from buying all of our trophy assets. They bought Pebble Beach, they bought Riviera, they were buying everything, anything. And so I get over there and I said to myself after I had finished talking to all these banks, these are really making some crazy loans. We should open an office here.
B
Bob Hart13:18
And so is that when you met Homosan?
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William Mcmorrow13:20
I hired him in 1995.
B
Bob Hart13:22
And how did you get acquainted with him?
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William Mcmorrow13:24
I met him through, it was the luckiest thing ever. I met him through a headhunter. I had our office was in Santa Monica at the time. I remember on Ocean. I was having a very difficult time finding somebody to lead that business and he came to my office and after 15 minutes I said, 'Listen Rio, you are not leaving this office until you agree to come to Kennedy Wilson.' I've been to that office. So he said, 'You know, no, I got to think about it.' Sure. He's a Japanese guy. He said there's nothing to think about. Anyway, I finally after a little while convinced him and then he had been a Mitsubishi guy. He was and he just, he unfortunately has passed away, but he was the most amazing friend and leader and just a prolific business development guy. He didn't even have a clue then the ride he would be on because that gave the seed to forming Kennedy Wilson Japan public company. He was just an amazing human being. And then other lucky things happened and we were able to get some capital to go to Japan and buy office buildings.
B
Bob Hart14:35
So really it started out as an asset manager acquirer.
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William Mcmorrow14:39
Started out really as a brokerage business where we were going to or a purchasing business here in California or Hawaii where the Japanese banks were taking back properties from their customers. We were buying real estate from them here in the states. And then in some cases acting as the broker like we sold the Tiffany building in New York. I remember that Japanese company. That was a huge deal. I remember. So that was the start of it. But then in 1997, I got a friend of mine to give us equity capital to buy real estate in Tokyo.
B
Bob Hart15:18
So you're really onshore and offshore.
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William Mcmorrow15:21
Eventually we got onshore and so last week they celebrated their 30th anniversary of the founding of this company and in 2002 it became a public company.
B
Bob Hart15:36
Right, that's when you exited the first time.
W
William Mcmorrow15:39
2004.
B
Bob Hart15:41
2004, yeah. But alongside the exit we started buying apartment buildings ourselves.
W
William Mcmorrow15:46
Right, and we bought 50 apartment buildings in Tokyo.
B
Bob Hart15:51
Yeah, I think I was there for a few of those.
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William Mcmorrow15:54
Yeah. And so it's just all these things, Bob, were such, you've got your own stories. They're all just, there's such an element of luck and putting yourself out there.
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Bob Hart16:08
Well, it's more than luck, Bill. I think it's vision. I think you've always had a vision to see ahead and you've not been afraid of bad cycles. You've actually used them to your advantage.
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William Mcmorrow16:19
You have to be able to look past. If you can't look past the moment you're in, you're going nowhere. And it's like today, I think all of us, I don't think there's any person in this country if they weren't honest with each other that wouldn't say this is a crazy period of time. But we've all lived in a period of time now for five years where we went through a pandemic, remote working, now we're not having remote working. We're all back in the office, and then we're going through whatever you want to call this period with social upheaval, too. There's a lot going on. It's a lot for human beings to cope with. And so I was telling everybody this morning at my office, look, you have to recognize that this won't go on forever. There will be a beginning, which there is, and there'll be an end. I don't know when the end is, but there will be an end. And so there always is. What are you going to do in between?
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Bob Hart17:33
And in your case, launch two public companies, take them private, go to Europe, go to Japan. And it seems like you've been able to navigate through change and growth and uncertainty to create a very large international company. In fact, I have a photo right behind you. I see it. I noticed that. That was a fun day for us. That was fun. You know, but to go from NASDAQ to NYSE.
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William Mcmorrow18:03
Yeah. And I have the medallion to prove it here.
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Bob Hart18:06
Well, you and I have a lot of great history together. We really do. And so we're in another one of those periods of time.
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William Mcmorrow18:16
Yeah.
B
Bob Hart18:17
And this one seems to be a little different. This one has a lot of chaos attached to it.
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William Mcmorrow18:23
Yes, it does.
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Bob Hart18:25
But I've seen you operate in chaos. Let's, okay, so we're done with Japan. Then we launch the apartment business in Japan with none other than Wachovia.
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William Mcmorrow18:34
Yeah.
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Bob Hart18:35
And then they go down.
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William Mcmorrow18:37
They go down. I'll never forget the trip that we went on because you had a bad feeling that they weren't going to step up at a certain point, right? And we'll leave the names out of it. Protect the innocent.
B
Bob Hart18:52
Please.
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William Mcmorrow18:53
But I'll never forget, we landed about 3:00 in Charlotte and I think we were starving because we hadn't had any food. So we're at Ruth's Chris and you said, 'I'm done. I'm not waiting for my food. We're heading over there now and we're going to handle this thing.' And you were ahead of the curve because you knew they weren't going to write a check anymore. Things were in a difficult spot. There's so many stories over all these years. I'll probably bore everybody else, Bob.
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Bob Hart19:25
Well, I think they're good. I think they're good learning experiences.
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William Mcmorrow19:29
Look, I'm sure you can say the same thing. I've never had a day off in my career at Kennedy Wilson. I'm doing something every single day. And you're usually the first one at the office pretty much. And so, it's just, are you willing to work hard and are you willing and will you get some luck along the way? And you have people around you just like you were with me. You have people around you that are really good at what they do.
B
Bob Hart19:57
They have to be better than good though, Bill. I think they have to be in your world entrepreneurial and largely positive because I think you thrive on good energy.
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William Mcmorrow20:09
I look, I tell my son Tyler, I said there's only two things in life that I don't want you to do. I don't want you to hang around negative people. And I don't want you to hang around phony people. And I said, if you can do those two things in your life and create relationships with people along the way that are positive, you'll always figure it out.
B
Bob Hart20:39
You're a textbook case of somebody that knows how to figure it out. You figure it out. Every day you're figuring out something new, whether it's a banking issue or a partner issue or employee issue. Well, let's talk about, let's go back to the GFC for a second.
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William Mcmorrow20:57
Yeah.
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Bob Hart20:58
You went public just as the GFC was kind of in its midst. Remember we did the SPAC?
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William Mcmorrow21:04
Yeah.
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Bob Hart21:05
And we got it over the goal line because you had the vision that the company could take advantage of this dislocation if it could raise capital. That was October of 2009. That took a lot of, you know, I was part of it. We were all there. But that money, which by today's standards would be, I mean you're making loans probably bigger than the cash out.
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William Mcmorrow21:29
That's right.
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Bob Hart21:30
But you used that in such a way that it allows, because I was helping you do some of the workouts. You remember what we had to do the last week, don't you? Before that happened, we all had to go get money.
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William Mcmorrow21:42
We all had to go get money. We all had to go get money to make it happen.
B
Bob Hart21:47
Yeah. Remember, right? Yeah. But if that wasn't enough to go public, you then decided to go to Europe.
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William Mcmorrow21:53
Luck. Because they were in a worse situation.
B
Bob Hart21:56
They were. And you picked Ireland.
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William Mcmorrow21:58
It was luck. I had an Irish friend that was a prominent part of a prominent political family here in the United States. And I read an article about what was going on in Ireland. And I knew he knew some very famous musical people in Ireland. And I called him up and I said, 'Hey, Bobby, would you mind having coffee with me on a Sunday?' And he says, 'Sure.' I said, 'You know, I've been reading about Ireland. Can you set up some meetings for me and go with me?' I remember. And so I go with Bobby and it was the, but it was very, it was winter of 2010.
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Bob Hart22:41
Yeah.
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William Mcmorrow22:42
And NAMA had just been formed.
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Bob Hart22:44
Yeah.
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William Mcmorrow22:45
And I got over there and in the second meeting I was talking to this banker, Richard.
B
Bob Hart22:54
No, it wasn't Richie. It was one of his underlings.
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William Mcmorrow22:56
Okay. A guy named Ben. And I was telling him the story about how we created this business in Japan. And I said, 'Look, the thing that has to happen in our business is I have to have our own team on the ground. Can't do it any other way.' He goes, 'I have an idea for you.' And so we bought the Bank of Ireland's real estate asset management division. I know that. I made a deal with him that same day.
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Bob Hart23:22
I know the price, too. You got a good deal, Bill.
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William Mcmorrow23:26
Don't say that. I won't. But anyway, so we buy that and we had our income stream and I had learned from Japan where it's very hard to start a business with no income, a real estate business which can be a pig and devour cash. So in June 29th of 2011 we closed and I asked if I could meet the CEO of the bank.
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Bob Hart23:56
Oh, so you hadn't met Richard yet.
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William Mcmorrow23:58
I wanted to thank him for selling me the business. I think he was thanking you a couple years later when he, but this is, I go to meet him.
B
Bob Hart24:12
One question from him?
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William Mcmorrow24:13
From you. Oh, from you. How's everything going? Horrible. He says they were under pressure. I said really why? I knew why, but I said why? And he said I need capital. And I said, 'Okay, who's helping you?' And he told me this very well-known Wall Street house. How are they doing? He said, 'Zero.'
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Bob Hart24:35
Yeah.
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William Mcmorrow24:36
And I said, 'I think we can help you. I think we can do it.' I remember you never met him in my life. And this was a lot of private money in there. It was a Thursday and by Tuesday we had raised all the money.
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Bob Hart24:48
Yes.
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William Mcmorrow24:49
And that was in the billions as I remember.
B
Bob Hart24:53
It was 1.5.
W
William Mcmorrow24:55
Yeah.
B
Bob Hart24:56
Yeah. And that's a lot of money to raise in five days in that period of time.
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William Mcmorrow24:59
Sure. But the piece we're missing is the Prem Watsa piece where who I met at a Berkshire Hathaway annual meeting. And so when you think about Kennedy Wilson today, so much credit has to go to Prem because we've now done $18 billion of joint ventures together. Transformative.
B
Bob Hart25:25
And it started modestly though, as I remember.
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William Mcmorrow25:28
You've got a good memory. I'll tell you.
B
Bob Hart25:31
Yeah, it did. Started relatively modestly.
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William Mcmorrow25:34
It was modest but if you remember in the great recession there was no capital.
B
Bob Hart25:38
No, that was why you did the SPAC.
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William Mcmorrow25:40
This is why I did it. There was no capital for anybody. You couldn't raise capital. No. And so he gave us, after the Berkshire meeting, he said, 'Come if you're ever in Toronto, come and see me.' This was a Saturday. And I somehow figured out I could be in Toronto the next week.
B
Bob Hart26:04
Amazing. Amazing, right? What a coincidence.
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William Mcmorrow26:08
So I go up there and see him and I had all these flip books and we're like 15 minutes into the meeting. You were overprepared like so overprepared like you always are. I know. And he says, 'Okay, time out. Can you go in the other room with me?' There were like 20 people in the room. He says, 'Go in the other room with me.' And he says, 'Well, what do you want to do?' And I explained to him, I said, 'Look, I need some more equity in KW to infuse the balance sheet.' And he says, 'Okay, fine. That's fine. How much?' I tell him. He says, 'That's fine.' And I said, 'Okay, but if you're going to do that, I need a separate account that we can invest out of. How much?' And since I hadn't rehearsed any of this, I told him the number that came into my mind.
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Bob Hart26:53
Yeah.
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William Mcmorrow26:54
And he said, 'Wow, that seems like a lot.' And I'm sure it had nine or more figures in it. Had a five in front of it.
B
Bob Hart27:04
Oh boy.
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William Mcmorrow27:05
Yeah. And he said, 'That seems like a lot to start.' And so he said, 'How about we do half?' And I said, 'Okay, that's fine.' Oh, you settle for half. And so, and he was really becoming kind of the Warren Buffett of Canada in a way. He is the kindest, smartest business human being I've ever met in my life. And like everything you've done, Bob, it's evolved to the point where we can make decisions with each other in, I'm not kidding, 15 minutes. When we bought the bank portfolio in 2023 with PWB loan portfolio, it was 5.7 billion. That whole conversation with Matt, 30 minutes.
B
Bob Hart27:54
30 minutes.
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William Mcmorrow27:55
30 minutes.
B
Bob Hart27:56
That was another transformative moment which really put you back in a big way in the banking business which now you're one of the largest construction and bridge lenders in the country.
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William Mcmorrow28:05
Overnight luck, you know, but it's, no, but I think it's cultivating, you're not giving yourself enough credit. I think you've cultivated relationships through good and bad times where there's a high level of trust.
B
Bob Hart28:18
Bill, it's been the secret of your business and the secret of my business.
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William Mcmorrow28:21
Well, I learned it from the master. How do you create relationships inside the company and outside the company and then how do you have an instinct if something makes sense to you to act on it?
B
Bob Hart28:34
So, do you think for younger people that watch this podcast, what would be the lesson learned there from your perspective? You've been in the business going on five decades here, banking and real estate. What's the lesson learned here, Bill?
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William Mcmorrow28:53
Bob, I mean, there's so many. I mean, you and I could go through a list of 10, but easily, but I think the main lesson is you really have to be willing to put yourself out there. So you've got to be willing to get up to bat. There's no money to be made in the office. I know. I remember that. Bob, what are you doing in the office? You got to be out with people and you got to, when somebody says something to you, you have to listen carefully. And then if you can go away and process it and then think, hey, maybe there's an idea there and then you have to also have the conviction that when people are all, there's so many negative people that are always quarterbacking you in life. 'Oh, I don't think that's very smart. Bob, why are you doing that, Bob? What's going on, Bob?' Well, okay. Are you willing to just say, 'Okay, fine. I heard you. But I'm actually going to do it anyway.' And so having the conviction and it's conviction. You're going to have so many moments in business where things are not going the way you want them. And do you have the perseverance? I learned so much from luckily being involved in the Navy SEAL community. I remember that started over 15 years ago. I got to know so many of these young men and their families and they don't give up. No, they don't. And they're trained not to. They're trained not to give up.
B
Bob Hart30:54
But you've been very involved in the transformative side of it where they're helping their families and helping them readjust into the real world after the military. It's not easy.
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William Mcmorrow31:07
I think it's one of the travesties of our country that we don't take care of our veterans enough. We don't take care of any service member, but particularly the military families that sacrifice so much for us. And they get out and they're especially like if they've been in for 15 years. Now they're in their late 30s and they don't know what to do. And now they've had this high intense teamwork relationship with their brotherhood and now they're just kind of kicked to the curb. They are. It's a very hard adjustment and they have to readjust their expectations and their tempo. It's not easy.
B
Bob Hart31:55
But how, I'm trying to remember, you got involved because our counsel at Kennedy Wilson, Kent Muton, was very involved, but you took it to another level and really brought your whole network.
W
William Mcmorrow32:07
I can't remember if you were still at the company at the time, but we were doing these kind of annual 30 people get-togethers and they evolved into, in my opinion, a waste of time. And I said to Kent one year, I said, 'I'd like to try to do something different. Do you have any ideas?' And he said, 'Why don't we go to Coronado and go on the Navy SEAL training base there and listen to how they view leadership and so on.' Wow. And I was at dinner the first night we were down there and I sat next to this admiral and I said, 'You know, it's none of my business, but what do you pay these guys?' And he told me and I said, 'Is it like 40 grand a year or something or more?' It was nothing. And I said, 'Listen, you're kidding me.' And he kind of got mad at me that you would challenge that paradigm. It was fine for him. He said, 'My house cost $20,000.' So anyway, that was how I got involved there. It's just another one of those lucky things.
B
Bob Hart33:21
Well yes, but you made it a mission. Let's talk about a couple other things that are very near and dear to you. One is all the work you've done in the state of Hawaii and I want to talk a little bit about USC because it's been a part of your life for most of it, for over five decades. Yeah, let's talk about Hawaii first. You had a vision. You always loved Hawaii. You love the water. You're a great paddler. I remember even before I was at Kennedy Wilson in the early 2000s, you really wanted to deepen your relationship with the state of Hawaii and the people there. And it took a lot to do that first development, the Kohaniki development that other people would have folded. I mean the entitlement process, the local politics, there were just so many difficult aspects of it, including capitalization. Maybe talk a little bit about your vision for Hawaii.
W
William Mcmorrow34:21
Came out of Japan. Out of the REO world, right? Well, a Japanese bank had decided to find another person to own the properties that this one borrower had. And it was what about 4 or 500 acres as I remember? It was 3,000.
B
Bob Hart34:40
Was it that big?
W
William Mcmorrow34:41
Yeah, because there were three separate properties.
B
Bob Hart34:44
Okay. I'm only focusing on.
W
William Mcmorrow34:46
And they called me and they said, 'We'd like to sell you the properties and in this case one loan which was on Kohaniki.' And I said, 'Okay.' I said, 'How much was the loan?' Had you gone to see it? No. It was on the telephone. This is like late '90s as I remember. This is 1997.
B
Bob Hart35:07
Yeah. Because when I joined the company in 2000, you were starting to think about what to do.
W
William Mcmorrow35:13
He said, 'Okay, there's 1,000 acres above the airport. 2,000, it was 1,500 or so.' No, it was 2,000 acres by Monolani and then 500 acres on the beach. And having grown up in Malibu and knowing the value of oceanfront, I said 500 acres on the beach. And he said, 'Yeah.' And I said, 'How much is the loan?' And he told me and I said, 'How much do you want for it?' He told me that. And I said, 'I'll tell you I'll buy it.' And so over the phone without even seeing it, I bought it, but I had to get the money to buy it. Yes. And so we did. But it was the beginning of an incredible journey because it was a lava field and unentitled. It was the biggest earthmoving project in the country at one time.
B
Bob Hart36:10
It was crazy because you had to create the land.
W
William Mcmorrow36:13
It was crazy. We all thought, I said, 'Bill, is everything okay here?' But like you, I'm a handshake guy and I went and met the mayor of the island with Dave Edy. And Harry said, 'I'll support this but first thing you got to do is find 25 people out of the community that will all agree on your plan.' So there's a linkage there. I see linkage with Japan, with Ireland, and with Hawaii.
B
Bob Hart36:47
I'll never forget when you sent me on the mission to meet the Polynesian hero who sailed across the ocean, and you were helping build a boat for him. You were there. You sent me up to the Navy yard with our attaches there. The big guy.
W
William Mcmorrow37:01
Yes. Bob, go see what's going on there. You guys, this is such a funny story. There's a, what's going on? How am I spending my money here? In the South Pacific who's a legend in the South Pacific because he is the first person that was able to sail everywhere in the South Pacific with no instruments.
B
Bob Hart37:21
Across the open ocean.
W
William Mcmorrow37:23
Across the open ocean. And so Bob and I got involved in helping reconstruct his original sailing canoe. His name was Mao. Mao had 57 children on different islands. He was a really, that's why he needed a big boat, Bill. So I remember he was so grateful, Bob, that you and I got involved. He sent me to my house this really kind of elaborate wrapping thing that he had had somebody do and I said, 'God, how could I ever repay him?' And he said, 'Buy him a couple bottles of Wild Turkey.'
B
Bob Hart38:08
Yeah. I think he bought him a boat. Right. So anyway, that was, but the great thing that came out of that was the mantra that we adopted at Kennedy Wilson, which is a saying, 'Emua,' rowing in unison together. Onward.
W
William Mcmorrow38:21
I'll never forget onward in 2006 where you stepped up to the plate to help me and you were the recipient of the Spirit of Life award at Chrysalis, which was a transformative event that we held at the Disney Hall and we were worried we were going to fill the room. Remember that? We overfilled the room and I think we raised about 650,000. But I'll never forget the moment where your dear childhood friend Tom Bareric, I had asked him to introduce you and we're all looking at the clock because it was approaching about 9:00 by then. Is Tom going to really make it? Because the guy lived in a virtual world. I remember we had Muton as the backup. But I remember the speech because he talked about how you've navigated the challenges of business and he talked about the great concept of emua and how you've worked in unison with people and local communities. And I think that's really been the thread.
Bill, Bob, you and I have so much common history, as I said at the beginning of this, and I think we certainly are handshake people, but we have a certain gene in our body that wants to work with other people and whatever the circumstances are, try to figure out. Our only legacy at the end of the day is really how did you positively impact the lives of other people? That's it.
B
Bob Hart39:54
Is that how you want to be remembered?
W
William Mcmorrow39:56
What else is there? I hope that my family thinks I've done a few things for them and then what impact did you have on the rest of the world? And since you and I came from nothing and we understand the luck that we had, what do you do about it? And so I tell everybody at Kennedy Wilson, I said, 'Look, I don't care whether it's time or money. You have to help other people. I hate that word. You've got to be involved with other people. It's a form of help, but it's also reciprocal in the sense that you're receiving great satisfaction from it.
B
Bob Hart40:36
But let's talk about USC because you've been so involved as an alum, as a trustee, and now you're helping inner city children who have promise in academics but not the resources to figure out how to grow and become professionals. Where they don't have access to education. And I know the faculty has recognized you for that effort, you and Leslie, and in your leadership, and it's really done transformative many good things for the community. Talk about that academic initiative that you're involved with.
W
William Mcmorrow41:17
It's been one of the greatest honors of my life. I met a young person that was at one of the trustee meetings. They had a young person come in. God, I'm forgetting his name. Last name was Ramirez. Justin or Jared, I'm forgetting. Sorry. Anyway, he talks about his life and I'm sitting there and I'm going, 'This kid is unbelievable.' So I went straight to the front of the, and this is when he was a student at NAI. And just as a way of background, NAI has a thousand students in it starting in the sixth grade to high school. And the objective is to prep them to get into college. And they're going to another high school, but they have to after school come to the NAI program and on Saturday their parents have to come. And these are the two campuses that we've built, one in East LA at the Keck Medical School and one on the USC campus. So it gives them access. And so we have this incredible person, Kim, who has run this program 23 years, but I got involved in 2016 when I met this kid. Did you hear him at the trustee meeting? It was just, you know, we all complain about our lives sometimes. Listening to this story was just, it was probably not a lot of positive stuff going on there. So anyway, what happened? I just went to the head fundraiser and I said, 'I got to be involved.' And he said, 'Okay, this is kind of the road map.' And I said, 'I'm in.' And so we last year graduated 95 kids from the program from local schools. They, East LA, South Central, all got accepted to a four-year college. Harvard, Stanford, MIT, and 55 got accepted to USC where they go for free for four years. Amazing. Free. Amazing. And so now I've got 200 kids at USC going for free. The first kid that I met just graduated from medical school at UCLA, the one from the trustee meeting, the first guy, a doctor now. Amazing. So we track the institute tracks their career progression. We have an alumni association and we expect that those younger people have to help the other younger people. And so it's the most rewarding thing I've ever been involved in ever because you get to meet the parents on this graduation day and you just get in your car and shake your head. It creates a feeling inside that for you having grown up in a working-class family with nine brothers and sisters.
B
Bob Hart44:41
I'll never forget how you told me you had to be quick to grab food from the lunch table because it'd be gone if you didn't.
W
William Mcmorrow44:47
Well, my wife always hated it when we first got started going out because she said, 'You eat so fast.' I said, 'That's how I was trained.'
B
Bob Hart44:59
Exactly. Well, Bill, you've been building a better community for a lot of people for a long time. And so, what's the future? What's going on next for Kennedy Wilson? I see you're doing a lot of alignments with international institutions for capital. You're deep into the loan space. What's new?
W
William Mcmorrow45:15
Like you, we're focused on housing. We've got between what we're financing for other people and what we own, we've got 70,000 units that we're involved in. And we had 40 of them that we have an equity interest in and 30 that we're financing and many of which you've got involved in the affordable space too. We have almost 15,000 units in the affordable and senior space and we're buying another company in another part of the United States right now. And so we're trying to grow that business. But you were smarter than me. I got in all kinds of different products in, you know, office and retail and you stayed focused and I'm trying to get back to where you are where I'm focused on one simple product.
B
Bob Hart46:05
Well, the housing space has an insatiable demand in this country. It's everywhere in the world, particularly workforce. It's the biggest issue in the world. We have a great single family homes for rent business now in the United Kingdom.
W
William Mcmorrow46:19
Fantastic. We started that last year with CPPIB, the big Canadian pension.
B
Bob Hart46:25
Well, it's interesting because you were really at the front end when we went to Ireland on transforming professionalism into renter-ship because there really was no management system. It was all individuals renting condominiums or social housing.
W
William Mcmorrow46:42
Well, I took the things that you did, Bob. There were no amenities in the projects there. There was no such thing as a leasing office. And so it wasn't like I had some genius ideas. We put a gym in. We opened a leasing office. But it was the fact that you did it.
B
Bob Hart47:01
Well, it was the fact that you did it. I think it was those things the early days with you were transformative for me in a lot of ways. I remember I used to bring you to the sites. Oh my god. I brought you to that project, that crazy project we did up in Alama that was empty coaster housing and you looked at me and said, 'Bob, I definitely think you're out of your mind. I finally convinced there's something missing here in your head.'
W
William Mcmorrow47:25
Oh, I got out. It was a zero cap. I got out of the car and I said, and somebody was screaming at you.
B
Bob Hart47:36
I remember there was this guy in a car screaming very nice things at me.
W
William Mcmorrow47:40
No.
B
Bob Hart47:41
And he said that he had gotten thrown out of the building and all of his stuff was still inside the building.
W
William Mcmorrow47:47
Yeah. I said, 'Have at it.' You know, but you got me. We did some pioneering stuff. We went into neighborhoods that probably wouldn't go into today.
B
Bob Hart47:58
Bob, you took me down a path.
W
William Mcmorrow48:01
I took you to Paramount. I took you to Panorama City. I don't even want to say where, but I mean there were some where I would just get in the car and I go, 'What in the hell is this guy thinking about?' But you always ended up having success with them.
B
Bob Hart48:17
Somehow we figured it out. We figured it out. And you're a great believer and a great supporter and a great mentor, Bill. And I'm so glad that things are going well through some, again, we're dealing with another time of uncertainty here.
W
William Mcmorrow48:31
Yeah. But we're navigating.
B
Bob Hart48:33
Look, pal, I love you. I love the time that we had together. I'm proud of what you've been able to build.
W
William Mcmorrow48:42
Thank you. It's not easy to do what you do. It all looks easy, but it's not. It's not. And so, but the key is to be positive, right? You try your best. You do. You know, every moment of every day can't be like you're in Disneyland, but you try your best.
B
Bob Hart49:02
Try your best.
W
William Mcmorrow49:04
Yeah.
B
Bob Hart49:05
Well, Bill McMorrow, chairman of Kennedy Wilson, and we're going on year number 37.
W
William Mcmorrow49:09
That's true.
B
Bob Hart49:10
And you're still running strong, Bill. Great to have you.
W
William Mcmorrow49:14
I am. All right. Thanks.
B
Bob Hart49:16
Thanks, Bobby.