LOS ANGELES-Robert E. Hart, former president of Kennedy Wilson Multifamily Management Group, is launching an investment firm focused on acquiring, managing and rehabilitating class-B or better multifamily housing on the West Coast. TruAmerica Multifamily is a venture between Hart and Guardian Life Insurance Co. of America.
The new company's goal will be to create a multifamily asset management operation and funding mechanism to build a portfolio of $1 billion in assets by investing $300 million into acquisitions. Thomas G. Sorell, EVP and CIO of Guardian, praised the new venture. “We are pleased to be working with an industry leader such as Bob as we continue to build our real estate debt and equity portfolio.”
Hart will serve as president, CEO and founder. He tells GlobeSt.com that the decision to leave Kennedy Wilson took over a year and much soul-searching. “Frankly, it's kind of about me at this point,” he says. “I'm turning 55 and worked at KW for 14 years. I decided I wanted to form my own company and Guardian wanted to get deeper into the multifamily space. We became good friends after several investments together. It sprouted organically after that. I felt it was the right move with the right partner and the right timing in the market. If not now, when would it be?” He added that the he also “wanted to do bigger institutional deals and carry my own flag and have discretion and not be in a public company environment,” although Hart cited his “warm, 17-year relationship” with Bill McMorrow, the chairman/CEO of KW.
The changing demographics of the U.S. were also in play in the decision, reflected in the new company name. “It's kind of corny, but being a workforce housing guy and growing up in a tenament house in Boston – a lot of new Americans live in apartments, so (the name) has a bit of a patriotic ring to it. As we look at where apartments are going, 35% of the country live in them. The name spoke to me about having the same value system.”
Hart owns “a material piece” of the new venture, but declined to state the actual amount of his investment. The majority of the new venture is funded by Hart and Guardian, but TruAmerica will provide co-investment capital and also invest with other third party partners.
The new venture's focus on class-B assets reflects Hart's background. “I've always been a player in what I call market-rate, workforce-type housing,” he says. “The market's at a point where there's a lot of opportunity there. But from time to time, we'll buy A's and C-pluses. But we'll stay in the b-minus to A-minus zone.”
Hart concedes he's competing with his former employer. “With them and a lot of players in the space. It's a big space, and we'll attack some broader markets. We'll feed through six primary Western states.”
TruAmerica is headquartered in Sherman Oaks, and has opened a small satellite office in Newport Beach. Hart anticipates a Seattle office opening in a month. Nine employees are on board, including Karen Millan as CFO, formerly of JB Partners Group Inc.; Greg Campbell as director acquisitions, formerly SVP of investments at Archstone; Michael Gold as senior director asset management, formerly senior director of asset management and operations at JB Partners Group Inc.; and Edward Kim, serving as director asset management and formerly SVP portfolio management with Winthrop Management.
Most of the new team has previously worked with and for Hart. “We have a lot of asset management experience,” Hart says. “I need to hire a few more acquisitions people. We want to hire good, quality people with their head on right, have some fun and do some good things.”
As previously reported by GlobeSt.com, Kurt Zech has replaced Hart as president of KW Multifamily. Zech says KW will continue with the same business plan.
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