Retail real estate investment trust (REIT) -
Kimco Realty Corp.
) recently closed the sale of InTown Suites company and its
associated real estate assets -- the single largest residual
non-retail investment of the company. It was vended to an
affiliate of Starwood Capital Group for a gross sale price of
$735 million, including $609 million of existing mortgage debt.
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Through the sale of this non-retail investment, which had a book
value of around $83 million, Kimco reaped $103 million as its
share of proceeds. Notably, InTown Suites was owned by a joint
venture, InTown Hospitality Investors LP, where Kimco held a 75%
The move comes as part of Kimco's current focus on improving its
core business line, trimming its non-retail assets and
investments as well as non-strategic retail assets, and
reshuffling its joint venture investments to achieve overall
Following this asset sale as well as other non-retail deals
during the quarter, Kimco's non-retail investments will represent
less than 2% of its gross assets -- a significant improvement and
the lowest level since the implementation of this program of
non-retail investments' monetization in 2010.
On the other hand, Kimco is redeploying the capital to improve
its core business operations and solidify its North American
portfolio. Alongside, it is raising stake in a number of its
Recently, Kimco raised its stake in one of its joint ventures
that helped it gain ownership interest in 39 shopping centers,
occupancy levels at which currently stand at 96%. Earlier, the
company invested $67 million to raise its stake in two ventures
that helped it gain ownership in 70 shopping centers. The tenant
list of these shopping centers boasts investment grade retailers
Bed Bath & Beyond Inc.
The Home Depot, Inc.
The TJX Companies, Inc.
Going forward, we expect this Zacks Rank #3 (Hold) stock to ride
high on the growth trajectory, though competitive market and
short-term headwinds for occupancy may somewhat impede the growth