Kimco Realty Corp.
) concluded transactions over $500 million in first-quarter 2014.
This included a number of noteworthy acquisitions and
divestitures and comes as part of the company's portfolio
Specifically, Kimco acquired 5 premium shopping centers
(spanning over 900,000 square feet) for $216.0 million. The
company bought Crossroads Plaza (Cary, NC) and Quail Corners
(Charlotte, NC). Crossroads Plaza (93.1% occupied), a dominant
power center, is anchored by renowned retailers such as
Best Buy Co., Inc.
Five Below, Inc.
) and Petco. Also, Quail Corners (94.5% occupied) - a
grocery-anchored shopping center - is housed by Harris
Moreover, Kimco acquired the remaining 89% equity stake in 3
grocery-anchored properties for $93.2 million from an
institutional joint venture (JV) partner. This was in tune with
the company's strategy of decreasing the institutional JVs and
partners count and bringing premium retail assets in its owned
Notably, since Kimco's Investor Day in Sep 2010, it purchased
a total of 87 premium properties (spanning 11.5 million square
feet) for $2.1 billion in the U.S.
On the other hand, Kimco offloaded its ownership stake in 11
assets in its U.S. portfolio for a gross sales price of $63.7
million. Of the generated proceeds, Kimco's share was $42.1
million. Notably, the company has sold 154 retail properties for
a gross sales price of $1.2 billion, since the commencement of
its U.S. non-strategic retail disposition program in Sep 2010.
Kimco's share of the reaped proceeds from the sale was around
Moreover, in the Latin America Portfolio, Kimco vended
9-property retail portfolio in Mexico for a gross sales price of
2.9 billion Mexican pesos ($222 million) to a JV between
Macquarie Mexican REIT and Grupo Frisa. The pro-rata share of
that sale price was around 2.0 billion Mexican pesos ($153
million) for Kimco. After the disposition of these 9 properties,
the company is left with 36 Latin American assets.
Kimco's successful efforts to improve its core portfolio
through the divestiture of non-strategic assets and acquisition
of high-quality properties are commendable. The move is aimed at
improving the overall profitability of the company. Going
forward, solid demand for its properties, its portfolio
transformation initiative, along with easy access to capital,
promises considerable upside potential.
Kimco is slated to announce its first-quarter 2014 results on
May 7, after the closing bell. The Zacks Consensus Estimate for
first-quarter funds from operations (FFO) per share is pegged at
34 cents, representing year-over-year growth of 2.6%.
This retail real estate investment trust (REIT) currently
carries a Zacks Rank #3 (Hold). A better-ranked stock in the
retail REIT industry is
Simon Property Group Inc.
) having a Zacks Rank #2 (Buy).
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
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