Retail real estate investment trust (REIT) -
Kimco Realty Corp.
) has raised stake in one of its joint ventures (JV). The move
has facilitated the company to gain ownership interest in 39
shopping centers, occupancy levels at which currently stand at
96%. This stake acquisition is in sync with Kimco's current focus
on improving its core business line and reshuffling its joint
venture investments to achieve overall efficiency.
In particular, Kimco raised its stake to 33% from 18% in the
Kimco-UBS ("KUBS") JV. Concurrently, Blackstone Real Estate
Partners VII acquired the remaining 67% stake in the JV from UBS
Wealth Management North American Property Fund's affiliates. The
deals were based on a gross purchase price of $1.1 billion and
included debt assumption of $631 million.
The tenant list of these shopping centers boasts of investment
grade retailers such as
Bed Bath & Beyond Inc.
The Home Depot, Inc.
The TJX Companies, Inc.
). In addition to retailers, the portfolio is balanced with
market leading grocers such as Safeway, Publix, Giant Food and
Whole Food Markets.
Spanning 5.6 million square feet in aggregate and mainly
positioned in New York, Virginia, Texas, Florida, California, and
Maryland, KUBS' portfolio consisting of 39-property shopping
centers is strategically located in retail markets with high
barriers to entry.
With the rise in stake in the JV, Kimco is well placed to ride on
the growth trajectory going forward. Earlier in the month, the
company invested $67 million to raise its stake in two ventures
that helped it gain ownership in 70 shopping centers.
Last month, the company disclosed the acquisition of Marketplace
at Factoria in the suburban Seattle community of Bellevue, Wash.
Kimco, which earlier had a 50% ownership interest in this
property, has now acquired the majority of its joint venture
partner's ownership interest in this property.
Kimco is simultaneously shedding its non-retail assets and
investments as well as non-strategic retail assets and
redeploying the capital to solidify its North American portfolio.
Hence, we remain upbeat on this Zacks Rank #3 (Hold) stock.
However, stiff competition from other players in the market and
short-term headwinds for occupancy in the midst of an unsettled
economic environment remain our concerns.
BED BATH&BEYOND (BBBY): Free Stock Analysis
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