Kimco repositions its portfolio

The real-estate investment trust continues to divest nonstrategic assets while acquiring high-quality properties.

By Zacks.com Oct 17, 2012 8:41AM

 VisionsofAmerica Joe Sohm Digital Vision Getty ImagesKimco Realty Corporation (KIM), a real-estate investment trust (REIT), continues to reposition its portfolio through the divestiture of nonstrategic assets and acquisition of high-quality properties.


Since the end of second quarter 2012, Kimco had sold 23 noncore retail properties (2.7 million square feet) for $165.0 million. This divestiture included the sale of a 13-property portfolio in the Midwest region, of which eight properties were located in Ohio and five in Indiana.

 

During the same time period, the company also acquired four wholly owned shopping centers in its primary markets. Spanning a total of 581,000 square feet, the properties were acquired for $118.8 million including the assumption of $42.5 million of mortgage debt.


The properties that were acquired included Hawthorne Hills Square in Vernon Hills, a suburb of Chicago; Savi Ranch in Yorba Linda, California; Woodlawn Center in Charlotte, North Carolina; and Wilton Campus Shops in the affluent Lower Fairfield County in Connecticut.


Since September 2010, the company had acquired 47 shopping centers in core markets spanning 6.0 million square feet for $984.8 million with a combined gross occupancy of 94.5%. During the same period, the company sold 86 non-strategic properties totaling 7.9 million square feet for $529.9 million. The proceeds generated from this divestiture were utilized to invest in additional premium-quality shopping centers in core markets and enhance the overall quality of its portfolio.


Kimco, together with its subsidiaries, is the largest publicly traded owner and operator of neighborhood and community shopping centers in the U.S. The company is widely recognized for acquiring properties at below-market rate leases, and maintaining a strong balance sheet with easy access to capital to allow for continued growth.


Kimco currently retains a Zacks No. 2 Rank, which translates into a short-term "buy" rating. We maintain our long-term "neutral" recommendation on the stock. One of its competitors, Simon Property Group Inc. (SPG), also currently retains a Zacks #2 Rank.

 

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