Kimco Realty Corp. (NYSE: KIM), North America’s largest owner and operator of neighborhood and community shopping centers, today reported its second quarter 2013 transaction activities. Kimco invested approximately $172 million during the second quarter of 2013 while generating approximately $307 million of proceeds from its disposition activity during this period. Highlights of the quarter include the acquisition of equity interests from existing joint venture partners, the disposition of 20 shopping centers and the completion of the InTown Suites sale.
SHOPPING CENTER ACQUISITIONS
During the second quarter of 2013, Kimco acquired for its consolidated portfolio two former joint venture properties totaling 607,000 square feet for a gross purchase price of approximately $146.6 million. In addition, the company increased its ownership interest in three existing institutional joint ventures for $133.3 million. Opportunistically acquiring equity interests in high-quality properties that have been actively managed by the company from existing joint venture partners represents a key element of Kimco’s strategy. Second quarter 2013 investments include:
- The Marketplace at Factoria (Bellevue, WA) – As previously announced, Kimco added the Marketplace at Factoria in the affluent Seattle community of Bellevue, Wash. to its consolidated portfolio. The company, which previously held a 50 percent interest, acquired a majority of its joint venture partner’s ownership interest in this 510,000-square-foot shopping center based on a gross value of $130.8 million. This center is 94 percent occupied and anchored by several large national and regional retailers, including Wal-Mart, Target, Nordstrom Rack, T.J.Maxx, Petco, DSW Shoe Warehouse, Old Navy, Rite Aid and Safeway. The Marketplace at Factoria, situated within an upscale retail market with an average household income of $131,000 within three miles, ranks as Kimco’s fifth highest net operating income producing property and possesses additional value creation opportunities from future redevelopment.
- Canyon Square Plaza (Santa Clarita, Calif.) – Kimco acquired the remaining 85 percent interest in this 97,000-square-foot grocery anchored center from an existing institutional joint venture for a gross purchase price of $15.8 million. The center is anchored by an Albertsons and is located in the Los Angeles-Long Beach-Santa Ana MSA, with an average household income level of $87,000 within a three-mile radius.
- KUBS Joint Venture – Kimco increased its ownership interest in the Kimco-UBS (“KUBS”) joint venture to 33 percent from its previous 18 percent interest. Simultaneous with this transaction, affiliates of Blackstone Real Estate Partners VII completed their acquisition from affiliates of the UBS Wealth Management North American Property Fund for the remaining 67 percent ownership interest. Both of these transactions were based on a gross purchase price of $1.1 billion, including $631 million of assumed debt. The KUBS joint venture comprises 39 properties totaling 5.6 million square feet, which is currently 96 percent occupied with an average base rent per square foot of $15.51.
- Kimco Income Fund I (KIF I) & Kimco Income REIT (KIR) – Kimco purchased one of its institutional partner’s 9.7 percent interest in the KIF I portfolio and 3.6 percent interest in the KIR joint venture for an aggregate $67 million. With this investment, Kimco has increased its ownership stake in KIF I and KIR to 39.2 percent and 48.6 percent, respectively. The KIF I and KIR portfolios comprise a total of 70 high-quality properties for 13.9 million square feet of retail space across 23 states, primarily in strong markets.
SHOPPING CENTER DISPOSITIONSIn the second quarter of 2013, Kimco sold 11 U.S. shopping centers (seven wholly-owned and four unconsolidated joint ventures), totaling 735,000 square feet, for $71.6 million, including $25.7 million of mortgage debt. These properties had a gross occupancy of approximately 83 percent and median household income of $63,000. The company’s share of proceeds from these sales was $36.9 million.