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.
Since the start of the company’s U.S. asset recycling program in September 2010, Kimco has disposed of 121 properties, comprising 11.9 million square feet, for $907.2 million, including $219.8 million of mortgage debt. The company’s share of the proceeds from these sales was $551.4 million.Also during the quarter, as previously announced, Kimco closed on the sale of a nine-property Mexican shopping center portfolio to a local real estate operator for a gross sales price of 3.35 billion Mexican pesos (US$274 million), including 573 million Mexican pesos (US$47 million) of mortgage debt. Kimco held a 47.6 percent interest in this portfolio which comprised 2.6 million square feet and was 91 percent occupied. The company’s share of proceeds from this transaction was approximately US$93 million. NON-RETAIL ASSETS During the quarter, Kimco reduced its non-retail investment portfolio by $177.9 million or 46 percent, highlighted by the previously announced sale of the InTown Suites portfolio, which had a book value of $83.1 million. In addition, the company disposed of four urban properties having an aggregate book value of $82.7 million as well as the sale of certain marketable securities and the repayment of a mortgage receivable. The non-retail portfolio is at its lowest level since the company initiated the monetization of its non-retail assets in 2010, currently representing less than two percent of gross assets. Additionally during the second quarter, the company and its joint venture partner, American Industries, announced it has agreed to sell its beneficial interests in certain trusts that hold a portfolio of Mexican industrial properties to Terrafina (BMV: TERRA13) based on a gross value in the underlying properties of approximately $600 million. Kimco holds approximately a 50.7 percent interest with American Industries holding the remaining interest in this portfolio which consists of 84 properties totaling approximately 11 million square feet. Closing is subject to customary conditions, including lender approvals, with Kimco expecting this transaction to be completed in the third quarter of 2013.
ABOUT KIMCOKimco Realty Corp. (NYSE: KIM) is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y., that owns and operates North America’s largest portfolio of neighborhood and community shopping centers. As of March 31, 2013, the company owned interests in 895 shopping centers comprising 131 million square feet of leasable space across 44 states, Puerto Rico, Canada, Mexico and South America. Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center acquisition, development and management for more than 50 years. For further information, please visit http://www.kimcorealty.com , the company’s blog at blog.kimcorealty.com/, or follow Kimco on Twitter at www.twitter.com/kimcorealty. SAFE HARBOR STATEMENT The statements in this news release state the company's and management's intentions, beliefs, expectations or projections of the future and are forward-looking statements. It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt, or other sources of financing or refinancing on favorable terms, (iv) the company’s ability to raise capital by selling its assets, (v) changes in governmental laws and regulations, (vi) the level and volatility of interest rates and foreign currency exchange rates, (vii) the availability of suitable acquisition and disposition opportunities, (viii) valuation of joint venture investments, (ix) valuation of marketable securities and other investments, (x) increases in operating costs, (xi) changes in the dividend policy for our common stock, (xii) the reduction in our income in the event of multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in a shopping center, (xiii) impairment charges, and (xiv) unanticipated changes in our intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company's Securities and Exchange Commission filings, including but not limited to the company's Annual Report on Form 10-K for the year ended Dec. 31, 2012. Copies of each filing may be obtained from the company or the Securities and Exchange Commission.
The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2012, as may be updated or supplemented in the company’s Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results.