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Tuesday, 20 February 2018

Kimco Plans to Sell $700Mln to $900Mln of Shopping Centers This Year

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Commercial Real Estate Direct Staff Report

Kimco Realty Corp. is planning to sell $700 million to $900 million of shopping centers this year as it makes an effort to reposition its portfolio.

The New Hyde Park, N.Y., REIT is selling properties in smaller markets that are non-core, while retaining those in its core markets: Baltimore, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington, D.C.

Kimco won't be buying properties. Instead, it will use proceeds of some of its sales to fund its development and redevelopment activity.

The company's redevelopments include the 325,000-square-foot Pentagon Center retail property in the Washington suburb of Pentagon City, Va., to which it's adding a 690-unit apartment component, 25,000 sf of retail space and a 450-space parking deck. Others include Hylan Plaza, a 365,000-sf property in Staten Island, N.Y., that will be expanded and remade into a grocery-anchored center called The Boulevard; and the former Owings Mills Mall, with 1 million sf, that will be demolished and remade into a lifestyle retail center anchored by Costco.

Meanwhile, the company also has a number of developments underway. It's building the Lincoln Square mixed-use project in Philadelphia, which will have 322 apartment units and 100,000 sf of retail space, and Dania Pointe, with 1 million sf of retail space, 500,000 sf of office space, 1,000 residential units and two hotels in the Miami suburb of Dania Beach, Fla.

Its disposition efforts already have started. It has sold three properties for $30 million, has another $300 million under contract and $475 million of properties on the sales market.

Among the properties on the sales block are Arboretum Crossing, with 191,760 sf in Austin, Texas, that's anchored by a Bed Bath & Beyond, Dave & Buster's and Toys R Us; Green Orchard, with 387,210 sf in Walker, Mich., that's anchored by a Kohl's, Target and Burlington, and the Shoppes at Easton, with 113,330 sf in Easton, Md., that's anchored by a Giant grocery store.

Kimco owned 492 shopping centers with 83 million sf as of the end of last year.

Ross Cooper, Kimco's president and chief investment officer, told analysts last week that the company expects to sell properties at prices resulting in capitalization rates of 7.5 percent to 8 percent. It plans to sell most properties individually and not through portfolios. Most earmarked for sale would command prices of between $20 million and $25 million each.

"I have been very encouraged by the buyer pool and some of the new capital formations that we have seen," he said. "The bids that we have been receiving on the assets have been pretty aggressive."

Last year, Kimco sold 38 shopping centers with 4.4 million sf and three land parcels for $565.7 million. It also acquired three shopping centers and 10 land parcels for $382.1 million, including Whittwood Town Center, a 783,000-sf shopping center in the Los Angeles suburb of Whittier, Calif., for which it paid $123 million.

If it completes its disposition efforts, Kimco's portfolio will be concentrated on the coasts.

"That's where we see the highest growth and that's where we see the biggest barriers to entry," said Glenn Cohen, Kimco's chief financial officer. "We really do believe that there is going to be a significant jump in quality (of Kimco's portfolio), once we execute on our disposition plan this year."

Comments? E-mail Tim Casey or call him at (267) 397-3347.



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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Retail
  • Subject: Property Acquisitions (ACQ), REITS -general (REITS)
  • Company: Kimco Realty Corp.
  • Private: No
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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