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Kimco Buys Retail Portfolio Worth 36M

Zacks Equity Research

Kimco Realty Corporation (KIM) disclosed the buyout of a fully occupied grocery-anchored portfolio in Clark, a densely populated suburb of New York City in Union County, N.J. With this $35.6 million acquisition, the company expanded its New York City metropolitan statistical area (MSA) retail centers portfolio to 73 assets that stretches around 7.8 million square feet of gross leasable space.

The acquired portfolio includes three properties and spans a total of 189,000 square feet. It includes 2 long-term ground leases to U.S.-based grocers – ShopRite (85,000 square feet) and A&P Fresh Market (53,000 square feet). The other U.S. tenants at the property include Bally Total Fitness and Rite Aid Corporation (RAD).

We believe that the portfolio’s premium location is one of the driving factors behind its acquisition by this retail real estate investment trust (:REIT). The area has a prosperous residential community with a median household income of $90,000 within three miles, which is about 25% higher than Kimco’s U.S. portfolio median income levels. Also, Clark, N.J. area has high retail occupancy levels, with shopping centers experiencing an average traffic count of 200,000 vehicles on a daily basis.

Notably, the acquired portfolio is situated within 20 miles of 17 other Kimco properties in this area. The high-end assets acquisition in the New York City MSA is in line with Kimco’s ongoing portfolio enhancement activity and is expected to boosts its earnings in the coming quarters.

Kimco currently carries a Zacks Rank #3 (Hold). Better placed REITs in Equity Trust – Retail include Regency Centers Corporation (REG) and Simon Property Group Inc. (SPG). All these stocks carry a Zacks Rank #2 (Buy).

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