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Kimco (KIM) Breaks Ground at The Boulevard in Staten Island

Zacks Equity Research

Kimco Realty Corp.KIM announced the ground breaking at The Boulevard, the company’s signature series $186-million redevelopment project that will replace the Hylan Plaza shopping center. Encouragingly, this grocery-anchored redevelopment in Staten Island, NY, has grabbed much attention and is already 80% preleased to a number of well-known national and regional brands.

Retailers such as ShopRite, Alamo Drafthouse, Marshalls, Ulta, PetSmart and LA Fitness have signed leases with Kimco to expand their footprint in the Staten Island market. In fact, ShopRite, a regional grocer, will relocate from a nearby location to a 68,000-square-foot store at The Boulevard. Alamo Drafthouse will also open one of its first cinemas in Staten Island, spanning 46,000 square feet of space.

Slated to open in early 2020, this multi-level man-street format project will span around 460,000 square feet of space. Upon completion, the ground level will offer retail shops, restaurants and outdoor dining, while the second level is set to house anchor tenants as well as entertainment provisions.   

Notably, this open-air center, located along the major commercial corridor of Hylan Boulevard, is well connected to the entire island. Located in New York City’s wealthiest neighboring market, Staten Island’s demography consists of high-income consumers. 

Per management, with solid preleasing and a big box tenant focus, The Boulevard will register organic growth and boost shareholders’ value. In addition, the company owns five properties, aggregating one million square feet of space, in the Staten Island market. It had previously revamped more than 560,000 square feet of retail space in the island. The redevelopment at The Boulevard will further fortify its position in the area and enhance the company’s growth profile as well.

Furthermore, the redevelopment is in line with Kimco’s 2020 Vision, which envisages the ownership of premium assets in core markets in the United States and a reduction in its joint-venture portfolio.

However, year to date, amid the choppy retail real estate environment, shares of Kimco have underperformed the industry it belongs to. During this time frame, shares of the company descended 24.8%, whereas the industry registered growth of 8.9%.

Kimco currently carries a Zacks Rank #3 (Hold).

Key Picks

Better-ranked stocks in the real estate investment trust (REIT) space include Regency Centers Corporation REG, Cedar Realty Trust CDR and EPR Properties EPR. All three carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Regency Centers’ funds from operations (FFO) per share estimates for the current year remained unchanged at $3.67 in the past month.

Cedar Realty’s 2017 FFO per share estimates remained unchanged at 54 cents during the same time period.

EPR Properties’ FFO per share estimates for full-year 2017 remained unchanged at $5.16 in a month’s time.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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