Kimco (KIM) Expands Portfolio With Stonebridge Acquisition
Kimco Realty KIM has announced the acquisition of Stonebridge at Potomac Town Center in a significant move that solidifies its position as a retail powerhouse. An impressive 504,000-square-foot, grocery-anchored lifestyle center, Stonebridge at Potomac Town Center is located in Woodbridge, VA.
This strategic acquisition, valued at $172.5 million, marks a decisive step in Kimco's pursuit of expanding its grocery-anchored shopping center portfolio. The move further emphasizes Kimco's commitment to tapping the potential of high-demand markets and capitalizing on evolving consumer preferences.
Stonebridge at Potomac Town Center stands out as a dominant force in the retail landscape of Washington D.C. suburbs. It is anchored by 138,500-square-foot Wegmans, a premier grocer with a substantial trade area of 40 miles.
Additionally, the center features a diverse tenant mix comprising leading national brands and local shops, including boutique fitness, personal services, restaurants and medical uses. Notable tenants include Ulta Beauty ULTA, REI, Starbucks SBUX, Cava, Firebirds Wood Fired Grill and the only Apple store in the greater trade area. With the presence of Ulta Beauty and Starbucks as well as local businesses, the center has firmly established itself as a go-to destination for a diverse range of consumers.
Its enviable location, with an estimated population of more than 230,000 people and an average household income of $125,000 within a five-mile radius, underscores its solid growth potential.
Ross Cooper, Kimco’s president, and chief investment officer, expressed his excitement about the acquisition, stating, "We’re excited to add Stonebridge at Potomac Town Center, a premiere grocery-anchored center situated in a high barrier-to-entry location with strong demographics, to our dynamic portfolio.”
This move aligns with Kimco's broader strategy of focusing on high-barrier-to-entry coastal markets and rapidly expanding cities, leveraging its extensive experience of more than 60 years in shopping center ownership and management.
The acquisition of Stonebridge at Potomac Town Center opens the door to a realm of growth prospects for KIM. The center's 96% occupancy rate forms a strong foundation for Kimco to explore avenues for further expansion. The potential to develop three outparcel retail buildings, boost density through mixed-use development and improve the existing merchandising mix through below-market lease recaptures presents opportunities for Kimco to drive revenues and enrich the consumer experience.
One of the center's notable attributes is its strategic location at the crossroads of I-95, Dale Boulevard, Route 1, and Opitz Boulevard. This location advantage facilitates a remarkable annual footfall of 5.5 million visits, positioning it in the 97th percentile nationally. Moreover, the construction of a municipal park and a ride garage adjacent to the center, scheduled for completion in mid-2024, is expected to generate additional foot traffic, thereby amplifying the growth potential of the acquisition.
In conclusion, Kimco Realty's acquisition of Stonebridge at Potomac Town Center signifies a well-calculated move to expand its influence in the open-air, grocery-anchored shopping center segment. The center's strategic location, strong demographic backdrop and growth prospects align perfectly with KIM's broader objectives.
As the company strengthens its foothold in the suburban Washington D.C. market, investors can look forward to the potential for increased value and a fortified position in a dynamic retail landscape. The Stonebridge acquisition exemplifies Kimco Realty's forward-looking strategy, positioning it for sustained growth in the evolving retail realm.
Shares of this Zacks Rank #3 (Hold) company have risen 3.6% over the past three months compared with its industry’s growth of 4.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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