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Kimco Realty Issues Q4 Activity Update, Keeps Vending Assets

Zacks Equity Research

As part of its efforts to fine tune the company’s portfolio, retail REIT Kimco Realty Corp. KIM announced the fourth-quarter 2019 disposition of 12 properties, aggregating 1.9 million square feet for $153.0 million. The company’s share of these sales amounted to $146.5 million.

The dispositions include properties like Woodbury Centre, a 228,000-square-foot shopping center in Harriman, NY, which was sold for $27.5 million and Towne Square, a 302,000-square-foot shopping center in Roanoke, VA, that was vended for $23.3 million. Further, a 313,000-square-foot shopping center located in Walker, MI — Green Orchard Shopping Center — has been disposed for $21.3 million, while the company also sold Mesa Pavilions North and Mesa Pavilions South, two adjacent centers aggregating more than 300,000 square feet in Mesa, AZ, for $26.8 million. The company also sold two wholly-owned land parcels totaling $47.5 million.

The rapid shift toward e-retailing, store closures and retailer bankruptcies have, notably, emerged as pressing concerns for retail landlords, including the likes of Simon Property Group SPG , Kimco, Macerich Company MAC and Taubman Centers, Inc. TCO.

However, Kimco is on track with its 2020 Vision that envisages the ownership of high-quality assets, concentrated in major metro markets which offer several growth levers. As part of such efforts, in 2019, the company acquired three grocery-anchored parcels and enhanced its ownership stake in an existing property for a total of $34 million.

In fact, amid transformation in the retail landscape, Kimco remains well poised to navigate through the retail apocalypse, with focus on service and experiential tenants, and omni-channel players. Moreover, the company is aiming to expand its small shops’ portfolio. These shops basically comprise service-based industries, such as restaurants, salons and spas, personal fitness and medical practices. The shops enjoy frequent customer traffic and are Internet resistant. Amid limited new supply and favorable demographics, this diversification is likely to help Kimco limit its operating and leasing risks.

Simultaneously, Kimco is shedding non-core assets in sync with this strategy. Particularly, during the fourth quarter, the company capitalized on the solid demand for open-air shopping centers amid sufficient liquidity in the transaction market.

Furthermore, in full-year 2019, Kimco disposed 32 properties for $542.5 million, which aggregated 4.8 million square feet of space. The company’s share of the sales would be worth $375.2 million. The company also sold five wholly-owned land parcels in the year, aggregating $50.8 million. While such efforts are encouraging for the long term, the dilutive impact on earnings from high disposition activities cannot be averted in the near term.

Shares of this Zacks Rank #3 (Hold) company have gained 5.6% in the past six months, outperforming the industry’s growth of just 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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Macerich Company (The) (MAC) : Free Stock Analysis Report
 
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
 
Taubman Centers, Inc. (TCO) : Free Stock Analysis Report
 
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
 
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