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Kimco Realty (KIM) Disposes Of 21 Shopping Centers in Q1

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Kimco Realty Corp. KIM revealed its transaction activities for first-quarter 2018. The company disclosed dispositions of 21 shopping centers, spanning 2.3 million square feet, for a total $219.5 million. Of this, the company’s share included $210.2 million.

A portfolio of five properties in the St. Louis market was disposed of for $49.5 million. Along with that, a five-property portfolio, located in Florida and Georgia, was sold for $72.7 million.

As per Ross Cooper, president and chief investment officer at Kimco, because of the increased demand for open-air shopping centers, the company was able to make substantial advances toward its disposition target for 2018. He further added, “We continue to see favorable interest for these types of assets, and together with the considerable sales volume achieved during the first quarter as well as the additional properties under contract, we remain confident in our ability to meet our 2018 net disposition target of $700 to $900 million.”

In 2018, Kimco intends to be a net seller of properties. The company has  about $465 million worth of properties already in contract and assets worth $330 million in the market as of Mar 31, 2018.

The company’s strategic 2020 Vision envisages simplifying its business structure by concentrating on its U.S. shopping center portfolio, targeting for the ownership of large and high-quality assets in major metro markets, and simultaneously shedding non-core assets and exiting from its joint-venture portfolio. In connection to this, the company is making significant disposition of its assets. While such efforts are encouraging for the long term, the dilutive effect on earnings from high disposition activity cannot be averted in the near term.

Moreover, amid the choppy retail real estate environment Kimco’s shares have declined 20.7% over the last three months compared with the industry’s decline of 12.6%.

Currently, Kimco carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

A few better-ranked stocks from the REIT space are Arbor Realty Trust ABR, Extra Space Storage Inc. EXR and Sotherly Hotels Inc. SOHO. All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arbor Realty Trust’s Zacks Consensus Estimate for 2018 funds from operations (FFO) per share remained unchanged at 90 cents over the past month. Its shares returned 2.4% in three months’ time.

Extra Space Storage’s FFO per share estimates for the current year moved up 2% to $4.59 in a month’s time. Its shares gained 0.7% over the past three months.

Sotherly Hotels’ FFO per share estimates for 2018 was revised upward approximately 1.9% to $1.05 over the past month. The stock gained 9.3% during the past three months.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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