Kimco Realty Anticipates Significant Value Creation Opportunities from Sears Holdings Announcement
October 15 2018 - 7:30AM
Business Wire
Company’s Exposure Limited to Less Than 1% of
Total Annualized Base Rent
Potential Recapture of Below-Market Leases
Offers Sizable Long-Term Mark-to-Market and Redevelopment
Opportunities
Kimco Realty Corp. (NYSE:KIM) announced today that it expects to
benefit from considerable mark-to-market and long-term
redevelopment opportunities in the wake of the recently announced
Sears Holdings (“Sears/Kmart”) bankruptcy filing. Overall, Kimco’s
exposure is limited to 14 leases (three Sears and eleven Kmart, one
of which is subleased to At Home), representing just 0.6% of
annualized base rent and 1.9% of the company’s total gross leasable
area.
“Today’s announcement may afford us the long-awaited opportunity
to recapture boxes with significant mark-to-market potential in our
core markets, and sparks several new redevelopment opportunities
within our portfolio,” said Conor Flynn, Kimco’s Chief Executive
Officer. “Given the highly favorable demographics of these
locations, along with the continued demand for well-located,
high-quality real estate, we expect to build on our past success in
creating value by re-tenanting and redeveloping these below-market
anchor spaces and activating underutilized parking fields.”
Sears/Kmart pays among the lowest rents of any tenant in Kimco’s
portfolio. The 14 Sears/Kmart leases have an average base rent of
$5.25 per square foot, which is significantly below the company’s
portfolio average of $15.95. Demographics across the 14 locations
are desirable, with a population of 129,000 within a three-mile
radius with an average household income of $88,000.
Select opportunities include:
- Whittwood Town Center, an infill
site in the densely populated Los Angeles suburb of Whittier,
California, serving a population of approximately 175,000 within a
three-mile radius with an average household income of over
$93,000.
- Bridgehampton Commons in
Bridgehampton, New York, serving the affluent Hamptons community,
with an average household income of over $193,000 in a three-mile
radius.
- Kendale Lakes Plaza in Miami,
Florida, with a population of 215,000 within a three-mile radius in
this strong South Florida market.
Since 2015, Kimco has proactively reduced its overall exposure
to Sears/Kmart and has recognized the benefits of recapturing eight
Sears/Kmart locations, achieving an average rent spread of 211%.
The recaptures triggered the redevelopment of four of those
centers, including:
- Hylan Plaza in Staten Island,
New York, where a former Kmart has been demolished to make way for
The Boulevard, Kimco’s $186 million Signature Series redevelopment
scheduled to open in 2020, featuring tenants such as Alamo
Drafthouse, Marshalls, Ulta, LA Fitness and ShopRite, which
replaced Kmart at a rent spread of 727%.
- Vermont-Slauson Shopping Center
in Los Angeles, California, where a former Kmart was re-leased to
Ross Dress for Less and dd’s Discounts for a total rent spread of
748%.
- Bayhill Plaza in Orlando,
Florida, where a Kmart box was re-tenanted with a PGA Superstore
and Ross Dress for Less for a total rent spread of 127%.
- Fullerton Plaza in Baltimore,
Maryland, where Kmart was replaced by Weis Markets for a rent
spread of 191%.
About Kimco
Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust
(REIT) headquartered in New Hyde Park, N.Y., that is one of North
America’s largest publicly traded owners and operators of open-air
shopping centers. As of September 30, 2018, the company owned
interests in 450 U.S. shopping centers comprising 78 million square
feet of leasable space primarily concentrated in the top major
metropolitan markets. Publicly traded on the NYSE since 1991, and
included in the S&P 500 Index, the company has specialized in
shopping center acquisitions, development and management for 60
years. For further information, please visit www.kimcorealty.com,
the company’s blog at blog.kimcorealty.com, or follow Kimco on
Twitter at www.twitter.com/kimcorealty.
The company announces material information to its investors
using the company’s investor relations website
(investors.kimcorealty.com), SEC filings, press releases, public
conference calls, and webcasts. The company also uses social media
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information the company posts on social media may be deemed
material information. Therefore, the company encourages investors,
the media, and others interested in the company to review the
information that it posts on the company’s blog
(blog.kimcorealty.com) and social media channels, including
Facebook (www.facebook.com/kimcorealty), Twitter
(www.twitter.com/kimcorealty), YouTube
(www.youtube.com/kimcorealty) and LinkedIn
(www.linkedin.com/company/kimco-realty-corporation). The list of
social media channels that the company uses may be updated on its
investor relations website from time to time.
Safe Harbor Statement
The statements in this news release state the company’s and
management’s intentions, beliefs, expectations or projections of
the future and are forward-looking statements. It is important to
note that the company’s actual results could differ materially from
those projected in such forward-looking statements. Factors which
may cause actual results to differ materially from current
expectations include, but are not limited to, (i) general adverse
economic and local real estate conditions, (ii) the inability of
major tenants to continue paying their rent obligations due to
bankruptcy, insolvency or a general downturn in their business,
(iii) financing risks, such as the inability to obtain equity, debt
or other sources of financing or refinancing on favorable terms to
the company, (iv) the company’s ability to raise capital by selling
its assets, (v) changes in governmental laws and regulations and
management’s ability to estimate the impact of such changes, (vi)
the level and volatility of interest rates and foreign currency
exchange rates and management’s ability to estimate the impact
thereof, (vii) risks related to the Company’s international
operations, (viii) the availability of suitable acquisition,
disposition, development and redevelopment opportunities, and risks
related to acquisitions not performing in accordance with our
expectations, (ix) valuation and risks related to the company’s
joint venture and preferred equity investments, (x) valuation of
marketable securities and other investments, (xi) increases in
operating costs, (xii) changes in the dividend policy for the
company’s common and preferred stock and the company’s ability to
pay dividends at current levels, (xiii) the reduction in the
company’s income in the event of multiple lease terminations by
tenants or a failure by multiple tenants to occupy their premises
in a shopping center, (xiv) impairment charges and (xv)
unanticipated changes in the company’s intention or ability to
prepay certain debt prior to maturity and/or hold certain
securities until maturity. Additional information concerning
factors that could cause actual results to differ materially from
those forward-looking statements is contained from time to time in
the company’s SEC filings. Copies of each filing may be obtained
from the company or the SEC.
The company refers you to the documents filed by the company
from time to time with the SEC, specifically the section titled
“Risk Factors” in the company’s Annual Report on Form 10-K for the
year ended December 31, 2017, as may be updated or supplemented in
the company’s Quarterly Reports on Form 10-Q and the company’s
other filings with the SEC, which discuss these and other factors
that could adversely affect the company’s results. The company
disclaims any intention or obligation to update the forward-looking
statements, whether as a result of new information, future events
or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20181015005477/en/
David F. BujnickiSenior Vice President, Investor Relations and
StrategyKimco Realty
Corp.1-866-831-4297dbujnicki@kimcorealty.com
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