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Riding high on its portfolio transformation activities, Kimco Realty Corp. (KIM - Free Report) announced third-quarter 2016 deals worth over $360 million. The company remains on track with its strategic 2020 Vision, making premium asset purchase in key metro markets in the U.S., joint-venture buyouts and progressing on its simplification efforts. Specifically, the company has been reducing the number of joint ventures and trimming its Canadian portfolio.
Q3 Activity
Kimco’s third-quarter acquisitions totaled 1.0 million square feet of space, worth $292.8 million, of which the company’s share was $263.4 million. Particularly, this included the previously declared partner buyout of a four-property joint-venture portfolio for a gross price of $169.0 million, and the acquisition of the Kentlands Market Square shopping center for $95 million. (Read: Kimco Buys JV Asset Stake, Kentlands Market Square)
On the other hand, Kimco’s third-quarter sales aggregated $150.7 million and included disposition of 12 shopping centers, totaling 1.4 million square feet. The company’s share of the sales price was $97.8 million.
Specifically, the company sold interests in five out of six remaining Canadian shopping centers for a gross sales price of USD $97.4 million. Kimco’s share of the sales price was USD $48.7 million. Additionally, seven unencumbered U.S. properties were disposed for a gross price of $53.3 million. The company’s share of the sales price was $49.0 million.
Kimco is well on track with its 2020 Vision which envisages the ownership of premium assets in major metro markets in the U.S. and trims its joint-venture portfolio.
In fact, the company’s 2016 shopping-center disposition guidance range is $1.0–$1.15 billion (Kimco’s share). Its share has already reached $918.6 million year to date from the disposition of 34 Canadian properties for USD $571.5 million and sale of 25 U.S. assets for $347.1 million. On the other hand, Kimco’s acquisition guidance is $450–$550 million (Kimco’s share) for 2016 and year to date, the company’s share totaled $451.9 million.
Going forward, premium properties in high-growth areas, presence of well-capitalized retailers in its tenant roster, investments in high-quality neighborhood and community shopping centers and shedding of non-core assets augur well for Kimco’s growth. However, earnings dilution led by high disposition activity, along with competition from other players, are causes of concern.
Kimco currently has a Zacks Rank #3 (Hold). Investors interested in the retail REIT industry can also consider stocks like Equinix, Inc. (EQIX - Free Report) , EPR Properties (EPR - Free Report) and The Macerich Company (MAC - Free Report) . While Equinix sports a Zacks Rank #1 (Strong Buy), both EPR Properties and Macerich carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinix has a long-term growth rate of 16.90%, ahead of the industry average of 5.60%. EPR Properties' long-term growth rate of 7.1% is also above the industry average. On the other hand, Macerich is a steady performer, having beaten the Zacks Consensus Estimate in all four trailing quarters, with an average surprise of 3.61%.
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Kimco's (KIM) Q3 Deals Exceed $360M, Reshuffle Continues
Riding high on its portfolio transformation activities, Kimco Realty Corp. (KIM - Free Report) announced third-quarter 2016 deals worth over $360 million. The company remains on track with its strategic 2020 Vision, making premium asset purchase in key metro markets in the U.S., joint-venture buyouts and progressing on its simplification efforts. Specifically, the company has been reducing the number of joint ventures and trimming its Canadian portfolio.
Q3 Activity
Kimco’s third-quarter acquisitions totaled 1.0 million square feet of space, worth $292.8 million, of which the company’s share was $263.4 million. Particularly, this included the previously declared partner buyout of a four-property joint-venture portfolio for a gross price of $169.0 million, and the acquisition of the Kentlands Market Square shopping center for $95 million. (Read: Kimco Buys JV Asset Stake, Kentlands Market Square)
On the other hand, Kimco’s third-quarter sales aggregated $150.7 million and included disposition of 12 shopping centers, totaling 1.4 million square feet. The company’s share of the sales price was $97.8 million.
Specifically, the company sold interests in five out of six remaining Canadian shopping centers for a gross sales price of USD $97.4 million. Kimco’s share of the sales price was USD $48.7 million. Additionally, seven unencumbered U.S. properties were disposed for a gross price of $53.3 million. The company’s share of the sales price was $49.0 million.
Kimco is well on track with its 2020 Vision which envisages the ownership of premium assets in major metro markets in the U.S. and trims its joint-venture portfolio.
In fact, the company’s 2016 shopping-center disposition guidance range is $1.0–$1.15 billion (Kimco’s share). Its share has already reached $918.6 million year to date from the disposition of 34 Canadian properties for USD $571.5 million and sale of 25 U.S. assets for $347.1 million. On the other hand, Kimco’s acquisition guidance is $450–$550 million (Kimco’s share) for 2016 and year to date, the company’s share totaled $451.9 million.
KIMCO REALTY CO Price
KIMCO REALTY CO Price | KIMCO REALTY CO Quote
In Conclusion
Going forward, premium properties in high-growth areas, presence of well-capitalized retailers in its tenant roster, investments in high-quality neighborhood and community shopping centers and shedding of non-core assets augur well for Kimco’s growth. However, earnings dilution led by high disposition activity, along with competition from other players, are causes of concern.
Kimco currently has a Zacks Rank #3 (Hold). Investors interested in the retail REIT industry can also consider stocks like Equinix, Inc. (EQIX - Free Report) , EPR Properties (EPR - Free Report) and The Macerich Company (MAC - Free Report) . While Equinix sports a Zacks Rank #1 (Strong Buy), both EPR Properties and Macerich carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinix has a long-term growth rate of 16.90%, ahead of the industry average of 5.60%. EPR Properties' long-term growth rate of 7.1% is also above the industry average. On the other hand, Macerich is a steady performer, having beaten the Zacks Consensus Estimate in all four trailing quarters, with an average surprise of 3.61%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>