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Kimco (KIM) Announces Plans to Refurbish Owings Mills Mall

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Kimco Realty (KIM - Free Report) is set to transform the Owings Mills Mall into an open-air shopping center, Mill Station. The move is expected to enhance the shopping experience of local people. The $108-million project will break ground in early 2018 and is expected open in early 2019.

The company’s signature series redevelopment project will have a dynamic line-up of nearly 30 national, regional and local brands, offering a variety of dining and retail options. In fact, Costco will be the anchor tenant of the 575,000 square foot shopping center. It is set to open a warehouse club spanning 148,000 square feet at the center. Further, this outlet will be the sole Costco outlet within a 15-mile radius of the Mill Station.

Other tenants are expected to be announced after Kimco signs leases with other retailers to take over an additional 350,000 square feet of the renovated center. The existing AMC Theatre will also be revamped under the renovation plan. The outdoor shopping destination will offer a large parking lot and pedestrian-friendly walkways. Further, retail outlets and offices will be interconnected through an extensive walkway network. 

Located in Baltimore County, MD, Mill Station is easy accessible from Carroll County to Baltimore County through I-795. The site also boasts favorable demography with a population of 166,000 in the neighborhood. Additionally, with an average household income of nearly $93,000, the center is expected to witness decent traffic and demand.

Owings Mills Mall was inaugurated in the mid-1980s as a premium shopping destination with a big-box tenant focus. However, rising popularity of e-retail resulted in a decline in footfall, leading to its closure in 2015. Consequently, Owings Mills Mall was demolished in 2016.

Kimco’s increased interest in redeveloping retail centers reiterates the significance of these brick-and-mortar stores that offer a diverse range of amenities.

However, year to date, amid the choppy retail real estate environment, shares of Kimco have underperformed the industry it belongs to. During the said time frame, shares of the company declined 25.5%, as against the industry’s 10.7% growth.

 


 

Kimco currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the real estate investment trust space are Cedar Realty Trust , Urstadt Biddle Properties and Regency Centers Corporation (REG - Free Report) . 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.

Cedar Realty’s funds from operations (FFO) per share estimates for 2017 remained unchanged at 54 cents over a month. Its share price has tumbled 8.6% year to date.

Urstadt Biddle Properties’ 2017 FFO per share estimates have remained unchanged at $1.25 over the past 60 days. Its share price has declined 3.1% year to date.

Regency Centers’ current-year FFO per share estimates have remained unchanged at $3.67 in a month’s time. Its shares have dipped 1.7% year to date.

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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