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Kimco's (KIM) JV Sells Part of Mixed-Use Project for $24.8M

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Kimco Realty (KIM - Free Report) and Rockefeller Group Development, joint-venture partners in the Miramar Town Center, recently sold a portion of the mixed-use development to IMC Equity Group for $24.8 million. 

The Rock-Kim Miramar LLC partnership transferred 17 apartments spanning 27,000 square feet of space, 127,000 square feet of retail and office space, a 585-space parking garage, along with a 3.7-acre vacant land for future development, to IMC Equity.   

Per IMC Equity management, the company has secured a $17.25-million loan from Loan Core Capital Markets — a commercial mortgage-backed securities (CMBS) lender — for the above-mentioned acquisition.

Miramar Town Center, which broke ground in 2006, is suitably located at the 2401 Main Street and 11645 Red Road. This town center includes a 487-unit residential community, the Miramar City Hall, a performing arts center, an educational building and a police headquarter as well. Its tenant roster includes several well-known names like 24-Hour Fitness, Subway, UPS Store, Juana’s Sports Bar, La Famiglia Restaurant, Salonz Suites and Comcast Corporation.  

In fact, per IMC Equity, the property offers immense scope to unlock additional value, with 90% of the retail and office space and 76% of the apartments being occupied. The company acquired 154,000 square feet space in the mixed-use project, for a cap rate of 8.25%, and a price per square foot that compares favorably with its replacement cost.  

IMC Equity plans to develop the 3.7-acre vacant land as a mixed-use property, with retail and entertainment options on the ground floor, and apartments as well as retail space, anchored by a solid retailer, on the top floor.  It also plans to acquire a vacant parcel along the Hiatus Road, quite near to the town center.

The aforementioned sale is in line with Kimco’s 2020 Vision, which is aimed at shrinking the company’s JV portfolio and increasing ownership of premium assets in core U.S. markets.

However, year to date, amid the choppy retail real estate environment, shares of Kimco have underperformed the industry it belongs to. During this time frame, shares of the company have dropped 25.3%, whereas the industry registered growth of 10.4%.

 


 

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

Key Picks

Better-ranked stocks in the real estate investment trust (REIT) space include Regency Centers Corporation (REG - Free Report) , Cedar Realty Trust and Urstadt Biddle Properties . All three carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Regency Centers’ funds from operations (FFO) per share estimates for the current year remained unchanged at $3.67 over the past month. Its shares have dipped 1.7%, year to date.

Cedar Realty’s 2017 FFO per share estimates remained unchanged at 54 cents during the same time period. Year to date, its share price has dipped 8.6%.

Urstadt Biddle Properties’ FFO per share estimates for the current year remained unchanged at $1.25 over the past 60 days. Its share price has declined 3.1%, 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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