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Kimco Realty to Break Ground on Second Phase of Dania Pointe

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Kimco Realty Corp. (KIM - Free Report) announced that it will break ground on the second phase of Dania Pointe on Jul 12. Encouragingly, this mixed-use development project in Southern Broward County, FL, has grabbed much attention and the initial 325,000 square feet of space is already 93% leased.

Notably, the project on 102 acres of land is situated just next to I-95 and will serve as the central location for residents going north and south on I-95. Moreover, it is situated less than 10 minutes from the Fort Lauderdale-Hollywood International Airport and Port Everglades.

The strategic location of the project has likely enabled the company to rope well-known tenants like TJ Maxx, Ulta Beauty (ULTA - Free Report) , Five Below (FIVE - Free Report) , YouFit, Starbucks (SBUX - Free Report) and Verizon, among others in its first phase, that is scheduled to open in August.  

The second phase of Dania Pointe will take place in multiple stages. Per management, strong demand for retail space in the first phase has encouraged the company to proceed with the second phase. The second phase will add 300,000 square feet of retail space that is already 50% pre-leased, as well as another 125,000-square-foot area which will be included later.

Further, management announced that it will break ground on the first 300 apartments at Dania Pointe this summer. Also, the site has received approval for 500,000 square feet of office space. This could mark the first office space and will likely stir interest from Class A office tenants.

Notably, healthy leasing activity for retail space in the development is in stark contrast to the lackluster retail environment prevailing in the United States. Importantly, the predominance of e-retailers over brick-and-mortar sales has emerged as a serious concern for retail REITs. In fact, a number of retail landlords have been affected due to online channels increasingly gaining popularity. This has also resulted in widespread store closures and bankruptcy filing by the retailers.

Hence, positive response for retail space in the development gives us confidence that the site will enjoy high occupancy. Moreover, open-air retail centers have performed better than enclosed malls.

Although Kimco owns premium properties in high-growth areas, it is not completely immune to the wrath of rising online sales, store closures and tenant bankruptcy.

Kimco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In addition, shares of Kimco have outperformed the industry it belongs to in the past three months. During this time frame, the stock has gained 17.4%, whereas the industry has rallied 10.3%.


 

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