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Kimco Realty (KIM) Issues 4Q18 and '18 Transaction Activity

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Accelerating its portfolio-transformation initiatives, Kimco Realty Corp. (KIM - Free Report) reported fourth-quarter 2018 and full-year 2018 disposition deals worth $357.1 million and $1.1 billion, respectively. Through these transactions, the company surpassed the high end of its full-year property sales goal of $900 million.

Final Tally

During the Oct-Dec quarter, Kimco disposed 16 properties and two land parcels spanning 1.9 million square feet of space, with the company’s share of sale proceeds being $228.4 million. These transactions included the sale of a 294,000-square-foot property — Cherrydale Point — in Greenville, SC and Shops at Kildeer, a 171,000 square-foot property in Kildeer, IL. Further, sale of the company’s South Park Shopping Center marked its exodus from Kentucky.

Accelerated disposition activity in the fourth quarter of 2018 aided Kimco to earn $913.9 million in sale proceeds from 68 properties for the full year. These assets spanning 8.2 million square feet of space were sold at a blended cap rate, in line with the company’s expected range of 7.5-8%.

Our take

Kimco is focused on simplifying its business structure by concentrating on its U.S. shopping center portfolio, targeting ownership of large, high-quality assets in major metro markets and simultaneously exiting from the company’s joint-venture portfolio. In regard to this, the company is making significant disposition of its assets. 

We believe such streamlining efforts, along with solid demand for Kimco’s properties and easy access to capital, promise considerable upside potential. 

In fact, per management, higher disposition activity in 2018 reflects the company’s long-term focus as well as high demand for open-air centers.

Furthermore, management believes earnings dilution is not a significant concern for Kimco. Also, through execution of strategic asset-pruning measures, the company’s strengthened portfolio is well placed in top U.S. coastal markets with favorable demographics and exclusive redevelopment opportunities.

Additionally, over the past six months, shares of this Zacks Rank #3 (Hold) company have fell 8.5%, narrower than the industry’s decline of 10.2%.


 

Stocks That Warrant a Look

Simon Property Group, Inc. (SPG - Free Report) witnessed marginal upward funds from operations (FFO) estimate revision for 2018 to $12.13, in 60 days’ time. Currently, it carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Saul Centers, Inc.’s (BFS - Free Report) Zacks Consensus Estimate for 2018 FFO per share remained unchanged at $3.12, in the last 30 days. It carries a Zacks Rank of 2, at present.

National Retail Properties’ (NNN - Free Report) Zacks Consensus Estimate for the current-year FFO per share has been revised marginally upward to $2.65 over the last month. It holds a Zacks Rank of 2, currently.

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