Kimco Realty Divests Non-Core Assets

Kimco Realty Corp. ( KIM - Analyst Report ) , a real estate investment trust (REIT), has recently announced that it had completed the divesture of 15 assets in first quarter 2012 for $215.4 million. This included the sale of 13 non-core assets, 2 joint-venture properties, and the repayment of $83.7 million in mortgage debt.

Spanning 1.2 million square feet of space, the divested non-strategic properties were primarily located outside the key metropolitan statistical areas (MSAs) targeted by the company. The properties were sold for $95.9 million, including the repayment of $1.3 million of mortgage debt.

With this asset sale, Kimco Realty presently has 53 non-strategic properties in its kitty aggregating $289.3 million, including the repayment of $41.6 million of mortgage debt.

The company also sold a joint-venture property spanning 713,000 square feet in Schaumburg, Illinois, for $118 million. The selling price of the property, in which Kimco Realty had a 45% ownership stake, included the repayment of $82.5 million of mortgage debt.

In addition, during first quarter 2012, the company sold an unencumbered joint-venture property for $1.6 million. Kimco Realty had a 50% ownership stake in this 31,000-square-foot property.

With a geographically diverse portfolio concentrated mostly in high-income, high-growth areas, Kimco Realty is the largest publicly traded owner and operator of neighborhood and community shopping centers in the U.S.

Kimco Realty has established a track record of conservative capital management and maintains strong investment-grade debt ratings. Furthermore, the company has continuous access to capital through debt or equity financing, that provide the necessary resources to expand and develop its business.

We maintain our long-term Neutral recommendation on Kimco Realty, which currently has a Zacks #3 Rank that translates into a short-term Hold rating. We also have a long-term Neutral recommendation and a Zacks #2 Rank (short-term Buy rating) for Simon Property Group ( SPG - Analyst Report ) , one of the competitors of Kimco Realty.