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Kimco Inks Lease with Target at New Jersey Shopping Center

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Kimco Realty Corp. (KIM - Free Report) , the New Hyde Park, NY-based retail real estate investment trust (“REIT”), has inked  a lease with Target Corp. (TGT - Free Report) for a small-format store at the 173,000-square-foot Westmont Plaza in Haddon Township, NJ. The move marks the initial step toward a broader repositioning of this New Jersey shopping center.

The 48,000-square-foot store, slated to open in Jul 2018, will be known as The Westmont Target. It will be Target’s third small-format store in the state of New Jersey, offering a select range of apparel, accessories, grocery, grab-and-go items, beauty products, electronics and toys, among others. The store will also include a CVS Pharmacy and its customers can avail Target’s Order Pickup service as well.

Such transformative redevelopments come at a time when mall traffic has continued to dwindle amid a rapid shift in customers’ shopping preference to online channels from traditional stores. However, Kimco is making concerted efforts and executing its 2020 vision that envisages portfolio quality upgrade with premium acquisitions and redevelopments, backed by proceeds from dispositions.

Recently, Kimco purchased the Jantzen Beach Center for $131.8 million. This 746,000-square-foot, open-air shopping center is located on 67 acres in Portland, OR. Currently, the property is 96% occupied, highlighting solid demand for space.

The property is positioned along Portland’s busy I-5 artery, where traffic count exceeds 128,000 cars per day. In addition, the asset enjoys barrier to entry in this market since it is positioned within the Urban Growth Boundary of Portland, which helps regulate urban expansion.(Read more: Kimco Buys Jantzen Beach Center, Reveals Q2 Activities)

These strategic investments are likely to help Kimco emerge stronger. However, currently, the challenges in the retail real estate market, including store closures and bankruptcy, are likely to have an adverse impact on the company’s shares which underperformed the Zacks categorized REIT and Equity Trust - Retail industry, over the past three months. During the period, shares of the company lost 17.8%, while the industry declined 7.7%.

As such, Kimco currently carries a Zacks Rank #4 (Sell).
 
Stocks to Consider
 
Investors can, however, consider better-ranked stocks in the Retail REIT industry like Regency Centers Corporation (REG - Free Report) and Retail Opportunity Investments Corp. (ROIC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Regency and Retail Opportunity have long-term growth rates of 7.7% and 6.9%, respectively.

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