Kimco Realty Corp. (NYSE:KIM) has provided an update of its Q3 transaction activity. The company announced that it sold eight properties and two land parcels, aggregating 1 million square feet of space, during the September-end quarter.
With these dispositions, the company’s third-quarter 2019 sales volume totaled $166.7 million (Kimco’s share of the sales price being $70.9 million), while year-to-date dispositions have resulted in gross proceeds of $392.8 million. Also, the retail real estate investment trust (REIT) is on track to meet its full-year disposition target of $200-$300 million in net dispositions.
Specifically, the assets disposed included Shoppes at Midway Plantation, a 323,000-square-foot shopping center situated in Knightdale, NC, and Tacoma Central spanning 112,000 square feet of space in Tacoma, WA. The properties were sold for $43.6 million and $29.9 million, respectively.
The company also sold two shopping centers in California. These consisted of Corona Hills Marketplace — a 149,000-square-foot property — that was sold for $31.5 million and Fairmont Shopping Center, spanning 103,000 square feet of space, for $39.3 million.
Accordingly, dispositions for the nine-month period ended Sep 30, 2019 include 20 properties and three land parcels, aggregating 3 million square feet of space, for a combined gross sales price of $392.8 million. Moreover, through a sales-leaseback transaction, the company acquired three grocery-anchored parcels at its existing properties for $31.2 million.
Net of this acquisition, the company’s share of year-to-date total dispositions was $200.8 million. Further, these disposals were in line with Kimco’s projected range of blended cap rate of 7.25-7.75%.
Notably, these strategic dispositions support the company’s portfolio-transformation initiatives aimed at simplifying its business structure.
Additionally, shares of this Zacks Rank #3 (Hold) company have outperformed its industry over the past three months. In fact, its shares have rallied 10% compared with the industry’s growth of 2.2% during the same time period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The rapid shift toward e-retailing, store closures and retailer bankruptcies have long prevailed as pressing concerns for retail landlords, including Kimco, Macerich Company (NYSE:MAC) , SITE Centers Corp. (NYSE:SITC) and Taubman Centers, Inc. (NYSE:TCO) .
Hence, amid transformation in the retail landscape, Kimco’s efforts to improve its portfolio mix are a strategic fit. Although such efforts are encouraging for the long run, the dilutive impact on earnings from high disposition activity cannot be averted in the near term.
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Kimco Realty Corporation (KIM): Free Stock Analysis Report
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