JERICHO, N.Y.–(BUSINESS WIRE)–Kimco Realty (NYSE: KIM) today announced the disposition of ten former RPT Realty properties for an aggregate price of $248 million. These centers did not fully align with the company’s long-term investment goals. Pricing for the ten properties equated to an approximately 8.5% blended in-place cap rate. As part of these sales, Kimco invested approximately $67 million under its Structured Investment program on seven of the properties and expects to earn a 10% blended return on these investments. With these sales, the company has achieved its 2024 disposition target for former RPT properties.
“We are very pleased to have completed, ahead of schedule, the sales of the former RPT properties we identified in our underwriting. These centers, which were primarily power centers, were prioritized for disposition due to lower growth, higher risk profiles and/or the need for significant capital commitments, which were inconsistent with our long-term investment objectives,” said Kimco CEO Conor Flynn. “The blended pricing achieved on the sale of these properties was in-line with our previously communicated cap rate assumptions, and similar to the level at which we acquired RPT as a whole, demonstrating solid execution. Additionally, as part of these sales, we were able to opportunistically invest approximately $67 million through our Structured Investment program, which generates above-average returns. Our remaining transaction activity for 2024 will likely see investment activity outpacing dispositions.”
These former RPT properties, which totaled 2.1 million square feet of gross leasable area, required high capital expenditure commitments in excess of $75 million in aggregate over the next several years. The properties sold include four in central Florida, two each in Missouri and Wisconsin, and one each in Michigan and Indiana. With the completion of these sales, the remaining 46 former RPT assets further increase Kimco’s percentage of pro-rata annual base rent from grocery-anchored shopping centers to approximately 83%.
Also during the quarter, the company made a $9.0 million structured investment in a shopping center owned by a third-party and sold six parcels in separate transactions for a total of $2.2 million. Earlier in the first quarter, Kimco sold its remaining 14.2 million shares of Albertsons Companies, Inc. common stock, generating $299.1 million in net proceeds; the company will record a provision for income taxes of $72.9 million during the first quarter of 2024 in connection with the sale. All realized and unrealized marketable securities gains and losses are excluded from the company’s calculation of Funds From Operations.
As noted in our earnings release dated February 8, 2024, Kimco’s 2024 outlook includes assumptions for total dispositions (pro-rata) ranging from $350 million to $450 million as well as acquisitions, including capital provided under the company’s Structured Investments program (pro-rata), of $300 million to $350 million. The company expects to provide an update on its 2024 outlook and assumptions when it reports first quarter results.
About Kimco Realty®
Kimco Realty® (NYSE: KIM) is a real estate investment trust (REIT) and leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States. The company’s portfolio is strategically concentrated in the first-ring suburbs of the top major metropolitan markets, including high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities. Its tenant mix is focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Publicly traded on the NYSE since 1991 and included in the S&P 500 Index, the company has specialized in shopping center ownership, management, acquisitions, and value-enhancing redevelopment activities for more than 60 years. With a proven commitment to corporate responsibility, Kimco Realty is a recognized industry leader in this area. As of December 31, 2023, the company owned interests in 523 U.S. shopping centers and mixed-use assets comprising 90 million square feet of gross leasable space. On January 2, 2024, Kimco Realty closed the acquisition of RPT, which added 56 open-air shopping centers, comprising 13.3 million square feet of gross leasable area, to Kimco’s portfolio.
