Kimco Realty Corp. (NYSE:KIM), North America’s largest owner and
operator of neighborhood and community shopping centers, today announced
transactions totaling a gross amount of $999.0 million in the fourth
quarter and $3.1 billion for the full year 2014. Highlights for the
fourth quarter include the sale of 66 properties for a gross amount of
$699.6 million as well as the acquisition of nine properties, including
eight from existing joint ventures, for $245.0 million. In addition, the
company purchased land for three new ground-up development projects for
a total price of $54.4 million.
The major disposition and acquisition activities for the fourth quarter
and full year 2014 are detailed below.
DISPOSITIONS
United States
During the fourth quarter, Kimco sold ownership interests in 41
properties (29 wholly owned and 12 joint ventures) in the U.S., totaling
4.5 million square feet, for a gross sales price of $492.3 million. The
company’s pro-rata share from these sales was $325.8 million.
For the full year 2014, the company sold 91 U.S. shopping centers (61
wholly owned properties and 30 unconsolidated properties), totaling 9.6
million square feet, for a gross sales price of $1.0 billion, including
$249.1 million of mortgage debt. The company’s pro-rata share from these
sales was $710.8 million.
Latin America
In the fourth quarter of 2014, Kimco sold a total of 25 properties in
Latin America totaling $207.3 million with the company’s pro-rata share
from these sales of approximately $192.7 million. These sales included:
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A nine property portfolio in Mexico, totaling 2.7 million square feet,
for approximately $180.9 million to one of its local operating
partners;
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A Mexican portfolio of 13 net-leased properties for approximately
$14.2 million;
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A shopping center in Puerto Vallarta, Mexico for approximately $6.4
million;
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The final two remaining Peruvian properties for approximately $5.8
million.
For the full year 2014, Kimco completed the sale of 41 properties in
Latin America, totaling approximately 7.5 million square feet, for a
gross sales price of $622.2 million, including $36.3 million of mortgage
debt. The company’s pro-rata share from these sales was $496.1 million.
These sales reflect Kimco’s strategy to simplify its operations by
exiting Latin America and focusing primarily on the U.S. and Canadian
shopping center portfolios. With the consummation of these sales, the
company has substantially liquidated its portfolio in Mexico, marking
the significant completion of Kimco’s goal to exit Latin America.
As previously reported, in the company’s balance sheet within
“Accumulated other comprehensive income” is a cumulative unrealized loss
on foreign currency translation relating to the company’s investments in
Mexico resulting from currency exchange rate fluctuations between the
local currency and the U.S. dollar during the company’s investment
holding period.
Under U.S. GAAP, upon the company’s substantial liquidation of its
investments in a particular country, the company must recognize the then
unrealized gain or loss on foreign currency translation in earnings.
Kimco estimates that it will, in the fourth quarter of 2014, recognize a
loss from foreign currency translation in the range of $135 million to
$145 million, which will be significantly offset from net gains on the
sales of operating properties in both the U.S. and Mexico, estimated to
be in the range of $105 million to $115 million, during the same period.
The impact of currency will apply to the respective gains and losses on
the sale of the operating properties and is excluded from the
calculation of funds from operations (FFO). The final gains and losses
on sales of properties, including the currency impact, will be
determined upon the company’s completion of closing its books of account
for year ended 2014.
ACQUISITIONS
In the fourth quarter, Kimco acquired nine shopping centers for its
wholly owned portfolio totaling more than 1.4 million square feet for a
gross purchase price of $245.0 million. In addition, the company
purchased several land parcels totaling $54.4 million for three future
ground-up development projects. Fourth quarter acquisitions included:
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Braelinn Village, a 227,000-square-foot grocery-anchored center
for $27.0 million in the highly desirable Atlanta suburb of Peachtree
City, Ga. This area is recognized for its high barriers for new
development and strong income levels, demonstrated by an average
household income of $101,000 within a three-mile radius. The center is
94% occupied and anchored by an expanding Kroger grocer and
substantially below-market Kmart.
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As previously announced, a portfolio of seven predominantly
grocery-anchored shopping centers from Kimco’s joint venture with BIG
Shopping Centers USA Inc. for a gross price of $195.0 million. The
properties feature a well-known lineup of national retailers that
includes Marshalls, Target, Dollar Tree, Sports Authority, and Ross
Dress for Less along with grocers such as Safeway, Sprouts Farmers
Market, and King Kullen.
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Acquired the remaining 89% equity interest in North Quincy Plaza, a
grocery-anchored shopping center located in Boston Metropolitan
Statistical Area (MSA) from an institutional joint venture partner,
for a gross purchase price of $23.0 million.
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Wynnewood - Purchased land for $13.4 million toward the
construction of a new 45,000 square foot Whole Foods anchored property
located in Wynnewood, Pa., an affluent area in the
Philadelphia-Camden-Wilmington MSA supported by high income and
population levels.
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Promenade at Christiana - Acquired a former Sears distribution
and surplus retail outlet for $13.4 million, which will be developed
into a new 440,000 square foot power center. This 46 acre property,
located in Christiana, Del. (Philadelphia-Camden-Wilmington MSA),
fronts I-95 and is directly across from the Christiana Mall.
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Grand Parkway – Purchased 90 acres in Houston, Texas for $27.6
million for the future development of a 350,000 square foot
grocery-anchored power center. The property is located off a new outer
loop parkway and in close proximity to Exxon’s new corporate campus
and The Woodlands, an upscale residential community in Houston.
For the full year 2014, Kimco acquired interests in 60 retail
properties, including 33 acquired from existing joint venture partners,
totaling 6.7 million square feet. The aggregate purchase price for these
acquisitions was $1.4 billion, including $583.7 million of mortgage
debt. These properties have, on a pro-rata basis, an average occupancy
of 95.6% and an annual base rent of $15.23 per square foot and are
supported by excellent demographics, including an average household
income of $90,000 within a three-mile radius.
Also, as previously announced, Kimco executed a contract to acquire the
remaining 66.7% interest in the 39-property Kimstone portfolio from its
joint venture partner, a subsidiary of Blackstone Real Estate Partners
VII (BREP), for a pro-rata price of $925 million, which includes the
assumption of approximately $426.7 million in mortgage debt. The company
will pay approximately $512.3 million to acquire BREP’s interest with
the transaction expected to close in the first quarter of 2015.
ABOUT KIMCO
Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust (REIT)
headquartered in New Hyde Park, N.Y., that owns and operates North
America’s largest publicly traded portfolio of neighborhood and
community shopping centers. As of September 30, 2014, the company owned
interests in 814 shopping centers comprising 117 million square feet of
leasable space across 41 states, Puerto Rico, Canada, Mexico and South
America. Publicly traded on the NYSE since 1991, and included in the S&P
500 Index, the company has specialized in shopping center acquisitions,
development and management for more than 50 years. For further
information, please visit www.kimcorealty.com,
the company’s blog at blog.kimcorealty.com,
or follow Kimco on Twitter at www.twitter.com/kimcorealty.
SAFE HARBOR STATEMENT
The statements in this news release state the company’s and management’s
intentions, beliefs, expectations or projections of the future and are
forward-looking statements. It is important to note that the company’s
actual results could differ materially from those projected in such
forward-looking statements. Factors which may cause actual results to
differ materially from current expectations include, but are not limited
to, (i) general adverse economic and local real estate conditions, (ii)
the inability of major tenants to continue paying their rent obligations
due to bankruptcy, insolvency or a general downturn in their business,
(iii) financing risks, such as the inability to obtain equity, debt or
other sources of financing or refinancing on favorable terms to the
company, (iv) the company’s ability to raise capital by selling its
assets, (v) changes in governmental laws and regulations, (vi) the level
and volatility of interest rates and foreign currency exchange rates and
management’s ability to estimate the impact thereof, (vii) risks related
to the company’s international operations, (viii) the availability of
suitable acquisition and disposition opportunities, and risks related to
acquisitions not performing in accordance with our expectations, (ix)
valuation and risks related to the company’s joint venture and preferred
equity investments, (x) valuation of marketable securities and other
investments, (xi) increases in operating costs, (xii) changes in the
dividend policy for the company’s common stock, (xiii) the reduction in
the company’s income in the event of multiple lease terminations by
tenants or a failure by multiple tenants to occupy their premises in a
shopping center, (xiv) impairment charges and (xv) unanticipated changes
in the company’s intention or ability to prepay certain debt prior to
maturity and/or hold certain securities until maturity. Additional
information concerning factors that could cause actual results to differ
materially from those forward-looking statements is contained from time
to time in the company’s SEC filings. Copies of each filing may be
obtained from the company or the SEC.
The company refers you to the documents filed by the company from time
to time with the SEC, specifically the section titled “Risk Factors” in
the company’s Annual Report on Form 10-K for the year ended December 31,
2013, as may be updated or supplemented in the company’s Quarterly
Reports on Form 10-Q and the company’s other filings with the SEC, which
discuss these and other factors that could adversely affect the
company’s results.
Copyright Business Wire 2015