Kimco Realty is the real deal. The self-managed and self-administered real estate investment trust (REIT) owns or has interests in about 750 community shopping centers with 110 million sq. ft. of leasable space in metropolitan areas in nearly 40 states, as well as in Canada, Mexico, Puerto Rico, and Chile. Kimco properties are usually anchored by a supermarket or a big-box store that sells day-to-day necessities rather than big-ticket items. Home Depot, Kohl's, TJX, Sears, and Wal-Mart are its largest tenants. Through subsidiaries, the company also develops shopping centers and provides real estate management and disposition services to retailers.
Kimco Realty ranks as North America's largest publicly-traded owner and operator of neighborhood and community shopping centers.
Sales and Marketing
In 2014, Kimco Realty's five largest tenants included TJX Companies, The Home Depot, Wal-Mart, Kohl's, and Bed Bath & Beyond. Combined, these tenants made up 11% of the company's annual rental revenue.
Kimco's revenues and profits have been on the rise in recent years thanks to added rental income from acquisitions of shopping center properties, and thanks to strategic property sales that have triggered healthy gains.
The REIT's revenue rose by 5% to a record $993.90 million in 2014, thanks to a combination of higher rental revenue from rental properties acquired in 2013 and 2014, and higher occupancy rates, which climbed to 96%, compared to 94% in 2013.
Higher revenue in 2014 also pushed Kimco's net income up by nearly 80% to $424 million for the year -- marking its highest profit since 2007. Kimco's operating cash rose by 10% to $629.34 million thanks to higher cash earnings.
With its focus historically planted on shopping center development and construction, Kimco Realty in late 2014 revised its strategy to move toward a more acquisition-based strategy in purchasing existing shopping centers across the US.
During 2014, the company acquired a total of 63 shopping center properties and five outparcels spanning 7.1 million square feet of leasable space for a total of $1.4 billion -- including 39 properties (totaling $1 billion) purchased from its joint venture partners. Its largest acquisition in 2014 happened late in the year, when Kimco purchased the remaining stake in 39 U.S. shopping centers from its joint-venture partner Blackstone Group for $925 million (including debt), which nearly doubled Kimco's equity investment in the properties. The deal involved 5.6 million-square-feet of 97% occupied, grocery-anchored, shopping center property (that Kimco had an existing stake in for some time) located in target demographic areas of New York, Virginia, Texas, Florida, California, and Maryland.
In late 2013, it acquired the remaining phase of the 283,000-sq. ft. Wilton River Park shopping center in Fairfield County, Connecticut. Kimco also sold its industrial portfolio to leading Mexican industrial real estate investment trust Terrafina.
Kimco also reemphasized in 2015 its global and portfolio expansion strategy though investments in institutional joint venture partnerships. In the past, the REIT has acquired retail properties and development projects in Canada through a partnership with Canadian REIT RioCan. It once had established similar arrangements in Mexico, Brazil, Peru, Puerto Rico, and Chile, however in 2013, the REIT began exiting markets in Mexico and South America (including Brazil and Peru) due to poor market conditions in those regions. During 2014, the company sold 27 properties in Latin America for a total aggregate sales price of $833.5 million, with plans to refocus the proceeds toward more investment in the US and Europe.
In the US, Kimco has a joint venture with Canada Pension Plan Investment Board to buy shopping centers around the nation. The REIT also joined forces with Israel's BIG Shopping Centers to acquire neighborhood and community shopping centers throughout the US.