NEW HYDE PARK, N.Y., 2015-1-8 — /EPR Retail News/ — 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.
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.
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:
• A nine property portfolio in Mexico, totaling 2.7 million square feet, for approximately $180.9 million to one of its local operating partners;
• A Mexican portfolio of 13 net-leased properties for approximately $14.2 million;
• A shopping center in Puerto Vallarta, Mexico for approximately $6.4 million;
• 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.
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:
• 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.
• 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.
• 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.
• 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.
• 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.
• 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 prorata 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 threemile 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.
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.
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David F. Bujnicki
Vice President, Investor Relations and Corporate Communications
Kimco Realty Corporation