Kimco disposes of 10 properties it acquired in a $2 billion deal

When neighborhood center giant Kimco acquired RPT Realty in a $2 billion all-stock deal in January, CEO Conor Flynn noted that 70% of the company’s portfolio aligned with its key strategic markets. This week Kimco began disposing of some of the other 30%.

The Jericho, N.Y.-based owner-operator has announced the sale of 10 of those former RPT centers for $248 million. Located in Florida, Indiana, Missouri, Michigan, and Wisconsin, the properties total 2.1 million sq. ft. of gross leaseable area.

“We are very pleased to have completed, ahead of schedule, the sales of the properties we identified in our underwriting,” said Flynn in a press release detailing the disposition. “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.”

Kimco had estimated the properties would require capital expenditure commitments in excess of $75 million over the next four years. Six of them are located outside of the coastal and Sun Belt markets that the company is currently focusing on.

Kimco reported that the deal achieved its 2024 target for culling its RPT acquisitions. Some $67 million of the sale price has been invested under its structured investment program on seven of the properties, on which the company expects to earn a 10% blended return. 

Kimco’s purchase of RPT’s 56 open-air properties had added some 13 million sq. ft. of GLA to its portfolio and lifted its total holdings to more than 100 million sq. ft., bolstering its claim of being the nation’s largest owner of grocery-anchored shopping centers. 

In 2021, Kimco spent $5.9 billion to acquire Weingarten Realty, whose strategic direction of focusing on centers in the Sun Belt closely matched its own. 

“Certain markets in the South don’t pose heavy barriers to entry for new supply,” Kimco president Ross Cooper told Chain Store Age following that acquisition. “In many of our other markets, like the Northeast and the Mid-Atlantic, it’s harder to get approval for development.”