Kimco Realty to acquire RPT Realty in $2 billion all-stock deal

Kimco Realty is expanding its portfolio in its key markets via a big acquisition. 

Real estate investment trusts Kimco Realty and RPT Realty have reached a definitive merger agreement under which Kimco will acquire RPT in an all-stock transaction valued at approximately $2 billion, including the assumption of debt and preferred stock.  Upon closing, Kimco expects to have a pro forma equity market capitalization of approximately $13 billion and a total enterprise value of approximately $22 billion.

 Headquartered in Jericho, N.Y., Kimco is the nation’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers. The transaction will add 56 open-air shopping centers, including 43 wholly-owned and 13 joint venture assets, comprising 13.3 million square feet of gross leasable area, to Kimco’s existing portfolio of 528 properties. 

As part of the deal, Kimco will also acquire RPT’s 6% stake in a 49-property net lease joint venture. 

Beyond strengthening Kimco’s presence in its key markets, the transaction is expected to provide embedded growth opportunities, including those associated with redevelopment, the company said. Kimco has identified a limited group of Midwest properties within RPT’s portfolio that it views as not consistent with its strategy that it expects to divest over time. 

“This transaction presents another exciting opportunity for our company to deepen our presence in key Coastal and Sun Belt markets, while accelerating our growth at an attractive valuation,” said Conor Flynn, CEO of Kimco. “Approximately 70% of RPT’s portfolio aligns with our key strategic markets.”  (Since it merged with Weingarten Realty in 2021 to give it a portfolio of more than 560 centers, Kimco has focused on growth in Sunbelt markets.)

In addition, Flynn noted, RPT has a substantial pipeline of signed, but not yet open leases and 20% or greater mark-to-market leasing spread across the portfolio, which will drive higher growth for the combined company.

As of June 30, 2023, Kimco owned interests in 528 U.S. shopping centers and mixed-use assets comprising 90 million square feet of gross leasable space. The company’s portfolio is primarily located in the first-ring suburbs of the top major metropolitan markets, including those in attractive coastal markets and rapidly expanding Sun Belt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week.

As of June 30, 2023, RPT’s  property portfolio consisted of 43 wholly-owned shopping centers, 13 shopping centers owned through its grocery-anchored joint venture, and 49 retail properties owned through its net lease joint venture, which together represent 14.9 million square feet of gross leasable area. 

“Since joining RPT five years ago, the team and I have worked tirelessly to create long-term stakeholder value by curating the portfolio towards Coastal and Sun Belt markets, while delivering exceptional leasing results and prudently managing the balance sheet,” said Brian Harper, president and CEO of RPT. “After carefully considering the merits of this transaction, we believe that aligning with Kimco, a leader in the grocery-anchored shopping center space, is in the best interest of our stakeholders, given the multiple synergies that can be realized as a combined company.”