Kimco Announces Buyout of The Markets at Town Center for $108M

Acquisition Details - Kimco Realty acquired The Markets at Town Center in Jacksonville, FL, for $108 million, a premier asset with 254,000 square feet of space located in a highly sought-after shopping district [1] - The acquisition strengthens Kimco's presence in the Jacksonville market, where it now owns six properties totaling approximately 1.5 million square feet with a 98.6% occupancy rate as of Dec 31, 2024 [1] Property Demographics and Performance - The property benefits from an affluent customer base, with an estimated 192,000 population and an average household income of $95,000 within a five-mile radius [2] - The center attracts over four million visitors annually, with several national tenants ranking among the top traffic generators for their respective chains in Florida [2] - The Markets at Town Center is 97% occupied and features a diverse mix of top tenants offering lifestyle, grocery, dining, and essential goods and services [3] - The property, built in 2008, presents mark-to-market opportunities due to below-market in-place leases, with several leases set to expire in the coming years [3] Strategic Investment Program - The acquisition represents Kimco's first property purchase through its Structured Investment Program, which aims to deploy mezzanine financing and secure rights of first refusal or first offer on assets that enhance the portfolio [4] - Kimco previously provided $15 million in mezzanine financing for the property, which was repaid at the time of closing [4] - The program is seen as a differentiator for the company, enabling above-average returns and the potential to transition into equity ownership of high-quality properties [5] Portfolio and Market Position - Kimco's portfolio of high-quality, open-air shopping centers, predominantly grocery-anchored, is well-positioned in drivable first-ring suburbs within top major metropolitan Sunbelt and coastal markets [6] - The company's focus on developing mixed-use assets supports long-term growth [6] - The acquisition aligns with Kimco's strategy to expand its premium shopping center portfolio, which offers essential goods and services and demonstrates resilience during economic downturns [7] Stock Performance and Industry Comparison - Kimco's shares have rallied 11.8% in the past six months, outperforming the industry's growth of 10% [7] - Better-ranked stocks in the retail REIT sector include Regency Centers (REG) and Tanger, Inc. (SKT), each carrying a Zacks Rank 2 (Buy) [8] - The Zacks Consensus Estimate for Regency's 2024 FFO per share is $4.28, suggesting year-over-year growth of 3.1% [8] - The Zacks Consensus Estimate for Tanger's 2024 FFO per share is $2.11, indicating a 7.7% increase from the year-ago figure [9]