2004 privatization of Price Legacy Corp.
In a release, Kimco chairman and CEO Milton Cooper calls the acquisition "a new beginning. These are high-quality assets in strong markets which are currently 94% leased." The purchase price includes approximately $805 million for existing assets at a cap rate of 7.6%, plus $20 million for development rights at the Pentagon Centre in Arlington, VA, according to Kimco.
The portfolio's largest tenant is Costco, which represents more than 10% of the GLA, the release states. Cooper says in the release that Wednesday's transaction is in line with his company's position as "Costco's largest landlord." Other major tenants include Home Depot, Ross, the TJX stores, Wal-Mart, Lowe's, Petsmart, BJ's Wholesale and Best Buy.
At New York City-based DRA, CEO David Luski says in a release, "While we are pleased with both the operating performance of the underlying assets of PL Retail and our relationship with Kimco, the sale is consistent with the anticipated ownership period of these properties and the strategy of our managed funds." He adds that "at a time in which relatively few properties are trading, our ability to return investor capital from this sale will undoubtedly provide more investment flexibility for many of our investors." Luski says DRA "will continue to look to acquire quality shopping centers with value-added upside and the opportunity to expand our relationship with Kimco."
Also on Wednesday, Kimco announced its third-quarter results, reporting net income to common shareholders of $28.3 million and funds from operations of $112.6 million or 30 cents per diluted share. These results compare to net income of $96.8 million and FFO of $176.9 million in Q3 2008.
Earlier this week, Kimco said its president, David B. Henry, will become CEO, effective Dec. 31. He joined the company as vice chairman and chief investment officer in 2001, and became president a year ago. Cooper will continue to serve as chairman of the board and will also continue to lead the office of the chairman, which includes Henry, CFO Michael V. Pappagallo and COO David R. Lukes.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
