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Kimco Completes Buy of 5M-SF Portfolio

NEW HYDE PARK, NY-The REIT has acquired the remaining 85% interest in PL Retail LLC from a DRA Advisors-managed fund for $825 million.

By Paul Bubny | Updated on November 05, 2009

NEW HYDE PARK, NY-Kimco Realty Corp. has acquired an 85% interest in PL Retail LLC, a 5.2-million-square-foot retail portfolio, for $825 million from a fund managed by DRA Advisors LLC. The price tag includes the assumption of approximately $564 million in non-recourse mortgage debt and $50 million of perpetual preferred stock, the locally based retail REIT said in a release Wednesday. Kimco manages the PL Retail portfolio, a joint venture that owns the remaining 21 shopping centers acquired in the 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.

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