INDIANAPOLIS—The Kite Realty Group Trust has just acquired a portfolio of nine retail centers, the majority of which have a grocery anchor, with a gross leasable area of about two-million-square-feet with a gross purchase price of about $307 million in cash. The company acquired the portfolio in an off-market transaction that it believes is at a significant discount to replacement cost.
Seven of the centers are in the company's existing markets of Florida, Georgia, and Texas, while two are in Birmingham, AL, a new market. The centers are in generally robust markets and as of September 30, 2013, the portfolio was 93.2% leased.
“This off-market portfolio acquisition enables us to add approximately two-million-square-feet of high quality shopping centers to our portfolio,” says John A. Kite, the company's chairman and chief executive officer. “These properties will complement those in our existing portfolio and provide us with an opportunity to strategically increase our footprint in our targeted markets. We believe there are significant value creation opportunities through the lease-up of vacant space, roll-over of below market rents, and the pursuit of redevelopment opportunities.”
“This transaction and the method by which we intend to fund it continue the Company's strategic plan to reduce our leverage through the acquisition of high-quality retail properties at below replacement cost,” says Daniel R. Sink, the company's chief financial officer. “The transaction and related financing will increase our unencumbered property pool and provide increased financial flexibility and liquidity to fund future growth.”
Furthermore, the officials said the portfolio provides the company with an opportunity to create value and grow its net operating income through lease-up of vacant space, roll-over of below-market rents and pursuit of redevelopment opportunities.
Below is a listing of the acquired properties:
- Lakewood, a 196,870-square-foot center in Jacksonville, FL, anchored by a Winn Dixie.
- Northdale, a 176,917-square-foot center in Tampa, FL, anchored by TJ Maxx and Beall's.
- Hunter's Creek, a 119,729-square-foot center in Orlando, FL anchored by Publix.
- Burnt Store, a 95,023-square-foot center in Punta Gorda, FL anchored by a Publix and Home Depot.
- Portofino, a 372,506-square-foot center in Houston, TX, anchored by Sports Authority and many others.
- Kingwood Commons, a 164,366-square-foot center, also in Houston, TX, and anchored by Randall's, Petco and others.
- Trussville I & II, a 446,484-square-foot center in Birmingham, AL, anchored by a Wal-Mart.
- Colonial Shoppes at Clay, a 66,165-square-foot center, also in Birmingham, AL, anchored by a Publix.
- Beechwood, a 342,217-square-foot center, in Athens, GA, anchored by a Fresh Market, TJ Maxx and others.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
