Kimco Buys Long Island Shopping Center Portfolio for $376M
REIT increases shopping center footprint on Long Island to 3.5M SF.
Kimco Realty has acquired a family-owned portfolio of eight Long Island, NY shopping centers for $375.8M. The seller was not disclosed.
The portfolio includes The Gardens at Great Neck, Woodbury Common, The Market Place, Stop & Shop Shopping Center, Green Cove Plaza and Syosset Corners in Nassau County and Sequams Shopping Center in Suffolk County.
The portfolio is 94.4% leased with significant mark-to-market and merchandising enhancement opportunities, Jericho-based Kimco said in a release. Five of the shopping centers in the portfolio of grocery-anchored. The portfolio features a strong collection of necessity-based tenants and retailers, including TJMaxx, GoHealth Urgent Care, Rite Aid, Starbucks, Dunkin’ Donuts, and Chipotle.
The ultra-infill markets of Long Island have a high barrier to entry and offer a highly captive consumer base boasting some of the best demographic profiles in the country, Kimco said.
The acquisition was funded by the issuance of a combination of cash and redeemable units and the assumption of $89M of 4.1% mortgage debt with a remaining term of about six years. Kimco recently received more than $300M in proceeds from the sale of 11.5M shares it held in Albertsons as part of the Albertsons-Kroger merger.
“This acquisition was a rare chance to expand our presence in one of Kimco’s most highly desired markets, with a portfolio of irreplaceable real estate located in one of the most heavily trafficked, densely populated suburbs that offers high barriers to entry and affluent communities,” said Conor Flynn, Kimco’s CEO, in a statement.
“The strength of our balance sheet, ample liquidity and ability to provide a tax efficient transaction for the seller put us in a prime position to be opportunistic when this multi-generational portfolio emerged,” Flynn added.” The acquisition also brings us closer to our target of 85% of the company’s annual base rent coming from grocery anchored centers.”
At the end of September, Kimco Realty owned 28 centers totaling 3M SF with an average occupancy rate of 97.8% in the dominant Long Island market.
The addition of this eight-property portfolio, which comprises 540K SF, will further Kimco’s position as one of Long Island’s largest owners of grocery-anchored shopping centers with 36 assets totaling over 3.5M SF.