Kimco Realty Corporation KIM, the retail real estate investment trust (“REIT”), has announced the setting up of a $500-million at the market (“ATM”) equity offering program. Per the program, Kimco is entitled to sell or offer its common shares, par value 1 cent a share.
Kimco plans to utilize the proceeds for general corporate purposes, to fund future acquisitions as well as development and redevelopment projects. Further, the company intends to use the money for redemption of depositary shares and lowering of outstanding indebtedness, including borrowings under its revolving credit facility.
Kimco, the New Hyde Park, NY-based retail REIT owns and operates the largest publicly traded portfolio of neighborhood and community shopping centers in North America. This program offers a very attractive and comparatively cheap source of capital and further it lends greater flexibility to the company’s balance sheet.
The program will remain effective for a period of 3 years. Notably, Kimco reported fourth-quarter 2014 adjusted funds from operations (“FFO”) per share, of 35 cents, in line with the Zacks Consensus Estimate and 2 cents above the prior-year quarter figure. Results benefited from growth in U.S. same-property net operating income (“NOI”).
Currently, Kimco carries a Zacks Rank #3 (Hold).
Investors interested in the retail REIT may consider stocks like Acadia Realty Trust AKR, Agree Realty Corp. ADC and National Retail Properties, Inc. NNN. All these stocks hold a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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