In a significant development, Kimco Realty Corporation KIM, the New Hyde Park, NY-based retail real estate investment trust (“REIT”) and RioCan Real Estate Investment Trust (“RioCan”), the largest REIT in Canada, have inked a mutually beneficial strategic deal.
As per the agreement, the Canadian REIT will acquire 50% interest in Kimco through two joint venture (“JV”) Canadian properties, Brentwood Village and Grand Park; while the U.S. REIT will acquire 80% stake of RioCan in the JV shopping center Montgomery Plaza in the Dallas/Fort Worth area.
Located at Calgary, Alberta, Brentwood Village is a grocery-anchored shopping center covering a gross leasable area of 294,310 square feet. The other property, Mississauga, Ontario-based Grand Park, is a new-format retail property spanning 118,637 square feet. Acquisition of remaining stakes in these two high-quality properties in a fiercely competitive market is likely to benefit RioCan going forward.
On the other hand, the U.S.-based Montgomery Plaza is a 465,011-square feet shopping center. Kimco’s acquisition of interest in this property not only reflects an excellent relationship between the two REITs, but is also likely to support the company’s goal of reducing the number of its JV properties. Further, this deal will add value to Kimco’s prominent portfolio in the core markets.
Currently, Kimco carries a Zacks Rank #3 (Hold).
Investors interested in the retail REIT may consider stocks like Acadia Realty Trust AKR, American Realty Capital Properties, Inc. ARCP and National Retail Properties, Inc. NNN. All these stocks hold a Zacks Rank #2 (Buy).
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