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NEW HYDE PARK, NY-By the end of 2004, Kimco had completed its $1.2-billion acquisition of Price Legacy's 7.7-million-sf retail portfolio with DRA Advisors and counted a joint venture purchase of the Factoria Mall in Bellevue, WA for $102 million among its other investments. "There was a flurry of investment activity at year end," said Michael Pappagallo, vice president and CFO, during the REIT's conference call yesterday. "One phrase that defined the year was getting the job done. It's safe to say we did get the job done...and more." For the year, Kimco completed transactions in excess of $3 billion.

He noted that the parent portfolio's occupancy rate of 93.6% is the highest level since the company went public 13 years ago. It was up from 92.9% at Sept. 30, 2004 and 90.7% a year earlier. The increase was the result of new leasing, acquisition activity and property sales. For the full year, the company signed 515 new leases in the parent portfolio, a 20% increase from 2003, totaling approximately 3.2 million sf of gross leasable area. In total, the publicly traded REIT has interests in 774 properties comprising approximately 113 million sf of leasable space located throughout 42 states, Canada and Mexico.

Mexico is one area, Kimco feels is ripe for growth. Company officials have said the improving economy, dense population and shortage of retail space create an opportunity rapid expansion. In the development pipeline for this quarter are three Wal-mart-anchored centers in Mexico with partner, GE. The largest center is valued at $60 million. Kimco anticipates having more than $380 million invested at year end and that there will be more than four million sf of approved deals this year, if all goes well.

Net income for the quarter was $75.8 million compared to $84.1 million a year earlier. (Net income for the current quarter included $4.7 million from discontinued operations compared to $21.3 million from discontinued operations in the fourth quarter of 2003.) Kimco's fourth quarter funds from operations rose 7.6% to $103.6 million from $96.3 million for the same period last year. Net income for the year was $297.1 million or $2.51 per diluted common share compared to $307.9 million, or $2.62 per diluted common share a year earlier.

During the fourth quarter, Kimco acquired interests in $1.5 billion of shopping center properties. In the parent portfolio the company acquired 13 properties totaling 962,000 sf of gross leasable area aggregating approximately $118.1 million. In co-investment programs, Kimco acquired interests in 37 shopping centers for approximately $1.3 billion. The REIT sold six properties for $38.9 million.

Milton Cooper, CEO, spoke on the retail mergers that have been making news of late, including Sears-Kmart. "It's not easy to compete with Target and Wal-mart on price, but this combination has things going for it." He pointed specifically to the companies' exclusive brands including Martha Stewart, Joe Boxer and Craftsman predicting the Stewart brand will get even "hotter" in the coming months.

Instant Insights /

Kimco Posts Highest Level of Occupancy Since Going Public

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