Kimco May Sponsor Separate Investment Vehicle for Retail Properties

The REIT would contribute $50 million to $100 million of its own money while raising private capital from others to take advantage of market disruptions that are affecting retailers and the retail real estate sector.

Kimco Realty is exploring the sponsorship of a private investment vehicle to take advantage of disruptions in the retail space.

Kimco is a publicly traded REIT focused on open-air, grocery-anchored shopping centers and mixed-use assets. Last week it announced that it would cash out a portion of its 9.29% stake in Albertson’s Companies as part of Apollo Global Management $1.75 billion purchase of Albertson’s stock.

Now Kimco is looking to raise capital to invest in opportunities “arising from market disruptions affecting retailers and the retail real estate sector, including the ongoing disruption caused by the COVID-19 pandemic,” according to a company announcement.

The company says it intends to invest about $50 million to $100 million of its own capital. A Kimco subsidiary would manage the investment vehicle.

Kimco says it cannot guarantee the capital raise will be completed on successful terms, or at all.

Jericho, N.Y.-based Kimco owns interests in 401 US shopping centers and mixed-use assets primarily concentrated in major metropolitan markets. The company saw its share price halved during the March downturn, but has gained most of that back since April. The company reported earlier this month that it has $900 million cash on hand and more than $1 billion in available credit.

CEO Conor Flynn said on the May 8 earnings call that Kimco has “the strongest liquidity position and one of longest debt maturity profiles in our sector, to not only overcome the current challenges, but to potentially capitalize on emerging opportunities as we move ahead.”

At the end of April, all of Kimco’s shopping centers remained open and operational with approximately 56% of tenants open, based on annualized base rent.