Zacks_Analysts' Blog : Kimco Acquires Two Shopping Centers - Analyst Blog

Kimco Realty Corp. (KIM) recently announced the acquisition of Woodbridge Shopping Center in Sugar Land, Texas and Bell Camino in Sun City, for $17.4 million, including $4.2 million of mortgage debt.

Woodbridge is a grocery-anchored shopping center, which is 96% occupied. The property spans approximately 97,000 square feet and comprises a wide range of restaurants, wellness, personal and professional services, as well as shopping. On the other hand, Bell Camino is a grocery-anchored shopping center, spanning 63,000 square feet and is currently 95 % leased.

With this transaction, Kimco intends to expand its portfolio of community shopping centers in the South West. Kimco reported third quarter 2011 funds from operations (FFO) of $128.2 million or 31 cents per share compared with $110.5 million or 27 cents in the year-ago period. Funds from operations, 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.

With a geographically diverse portfolio concentrated mostly in high-income, high-growth areas, Kimco is the largest publicly traded owner and operator of neighborhood and community shopping centers in the U.S.

Kimco has established a track record of conservative capital management and maintains strong investment-grade debt ratings. Furthermore, the company has continuous access to capital through debt or equity financing, that provide the necessary resources to expand and develop its business.

Kimco currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Simon Property Group (SPG), also has a Zacks #3 Rank.