Kimco Realty announced that it plans to complete a holding company reorganization (the “Reorganization”), which would restructure the Company as an Umbrella Partnership Real Estate Investment Trust, or UPREIT. As part of the reorganization, a new holding company (New Kimco) will become the publicly traded parent company by way of an intercompany merger, assuming the existing name of “Kimco Realty Corporation,” while the current corporation (Old Kimco) will convert to a limited liability company called Kimco Realty OP LLC controlled by the publicly traded parent company (the conversion).
“We are very excited to announce our reorganization into an UPREIT, which we believe will enhance our ability to compete in the acquisition of real estate assets by enabling us to offer tax-deferred opportunity to sellers,” said Conor Flynn, Kimco chief executive officer. “We believe this reorganization will have no material impact on our existing shareholders, debt security holders, lenders or other constituencies, and will represent an enhanced platform for Kimco’s continued growth.”
The reorganization is intended to align the company’s corporate structure with other publicly traded U.S. real estate investment trusts and provide a platform for the company to more efficiently acquire properties in a tax-deferred manner, Kimco said. The UPREIT structure will allow owners of appreciated property to contribute such property to an LLC structured as an “operating partnership” in exchange for membership interests therein. Subject to applicable tax requirements, this type of contribution may be done on a tax-deferred basis for the contributors. Following the conversion, Kimco OP will function as the operating partnership in the UPREIT structure.
All shares of common and preferred stock of Kimco will automatically be converted into identical shares of the new parent holding company as part of the reorganization, and the reorganization will not impact the payment of the dividends declared by the company’s board of directors and payable to stockholders of record in accordance with previously announced dividend payment dates in respect of the company’s common shares and the Class L preferred stock and Class M preferred stock.
The Merger is expected to be effective as of January 1, 2023, and the conversion is expected to be effective promptly thereafter. When the reorganization is complete, the holding company will be named “Kimco Realty Corporation,” just as Kimco is today, and its shares of common stock, Class L depositary shares and Class M depositary shares are expected to continue to trade on the NYSE under the symbols “KIM,” “KIMprL” and “KIMprM”, respectively.
