Already the largest publicly traded owner and operator of open-air, grocery anchored shopping centers, Kimco Realty continues to expand, agreeing to acquire RPT Realty, also an owner of neighborhood centers, in an all-stock transaction valued at approximately $2 billion.
The transaction will add 56 open-air shopping centers, including 43 wholly owned and 13 joint venture assets, comprising 13.3 million square feet of gross leasable area, to Kimco’s existing portfolio of 528 properties. Beyond strengthening Kimco’s presence in its key markets, today’s transaction is expected to provide embedded growth opportunities, including those associated with redevelopment. In addition, Kimco will acquire RPT’s 6% stake in a 49-property net lease joint venture. Kimco will sell off a limited number of RPT properties in the Midwest it has deemed inconsistent with its strategy.
“This transaction presents another exciting opportunity for our Company to deepen our presence in key Coastal and Sun Belt markets, while accelerating our growth at an attractive valuation,” said Conor Flynn, CEO of Kimco. “Approximately 70% of RPT’s portfolio aligns with our key strategic markets. Furthermore, their substantial pipeline of signed, but not yet open leases and 20% or greater mark-to-market leasing spread across the portfolio, will drive higher growth for the combined company. The transaction is immediately accretive to FFO and the addition of these properties further positions Kimco as the country’s premier owner and operator of open-air, grocery-anchored shopping centers and mixed-use assets.”
Upon closing, Kimco expects to have a pro forma equity market capitalization of approximately $13 billion and a total enterprise value of approximately $22 billion.
The transaction is expected to close in the beginning of 2024. J.P. Morgan is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Kimco. Lazard is acting as financial advisor and Goodwin Procter LLP is acting as legal advisor to RPT. ICR LLC is serving as communications advisor to Kimco. Prosek Partners is serving as communications advisor to RPT.
