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Kimco Realty Corp. (KIM - Free Report) is taking initiatives to invest in retail real estate-related opportunities arising from the COVID-19 outbreak-related market disruptions that are significantly impacting retailers and the retail real estate sector.
Accordingly, the company is eyeing an opportunity to sponsor a separate investment vehicle by raising private capital. It expects to invest around $50-$100 million in the separate investment vehicle upon the closing of the private capital raise.
The separate investment vehicle is likely to start operations after the completion of its private capital raise. One of Kimco’s subsidiaries is expected to manage the new vehicle and will receive income from managing the same.
Notably, amid the pandemic-led market mayhem, Kimco is focusing on strategic initiatives and programs to sail through.
Specifically, the pandemic has increased the relevance of local grocery, pharmacy and essential physical brick-and-mortar retail, and is driving the fast adoption of the e-commerce platform. In fact, the majority of e-commerce deliveries are originating at the store base.
Amid these, curbside pick-up combined with click-and-collect options is likely to gain attention and therefore, in April, the company launched the curbside pick-up program to capitalize on the growing trend. Such efforts are likely to add a competitive advantage in current times.
Further, in the uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets and more than 77% of its annual base rent (ABR) comes from grocery-anchored centers.
However, a number of the company’s tenants have been subjected to some form of mandatory closure or have voluntarily closed. As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments. Given the current environment, the trend is likely to continue in the near term.
Particularly, Kimco received rent deferral requests, totaling 37% and 36% of its pro-rata ABR for April and May, respectively, of which 18% and 16% of the ABR were selectively permitted deferrals. The company continues to negotiate for payment of the residual April rent not yet collected.
Moreover, shares of the Zacks Rank #4 (Sell) company have plunged 28.7% over the past year compared with the industry’s decline of 24.7%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Kimco (KIM) Eyes Retail Sector Investments Amid Market Havoc
Kimco Realty Corp. (KIM - Free Report) is taking initiatives to invest in retail real estate-related opportunities arising from the COVID-19 outbreak-related market disruptions that are significantly impacting retailers and the retail real estate sector.
Accordingly, the company is eyeing an opportunity to sponsor a separate investment vehicle by raising private capital. It expects to invest around $50-$100 million in the separate investment vehicle upon the closing of the private capital raise.
The separate investment vehicle is likely to start operations after the completion of its private capital raise. One of Kimco’s subsidiaries is expected to manage the new vehicle and will receive income from managing the same.
Notably, amid the pandemic-led market mayhem, Kimco is focusing on strategic initiatives and programs to sail through.
Specifically, the pandemic has increased the relevance of local grocery, pharmacy and essential physical brick-and-mortar retail, and is driving the fast adoption of the e-commerce platform. In fact, the majority of e-commerce deliveries are originating at the store base.
Amid these, curbside pick-up combined with click-and-collect options is likely to gain attention and therefore, in April, the company launched the curbside pick-up program to capitalize on the growing trend. Such efforts are likely to add a competitive advantage in current times.
Further, in the uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets and more than 77% of its annual base rent (ABR) comes from grocery-anchored centers.
However, a number of the company’s tenants have been subjected to some form of mandatory closure or have voluntarily closed. As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments. Given the current environment, the trend is likely to continue in the near term.
Particularly, Kimco received rent deferral requests, totaling 37% and 36% of its pro-rata ABR for April and May, respectively, of which 18% and 16% of the ABR were selectively permitted deferrals. The company continues to negotiate for payment of the residual April rent not yet collected.
Moreover, shares of the Zacks Rank #4 (Sell) company have plunged 28.7% over the past year compared with the industry’s decline of 24.7%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>