Kimco Sells San Diego-Area Retail Center
- Jun 27, 2018
With NKF Capital Markets leading the marketing effort, Kimco Realty Corp. has pocketed $58.5 million on the disposition of Broadway Plaza in Chula Vista, Calif. The REIT sold the approximately 356,300-square-foot community retail center to Protea Properties Inc.
Broadway Plaza had been part of Kimco’s portfolio since 1998, when the shopping center REIT came into possession of the asset with the acquisition of Price REIT in a $960 million merger. The investment community took a strong interest in the well-located property, which is 100 percent leased.
“Given the quality of the overall investment coupled with the scarcity of like kind opportunities in Southern California, the interest was robust with a healthy mix of institutional and private capital,” Glenn Rudy, a senior managing director with NKF Capital Markets, told Commercial Property Executive. “NKF garnered over a dozen qualified offers with a number of additional groups at less than competitive pricing.” Rudy was joined on the Broadway Plaza sale by NKF colleagues Pete Bethea, vice chairman, and Rob Ippolito, senior managing director. Protea relied on internal representation in the transaction.
Located on 32 acres at 1144 Broadway Ave., roughly 10 miles from downtown San Diego, Broadway Plaza opened in 1984 and expanded with the addition of an approximately 150,000-square-foot Walmart building in 2005. Nary a space remains on the tenant roster, with such national names as Panda Express, Petco and Verizon occupying space at the shopping center, and Costco, like Walmart, serving as a 150,000-square-foot anchor on its own parcel.
“Broadway Plaza was truly a rare investment opportunity in that it delivered all the priorities of today’s active retail investor—quality real estate, dynamic submarket, density, credit, tenant performance and durability,” Rudy said. “The fact that both Walmart and Costco were included in the sale made it especially unique as most often these two industry-leading retailers are not a part of the collateral being offered for sale.”
A selling state of mind
The sale of certain assets is one of the initiatives that comprise Kimco’s plan for positioning itself for the future, as was noted during the company’s first quarter 2018 earnings conference call on April 26. The goal of the selective dispositions is not only to upgrade the quality of the company’s portfolio, but to secure funds to finance development projects and decrease debt.
The list of transactions Kimco announced during spring 2018 alone includes the sales of the 371,600-square-foot Primrose Marketplace in Springfield, Mo., and Five Forks Crossing, a suburban Atlanta retail property Kimco sold for $10.5 million, after having purchased the 74,000-square-foot center for $9.8 million in 2013. In the first quarter of this year, the company realized $210.2 million in gross proceeds with the shedding of 21 shopping centers totaling 2.3 million square feet.
“Despite concerns that continue to surround retail real estate, we are enthused about the volume, pace and pricing of our sales,” Conor Flynn, CEO of Kimco, said during the earnings conference call.
Images courtesy of NKF Capital Markets