Kimco Strengthens Balance Sheet With $375M Loan
- Apr 03, 2020
Kimco Realty, which owns more than 400 grocery-anchored shopping centers and mixed-use assets in the U.S., has obtained a new $375 million unsecured term loan to help strengthen its financial flexibility during the Covid-19 crisis.
READ ALSO: Bracing for a Wave of Missed Retail Rents
With the proceeds of the term loan, Kimco will have about $800 million of cash on its balance sheet. Combined with more than $1.3 billion available under its revolving credit facility and more than 300 unencumbered properties, the REIT said it has sufficient financial capability to meet its $171.9 million in pro-rata debt obligations maturing in 2020.
The proceeds are to be used for general corporate purposes, which may include but is not limited to repayments of debt and working capital. The new facility is scheduled to mature in April 2021 and can be extended for one year. It also has an accordion feature for an additional $750 million, subject to further syndication of the term loan.
Highest liquidity level
Glenn Cohen, CFO of Jericho, N.Y.-based Kimco, said in a prepared statement the REIT has the largest liquidity level in the shopping center sector thanks to the revolving credit facility, solid cash position and large number of unencumbered properties and is well-positioned to meet its 2020 obligations. Cohen noted the REIT has one of the longest weighted-average debt maturity profiles in the industry at 10.6 years. He added Kimco has a “flexible approach to value creation” that has allowed it to defer approximately $90 million to $100 million in capital spending originally planned for this year.
In addition to having a small ownership position (less than 10 percent) in the Albertsons food store chain, Kimco CEO Conor Flynn noted 78 percent of the company’s annual base rent comes from grocery-anchored centers. Due to the ongoing spread of Covid-19 and the uncertainty of its related economic impact, Kimco had withdrawn its 2020 guidance that was issued Jan. 30 and will provide updates on May 8, when it releases its first-quarter 2020 earnings results. Kimco also pushed back the first quarter earnings report by a week, moving it from April 30.
Late last year, Flynn told CPE the demand for stores continues to be strong in the top 20 metro markets where most of the REIT’s 72.4 million-square-foot portfolio is concentrated. In January, Lamar Cos., in partnership with Real Capital Solutions, announced the acquisition of two Kimco assets in Mesa, Ariz., for $26.8 million—Mesa Pavilions North and South, which totaled 307,417 square feet of space.