Merger underscores conviction in open-air shopping center segment.Content
Kimco Realty Corp . (NYSE: KIM) said April 15 it will merge with Weingarten Realty Investors (NYSE: WRI) in an approximately $3.9 billion cash and stock deal, creating a major player in the open-air shopping center segment that has held up well during the pandemic.
The merger will create a national operating portfolio of 559 open-air grocery-anchored shopping centers and mixed-use assets, with properties mainly concentrated in the top major metro markets.
The combined company is expected to have a pro forma equity market capitalization of approximately $12 billion and a pro forma total enterprise value of approximately $20.5 billion.
Under the agreement, each Weingarten common share will be converted into 1.408 newly issued Kimco common stock, plus $2.89 in cash. Based on the closing stock price for Kimco on April 14, this represents a total value of approximately $30.32 per Weingarten share. Kimco shareholders are expected to own approximately 71% of the combined company’s equity, with Weingarten shareholders owning approximately 29%.
“This business combination is highly strategic, creating a stronger platform that is even more capable of delivering long-term growth and value creation,” said Conor Flynn, Kimco CEO.
Flynn said the transaction, which is expected to be completed in the second half of this year, reflects a strong conviction in grocery-anchored shopping centers. The category, he said, has performed well throughout the pandemic and provides last-mile locations that are “more valuable than ever due to their hybrid role as both shopping destinations and omnichannel fulfillment epicenters.”
The combined company is expected to benefit from increased scale and density in key Sun Belt markets, enhanced asset quality, tenant diversity, a larger redevelopment pipeline, and a deleveraged balance sheet.
Drew Alexander, chairman, president, and CEO of Weingarten, said the combined company’s increased size and scale, together with its financial strength, “should drive an advantageous cost of capital, allowing the combined company to more readily pursue value creation opportunities.”
Meanwhile, Haendel St. Juste, managing director and senior REITs analyst at Mizuho Securities, described the deal pricing as a “good read-through for the sector…it gives clarity on asset values.”
At the same time, St. Juste does not see the deal as necessarily providing an impetus for further M&A activity. Institutional capital had been buying shopping center assets before the pandemic, he said, but has since pulled back. “There’s some post-COVID euphoria…but there’s also a reality that it’s still a pretty challenged business and do you want to be buying portfolios?”Article Author(s) Sarah Borchersen-Keto Featured Image Companies Kimco Realty Corporation Weingarten Realty Investors
Seven REITs received the ENERGY STAR sustained excellence award, the highest honor.Tags Esg Content
Thirteen REITs have been named as 2021 Environmental Protection Agency (EPA) ENERGY STAR Partner of the Year Award winners, with seven of the 13 receiving a Sustained Excellence Award—the highest honor among ENERGY STAR Awards.
Each year, EPA honors a group of businesses and organizations that have made outstanding contributions to protecting the environment through superior energy efficiency achievements.
EPA presents the Sustained Excellence Award to businesses or organizations that have already received ENERGY STAR Partner of the Year recognition for a minimum of two consecutive years and have gone above and beyond the criteria needed to qualify for recognition.
REITs that received the Sustained Excellence Award include:
Kilroy Realty Corp . (NYSE: KRC), its sixth consecutive Sustained Excellence win
Vornado Realty Trust (NYSE: VNO), its sixth consecutive Sustained Excellence win
SL Green Realty Corp . (NYSE: SLG), its fourth consecutive Sustained Excellence win
Office Properties Income Trust (Nasdaq: OPI), its second consecutive Sustained Excellence win
Boston Properties, Inc . (NYSE: BXP), its first Sustained Excellence win
Hudson Pacific Properties, Inc . (NYSE: HPP), its first Sustained Excellence win
Welltower Inc . (NYSE: WELL), its first Sustained Excellence win
In addition, The RMR Group LLC, which manages all properties owned by Office Properties Income Trust, had its first Sustained Excellence win.
REITs that were named as a Partner of the Year award winner include:
Columbia Property Trust, Inc, (NYSE: CXP); Digital Realty Trust, Inc. (NYSE: DLR); Empire State Realty Trust, Inc. (NYSE: ESRT); Physicians Realty Trust (NYSE: DOC); Piedmont Office Realty Trust, Inc. (NYSE: PDM); and, Ventas, Inc. (NYSE: VTR).Article Author(s) Sarah Borchersen-Keto Featured Image Companies Kilroy Realty Corporation Vornado Realty Trust SL Green Realty Corp. Office Properties Income Trust Boston Properties, Inc. Hudson Pacific Properties, Inc. Welltower Inc. Columbia Property Trust Inc. Digital Realty Empire State Realty Trust Physicians Realty Trust Piedmont Office Realty Trust, Inc. Ventas, Inc.