The retail market in Boston, Massachusetts was always a famously tough nut to crack. Demand for space has increased while the vacancy rate, currently hovering only around 4.3 percent, has been in steady decline. Rents are on the rise in this densely infilled market and new construction is booming all over the city and out into the suburban ring. Consumer confidence is up and employment is strong in the area, where the incomes of a well-educated consumer base are fed by high-paying industries.

Demographics and high demand help explain how Boston has maintained its No. 7 ranking on the National Retail Index (NRI) — and why the barrier to entry has remained extremely high. They also explain why we’re proud to have expanded into this desirable market with the purchase of a 1.4 million-square-foot retail portfolio.

The 24-property acquisition announced at the end of April includes 17 shopping centers in the greater Boston metropolitan area (most of which are inside the Route 128 loop). The portfolio also includes three centers near Cape Cod, a Walmart-anchored center in Danbury, Connecticut, and two grocery-anchored centers in northern New Jersey just outside of New York City. It’s an ideal match for our overall strategy to transform our portfolio by acquiring larger, higher quality properties in the top U.S. markets, where population, income and growth prospects are most favorable.

The portfolio, which is nearly 100 percent occupied, features a tenant mix that is likewise well aligned with our focus on grocery, necessity-based and discount retailers. Our centers in the Boston area are anchored by investment-grade chains such as Whole Foods, Trader Joe’s, Lowe’s, CVS, and Walgreens. Staples, Kohl’s, Petco, and PetSmart are among our major tenants as well. We’re also seeing opportunities to respond to regional trends currently driving retail in the Northeast such as the growth of specialty grocers, urgent care centers, fast casual restaurants and health clubs.

Population: 601,263
Median Household Income: $58,237
Households: 257,768
Median Home Value (2010): $404,005
Population: 316,352,297
Median Household Income: $52,961
Households: 120,445,871
Median Home Value: $179,711

Source: SitesUSA (2013 estimates)

Undeveloped outparcels at several sites open additional possibilities for transformation and expansion, creating additional value in our portfolio. Given Boston’s aforementioned vacancy rate, which is well below the national average, increasing occupancy is another important way we can serve local populations. Several of our centers have more than 200,000 residents within a three-mile radius, including those strategically located near the vibrant student bodies at Boston College, Boston University, Harvard, and MIT.

In keeping with our emphasis on redevelopment, nearly every property will undergo renovations. We’ll be making substantial improvements to landscaping, façades and signage across the portfolio, and upgrading parking lots and lighting. We’re moving quickly, too. The lion’s share of the refresh work on our properties will be completed this summer.

On balance we see great value and a promising future for the new portfolio. The assets are mature and well located to serve a dense population of active consumers. Average rents are significantly below market value, indicating excellent potential for growth. Many sites have the opportunity for us to add density and potentially a mixed use component. The acquisition affirms our commitment to strengthen our portfolio by increasing Kimco’s presence in core markets and by expanding opportunities for short- and long-term redevelopment.