HOW KIMCO CHOOSES PROPERTIES TO REDEVELOP
In an effort to create value in our existing portfolio of properties, Kimco continually analyzes redevelopment and retenanting opportunities. Redevelopment keeps a property fresh; ensures continued retail foot traffic; repositions the property for future growth; and increases cash flow, NOI, and property value -- thereby maximizing value to both the community and our shareholders.
Over the company's course of buying land and properties for the past 50+ years, redevelopment opportunities have come up annually within our portfolio. Our goal is to be nimble and strategic, seeking opportunities that follow a core set of criteria:
1. Property age. Kimco's strong, diverse core of assets in major markets has attracted sought-after national and regional retailers. However, some of the assets have been in our portfolio for 10 to 30 years. Although an asset might be situated on quality land in a strong location, over the years, the building will age and might need moderate to significant renovations. This type of property is an ideal redevelopment opportunity. Kimco will reconfigure the property, reinvesting our capital to enhance its appearance and bring it to current design standards for the next generation of retailers and shoppers.
2. Tenant performance. Although retail sales are showing an upswing, large blocks of space can unexpectedly become available when a major chain files for bankruptcy. In these instances, the property is analyzed, and might be partly or completely demolished and reconfigured to suit a new tenant mix or new retail concept.
3. Amenities and logistics. We review property amenities and logistics to ensure we are drawing the most possible value from the property. We conduct comparative analyses among our centers to identify areas where we can bolster performance. For example, we might find that a shopping center is maxed out on gross leasable area (GLA), however, there are too many parking spaces because more people are using new public transportation. The parking area might better serve the community if it was a bank, gas, or food outparcel. We'd work closely with the municipality to better utilize the existing land by redeveloping the excess parking area.
Whether it's demolishing existing retail to allow for newer prototypes, acquiring adjacent land to expand an existing asset, or conducting other value-creation approaches, we strive to find creative ways to keep our shopping centers vibrant. The better we utilize our shopping centers and our land, new or old, the stronger they are for our communities, local economies, families, and shareholders. More on development and redevelopment to come.