KIMCO IN THE NEWS: Q2 2017 RECAP
Kimco’s media coverage for Q2 2017 reflected a whirlwind of activity, from speaking engagements to new property purchases and exciting updates on our redevelopment and development projects.
Here’s a sampling of the top stories from the past quarter.
Kimco details retail’s biggest trends
Continuing the thread of last quarter’s conversation on how retail is being painted with too broad a brush, CEO Conor Flynn spoke at New York University’s REIT Symposium on how omnichannel retailing is here to stay, with Home Depot as a prime example of a retailer that’s hitting the right balance between in-store and online, and how a proposed border adjustment tax will negatively impact retail employment.
I joined a panel of my peers to share my thoughts on retail’s next big thing: using technology to gain insight into how consumers shop, whether through motion-sensing foot traffic counters or using geospatial information systems.
Vice President of Leasing Carmen Decker spoke to The Columbian to offer her insights on what shoppers expect nowadays. “A lot of younger shoppers want to have an experience,” Decker said. “That includes coming and working out or going to the movies or going out to dinner.”
Retail REITs have been taking the brunt of the negative retail headlines, despite solid fundamentals. Conor Flynn, and many other retail execs, believe that the reports of the “death of retail real estate” have been extremely exaggerated, and Kimco’s recent results can attest to that.
"Our leasing volume has validated the success of our transformation in helping to offset the challenging retail environment the industry is currently experiencing," said Flynn, regarding our first quarter earnings.
Retail’s evolution was the topic of the week at this year’s ICSC RECon. We went on record that 75 percent of our properties’ surface area is made up of parking lots. The New York Post stated that smart retail owners, ourselves included, are capitalizing on the trends of ridesharing and driverless cars to turn parking lots into apartment buildings and hotels.
Vice President of Development Gregory Reed shared examples of this with The Philadelphia Inquirer. As land gets more expensive, the only way that landlords can grow would be to reclaim space to add density or go vertical, with our Suburban Square redevelopment as a perfect example.
Finally, SCORE, the national association dedicated to assisting small business owners, called out one of our most popular blog posts offering tips to prospective business owners on where to open a new business. Think location, location, location.
Signing on the dotted line
This quarter, Kimco was named one of Chain Store Age’s 2016 Fastest-Growing Acquirers. We placed fourth this year with 2.4 million square feet purchased last year. Ross Cooper, president and chief investment officer, noted the appeal of grocery-anchored shopping centers. “There’s definitely more competition in grocery-anchored space,” said Ross.
Earlier this quarter, three of our recent acquisitions made the news: Plaza Del Prado, a grocery-anchored shopping center in Glenview, Illinois; Columbia Crossing shopping center in Columbia, Maryland; and Lincoln Square, a mixed-use project in Philadelphia. Ross Cooper told Shopping Centers Today that Lincoln Square is a good example of the kind of development project that we are moving towards: urban, in-fill projects where an owner can add residential or another mixed-use component.
The first quarter of 2017 resulted in our highest leasing volume in the past 10 years and was widely reported in the media. 145,000 square feet of new leases were signed across Alamo Drafthouse Cinemas, PetSmart, Party City, and ShopRite at our Hylan Boulevard redevelopment in Staten Island. Target is opening a small-format store at Lincoln Square in Philadelphia; Marshalls signed a 24,000-square-foot lease at our Barrington Plaza in Great Barrington, Massachusetts in a former Kmart store location; and Asian Supermarkets signed at Mill Plaza in Worcester, Massachusetts.
Making headway on our developments
The completion of our $18 million redevelopment of Wilde Lake Village Center in Columbia, Maryland made the news, along with Grand Parkway Marketplace I in Spring, Texas, which is currently 80 percent leased, with the development of Grand Parkway Marketplace II underway.
Our redevelopments continue to make headway and barrel towards their respective grand openings. The redevelopment of Hylan Plaza in Staten Island, scheduled to open in summer 2019, will transform the area as a retail destination and house 50 stores, including the aforementioned ShopRite and Alamo Drafthouse Cinemas as anchors.
"We're calling it the Hub of Staten Island,'" said Joshua Weinkranz. "This will be the place that people can come and congregate and spend time."
As Suburban Square in Ardmore, Pennsylvania nears its 90th birthday, we announced the proposal for the first apartment complex in the center. We are in the midst of acquiring 1.3 acres along Coulter Street to build the 158-unit apartment complex, which includes ground-floor shops.
Said Reed, “When you’re home, you can walk right to the farmer’s market, to the retail. You can walk right over to the gym.”
In addition to the apartment complex, Kimco is constructing a parking garage that will contain 629 spaces, replacing the previous lot which had only 254 spaces. The garage is expected to open in September.
This year, Ross Cooper, Kimco’s president and chief investment officer, was awarded one of ICSC’s Next Generation’s 4 under 40. The honorees joined a panel, moderated by Jason D. Richter, managing principal at Hudson, and discussed the future of real estate and shared insights for the next generation of leaders in the industry.
Senior Manager of Property Standards and Improvements Nathan Mitten was interviewed by Facility Executive on the success of our lighting retrofit program, Illumi-Nation. By the end of this year, we will have performed retrofits at 225 of our 524 properties with a goal of upgrading the rest by 2020.
At Building Operating Management’s NFMT Baltimore 2017 conference, Mitten explained how the program was a success even at properties with difficult triple-net leases. “A key consideration is qualitative gains,” he said. “The LED upgrades not only saved energy, they also made a significant improvement of the appearance of the properties, as well as in safety and security. The gains were so substantial that properties were willing to invest in the new LED lights as a way to become more appealing to customers.”
Our full sustainability efforts were detailed in our Q2 release of our annual corporate responsibility report. One of these efforts is increasing the use of solar energy at our shopping centers. We have financed and developed rooftop solar systems that supply electricity to tenants. In total, Kimco has six solar-powered properties that consume enough energy to power about 300 households.
Because of our sustainability efforts, Kimco has been named to the Dow Jones Sustainability North America Index and Newsweek’s Top Green Companies in the U.S. Overall, Kimco has reduced energy use by 18 percent since 2011 at its centers nationwide.
Check back here in October for the next round of media coverage.