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Grocery-anchored shopping center owners Kimco, Weingarten to merge

Nearly $4 billion deal underscores value of supermarket-led properties

Russell Redman

April 15, 2021

3 Min Read
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Combined, Kimco and Weingarten would have a national portfolio of 559 open-air, grocery-anchored shopping centers and mixed-use properties, mainly in the top U.S. metro markets.Kimco Realty Corp.

Kimco Realty Corp. plans to acquire Weingarten Realty Investors in a $3.87 billion deal that will create one of the nation’s largest public owner/operators of open-air, grocery-anchored shopping centers and mixed-use properties.

Kimco and Weingarten said Thursday that their combined national portfolio would include 559 open-air grocery-anchored shopping centers and mixed-use developments — mainly in the top U.S. metropolitan markets — and encompass about 100 million square feet of gross leasable area (GLA).

Grocery retail anchors include Albertsons Cos., Whole Foods Market, Ahold Delhaize USA, The Kroger Co., Walmart, Costco Wholesale and Target, as well as regional and specialty grocers such as Trader Joe’s, Publix, Winn-Dixie, H-E-B, ShopRite and Sprouts Farmers Market, among others. Key anchor tenants also include T.J. Maxx, Ross Stores and Burlington.

Jericho, N.Y.-based Kimco said the merger with Weingarten expands its geographic footprint in the Sun Belt, including in high-growth, first-ring suburbs in such markets as Houston, Miami, Phoenix, Atlanta and Orlando, Fla. The company noted that the acquisition also advances its strategy of providing tenants and shoppers with greater last-mile fulfillment opportunities for online retail orders.

Related:Kimco stake in Albertsons Cos. shrinks

“This combination reflects our conviction in the grocery-anchored shopping center category, which 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,” Kimco CEO Conor Flynn said in a statement. “It also gives us even greater density in the Sun Belt markets we are targeting, as well as visibility into the trends shaping necessity-based retail.”

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Grocery retail anchors for the merged company would include Albertsons Cos., Whole Foods Market, Ahold Delhaize USA, The Kroger Co. and Walmart plus regional and specialty grocers like Trader Joe’s, Publix and Sprouts.

Overall, Kimco’s current holdings include 400 U.S. shopping centers and mixed-use assets comprising 70 million square feet of GLA, primarily on the East Coast and West Coast. Houston-based Weingarten brings a portfolio of 159 shopping centers, totaling about 30 million square feet, in 15 states coast to coast. The Sun Belt and top coastal markets will represent more than 82% of the merged company’s total annualized base rent (ABR), while the core anchor-tenant banners will account for about 19.3% of total ABR, with no single tenant representing more than approximately 4%, according to Kimco and Weingarten.

“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,” stated Andrew Alexander, chairman, president and CEO of Weingarten. “We are excited to deliver this transaction to our shareholders, who will realize compelling and immediate value while also benefiting from the upside potential associated with owning the industry’s pre-eminent open-air shopping center and mixed-use REIT.”

Kimco and Weingarten expect the transaction to close in the second half of 2021, pending shareholder approval from both companies and customary closing conditions. Both company boards have unanimously approved the deal.

After the transaction is finalized, Kimco shareholders stand to own about 71% of the combined company’s equity on a pro forma basis, with Weingarten shareholders holding an approximately 29% interest. The merged company is expected to have a pro forma equity market capitalization of roughly $12 billion and a pro forma total enterprise value of about $20.5 billion.

Plans call for Kimco’s management team to lead the merged company, with Flynn as CEO. Kimco Executive Chairman Milton Cooper will continue serve in that role for the combined company after the transaction closes. The merged entity will retain the Kimco name, with headquarters in Jericho, and continue to trade under the ticker symbol “KIM” on the New York Stock Exchange.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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