Largest Strip-Mall REIT Kimco To Acquire West Coast Peer Pan Pacific (KIM, PNP)

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 |  Includes: KIM, PNP
by: Mick Weinstein

Excerpt from our One Page Annotated Wall Street Journal Summary (which you can get emailed to you every morning by signing up here):

Kimco to Acquire Pan Pacific Retail For $2.9 Billion

  • Summary: Kimco Realty (NYSE:KIM), the nation's largest strip-mall REIT, will buy Pan Pacific Retail (PNP) for $2.9 billion, expanding its reach in the West Coast. Kimco will pay $70 a share for Pan Pacific, a price that represents no premium over PNP's closing price Friday, though PNP had risen about 7% in the past two weeks on speculation regarding an acquisition. A Morgan Stanley REIT analyst estimates the capitalization rate -- ROI for the first year of ownership -- on this transaction to be 6.3%. It's been a record year for M&A activity in the REIT sector.
  • Comment on related stocks/ETFs: This comes just one day after Centro Watt bought up another strip-mall owner, Heritage Property of Boston. What smaller mall REITs are left in this consolidation process?