NEW YORK — Kimco Realty Corp., the country’s largest developer and owner of neighborhood and community shopping centers, said it agreed Monday to acquire San Diego-based Pan Pacific Retail Properties for $4 billion in cash and debt.
Kimco, whose name is often tossed around with Vornado Realty Trust as a potential real estate partner for private equity players and hedge funds on big merger and acquisition deals, will pay $70 per share and assume $1.1 billion in outstanding debt for the San Diego-based real estate investment trust. The Pan Pacific acquisition will add nearly 140 properties to its portfolio.
Though the new centers will be a drop in the bucket for Kimco — it counts more than 1,110 shopping centers in its portfolio, totaling 143.2 million square feet of leasable retail space in North America — the deal is a good fit for the mega-REIT, which plans to target a chunk of the Pan Pacific properties for its strategic co-investment programs. It also gives the REIT access to a competitive retail market.
The West Coast, where Pan Pacific’s properties are concentrated, “offers superior demographics and high barriers to entry to new competition,” wrote Wachovia Securities analyst Jeffrey Donnelly in a report. “As the dominant owner focused exclusively on the West Coast, we believe PNP is well-positioned.”
The deal is expected to close by yearend, pending Pan Pacific shareholder approval.