Kite Realty Group Trust has made a major play in the Houston commercial real estate market this month by purchasing both the Portofino Plaza shopping center, which is located near The Woodlands, and Kingwood Commons in Kingwood. Yet this doesn’t even tell the full story – Kite Realty has actually purchased a total of nine properties for approximately $307 million.
This is a clear statement of intent from Kite Realty, as the bold purchase added some two million square feet of property to its portfolio. The other properties involved in the mega deal are located in Alabama, Florida, and Georgia. By expanding in these markets, Kite Realty is cleverly putting itself in a position where it can build on its operating experience and presence. It is estimated that over 93% of the portfolio that has been acquired was leased as of the end of September 2013.
REIT is said to be funding the purchase via net proceeds from a common share offering, though cash in hand was also used in the deal. Kite Realty is also currently looking to sell two retail properties and expected proceeds from these deals were also used to fund the major purchase. Finally, more funding came from borrowings under the company’s unsecured revolving credit facility.
Portofino includes more than 370,000 square feet of gross leasable space, with important tenants including PetSmart, DSW, and Old Navy. This property was developed by Jefco Development Group in 2000 and can be found in the town of Shenandoah. It is a much coveted property given its proximity to The Woodlands, which is a favored location for global businesses interested in setting up in Houston.
Kingwood Commons is a shopping center that is more than 164,000 square feet and has tenants such as Talbot’s and Randall’s. The property was built in 2000 by Planned Community Developers of Sugar Land.
The CEO and Chairman of Kite Realty, John A. Kite, was delighted with the acquisition and said that it added an additional two million square feet of high quality shopping centers to the company’s portfolio. He also said that the new buildings complemented the company’s existing portfolio and provided it with the chance to strategically increase its footprint in key targeted markets. He concluded by saying that there were several value creation opportunities to come, including roll-over of below market rents and lease-up of vacant space.
Kite Realty’s Chief Financial Officer, Daniel R. Sink, also weighed in and said that the acquisition would provide the company with a level of increased financial stability and liquidity, which would in turn help to fund future growth. It didn’t take long for Kite Realty to act, as it announced its intention to make the purchase only a few weeks before completing the deal. It is of course a sign that in the world of commercial real estate you have to be quick off the mark and decisive. If you can achieve that, there is huge potential for profit in your future.
Copyright © 2017 Bobek Realty Group, LLC. All rights reserved. XML Sitemap