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InTown Suites Portfolio Sells for $735M

Kimco Realty Sheds Largest Remaining Non-Retail Asset To Starwood Capital
July 11, 2013
Starwood Capital Group, a global real estate investment firm based in Greenwich, CT, closed on the purchase of the InTown Suites company and related real estate assets for a gross price of $735 million, including the assumption of $609 million of existing mortgage debt.

For seller Kimco Realty, the largest owner and operator of neighborhood and community shopping centers in North America and majority partner in the InTown Hospitality Investors LP venture, the portfolio had represented the single largest remaining non-retail investment.

The InTown Suites portfolio consists of 138 extended stay properties across 21 states. After closing adjustments, Kimco cleared approximately $103 million from the sale.

Kimco also continued to trim other non-retail holdings during the second quarter, including the sale of four urban properties having an aggregate book value of $82.7 million as well as the sale of certain marketable securities and the repayment of a mortgage receivable. The company reported that its non-retail portfolio is at its lowest level since 2010 when it announced plans to sell off its non-retail assets, which currently representing less than two percent of gross assets.

In addition, during the second quarter Kimco and its joint venture partner, American Industries, agreed to sell the retail REIT's beneficial interests in certain trusts that own a portfolio of Mexican industrial properties to Terrafina. Kimco holds approximately a 50.7 percent interest with American Industries holding the remaining interest in this portfolio which consists of 84 properties totaling approximately 11 million square feet. The sale of Kimco's share is expected to be completed in the third quarter of 2013.

As it sold-off its non-retail holdings, Kimco continued to invest in its core retail portfolio. During the second quarter of 2013, Kimco bought out two former joint venture properties totaling 607,000 square feet for approximately $146.6 million. In addition, the company increased its ownership interest in three existing institutional joint ventures for $133.3 million.

Going forward, Kimco said acquiring equity interests in properties from existing joint venture partners represents a key element of its investment strategy.

Please see CoStar Comp #2777326 for additional information on the transaction.

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