Exclusive Q&A With Kimco Asset Chief David Jamieson
Following its recent sell-off of assets in Mexico and Canada, the largest public owner and developer of shopping centers in the US saw both its NOI and stock price rise at the end of Q2. The man in charge of the 107M SF portfolio, EVP for asset management and operations David Jamieson, spoke to us about Kimco's growth as part of Bisnow's official media partnership with MAPIC, the retail conference at the Palais des Festivals in Cannes, France, Nov. 18-20.
Bisnow: Kimco has moved toward buying out JV partners and has exited from Mexico entirely. Why?
David Jamieson: We’ve been in active disposition mode for the last several years; it’s part of our portfolio transformation and simplification strategy. We’re now focused on our top 15 major MSAs. We’re trying to build concentration and mass around those. We like the growth rates, the densities. They are the best opportunity to deploy capital in the future. In terms of simplifying the strategy, buying out of JVs and helping us own more of what we manage and it’s very consistent with what we’ve been doing.
Bisnow: The first half of 2015 was very good to Kimco’s bottom line. Same-site NOI increased 3.7% in Q2. What has been the key to the high rate of growth?
David: The simplification has helped. It’s really the transformation of the portfolio. Higher-end, better quality assets drive demand, with the limited supply of shopping centers that still exists in development. That has driven demand and retailer expansion plans have driven demand in terms of those boxes. We’re at an all-time high in terms of occupancy. We’re very proactive in terms of managing our real estate. We are real estate managers at the end of the day, that’s our bread and butter.
Bisnow: One of your big properties, Pentagon Centre (or the Costco in Pentagon City, as the locals know it) has major redevelopment plans in the works, including apartments and offices. What are your future plans?
David: This property has a bit of a history and it’s gone through several phases of entitlements. We’re going to be developing over 700 apartments in two towers in the first two phases. We’ve already started, we just did all the site work for the parking structure this fall. We’re going to start going vertical on the parking structure early next year, and look to start going vertical on the apartments and look forward to opening in 2018.
Bisnow: Why reposition such a successful site?
David: What we’ve identified with a lot of our shopping centers is that over time, markets have to change, we have to change. When you start seeing everyone around us go vertical, you acknowledge you’re the only single-floor shopping center in the market, you acknowledge there’s a higher use and better opportunities. That location, we can definitely add density. The market warrants it. Over time, as leases expire, we want to make sure that we have plans in place to accommodate growth. We know the only constant is change.
Bisnow: What other projects are in development right now?
David: We have four projects in ground-up. We have one starting in Houston, Texas. Grand Parkway is going to be a large power center two miles from the ExxonMobile campus and just south of The Woodlands area. The other one is Christiana across from the Christiana Mall. It’s a former Sears Distribution Center. There’s Whole Foods center in Winwood, just along the main line in Philly. The fourth is Dania Point, adjacent to Oakwood Plaza. It will be a Phase 2 expansion of our Oakwood Plaza, so the first phase will be a more traditional power center, and Phase 2 will be a lifestyle center with a main street. It will be pretty spectacular.
Bisnow: What other projects do you plan on featuring at MAPIC next month?
David: This year, we’re featuring primarily our top-tier flagship assets. One being the Westlake Shopping Center just south of San Francisco (above). It’s our power lifestyle concept. You have a main street down the middle, anchored by Safeway, Home Depot. Estimated population around the area is 578,000, household incomes over $108,000. It’s always been our No. 1 flagship asset. There’s the District at Tustin Legacy, anchored by Whole Foods, DSW, Lowe’s and an AMC movie theater. We want to showcase the size and breadth of our open-air shopping centers. We’re also showcasing that we’re in the process of selectively developing flagship assets assets within our top 15 MSAs, so retailers can get a sense of Kimco’s enhanced quality and scale over the next several years.
Bisnow: Why is MAPIC important to you? What’s the upside?
David: It’s really an opportunity for us to introduce Kimco to the European market and retailers who aren’t aware of us. Retailers tend to focus on the major main street metro markets in NY, Miami and LA. While we have presence in all those markets, we have presence all over the country. It’s to educate on the US market in general and how, if someone wants to expand, we are the local experts on a national level. We are a one-stop shop and if someone is looking to penetrate the entire US market, we can help you do that.