Demystifying REIT’s Approach

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Recent headlines dominating the news often suggest that the retail industry is in a structural decline due to the advent of online shopping and changes in consumer shopping behavior. Malls in particular have been hit hard as large retail chain stores have announced widespread store closures. Yet, the reality is that the woes of the retail industry have predominantly affected mall operators. High quality strip mall operators, on the other hand, have been adapting to the changing environment and adopting innovative ways to grow. This was one of the key messages delivered at the Carey Private Equity and Venture Capital Club (PEVC Club) speaker series event on Jun 22, 2017 by Mr Wilbur Simmons, III, also known as Tom, who has been President of the Mid-Atlantic Region at Kimco Realty since 2004. Tom holds a Master of Science in Real Estate from the Johns Hopkins Carey Business School.

Headquartered in New Hyde Park, New York, Kimco Realty is a real estate investment trust that is one of the largest operators of strip malls in the U.S. To position the company for growth and to tackle the challenges in the industry, Kimco Realty has come up with a 2020 Vision that is centered on three major principles: 1) improving portfolio quality by owning high quality assets in major metro markets; 2) increasing Net Asset Value through redevelopment and active investment management; and 3) improving financial strength by maintaining a strong balance sheet. Tom shared that while most people are familiar with the expansion of e-commerce, he saw the increasing trend of previously e-commerce stores establishing physical presence to enhance the touchpoints with customers.

For example, Amazon has opened physical bookstores in selected cities and its recent announcement to acquire Whole Foods will provide Amazon with a significant physical presence for its AmazonFresh concept. Hence, Tom emphasized that innovative mall operators that are well-managed and can tailor their real estate product offerings to ride on this omni-channel trend will be able to grow their portfolio.

As part of its strategy to take on a more active role in investment management, Kimco Realty has entered joint venture partnerships with high quality development groups to deliver mixed-used developments in major metropolitan areas. For example, the Lincoln Square project, which consists of 322 apartments, restaurants and retail, was announced in March 2016 in Philadelphia .

The PEVC Club is grateful to Tom for spending an afternoon with the members and sharing his insights into the industry. Prospective and current students, alumni and friends who are interested in attending future events of the PEVC Club should visit the Club’s website and sign up for the mailing list!

Kelvin Fu
Kelvin Fu

Kelvin Fu is Vice-President at Interprise Partners (http://www.interprisepartners.com), a private equity firm focused on growth companies in the Mid-Atlantic Region. He is also a Partner at A-Level Capital, the student-led venture capital firm focused on providing early stage investments across the Johns Hopkins University ecosystem that includes student, alumni, and faculty-run companies. Kelvin is the Founder of the Johns Hopkins Private Equity and Venture Capital Club, which is one of the most active student clubs that organizes educational seminars, competitions, and networking sessions. Kelvin was based in Singapore and Shanghai and worked for one of the largest foreign-owned private equity growth funds. He has worked on numerous deals spanning across consumer related sectors, energy, and healthcare in different geographic regions such as North Asia, Southeast Asia, and Europe. He graduated from the Johns Hopkins Carey Business School with a MBA and Macquarie University with a Masters of Applied Finance. He also studied Political Science at the National University of Singapore and Technopreneurship in Fudan University, Shanghai, China. Email: k@kelvinfu.com. Website: http://www.kelvinfu.com

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