Q4 2024 Shopping Center REIT Earnings Report
Earnings Recap and Forward Momentum: Q4 2024
The open-air shopping center REITs recently wrapped up their earnings calls for Q4 2024 and issued guidance for expectations in 2025. Property operations continue to remain solid as occupancy numbers remain at record highs.
Transaction Activity: Federal Realty, Kimco, and Brixmor
Federal Realty
Federal Realty reported a portfolio leased rate of 96.2%, which is a 200-basis-point increase over the prior year. They achieved the highest annual comparable leasing volume on record, with 452 signed comparable leases for 2.4 million square feet. Kite Realty Group executed 170 new leases for the quarter, which brought their portfolio leased rate to 95%, an increase of 110 basis points year-over-year. Regency Centers reported a 96.7% portfolio leased rate, an increase of 100 basis points over the prior year. They are also optimistic about the transaction market moving forward in 2025 as they issued acquisition guidance of $135M. Phillips Edison issued acquisition guidance of $350M-$400M, Federal Realty issued acquisition guidance of $124M, and Kimco issued acquisition guidance of $100M-$125M.
Kimco
Kimco closed on the purchase of Waterford Lakes Town Center in Orlando, Florida for $322M. Subsequent to quarter-end, they made another large purchase as they acquired The Markets at Town Center, a 254,000-square-foot Sprouts-anchored center in Jacksonville, Florida for $108M. They acquired this asset for a low 7% cap rate. Kimco’s 2025 acquisition guidance was significantly lower than the previous year as they announced they will focus on the opportunity to enhance their growth profile with two new initiatives in 2025. The first initiative is the disposition of several long-term flat ground leases in the portfolio at aggressive cap rates. The second is to focus on monetizing select development entitlements where they believe the most prudent approach is to mitigate risk and sell the rights to a developer, and still benefit from the densification of their centers.
Brixmor
Brixmor was active in the quarter as they acquired four shopping centers and one land parcel. The properties were in Manchester (CT), St. Petersburg (FL), Raleigh (NC), and Ann Arbor (MI). They were acquired between a cap rate range of 6%-7%. Phillips Edison acquired five shopping centers in the quarter for a total of $94.6M. The cap rates on their acquisitions ranged widely but averaged around a 7.5% cap rate. The properties were in Houston (2), Cincinnati, Denver, & Phoenix. They currently have several acquisitions in the pipeline totaling over $150M that are expected to close by early Q2 2025.
Shopping Center REIT Acquisitions: Regency Centers, Curbline Properties, and Agree Realty
Regency Centers entered a joint-venture and acquired a property in Austin, TX for $14M at their share. They currently have an asset under contract in Nashville, TN. Federal Realty didn’t acquire any properties in Q4 2024, but subsequent to quarter-end, they purchased Del Monte Center in Monterey, CA for $124M. Kite Realty Group also acquired a property at the beginning of the new year as they purchased Village Commons in West Palm Beach, FL, a 170,000-square-foot Publix-anchored center for $68.4M.
Curbline Properties reported their first quarter of earnings after completing their spinoff from Site Centers. They acquired 20 convenience centers in the quarter for $206.1M. STNL juggernaut Realty Income acquired 200
U.S. properties for $988.6M at a weighted average cap rate of 6.4%, which is 100 basis points lower than the previous quarter. They issued investment guidance of approximately $4B and expect cap rates to remain around the same level as 2024.
Agree Realty’s total acquisition volume for Q4 2024 was approximately $341.5 million and included 98 properties net leased to leading retailers operating in sectors that include auto parts, off-price retail, farm and rural supply, home improvement, tire and auto service, and crafts and novelties. Their acquisitions were acquired at a 7.3% cap rate and had a weighted-average lease term (WALT) of 12.3 years. The 7.3% cap rate on acquisitions was 10 basis points lower than the previous quarter, and marks two consecutive quarters of cap rate compression on acquisitions. NETSTREIT acquired 52 properties for $195M at an average cap rate of 7.4% and a WALT of 14 years. The 7.4% cap rate was also 10 basis points lower than the previous quarter.
