Acquisitions

2 new reasons why it’s sunnier in San Diego

Posted by: Matt Golden Matt Golden
on March 6, 2013

Kimco is continuing its initiative to focus its portfolio on core, strategic assets in the country’s strongest markets, and has been on the lookout for properties that will become a solid long-term investment. Two of our latest acquisitions in this effort have been City Heights Retail Village and Santee Trolley Square in the San Diego metro area. They are good examples of how we’re strengthening our portfolio of shopping centers, and we wanted to share some insights into why we believe they are ideal fits for Kimco.

City Heights Retail Village

City Heights Retail Village is a 110,000-square-foot center in the densely populated community of City Heights, three miles northeast of downtown San Diego. It is anchored by Albertsons and includes Starbucks, Chase Bank, Scripps Wellness Center, O’Reilly Auto Parts, McDonald’s, Subway, RadioShack, and Panda Express.

This center opened in 2001 and has remained almost fully occupied since then, with many of the original tenants still located there. One of the newest comers has been tortilla and salsa producer Mission Foods, which opened its first U.S. tortillaria in the City Heights center in early 2012.

City Heights is a standout addition to the Kimco portfolio as it was the centerpiece of an urban revitalization project in the area spearheaded by City Councilman William Jones. He opened the retail center and led other major redevelopment and beautification projects in the area. As a result, City Heights Retail Village has become a popular shopping destination for many residents in the East San Diego neighborhood. You can read other details on Kimco’s City Heights Retail Village acquisition in our press release.

Santee Trolley Square

Kimco was a partner in the development of Santee Trolley Square in 2001, and we recently bought out our institutional partner to become sole owner of the center. Located in Santee, Calif., in the San Diego–Carlsbad–San Marcos MSA, the 311,000-square-foot center is 98 percent leased and home to 45 shops and restaurants as well as an amphitheater. The property is anchored by Target and includes T.J. Maxx, PetSmart, Party City, Bed Bath & Beyond, Old Navy, Olive Garden, Chipotle, Pier 1 Imports, and 24 Hour Fitness.

The center has several major factors in its favor as far as location goes. Santee Trolley Square is positioned off California State Route 52 along the highly trafficked retail corridor at Cuyamaca Street and Mission Gorge Road. In addition, the San Diego MTS Trolley stops daily at the retail center, helping drive foot traffic to tenants. Some more details about Kimco’s Santee Trolley Square acquisition are in our press release.

A solid San Diego

These centers bring our total properties in the San Diego-Carlsbad-San Marcos MSA to 21, strengthening our presence in a solid, core market. We like San Diego for a number of reasons — in particular, of course, due to strong economic numbers and demographics.

At a Glance

San Diego
Population: 3,190,932
Median Household Income: $71,762
Households: 1,116,272
Median Home Value: $424,333
U.S.
Population: 314,893,068
Median Household Income: $53,132
Households: 119,804,218
Median Home Value: $179,711

Source: Data obtained through SitesUSA

San Diego is the second largest city in California and the eighth largest city in the country. The area is well-leased, with only 4.8 percent of the region’s retail properties vacant, and net absorption is a positive 570,355 square feet, according to CoStar’s Year-End 2012 San Diego report.

The average household in 2012 had an income of $85,296 according to Sites USA. In addition to the more than 3 million residents that reside in San Diego County, its thriving tourism industry attracts visitors — and shoppers — from all over the world.

Overall, the San Diego MSA employs an estimated 323,394 workers at 24,350 businesses, according to data obtained through SitesUSA. Total household expenditure in 2011 was $12.4 billion. That’s just a snapshot of some of the metrics that are important to us as we focus acquisition efforts in San Diego.

The acquisition of City Heights Retail Village and Santee Trolley Square take us two steps closer to achieving Kimco’s goal to own well-tenanted retail centers located in our key markets. We are continuing to look for other retail properties in San Diego that would be a good fit for our portfolio and will result in strong returns over time.

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