Kimco Realty said Monday, November 2, that it acquired Paddock Shops and Shelbyville Road Plaza in Louisville, Kentucky, for $295 million, expanding its grocery-anchored shopping-center holdings in the city’s East End. The two open-air centers together contain approximately 741,000 square feet.
The company’s announcement describes a completed acquisition, primarily funded with proceeds from property dispositions through 1031 exchanges. Kimco characterized the transaction as leverage-neutral, rather than an expansion funded mainly by new borrowing.
Kimco put the blended going-in capitalization rate in the low 6% range, more than 100 basis points above the approximately 5% average cap rate on its 2026 dispositions. Those figures are the company’s assessment of the income yield on the properties relative to their purchase price, not a guaranteed investor return.
The company said its underwriting assumes net operating income growth of approximately 4% annually over the next decade. It pointed to below-market rents on some leases and opportunities to change the tenant mix. That growth figure is a company projection, not income already earned or a promise that rents will rise at that pace.
Paddock Shops is a 351,000-square-foot lifestyle center in northeast Louisville and is 94% leased, according to Kimco. It will join the company’s Lifestyle Collection of open-air and mixed-use properties. Shelbyville Road Plaza, in St. Matthews, contains 390,000 square feet and is 92% leased.
Trader Joe’s and The Fresh Market anchor the acquired centers. Other national tenants across the properties include REI, Total Wine & More, Pottery Barn, West Elm, ULTA Beauty, Nordstrom Rack, Burlington, Ross Dress for Less and Old Navy. Kimco said each center draws more than 4 million annual visits, citing Placer.ai.
CEO Conor Flynn said Kimco had sold lower-growth properties and reinvested the proceeds in centers with better growth prospects. President and Chief Investment Officer Ross Cooper said the acquisitions give the company greater scale in a Louisville retail corridor where it sees room to increase occupancy and rents.
Kimco also cited Cushman & Wakefield data showing Louisville shopping-center vacancy of 3.9%, compared with 6% nationally, with no new shopping-center space under construction. Those market figures were supplied in the company’s release.
Including its existing Kroger-anchored Festival at Jefferson Court, Kimco now owns three grocery-anchored centers in Louisville totaling 911,000 square feet. The acquisition adds operating retail properties to that portfolio; the projected rent and income gains remain future targets.
JBizNews Desk | Louisville, Kentucky
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