Shopping-center owner Kimco Realty Corp. became the latest real-estate investment trust to attempt to sell a large allotment of stock to address its debt concerns.
Kimco, which owns stakes in 1,950 shopping centers globally, said it will sell 70 million shares of its stock and use the proceeds to pay debt. The offering amounts to a 25% expansion of Kimco's base of shares outstanding.
The announcement came after the close of regular trading Thursday. Kimco stock had risen 71 cents, or more than 10%, to $7.49, in 4 p.m. composite trading on the New York Stock Exchange. If the new shares are sold at a discount, as is common in such offerings, the sale will bring Kimco roughly $500 million.
In other financing news, a mall partly owned by Simon Property Group has gone into default.
The Mall at the Source in Westbury, New York, defaulted on the payment of the principal on March 11, said a spokesman for Simon, the largest U.S. mall owner and operator.
Simon holds a 25 percent stake in the mall, and would not disclose its partners.
"Right now there's a shortage of refinancing dollars in the market place and yes, they're not going to be alone," said Thomas Fink, senior vice president of Trepp, which tracks the commercial real estate loans. The loan for the Mall at the Source had been securitized as bonds in a commercial mortgage-backed securities (CMBS) trust.