Kimco Realty intends to complete holding company reorganization

Kimco Realty announced that it intends to complete a holding company reorganization, which would restructure the company as an Umbrella Partnership Real Estate Investment Trust, or UPREIT. As part of the reorganization, a new holding company will become the publicly traded parent company by way of an intercompany merger, assuming the existing name of "Kimco Realty Corporation," while the current corporation will convert to a limited liability company called "Kimco Realty OP LLC" controlled by the publicly traded parent company. The reorganization is intended to align the company’s corporate structure with other publicly traded U.S. real estate investment trusts and provide a platform for the company to more efficiently acquire properties in a tax-deferred manner. The UPREIT structure will allow owners of appreciated property to contribute such property to an LLC structured as an "operating partnership" in exchange for membership interests therein. Subject to applicable tax requirements, this type of contribution may be done on a tax-deferred basis for the contributors. Following the Conversion, Kimco OP will function as the operating partnership in the UPREIT structure. Membership interests in Kimco OP will generally entitle their holders to receive the same distributions as holders of New Kimco common stock, and the holders of such interests will generally be entitled to exchange the membership interests for cash or common stock, at New Kimco’s option. The reorganization is not anticipated to have any material impact on the company’s financial position and is not expected to result in any material changes to the Company’s combined financial statements, outstanding debt securities, material debt facilities, or business operations. All shares of common and preferred stock of Kimco will automatically be converted into identical shares of the new parent holding company as part of the reorganization, and the reorganization will not impact the payment of the dividends declared by the company’s board of directors and payable to stockholders of record in accordance with previously announced dividend payment dates in respect of the company’s common shares and the Class L preferred stock and Class M preferred stock. The reorganization does not require shareholder approval under Maryland law and the merger is expected to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended, meaning that Kimco’s shareholders are not expected to recognize a gain or loss for federal income tax purposes as a result of the merger. The merger is expected to be effective as of January 1, 2023, and the conversion is expected to be effective promptly thereafter. When the reorganization is complete, the holding company will be named "Kimco Realty Corporation," just as Kimco is today, and its shares of common stock, Class L depositary shares and Class M depositary shares are expected to continue to trade on the NYSE under the symbols "KIM," "KIMprL" and "KIMprM", respectively.