Kimco Realty Forms Auto Dealership Real Estate Fund
5 November 1997
Kimco Realty Forms Auto Dealership Real Estate Fund
The Kimco AutoFund Becomes the Nation's First Real Estate Fund
To Specialize in Automotive Dealership Properties
NEW HYDE PARK, N.Y., Nov. 5 -- Kimco Realty Corp.
, a leading real estate investment trust, announced today that it
has formed the Kimco AutoFund, establishing the nation's first real estate
fund designed exclusively to acquire and lease back facilities on which
top-flight, privately held automotive dealerships are operated.
The Fund has agreements in principle to acquire an initial portfolio with
dealerships represented by franchises including Chevrolet, Chrysler, Dodge,
Hyundai, Isuzu, Jeep-Eagle, Kia, Lincoln-Mercury, Mitsubishi, Plymouth, Toyota
and Volkswagon.
J. E. (Jerry) Farrell, formerly president and chief operating officer of
Chrysler Financial Corp., has been designated president and chief executive
officer of the Kimco AutoFund. He has 35 years of experience in commercial
finance including 29 years with Chrysler Corp. During the decade that Farrell
led Chrysler's consumer and commercial financial division, its assets under
management grew to $36 billion.
"Creation of the Kimco AutoFund offers a win-win opportunity for owners of
the country's best located and best operated private auto dealerships and
investors interested in high-quality properties," said Milton Cooper, chairman
and chief executive officer of Kimco Realty.
"The automotive dealership property Fund fits our exacting criteria for
expanding Kimco's holdings in the specialty real estate investment field. At
the same time, it provides a financing opportunity to a segment of the real
estate market not recognized by conventional capital sources," Cooper said.
Farrell said the fund plans to aggressively pursue acquisitions of
automotive dealership properties over the next few years. The Fund seeks to
acquire desirable properties only from the top tier of well-established auto
dealerships and entering into long-term leasebacks.
"The Kimco AutoFund offers the owners of successful multi-franchise
dealerships the opportunity to free their significant investments in real
estate, enabling them to expand their businesses in an increasingly
competitive market," Farrell said. "By entering into long-term, competitive
leases, they will have the benefit of added liquidity to support vibrant
franchises."
Alan Potamkin, one of the nation's largest dealers, explained, "It's the
best of both worlds. My dealerships can continue to operate at the same
locations at reasonable rent factors. Meanwhile, I have instant access to my
equity."
Cooper said, "The AutoFund is a logical extension for Kimco Realty, which
historically focuses on fundamental, inherent real estate values. The
intrinsic value of the dealership properties that will make up the auto fund
are solid, with locations in high traffic-areas suitable for multiple uses. In
addition, the Fund will be acquiring only those properties where experienced
managers, who will remain in place, have successfully operated the dealerships
over extended periods of time."
Cooper said Kimco Realty indicated earlier this year that it was seeking
opportunities for growth outside of the core shopping center business,
contingent on identifying sectors where experienced management and growth
prospects were favorable.
Kimco Realty, based in New Hyde Park, New York, owns and operates the
nation's largest portfolio of neighborhood and community shopping centers with
interests in 322 properties comprising 39.5 million square feet of leaseable
space located throughout 37 states.
SOURCE Kimco Realty Corp.