Kimco and The REIT Gold List

Implications: Kimco is one of only a handful of REITs still trading at a premium to net asset value. Kimco has the lowest rents of any strip center REIT.  Kimco rates only a "D" for performance and a "D" for value on the Forbes Gold List. Yet Kimco seems to be the darling of investors. Why?

Analysis: It is my firm opinion that the real reason Kimco's stock has dropped only 34% while the rest of the major REITs are down over 46%, is because of the genius of its founder, Milt Cooper.
 
Milt is one of the smartest, most creative and most unassuming people I have ever dealt with in my 40+ years in the industry. He is 78 years old and has spent 50 years in the shopping center business, most of them out of the limelight, and presides over an $8.4 billion strip shopping center empire. 

Unlike the better known giants of the industry, Milt has quietly assembled his portfolio from the remnants and broken dreams of other less savvy or less cautious developers. He buys right and always seems to be able to figure out the highest and best use for properties others have "stubbed their toes" on.

While the Forbes article is quite complementary and informative, it misses the main reason for Milt's amazing ability to "turn a sow's ear int a silk purse". The reason is simple, Milt does his own homework. 

For example when bidding on a package of real estate at a bankruptcy auction, Milt has already obtained commitments for enough of the distressed properties from his "clique" of successful retailers, to justify the price of the entire package. 
He can do that for two reasons.

First and most importantly, he is so well liked in the industry and has such an outstanding reputation for decency and fair dealing, that every real estate executive representing the major chains takes his calls. They all know him to be one of only two or three "billionaire developers" that choose to stand in a taxi line at the industry conventions, talking to the unwashed masses of mid level executives, instead of having his limo whisk him away to the endless rounds of fancy parties. 

Next and of equal importance, he maintains a very close watch on every major retailer to the extent he seems to know their needs and desires as well as they do. When distress real estate becomes available he often has made the calls and obtained commitments for the spaces before his competitors have even figured out who the most likely prospects might be.

The article in Forbes is a good one but simply does not go far enough in explaining the real reasons for Kimco's success.