Shopping center REITs Kimco Realty and RPT Realty said Monday they had reached a definitive merger agreement under which RPT will be acquired by Kimco in an all-stock transaction valued at approximately $2 billion, including the assumption of debt and preferred stock. Upon closing, Kimco expects to have a pro forma equity market capitalization of approximately $13 billion and a total enterprise value of approximately $22 billion.

The merger deal will add 56 open-air shopping centers, comprising 13.3 million square feet of gross leasable area, to Jericho, NY-based Kimco’s existing portfolio of 528 properties. In addition, Kimco will acquire New York City-based RPT’s 6% stake in a 49-property net lease joint venture.

Beyond strengthening Kimco’s presence in its key markets, the acquisition is expected to provide embedded growth opportunities, including redevelopment. Kimco has identified a limited group of Midwest properties within RPT’s portfolio that it views as not consistent with its strategy and will divest over time.

“This transaction presents another exciting opportunity for our Company to deepen our presence in key Coastal and Sun Belt markets, while accelerating our growth at an attractive valuation,” said Conor Flynn, CEO of Kimco. “Approximately 70% of RPT’s portfolio aligns with our key strategic markets. Furthermore, their substantial pipeline of signed, but not yet open leases and 20% or greater mark-to-market leasing spread across the portfolio, will drive higher growth for the combined company.”

J.P. Morgan is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Kimco. Lazard is acting as financial advisor and Goodwin Procter LLP is acting as legal advisor to RPT. The acquisition is expected to close in the beginning of 2024.

Pictured: RPT’s Peachtree Hill shopping center in Duluth, GA.