Kimco Realty Corp.’s entrance into Puerto Rico this week fits into two of the company’s main growth strategies: international expansion and a growing focus on driving revenue through asset management rather than through solely buying and selling properties.

The firm made a $448 million play in Puerto Rico, acquiring interests in two shopping centers and agreeing to buy stakes in five additional properties. It is the company’s first investment in Puerto Rico. Previously, it has spent heavily in Mexico, and Cooper has said the company has targeted Central and South America as further growth targets.

Chairman and CEO Milton Cooper has, in recent months, been trumpeting the idea that he wants Kimco to be seen as an asset manager rather than a real estate company. Specifically, the company wants to partner with large funds to form joint ventures in acquiring new properties.

Kimco has said it thinks it can grow its asset management business up to $75 billion, from an undisclosed number today. Part of this will come through international expansion.

Rather than Kimco buying and owning properties itself, the company plans to retain small interests in properties and instead focus on management. The result is that Kimco’s revenue streams will come in the form of management fees, promotes and other fees. It is similar to how other REITs, primarily in the industrial sector, are operatiang. To be sure, REITs have been pursuing joint ventures and providing management services for years. The difference is that in the past most arrangements have been through finite-life funds that have specific start and end timeframes. These new ventures will be more open-ended, allowing investors to cash in and out, more like a mutual fund.

“If you look at companies like ProLogis and AMB, they have very large funds management businesses where they essentially raise money from lost of different sources -- pension funds, foreign investors, etc. -- and use those to acquire assets, where they retain a small interest, but they are also paid a panoply of fees,” says Barry Vinocur, editor of Realty Stock Review. “I think it is one of those things that has been only now coming to be recognized as really powerful tool for REITs.”

Vinocur added that part of Kimco’s drive to re-cast the company as an asset manager stems from the fact that companies that traditionally fall into that category—such as T.Rowe Price -- trade at higher multiples than REITs.

“ProLogis and AMB have made big returns for investors and large returns for themselves,” Vinocur says. “As a result, there will be a significant impact on the bottom line and valuation as people realize the asset management business should be valued more richly than just owning properties.”

In the Puerto Rico deal, Kimco is partnering with two individual investors, Walter Samuels and Jay Furman. Kimco’s stake breaks down as $97 million in cash, $204 million in partnership units and the assumption of $147 million of debt.

-- David Bodamer