Kimco Realty Corporation (KIM) Earnings

Management highlights

- Core Portfolio and Leasing Performance * Signed 461 leases covering 2.5 million square feet in Q2 2026, with a blended rent spread of 13.1%; year-to-date 2026 leasing totals over 7 million square feet * New leasing delivered a 40.4% blended rent spread, marking the 19th consecutive quarter of double-digit new leasing spreads; renewals and options delivered a 7% blended spread * Demand is particularly strong for small shop space from service-oriented tenants including fitness, health and wellness, restaurants, and professional services * Package leasing initiative gained momentum, accelerating deal velocity and deepening relationships with growing national retailers * Foot traffic across portfolio increased 3% year-over-year in Q2, with 3.2% growth in June; tenant spending remains robust across all income demographics - Capital Recycling and Transaction Activity * Completed first full-cycle monetization of a ground-up mixed-use multifamily development, selling The Milton (253-unit building at Pentagon Center, VA) at a 4.9% cap rate, proving long-term value creation from the mixed-use platform * Sold low-growth long-term net lease assets (including Costco ground leases) with a sub 6% unlevered 10-year IRR, and recycled proceeds via 1031 exchange to acquire two high-quality grocery-anchored shopping centers in Florida for a combined $109 million, delivering a north of 9% unlevered IRR * Both Florida acquisitions were off-market; one (Pompano Marketplace) was sourced through Kimco's proprietary Structured Investment Program (SIP), marking the third SIP acquisition * The mixed-use development pipeline holds 14,000 residential units of approved entitlements, creating a laddered long-term opportunity set for value creation - Operational Transformation (One Kimco) * Launched a new national functional operating model effective July 1, 2026, replacing the prior regional structure to sharpen accountability, improve execution consistency, and accelerate growth without incremental cost * Investments in supporting infrastructure include a unified portfolio data platform, AI workflow automation tools, and modern enterprise collaboration tools; 80% of workforce currently uses AI tools weekly, with year-to-date 5x return on AI investments from expense savings * The new model includes a dedicated national account team to streamline multi-site deals with national retailers, accelerating deal closing and rent commencement timelines for the SNO pipeline - Balance Sheet and Capital Structure * Ended Q2 with $2.7 billion in total liquidity ($700 million cash on hand), enough to cover all upcoming 2026 debt maturities * Issued $600 million of 3.5% exchangeable senior notes due 2031, upsized from original offering based on strong investor demand; used proceeds to repurchase ~4.1 million common shares * Consolidated net debt to EBITDA was 5.2x (5.5x on a look-through basis including pro-rata JV debt and preferred stock), maintaining Kimco's investment grade credit profile * Board approved a 12% year-over-year increase in the quarterly common dividend to $0.28 per share ($1.12 annualized)

Guidance

- Full year 2026 diluted FFO guidance range was adjusted to $1.83 to $1.84 per share, up from the prior range of $1.81 to $1.84, raising the lower bound while maintaining the upper bound; this represents 4% to 4.5% full year FFO growth year-over-year - Full year same property NOI growth guidance was updated to 3% to 3.5%, up from the prior 2.8% to 3.5% range - Full year credit loss assumption was tightened to 55 to 75 basis points, down from the prior 65 to 90 basis point range - Interest expense and preferred dividend assumptions were adjusted downward to reflect favorable year-to-date financing activity; all other guidance assumptions remain substantially unchanged - 2026 projected cash flow from SNO pipeline rent commencements is $33 million, 16% higher than the initial estimate, with $9 million expected in the second half of the year - Same property NOI growth is expected to accelerate in the second half of 2026, reaching mid-3% to over 4% year-over-year in Q3 and Q4, as the portfolio laps prior year bankruptcies of retail tenants including Party City, Joann's, and Big Lots - Management expects continued transaction activity in the second half of 2026, with disposals front-weighted in the first half and acquisition activity expected to increase in the back half of the year, continuing through 2027 and beyond

Segment performance

Kimco Realty is a retail-focused real estate investment trust with a single consolidated operating portfolio of open-air, grocery-anchored shopping centers and mixed-use assets. For Q2 2026, total FFO was $309.2 million, representing 3.9% year-over-year growth from $297.6 million in Q2 2025. Diluted FFO per share was $0.46, up 4.5% year-over-year from $0.44. Same property NOI growth was 3.5% year-over-year, driven by higher minimum rents and stronger net recoveries. Overall pro rata portfolio occupancy reached an all-time high of 96.4%, while small shop occupancy hit a new record of 92.9%. Anchor occupancy was 97.8%, down 10 basis points quarter-over-quarter but up 110 basis points year-over-year. The signed-but-not-yet-opened (SNO) pipeline totals $95 million in annual base rent, of which $75 million is incremental, with 48% expected to commence by the end of 2026.

Risks & headwinds

- All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections, including changes in consumer spending and sentiment, macroeconomic conditions such as interest rate changes, shifts in retail tenant demand and bankruptcy risk, and changes to capital market access and pricing - Consumer resilience, while strong to date, could be impacted by rising unemployment or sustained high interest/price levels, which could negatively impact tenant sales and rent payment ability - Transaction pricing for retail and multifamily assets is highly competitive, which may compress acquisition yields or limit the availability of attractive accretive investment opportunities - Conversion of the SNO pipeline to cash rent depends on coordinated construction and leasing timelines, and delays could negatively impact near-term FFO growth - Mixed-use development value creation depends on market conditions for multifamily sales, and adverse market shifts could delay monetization or reduce projected returns

Analyst Q&A

• Q: What level of capital recycling transaction activity should we expect in the second half of 2026, and what is the expected mix of deal types? /

  A: Management expects acquisition activity will pick up in the back half after disposals were front-weighted in the first half of 2026. The Whitmer, the second multifamily tower at Pentagon Center, is expected to be monetized in 2026. Structured Investment Program (SIP) will continue to be a source of high-quality acquisition opportunities, and there are additional low-growth ground lease assets available for sale to recycle into higher-growth properties, with tax efficiency via 1031 exchanges remaining a core priority.

• Q: Is all developed mixed-use multifamily a high-priority for sale, or will Kimco hold some projects long-term? /

  A: Kimco retains full optionality across all mixed-use multifamily projects, with flexible structures that allow management to choose the best exit strategy on a case-by-case basis. In the current market, multifamily is pricing at very aggressive cap rates, making monetization attractive, but management will hold assets long-term if it makes strategic and financial sense. The core goal of mixed-use development is to enhance the underlying retail portfolio value, with optionality on the residential component.

• Q: What is the AFFO accretion from capital recycling after accounting for higher capex requirements of acquired shopping centers versus low-maintenance ground leases? /

  A: Even after accounting for all operating costs and capex for multi-tenant grocery-anchored acquisitions, the 10-year unlevered IRR is 300 to 350 basis points higher than the low-growth ground leases sold. Year-one AFFO spread is 50 to 100 basis points, with the larger benefit coming from the much stronger long-term cash flow CAGR of the acquired assets, making the exchange very accretive to long-term growth.

• Q: How does the new One Kimco operating model impact retailer relations, what is the expected return on digital/AI investments, and what long-term margin benefits are expected? /

  A: The new model creates a single unified point of contact for national retailers, enabling faster end-to-end deal execution and pulling forward rent commencements for the SNO pipeline, while improving Kimco's national negotiating leverage. Year-to-date, AI and digital transformation investments have already delivered a 5x return via incremental expense savings, with long-term benefits including improved FFO growth and margin expansion as operational efficiencies scale.