Kimco Realty Corporation Q3 FY2025 earnings call

• Conor Flynn highlighted consistent high-quality execution, with FFO per diluted share at $0.44, exceeding expectations. Same-site NOI showed growth, and leasing momentum accelerated with strong activity. The redevelopment pipeline stood at $600 million, and the Office of Innovation and Transformation was formalized.
• Ross Cooper discussed active transactions, including investments in a senior loan, structured investments, and a loan to Family Dollar. Acquisitions of a dual grocery-anchored asset in Hillsboro, Oregon were also noted.
• Glenn Cohen reported FFO of $300.3 million or $0.44 per diluted share, 2.3% higher than the previous year. The balance sheet was strong, with net debt to EBITDA at 5.3x, and credit ratings upgraded. Full year FFO guidance was raised, same-site NOI growth outlook maintained, credit loss assumption revised, and the quarterly dividend increased by 4%.

For the third quarter, Kimco Realty delivered funds from operations (FFO) of $0.44 per diluted share. Same-site NOI increased 1.9% for the quarter and 3% year-to-date. Leasing activity was strong, with 427 leases totaling 2.3 million square feet completed during the quarter, including 144 new deals and 283 renewals/options, resulting in a blended leasing spread of 11%. Year-to-date, lease gross leasable area (GLA) was up 8% compared to the same period in 2024. The redevelopment pipeline was elevated to approximately $600 million, with 25 grocery-anchored projects generating unlevered returns of 10%-12%.

Kimco Realty raised its full year FFO guidance to $1.75 to $1.76 per diluted share, up from the prior range of $1.73 to $1.75. The same-site NOI growth outlook was maintained at 3% or better. The credit loss assumption was revised to a range of 75 to 85 basis points. A quarterly common stock cash dividend increase of 4% to $0.26 per quarter was approved. The signed not open pipeline reached a record $71 million, with potential for further growth.

Actual results may differ materially from forward-looking statements due to various risks, uncertainties, and factors. Intense competition for quality open-air retail and market uncertainties could impact performance.

Q: Caroline on for Ron asked about the transaction environment and cap rates.

A: Ross Cooper responded that the transaction environment is competitive, Kimco has geographic and strategy diversification, ample deal flow, aggressive cap rates, and focuses on recycling capital accretively.

Q: Michael Goldsmith inquired about the 2026 outlook.

A: Glenn Cohen stated that 60% of the SNO pipeline is expected to commence in 2026, totaling about $24 million, and efforts will be made to minimize debt maturity headwinds via refinancing.

Q: Alexander Goldfarb asked about retailer investments.

A: Ross Cooper explained that the Family Dollar deal was opportunistic with real estate collateral, and Kimco has a long track record, regularly engaging with retailers that own significant real estate.

Q: Samir Khanal asked about 2026 onetime benefits.

A: Glenn Cohen mentioned that onetime items throughout the year amounted to about $0.03, which are lumpy and difficult to forecast.

Q: Floris Van Dijkum asked about capital recycling.

A: Ross Cooper said Kimco is focusing on recycling from low-growth ground leases and non-core assets, while backfilling with new leases to maximize value.

Q: Michael Griffin asked about retailer conversations.

A: An executive replied that retailers have confidence, continue pushing for growth, with 30% higher GLA executed deals quarter-to-date and strong demand on big box and grocery sides.

Q: Rich Hightower asked about SIP pipeline predictability and share repurchase.

A: Ross Cooper said the SIP pipeline is well telegraphed, and Glenn Cohen noted share repurchases depend on stock price performance.

Q: Cooper Clark asked about portfolio deals and 2026 appetite.

A: Ross Cooper stated that Kimco is focused on accretive and quality deals, with a competitive environment making large portfolio acquisitions challenging, but opportunities exist from institutional and structured programs.

Q: Haendel St. Juste asked about redev pipeline funding.

A: An executive said sufficient funding is available from free cash flow, with multifamily projects being capital-light through partnerships.

Q: Juan Sanabria asked about small shop upside.

A: An executive mentioned small shop leases see lifts with grocer additions, with gains of teens to low 20s on a case-by-case basis.

Q: Caitlin Burrows asked about ground-up development.

A: An executive said ground-up development is controlled, opportunistic, tied to leasing demand, and limited new supply in the industry.

Q: Craig Mailman asked about the innovation initiative.

A: Conor Flynn and Will Teichman explained the formalized Office of Innovation and Transformation, a multidisciplinary approach, and ROI-focused investments.

Q: Michael Mueller asked about 2026 development dollars.

A: An executive said ground-up retail development is small and opportunistic, with multifamily projects via preferred equity with partners.

Q: Alec Feygin asked about the Family Dollar investment.

A: An executive stated Kimco has a few Family Dollar locations, and the loan is backed by owned real estate.

Q: Greg McGinniss asked about the structured investment program.

A: Ross Cooper said ROFOs and ROFRs have value, with potential for acquisitions or repayments, viewed as a win-win-win scenario.

Q: Linda Tsai asked about SNO pipeline cadence.

A: Glenn Cohen said the SNO pipeline is weighted more towards the second half of 2026.