• FFO (Funds From Operations): $287.4 million or $0.43 per diluted share, representing a 7.5% growth per share compared to last year's third quarter.
• Total Pro Rata NOI: $394.1 million, an increase of $51.3 million or 15% over the same period in the prior year.
• Same Site NOI Growth: Positive 3.3% for the third quarter.
• Leased Occupancy: All-time high at 96.4%, up 20 basis points sequentially and 90 basis points year-over-year.
• Anchor Occupancy: 98.2%, up 10 basis points sequentially and 100 basis points year-over-year.
• Small Shop Occupancy: 91.8%, up 10 basis points sequentially and 70 basis points year-over-year.
• New Lease Volume: 119 deals totaling 543,000 square feet with a rent spread of 41.9%.
• Renewals and Options Volume: 332 deals totaling 1.9 million square feet with a spread of 6.8%.
• Combined Lease Volume: 451 deals totaling 2.4 million square feet with a combined spread of 12.3%.
• Net Debt to EBITDA: 5.3x consolidated; 5.6x including pro rata JV debt and perpetual preferred stock.
• Term Loan Increase: From $200 million to $550 million with a blended all-in rate of 4.61%.
• New Unsecured Bond: Issued with a maturity in 2035 at a coupon of 4.85%.
• FFO Per Diluted Share Guidance: Raised to $1.64 to $1.65 from the previous range of $1.60 to $1.62.
• Same Site NOI Growth Guidance: Updated to 3.25% plus from the previous range of 2.75% to 3.25%.
• Investment Guidance: Increased to a range of $565 million to $625 million.
• Disposition Outlook: Lowered by $50 million to $250 million to $300 million.

• Warning! GuruFocus has detected 8 Warning Signs with KIM.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kimco Realty Corp (NYSE:KIM) achieved a record high occupancy rate of 96.4%, matching its all-time high from Q4 2019.
• The company successfully integrated the RPT acquisition, exceeding expectations in operational synergies and NOI projections.
• Kimco Realty Corp (NYSE:KIM) secured 12,000 multifamily unit entitlements a year ahead of schedule, valued between $175 million to $325 million.
• The company reported a strong rent spread for new leases at 41.9%, marking the 12th consecutive quarter of double-digit rent spreads.
• Kimco Realty Corp (NYSE:KIM) raised its full-year FFO per diluted share guidance to $1.64 to $1.65, reflecting strong financial performance.

Negative Points

• Higher debt levels led to an increase in pro rata interest expense by $16.3 million.
• The company anticipates a decrease in interest income in 2025 due to maintaining approximately $100 million in cash.
• Kimco Realty Corp (NYSE:KIM) lowered its disposition outlook by $50 million, indicating potential challenges in asset sales.
• The company faces competition in the acquisition market, particularly for neighborhood grocery-anchored shopping centers.
• Inflation remains a concern, with potential impacts on real estate pricing and rent growth.

Q & A Highlights

Q: Can you quantify how much the RPT and Weingarten transactions exceeded your original underwriting? A: Conor Flynn, CEO, stated that both transactions have outperformed expectations, particularly in operational synergies and NOI assumptions. RPT's same site NOI was 10.3% this quarter, highlighting the enhanced growth profile these acquisitions have brought to Kimco.

Q: What opportunities do you see in the RPT small shop leasing, and how does it set up for 2025? A: Ross Cooper, President and CIO, noted that the RPT portfolio is performing well, especially in the Sun Belt and Midwest markets. The operating team is effectively driving small shop leasing, and the momentum is expected to continue into 2025, closing the gap with Kimco's core portfolio.

Q: Can you elaborate on the structured investments opportunity and potential acquisitions? A: Ross Cooper explained that the structured investments program offers attractive returns and potential ownership opportunities. With $470 million outstanding across several assets, Kimco is exploring converting some mezzanine investments to outright ownership, potentially materializing in early 2025.

Q: How are you approaching the timing and activation of entitled projects? A: Ross Cooper emphasized maintaining discipline in activating projects. With 12,000 units entitled, Kimco is evaluating market conditions and costs for potential activations in 2025, considering options like joint ventures, ground leases, or selling entitlements to third-party developers.

Q: What is driving sellers to the market, and how have cap rates moved since the Waterford transaction? A: Ross Cooper noted that liquidity needs and favorable pricing for open-air, grocery-anchored centers are driving sellers. Cap rates have remained stable, with some compression in certain markets, despite rising interest rates. The Waterford transaction, initiated earlier in the year, reflects these dynamics.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.