Kimco Realty Corp ((KIM)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Kimco Realty Corp’s recent earnings call exuded a positive sentiment, driven by robust leasing activity, a record-high signed not open (SNO) pipeline, and an upward revision of the full-year funds from operations (FFO) guidance. These positive aspects overshadowed challenges such as the impact of early recaptures and increased interest expenses.
Record-High Signed Not Open Pipeline
Kimco Realty Corp has achieved a record-high SNO pipeline, reaching 360 basis points and totaling $71 million. This milestone indicates a strong potential for future rent growth, reflecting the company’s strategic positioning and robust leasing demand.
Increased Full-Year FFO Guidance
The company has raised its full-year FFO guidance to a range of $1.75 to $1.76 per diluted share, marking over 6% growth compared to 2024. This increase underscores Kimco’s confidence in its financial performance and strategic initiatives.
Strong Leasing Activity
Kimco completed 427 leases totaling 2.3 million square feet in the third quarter, with a blended leasing spread of 11%. This strong leasing activity highlights the company’s ability to capitalize on market demand and enhance its portfolio’s value.
High Small Shop Occupancy
Small shop occupancy reached a new all-time high of 92.5%, up 70 basis points year-over-year. This achievement reflects Kimco’s successful efforts in optimizing its tenant mix and maximizing occupancy rates.
Dividend Increase
The Board of Directors approved a 4% increase in the quarterly common stock cash dividend, raising it to $0.26 per share. This decision demonstrates Kimco’s commitment to returning value to its shareholders.
Impact of Early Recapture of Large Anchor Boxes
The early recapture of several large anchor boxes, including Party City, JOANN’s, and Rite Aid, resulted in a 130 basis points drag on same-site net operating income (NOI). Despite this challenge, Kimco has swiftly re-tenanted these spaces at higher rates, mitigating the impact.
Higher Interest Expenses
Interest expenses increased by $8 million, primarily due to refinancing activities planned for 2024 and 2025. This rise in expenses reflects the company’s proactive approach to managing its debt portfolio.
Forward-Looking Guidance
During the earnings call, Kimco Realty Corp provided an optimistic outlook for the future. The company reported FFO of $0.44 per diluted share, surpassing expectations, and reaffirmed its strategic focus on redevelopment and grocery-anchored properties. With a strong liquidity position of over $2.1 billion and a robust development pipeline, Kimco is well-positioned to capitalize on leasing demand and drive future growth.
In conclusion, Kimco Realty Corp’s earnings call highlighted a positive sentiment, driven by strong leasing activity, a record-high SNO pipeline, and increased FFO guidance. Despite challenges such as early recaptures and higher interest expenses, the company remains focused on strategic growth and delivering value to shareholders.