Conor C. Flynn
Chief Executive Officer at Kimco Realty
Good morning, and thanks for joining us. Today, I'll recap our operating results for the fourth quarter, provide an update on our strategic merger with Weingarten, and outline our key goals for the year ahead. Ross will give an update on the transaction market and Glenn will cover our earnings results and guidance for 2022.
We continue to focus on execution as reflected by our strong fourth quarter performance. Leasing, leasing, leasing has been, is now, and will continue to be our first, second, and third priority. Our entire team has worked tirelessly to create a one-of-a-kind platform that utilizes our scale, portfolio quality, relationships, procurement abilities, data analytics, tenant support programs, last-mile infrastructure, and pricing power. This platform has proven to be resilient when times are tough and shown to generate growth when the economic climate is favorable. It is a key reason why we have been successful in re-leasing pandemic-induced vacancies, while simultaneously attracting best-in-class operators that have embraced the future of last-mile omnichannel retail.
Now, for some details on the quarter. Pro-rata occupancy increased to 94.4%, up 30 basis points from last quarter and 50 basis points from a year ago. Anchor occupancy grew 20 basis points from last quarter to 97.1% and was up 40 basis points year-over-year. Small shop occupancy also increased and is now at 87.7%, up 40 basis points from last quarter and 160 basis points from a year ago.
Our portfolio continue to exhibit strong pricing power. During the fourth quarter, as illustrated by the solid increase in new leasing spreads, which were up 14.1% based on 152 deals and 588,000 square feet. Blended spreads on renewals and options also increased by a healthy 7% comprised of 4.1% for renewals and 13.1% for options. These spreads were based on 286 deals covering 1.5 million square feet. Overall, our combined leasing spread grew 8.1% based on 438 deals covering nearly 2.1 million square feet.
A couple of things to note about our strong results. First, the suburbanization trend spurred by the pandemic helped increase retailer sales and supported our efforts to push rents, at our high-barrier entry locations. Second, our portfolio continues to benefit from the pandemic-induced work-from-home trend as people are eating more take-out than home-cooked meals, which is driving more frequent visits to our restaurants and grocery stores. As a result of this activity, our traffic counts have exceeded 2019 levels. We expect this trend to continue in the post-pandemic. New normal as shopping centers continue to play a critical role in omnichannel retail.
Our strategy to have a grocery and mixed-use portfolio surrounding the first ring of our top 20 major metropolitan markets in the U.S. continues. When we started this strategy over five years ago, it was nearly a 50-50 split of our annual base rent coming from our grocery-anchored shopping centers versus our non-grocer. Today, 80% of our annual base rents comes from shopping centers that have a grocer.
We have continued to successfully invest in our assets and over the past year, signed eight new grocery leases, two of which converted non-grocery spaces. The other six leases backfilled former grocers who vacated, and with the Weingarten merger now complete, we have further solidified our dominant grocery portfolio in our major Sunbelt markets. In addition, we have taken a deep dive into every asset we own and believe there continues to be further opportunity to push our AVR from the portfolio up to 85% from grocery-anchored centers and increase our mixed-use over the next five years with the combination of strategic redevelopment, leasing, acquisitions, and to a smaller extent, dispositions.
The Weingarten merger was a perfect fit for our strategic vision, and I'm happy to report that our fourth quarter results from the Weingarten portfolio exceeded all of our underwriting assumptions. We were ahead on leasing spreads, occupancy gains, retention rates, and cash flow. In addition, we have exceeded the high end of the synergy forecast range of $35 million to $38 million and we will continue to mine for additional savings throughout 2022.
With our first full quarter as a combined entity complete, we demonstrated that our proactive efforts to ensure a seamless integration really paid off, resulting in outperformance, including enhanced margins and cash flow. I want to thank all the new and existing Kimco employees for their ongoing commitment and contributions without skipping a beat during the integration.
In closing, we have a good visibility into our leasing momentum and continue to see strong demand across our portfolio in all categories. We remain committed to strengthening our long-term earnings growth through the portfolio by curating the right merchandising mix that will drive traffic at all points of the day. Ultimately, we expect to be first in last-mile retail by attracting tenants that can plug-in to the supply chain and deliver goods and services to the consumer in the most flexible and convenient way possible. We believe that this ongoing approach is the best way to generate long-term growth and value creation.
Now, I will turn it over to Ross.
