Kimco Realty Q2 Earnings Call Highlights

Key Points

• Kimco reported solid second-quarter results: FFO rose 4.5% year over year to $0.46 per diluted share, same-property NOI increased 3.5%, and credit losses improved to 57 basis points.
• Leasing momentum remained strong: Portfolio occupancy matched a record 96.4%, small-shop occupancy reached 92.9%, and new leases achieved a 40.4% blended spread. The signed-but-not-open pipeline represented $95 million in annual base rent.
• Kimco raised its outlook and dividend: The company lifted the low end of its 2026 FFO forecast to $1.83 per share, increased its same-property NOI growth outlook, and raised the quarterly dividend 12% year over year to $0.28 per share.

Kimco Realty NYSE: KIM reported second-quarter funds from operations of $0.46 per diluted share, up 4.5% from a year earlier, as higher rents, improving credit trends and strong leasing activity supported results. The shopping center REIT also raised the lower end of its full-year FFO outlook and increased its quarterly common dividend by 12% from the prior-year period.

CEO Conor Flynn said the company’s portfolio continued to benefit from retailer demand for open-air, grocery-anchored centers, while new shopping center development remains limited in its markets. Same-property net operating income rose 3.5% in the quarter, driven by higher minimum rents and stronger net recoveries.

“Kimco has the right platform, portfolio, and balance sheet to drive sustainable earnings growth,” Flynn said, citing retailer demand, shopper traffic, a signed-but-not-open leasing pipeline, capital recycling and balance-sheet management.

Occupancy and Leasing Trends

Kimco’s pro-rata portfolio occupancy matched its all-time high of 96.4%, despite a 16-basis-point impact from lease rejections connected to the Painted Tree bankruptcy. Small-shop occupancy reached a record 92.9%, while anchor occupancy was 97.8%, down 10 basis points sequentially but up 110 basis points year over year.

David Jamieson, executive vice president and chief operating officer, said Kimco signed 461 leases covering 2.5 million square feet during the quarter at a blended lease spread of 13.1%. New leases accounted for 161 transactions and 685,000 pro-rata square feet, with a blended spread of 40.4%.

The quarter marked Kimco’s 19th consecutive period of double-digit new-lease spreads, according to Jamieson. Renewal and option activity totaled 300 deals covering 1.9 million square feet, with a blended spread of 7%.

• Kimco replaced a former Rite Aid at Marketplace of Victoria with Japanese-inspired home goods retailer Teso Life.
• Woodlawn Marketplace in Charlotte, North Carolina, added Lowes Foods.
• The company signed its first Uniqlo lease within its lifestyle portfolio.
• Non-anchor leasing was broad-based, with strength in fitness, health and wellness, restaurants and professional services.

Kimco’s signed-not-open pipeline represented $95 million of annual base rent, including $75 million of incremental rent. The company expects 48% of the incremental pipeline to commence by year-end. Jamieson said Kimco now projects $33 million of rent commencements in 2026, 16% above its initial estimate, including $24 million from tenants that opened during the first half and $9 million expected in the second half.

Foot traffic across the portfolio increased 3% year over year, including 3.2% growth in June, Flynn said. In response to an analyst question, management said spending growth was strongest among higher-income consumers, but remained positive among lower-income shoppers. Jamieson cited spending growth of about 5.5% among middle-income consumers and 3.5% among lower-income consumers.

Capital Recycling and Mixed-Use Monetization

Kimco continued to recycle capital from lower-growth assets into grocery-anchored properties with higher expected growth. During the quarter, the company acquired Pompano Marketplace, a Walmart-anchored center in Pompano Beach, Florida, for $53 million, and Sunshine Plaza, a Publix-anchored center in a first-ring Fort Lauderdale suburb, for $56 million.

Pompano Marketplace was the third acquisition sourced through Kimco’s structured investment program. President and Chief Investment Officer Ross Cooper said the property had initially been financed through the program, where Kimco served as senior lender at an 8% yield. Kimco later used contractual rights to acquire the property when its borrower sought to sell.

Cooper said the acquired South Florida centers had compound annual growth rates more than 350 basis points above the Costco properties Kimco sold as part of its disposition initiative. The company said the Costco assets had annual growth below 1% and a sub-6% unlevered internal rate of return over a 10-year hold, compared with an expected unlevered IRR above 9% for the replacement properties.

The company also completed the sale of The Milton, a 253-unit multifamily building at its Pentagon Centre mixed-use project in Pentagon City, Virginia. Cooper described the sale as Kimco’s first full-cycle monetization of a ground-up multifamily development within its value-add redevelopment program. The Milton sold at a 4.9% capitalization rate.

Kimco expects to consider monetizing the second residential tower at Pentagon Centre, The Witmer, next, though Cooper said no formal timetable has been established. Management said it evaluates each mixed-use project individually and retains flexibility to hold, develop, sell or structure assets through joint ventures and preferred-equity arrangements.

Balance Sheet, Outlook and Dividend

Executive Vice President and CFO Glenn Cohen said second-quarter FFO totaled $309.2 million, compared with $297.6 million a year earlier. Credit loss was 57 basis points in the quarter, down from 89 basis points in the comparable 2025 period. Year-to-date credit loss was 54 basis points.

Kimco ended the quarter with consolidated net debt to EBITDA of 5.2 times, or 5.5 times including pro-rata joint venture debt and preferred stock. Total liquidity was $2.7 billion, including $700 million of cash, much of which Cohen said is expected to be used for 2026 debt maturities.

During the quarter, Kimco issued $600 million of 3.5% exchangeable senior notes due 2031. The offering was upsized due to investor demand. The notes have an initial exchange price of approximately $32.36 per share, a 27.5% premium to Kimco’s stock price at issuance. In connection with the offering, the company repurchased approximately 4.1 million common shares for $104.7 million.

Kimco raised the lower end of its 2026 FFO outlook to $1.83 per diluted share from $1.81, while maintaining the upper end at $1.84. It also increased its same-property NOI growth forecast to 3% to 3.5%, from a prior range of 2.8% to 3.5%, and tightened its credit-loss outlook to 55 to 75 basis points from 65 to 90 basis points.

The board declared a quarterly common dividend of $0.28 per share, or $1.12 on an annualized basis. Cohen said the increase reflects growth in operating cash flows, earnings and taxable income.

About Kimco Realty (NYSE:KIM)

Founded in 1958 by Milton Cooper and headquartered in Jericho, New York, Kimco Realty Corporation NYSE: KIM is a leading publicly traded real estate investment trust (REIT) specializing in the ownership, operation and development of open-air shopping centers. The company's portfolio, concentrated on neighborhood and community centers anchored by grocery stores, encompasses approximately 400 properties across the United States, with selective holdings in Canada and Mexico.

Kimco's core business activities include acquiring, repositioning and managing retail real estate assets that serve as daily-need destinations for consumers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source