KIM-PN - NYSE

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Kimco Realty Corporation

KIM-PN·NYSE

$60.00

+0.0000%
Real EstateREIT - Retail

Kimco Realty (NYSE:KIM) is a real estate investment trust (REIT) headquartered in Jericho, N.Y. that is North America's largest publicly traded owner and operator of open-air, grocery-anchored shopping centers and a growing portfolio of mixed-use assets. The company's portfolio is primarily concentrated in the first-ring suburbs of the top major metropolitan markets, including those in high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Kimco Realty is also committed to leadership in environmental, social and governance (ESG) issues and is a recognized industry leader in these areas. Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center ownership, management, acquisitions, and value enhancing redevelopment activities for more than 60 years. As of December 31, 2023, the company owned interests in 523 U.S. shopping centers and mixed-use assets comprising 90 million square feet of gross leasable space.

StatementsValue Model

At a Glance

Live Snapshot
Market Cap$40.58B
EPS0.2400
P/E Ratio62.09
Earnings Date08/01/2025

Earnings Call Transcript

KIM-PN • 2024 • Q1

Operator
[Operator Instructions] Our first question comes from Dori Kesten of Wells Fargo.
Dori Kesten
You left your credit loss guide unchanged, but had a relatively low Q1. Can you just remind us of your [ 10 ] exposures that are built up to the annual assumption?
Conor Flynn
Overall, we look at just the entire portfolio when we're doing the assumptions. And again, the 75 to 100 basis point credit assumption is really back to more historic levels. And the first quarter is clearly lower at 62 basis points. But there are some potential bankruptcies potentially during the year that could impact it. And we think it's more prudent to just leave the current guidance assumption, even though we still have been able to increase the same-site NOI guidance pretty significantly.
Operator
The next question comes from Michael Goldsmith of UBS.
Michael Goldsmith
On the integration of RPT, you said initial G&A synergies of $30 million to $34 million, you took it up to $34 million to $35 million. So in terms of realizing the synergies, what's driving them? What's driving the upside to your initial guidance? And where have there been positive surprises as you've started to put the plan into action?
David Jamieson
Thanks, Will. I also just comment that with the execution of the 10 dispositions, the grocery percentage of the RPT portfolio is up to 85.5%. So it's obviously enhancing to the Kimco portfolio as well. We even have activity on a few of the 9 remaining sites that don't have grocery anchors to potentially convert those to grocery anchors as well. So Will, do you want to comment a little bit on ancillary income as well?
Operator
The next question comes from Alexander Goldfarb of Piper Sandler.
Operator
The next question comes from Floris Van Dijkum of Compass Point.
Operator
Our next question comes from Juan Sanabria of BMO Capital Markets.
Juan Sanabria
Just wanted to switch tack here. in terms of the Q&A. Just wanted to get your strategic views or sense of the pharmacy and kind of health and wellness business trends and credit there, just we've had Rite Aid, BK, Walgreens is shrinking and Walmart is now pulling out. So just curious on how you see the space evolving and how you're positioning the company just to deal with the changing landscape.
Operator
The next question comes from Samir Khanal of Evercore ISI.
Samir Khanal
Conor, just looking at the shop occupancy for the RPT portfolio, I think sequentially, was down 40 basis points here. Is there something to read into that, considering that we've seen sort of sequential increases for a while now? Or is that sort of you being more proactive as you sort of de-lease space for greater opportunities?
Glenn Cohen
Yes. I would just add that when we acquired RPT, their small shop occupancy was over 200 basis points lower than ours. So when you blended it all together, again, because it's obviously a much smaller portfolio, the impact at the end is only about 40 basis points.
Operator
The next question comes from Haendel St. Juste of Mizuho.
Operator
The next question comes from Craig Mailman of Citi.
Operator
The next question comes from Caitlin Burrows of Goldman Sachs.
Caitlin Burrows
Occupancy's on the rise and same-store -- sorry, not same-store, the SNO pipeline is still pretty wide. But I guess, looking forward, it looks like you leased 4 million square feet of space in the first quarter, but that's down from 1Q '23 and 1Q '22 despite now having a larger portfolio. So wondering if you can talk about what's driving that leasing volume lower? Realize it could be for a number of reasons.
Operator
Our next question comes from Greg McGinniss of Deutsche Bank (sic) [ Scotiabank ].
Greg McGinniss
Sorry, a little thrown by the bank there. Looking at the guidance update, it's just under $0.02 from interest income, non-GAAP income and around $0.015 from higher same-store NOI growth, at least based on our math. What are the offsetting factors on the $0.02 guidance range. Is that just earlier dispositions than initial plan? Or any color would be appreciated there.
Glenn Cohen
Yes. I mean, again, it was a very strong quarter. There is, as I mentioned, just under $0.01 of I'll call nonrecurring or onetime things that are in there. But the balance of the year is shaping up very well. So we increased the guidance by the $0.02 that we saw so far and feel good that we're in good shape to reach towards the upper end of that range.
Greg McGinniss
Okay. And then on the 10 RPT dispositions, how important was providing the seller mortgage financing on those transactions to getting them done at the 8.5% cap rate? I mean if the buyer had to go elsewhere for financing, where do you think those cap rates might have trended?
Operator
The next question comes from Mike Mueller of JPMorgan.
Michael Mueller
I guess looking at the full year planned dispositions, it looks like another maybe $100 million to $200 million and those, I guess, the guided to cap rates look to still be in the mid-8s. Just curious what's making up that remaining disposition bucket?
Operator
Our next question comes from Anthony Powell from Barclays.
Anthony Powell
You mentioned you saw a lower, I guess, landlord expenses than you expected and we noticed that, too. Maybe talk about what drove those lower and your opportunity to continue to control expenses going forward.
Operator
The next question comes from Wes Golladay of Baird.
Wesley Golladay
I'm just looking at the presentation, and you have about 6,500 multifamily units entitled. Do you have any interest in starting developments this year to deliver to the -- like a low supply market a few years from now?
Operator
The next question comes from Linda Tsai of Jefferies.
Linda Yu Tsai
As you look at the SNO pipeline, you have good lease-up opportunity you had still. Do you expect the SNO pipeline to be higher or lower by year-end versus now?
Operator
Our next question comes from Ronald Kamdem of Morgan Stanley.
Ronald Kamdem
Just a quick 2-parter for you guys. So on the same-store NOI guide raise, is it fair to say that it's basically earlier commencements that drove the upside? And what is driving sort of the expected deceleration in the rest of the year, is part 1? And then part 2, on the acquisition guidance, just how much of that is identified already versus speculative?
Operator
The next question comes from Tayo Okusanya of Deutsche Bank.
Omotayo Okusanya
I wanted to go back to Wes' question, but rather I talk about multifamily, talk a little bit more about just the retail redevelopment. You do have in your supp, a fairly expansive list of potential new retailers you could start. I'm just kind of curious about potentially starting those up, just kind of given the overall development pipeline, is probably not as large as some of your peers, but everyone is getting really good yields on that.
Operator
The next question comes from Paulina Rojas of Green Street.
Operator
The next question comes from Jeff Spector of Bank of America.
Jeffrey Spector
Maybe let's turn back to the transaction market. Ross, you said at the top of the call, just given what's happening with the Fed view on rates, there's a dampening in the transaction market. Has anything changed, let's say, in the last couple of weeks? And maybe you could touch on the structured investment pipeline.
Operator
And our next question comes from Alexander Goldfarb of Piper Sandler.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Bujnicki for any closing remarks.
David Bujnicki
I'd just like to thank everybody for joining today's call. We look forward to seeing a number of you at the upcoming NAREIT conference in June. Please enjoy the rest of your week. Thank you.
Transcript from May 2, 2024

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