Earnings call transcript: Kimco Realty Q2 2025 beats EPS estimates, stock dips

Kimco Realty Corp (KIM) reported its earnings for the second quarter of 2025, surpassing earnings per share (EPS) estimates but slightly missing revenue forecasts. The company posted an EPS of $0.23, beating the forecasted $0.17 by 35.29%. Despite this positive earnings surprise, the stock saw a decline of 2.37% in pre-market trading, closing at $21.90, which is near the lower end of its 52-week range of $17.93 to $25.83. According to InvestingPro, Kimco maintains an impressive track record of 34 consecutive years of dividend payments, with a current yield of 4.57%.

Key Takeaways

• Kimco Realty exceeded EPS expectations by 35.29% for Q2 2025.
• Revenue fell short of forecasts, with a slight miss of 0.68%.
• The stock dropped 2.37% pre-market, despite positive earnings.
• Full-year FFO guidance was raised, indicating confidence in future performance.
• Strong leasing activity with record small shop occupancy.

Company Performance

Kimco Realty demonstrated robust performance in Q2 2025, highlighted by a 7.3% year-over-year increase in funds from operations (FFO) to $0.44 per diluted share. The company’s strategic focus on grocery-anchored shopping centers, which now account for 86% of its annual base rent, has supported its steady growth. The firm also reported a record small shop occupancy rate of 92.2%, reflecting strong tenant demand. InvestingPro analysis reveals the company’s strong financial health with an overall score of 3.07 out of 5, supported by robust revenue growth of 12.23% over the last twelve months.

Financial Highlights

• Revenue: $520.93 million, slightly below forecasts.
• Earnings per share: $0.23, surpassing expectations by 35.29%.
• Same-site NOI growth: 3.1% year-over-year.
• Full-year FFO guidance raised to $1.73-$1.75 per share.

Earnings vs. Forecast

Kimco Realty’s Q2 2025 EPS of $0.23 exceeded the forecast of $0.17, delivering a surprise of 35.29%. However, revenue came in at $520.93 million, slightly below the anticipated $524.52 million, missing by 0.68%. This mixed performance contrasts with previous quarters where revenue typically met or exceeded expectations.

Market Reaction

Despite the positive earnings surprise, Kimco Realty’s stock fell by 2.37% in pre-market trading. The decline brings the stock closer to its 52-week low of $17.93, suggesting that investors may have reacted to the revenue miss or broader market trends affecting the real estate sector. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, with analyst targets ranging from $21 to $30 per share. Subscribers can access 6 additional ProTips and comprehensive valuation metrics through the Pro Research Report.

Outlook & Guidance

Kimco Realty has raised its full-year FFO per share guidance to between $1.73 and $1.75, reflecting growth of 4.8% to 6.1%. The company anticipates collecting $30 million in annual base rent from its signed pipeline in 2025 and expects occupancy to improve in the coming quarters. InvestingPro data shows the company’s strong financial position, with liquid assets exceeding short-term obligations and a healthy current ratio of 1.79, supporting its growth initiatives.

Executive Commentary

CEO Conor Flynn stated, "We are executing ahead of plan and converting leasing momentum into durable cash flow." This sentiment was echoed by another management representative, who noted, "Private markets recognize the cash flow growth." These comments underscore the company’s strategic focus on enhancing cash flow through strong leasing activity and disciplined investments.

Risks and Challenges

• Market saturation and competition in the retail sector could pressure rental growth.
• Economic uncertainties may impact consumer spending and tenant stability.
• Rising interest rates could affect real estate financing costs.
• Supply chain disruptions might delay redevelopment projects.

Q&A

During the earnings call, analysts inquired about the competitiveness of the transaction market and Kimco’s structured investment strategy. Management also addressed questions about small shop leasing momentum and the outlook for the retail sector, providing insights into the company’s strategic priorities and market positioning.

Full transcript - Kimco Realty Corp (KIM) Q2 2025:

Conference Operator: Good day, and welcome to the Kimco Realty Second Quarter twenty twenty five Earnings Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to David Buchnicki, Senior Vice President of Investor Relations and Strategy.

Please go ahead.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty: Good morning and thank you for joining Kimco’s quarterly earnings call. The Kimco management team participating on the call today include Conor Flynn, Kimco’s CEO Ross Cooper, President and Chief Investment Officer Glenn Cohen, our CFO Dave Jamieson, Kimco’s Chief Operating Officer as well as other members of our executive team that are also available to answer questions during the call. As a reminder, statements made during the course of this call may be deemed forward looking and it is important to note that the company’s actual results could differ materially from those projected in such forward looking statements due to a variety of risks, uncertainties and other factors. Please refer to the company’s SEC filings that address such factors. During this presentation, management may make reference to certain non GAAP financial measures that we believe help investors better understand Kimco’s operating results.

Reconciliations of these non GAAP financial measures can be found in our quarterly supplemental financial information on the Kimco Investor Relations website. Also, in the event our call was to incur technical difficulties, we’ll try to resolve as quickly as possible. And if the need arises, we’ll post additional information to our IR website. With that, I’ll turn the call over to Connor.

Conor Flynn, CEO, Kimco Realty: Thanks, Dave. Before we begin, I wanna take a moment to acknowledge the tragic events that unfolded in New York this week and the lives that were senselessly lost. Among them was Wesley Lapatner, a respected real estate executive at Blackstone and a fellow member of the NAREIT Board of Governors. Wesley was also a friend of mine from my time at Yale and someone I deeply respected both personally and professionally. Blackstone has been a long standing joint venture partner of ours, and our hearts go out to Wesley’s family, friends, and everyone at Blackstone during this incredibly difficult time.

On behalf of the entire Kimco family, we extend our deepest condolences. Now I’ll start with a summary of our stellar q two highlights, and I’ll provide an update on our strategy going forward and address the macroeconomic environment. We’ll also follow with an update on the transaction market. And as usual, Glenn will provide details on our financial metrics and guidance. I’m pleased to report another quarter of consistent, high quality execution, one that reflects the strength of our portfolio, the discipline of our strategy, and the exceptional efforts of the Kimco team.

Let’s start with the key results. In the second quarter, we delivered funds from operations of $0.44 per diluted share, representing a 7.3% increase year over year. We continue to see strong property level fundamentals with robust tenant demand translating into a blended pro rata leasing spread of 15%, our highest in nearly eight years. We also achieved a new all time high in small shop occupancy of 92.2%, a clear indicator of the ongoing demand for well located necessity driven retail. I also wanna highlight the continued momentum in the RPT portfolio where small shop occupancy has climbed to 90.3%, up a 190 basis points since the acquisition just last year and up 90 basis points sequentially.

These small shop leasing results reflect the strength of our leasing platform driven by new prospecting tools, strong retailer relationships, national scale, and the targeted outreach we’re doing through the portfolio review program. In total, we executed a 174 new leases for 916,000 square feet at an average spread of 34% and completed 332 renewals and options covering 1,800,000 square feet at a 9.6% spread. Combined, these contributed to a blended spread of 15.2%, further reinforcing the pricing power and productivity of our centers. While overall pro rata occupancy dipped slightly to 95.4%, largely due to the anticipated lease rejections from Joanne and Party City, we had positive absorption that helped offset the impact of these vacates. Importantly, our team is doing a great job of capturing pent up demand by quickly backfilling space that comes back to us.

Specifically, with the Party City and Joanne spaces, our team responded with speed and precision as the majority of those locations are now either re leased or under LOI, many at significantly higher rents. This quarter, we also leveraged market dislocation to drive additional grocery anchored conversion, advancing our long term strategy. This is where Kimco excels, upgrading tenancy and enhancing portfolio strength. As a result, 86% of our annual base rent now comes from grocery anchored shopping centers, an all time high that underscores the essential and resilient nature of our portfolio. In addition to driving leasing velocity, we’re focused on enhancing execution through innovation.

We’re deploying AI in targeted high impact areas, reducing costs, increasing speed, and supporting growth. We’ve significantly accelerated lease abstraction, freeing up internal resources and improving accuracy. Our teams are also piloting AI tools to enhance small shop tenant prospecting and streamlining early stage redevelopment planning, both of which support leasing momentum and long term value creation. These applications are already generating measurable returns and strengthening the foundation for future performance. Further, we continue to build embedded growth that Glenn will speak to through our signed but not yet open pipeline.

This visibility into future rent commencements reinforces the value of our real estate and gives us confidence in our annual base rent trajectory, particularly in today’s more dynamic environment. Turning to capital allocation. We remain disciplined and strategic on how we deploy capital. This quarter, we continue to execute on our capital recycling strategy, monetizing low growth assets and positioning the portfolio for stronger long term performance. Private capital interest in our sector remains robust, but we’re underwriting carefully and maintaining a high bar for new acquisitions.

Our structured investment program continues to deliver attractive risk adjusted returns and serves as a pipeline for future fee simple opportunities. Ross will elaborate on this. On the balance sheet, we remain in a position of strength. We took proactive steps this quarter to enhance flexibility and position ourselves for growth, including a well timed debt issuance and an opportunistic use of our share repurchase program. Based on our strong first half performance and the lease up visibility we have ahead, we’ve increased our confidence in our full year outlook.

Glenn will walk through the updated guidance in a moment, but the message is clear. We are executing ahead of plan and converting leasing momentum into durable cash flow that could grow FFO over 5% for the second consecutive year. To wrap up, we’re operating from a position of strength with three clear priorities guiding our continued success. First, continue to drive leasing velocity and accelerate rent commencements from our signed pipeline. Next, backfill return space with stronger, higher credit operators.

And finally, allocate capital with discipline while maintaining the strength and flexibility of our balance sheet. With record demand, limited new supply, and a robust pipeline of rent commencements on the horizon, we believe Kimco, with our open air gross ranker shopping centers in well located markets, is positively positioned to deliver growth and value creation at the upper end of the shopping center sector. Thank you to our incredible team for their continued dedication and execution and to our shareholders for your continued support. With that, I’ll turn the call over to Ross for an update on the transaction market, followed by Glenn with our financial results and updated outlook.

Ross Cooper, President and Chief Investment Officer, Kimco Realty: Thank you, Connor. I hope everyone is enjoying their summer. The second quarter was one marked with uncertainty and volatility. However, it also presented tremendous opportunities for Kimco given our broad investment strategy along with a strong well capitalized balance sheet, great liquidity and extensive industry relationships. As a result, we are benefiting from meaningful deal flow, a key differentiator for us that we are very excited about.

Early in the quarter, we saw several acquisitions that other groups had tied up get dropped amid the uncertainty. Lenders also acted cautiously due to the potential tariff impacts. This was a window of opportunity for us to lean into our conviction in open air retail. We utilized our structured investment program to offer solutions to borrowers in need of capital. We issued two senior mortgages on high quality grocery anchored and lifestyle assets with a right of first offer on both properties.

A portion of the funding for these investments came from the repayment of a pair of mezzanine financing positions on former RPT assets. For the quarter, the net investment on the structured investment side was just under $20,000,000 Additionally, during the quarter, we sold a long term flat lease for $49,500,000 on a Home Depot parcel in Santa Ana, California at a 5.7% cap rate. As we have indicated previously, we anticipate recycling capital from these flat leases and non income producing parcels into higher yielding, higher growth investments. Our goal is to sell between a 100,000,000 to a 150,000,000 in the 5% to 6% cap rate range for these types of properties annually going forward, and this transaction puts us on a good path for 2025. Specific to the Home Depot parcel, we elected to designate this as a ten thirty one exchange to defer the gains on the sale and have already identified a grocery anchored property as a replacement.

The exchange property is expected to close in the third quarter with a compound annual growth rate of approximately 3%, which is significantly higher compared to the Home Depot that had a roughly 1% CAGR. Since the Vegas ICSC conference in late May up through today, investor apprehension related to acquiring core assets has mostly subsided as concerns related to the tariffs have been tempered. This is manifested with aggressively priced assets transacting supported by an extremely competitive landscape on the debt and equity side, an abundance of private capital that is ready to come off the sidelines, as well as the anticipation of possible rate cuts in the second half of the year. These factors, along with our current cost of capital, have limited our ability to accretively acquire. Despite this, we remain active in evaluating new acquisitions of shopping centers outright.

And if we see a positive change in our cost of capital, we’re positioned to go on offense. Regardless, we’ll remain disciplined with our capital allocation. Furthermore, we have a healthy pipeline of new structured investment opportunities, which continue to provide a foothold into high quality real estate at attractive returns with a chance to acquire in the future. As I mentioned, the capital markets are open with financing available for the right sponsors and better real estate. As a result, we anticipate a few of our existing structured investment borrowers are either evaluating sales or refinancings that may result in repayments to us in the second half of this year.

We remain very confident in our ability to structure deals creatively. This outside the box approach continues to provide us with unique access to a number of other exciting structured investment opportunities. And as I mentioned, we have a solid pipeline of new investments that we anticipate closing in the back half of the year to offset any potential repayments. Overall, we remain disciplined in our approach to capital allocation, prioritizing the sale of low growth, low cap rate assets accretively into new investment opportunities with a higher growth profile. Between our existing pipeline and those that materialize during the rest of the year, we aim to remain a positive net acquirer as we were through the 2025.

Now to Glenn for the financial results and updates to 2025 outlook.

Glenn Cohen, CFO, Kimco Realty: Thanks, Ross, and good morning. The strength and durability of Kimco’s OpenAir platform resulted in another quarter of solid performance. We again delivered strong per share FFO growth, broad based leasing momentum and ended the quarter with over $2,000,000,000 of available liquidity. Let me walk you through the quarter. FFO was $297,600,000 representing a per share increase of 7.3% to $0.44 per diluted share compared to $0.41 per diluted share in the second quarter of last year.

This growth was driven primarily by a $20,800,000 increase in pro rata NOI, which reflected higher minimum rents, stronger net recoveries and a 21 basis point improvement in credit loss, which came in at 89 basis points for the quarter. Year to date, credit loss stands at 72 basis points, highlighting the durability of our tenant base. We also saw a $4,800,000 incremental contribution from our structured investment program this quarter. Offsetting these positives was a $7,900,000 increase in consolidated interest expense tied to our 2024 and 2025 refinancing activity. Additionally, we recorded a one time accounting benefit of $01 per share, primarily driven by $4,700,000 in joint venture income from the conversion of a legacy JV structure to an LLC, as well as approximately $2,000,000 from the recapture of below market rent on a vacated Joann space.

First half FFO totaled 599,500,000.0 or $0.88 per diluted share, a 10% increase over the 2024. Turning to operations. As Conor mentioned, this was another strong quarter for leasing across the portfolio with tenant demand translating into healthy spreads and record small shop occupancy. Same site NOI increased 3.1% driven by contractual rent growth, contributions from ancillary income, and further improvement in credit loss. The signed but not yet open pipeline remains a key growth driver.

We ended the quarter with a lease to economic occupancy gap of three ten basis points, representing approximately $66,000,000 of ABR. We expect about 40% of that to commence in the second half of the year, which will contribute $7,000,000 in incremental rent. Including commencements from the first half, we anticipate collecting $30,000,000 of ABR in 2025 from the Snow pipeline. The continued lease up progress provides strong visibility into future earnings and reinforces the embedded growth across our portfolio. Shifting to the balance sheet, we took proactive steps this quarter to strengthen our financial flexibility.

We opportunistically repurchased 3,000,000 shares in April at an average price of $19.61 reflecting an FFO yield of 9% and a 24 discounted consensus NAV. We also completed a $500,000,000 bond issuance in June, pricing a long ten year note at 5.3%, reflective of a spread to treasuries of 92 basis points, our lowest issuance spread in many years. Proceeds were used to repay the $240,500,000 Weingarten bond, pay down our revolver and retain approximately $80,000,000 for future accretive investment opportunities. We ended the quarter with consolidated net debt to EBITDA of 5.4 times and a look through leverage ratio of 5.6 times. Liquidity remains robust at over $2,200,000,000 including $228,000,000 of cash on hand.

Now turning to guidance. Based on our strong first half results and improved visibility into lease up and cash flow timing, we are raising our FFO per share range to $1.73 to 1.75 representing annual growth of 4.8% to 6.1% over 2024. We’re also raising our full year same site NOI growth outlook to 3% or better, 50 basis points above our prior guidance. This updated range incorporates the impacts of lease rejections we’ve already absorbed. All other guidance assumptions remain unchanged.

In closing, I want to thank our associates for their outstanding execution. The embedded rent growth in our portfolio, combined with a conservative balance sheet and consistent performance, continue to position Kimco as a top tier REIT capable of delivering through a variety of market cycles. And with that, we’re happy to answer your questions.

Conference Operator: You. Our first question comes from Michael Goldsmith with UBS. You may proceed.

Michael Goldsmith, Analyst, UBS: Good morning. Thanks a lot for taking my questions. Really solid same property NOI growth in the first half of 3.5%, second quarter at 3.1%, but the guidance implies trends decelerate in the second half to 2.5%. So can you help us understand the puts and takes for the outlook for the back half? Maybe within that, just talk about kind of the occupancy trajectory that’s anticipated within that?

Sure.

Management Representative, Kimco Realty: Thanks. Good morning, Michael. Just so we increased our annual guide to 3% or better. Again, and that’s coming off of 2% or better at the beginning of the year. It’s really it’s based on just the positive operating performance of the operating portfolio.

We’ve seen we have seen quicker rent commencements from the Snow Pipeline, which has added another $5,000,000 since the original guidance. We have now accounted really for the impact of the Party City and Joanne bankruptcies, which will have a much more impact during the second half of the year as we’ll be we’re down about $5,000,000 per quarter from those vacancies due to the bankruptcies. But having said all that, we’re very confident that we’ll be able to achieve the 3% or better level for the full year. Again, same site NOI, it’s a full year guide number, and it takes into account any of

Management Representative, Kimco Realty: the comps from last year. And then from an occupancy standpoint, we definitely feel like Q2 was the trough as we look at the back half of the year with Q3 and Q4 already generating incredible momentum. Obviously, when you look at the small shop occupancy up to 92.2%, a new record high for the company, it is incredible and impressive. And what’s impressive about that actually is that over the first half of this year, we’ve used about 100,000 square feet of vacancy that’s been vacant for over three years. And I think that’s just a further demonstration of the demand for quality product and retailers and operators really looking to enter and participate in a Kimco shopping center.

So really pleased with sort of where we are today and our expectations through the back half of the year.

Conference Operator: Thank you. Our next question comes from the line of Alexander Goldfarb with Piper Sandler. You may proceed.

Alexander Goldfarb, Analyst, Piper Sandler: Thank you and good morning out there. Just a question on the structured finance book, the debt deferred equity book. I think you said that you’re expecting some repayments in the back half. So two parts on this. One, presumably your guidance includes the impact of those repayments.

And then two, some of the other REITs in REIT land are scaling back the debt and preferreds just because what they perceive as volatility. Sounds like you guys think there’s ample runway on it. So just want to get a sense of if you think that this business is sustainable at a run rate? Or if your view of this business is it’s more moment in time where there’s an opportunity at one point, another point it gets scaled back because there’s opportunities don’t exist. Just trying to understand how this factors into your FFO going forward.

Management Representative, Kimco Realty: Sure. Thanks, Alex. Yes, to answer the first part, our guidance absolutely incorporates any expectation of repayments and new capital that we put out. Now we do think that this is a business that has viability through all parts of the cycle. We’ve seen tremendous opportunity.

We continue to see the pipeline growing. And I think that whether interest rates are up or down, there’s always going to be a need for this capital. There are very few operators on the institutional side that are providing this capital. So we think it’s a real differentiator for us. The way that we underwrite the deals, we look at it through the lens of an operator, through the lens of an acquirer, not too dissimilar from the way that we underwrite when we’re looking to acquire an asset outright.

So we’re extremely disciplined with the real estate that we’re willing to invest in. And to the extent that we continue to see opportunities in real estate that we like, the sponsors we like and continue to get that foot in the door with the right of first offer, the right of first refusal, we do anticipate that we’ll continue to scale the business. That being said, there’s going to be ins and outs quarter to quarter. But when you look at it through an annualized basis, we anticipate that we will be net sort of positive investors in this program on a go forward basis.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: The only thing I would add, Alex, is we’re really being paid the wait because we’re focused on that right of first refusal of a future acquisition pipeline. And it’s a really nice offering for us to be able to identify assets we want to own, potentially assets that may come to market, but it’s a nice way to get our foot in the door on some generationally owned assets where they rarely trade and we get a last look at it if they do come to market, which in this competitive set, but you know how competitive it is out there on the acquisition front, it’s nice to be in a position where we get last look on a pretty significant pipeline of opportunities, which is a big differentiator for us.

Conference Operator: Thank you. Your next question comes from Greg McGinnis with Scotiabank. You may proceed.

Management Representative, Kimco Realty: Hey, good morning. Given the more aggressive pricing institutional investor interest in grocery anchored shopping centers, is there any desire to expand the JV platform to help fund acquisitions that you’re currently priced out of given the cost of capital? Or have your current partners talked about making additional investments in the relationships you already have? Yes. It’s a great question.

And I think we like to think of it as a tool in our tool belt. We always have the opportunity with some really wonderful partners, some of which are looking to expand within retail. Other new potential partners that have expressed interest in co investing with us. We continue to have those conversations. Where we sit today, we think that we’ve taken an appropriate approach to capital allocation in terms of selling some lower growth, lower cap rate assets and then redeploying that into higher growth opportunities primarily with grocery anchored.

As we indicated, we have identified a ten thirty one exchange for the Home Depot sale that occurred in the second quarter and that will be something that we can acquire on our own grocery anchored asset with a 3% plus CAGR. But to the extent that we can recycle sort of internally into wholly owned assets, we’ll continue to do that, but also have the optionality in the future of considering scaling the joint venture program.

Conference Operator: Thank you. The next question comes from Samir Khan with Bank of America. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty1: Good morning, everybody. Hey, Connor, as part of guidance, I know the term fees went up. Maybe elaborate kind of the type of tenants category that’s driving this number higher and maybe along the same lines talk about sort of the watch list sort of into next year, especially given some of the looks like some of the concerns around tariffs have subsided, but maybe talk around that as well. Thank you.

Management Representative, Kimco Realty: I’ll take the LTA question, Sameer. So it’s actually primarily driven by one received that’s associated with a large redevelopment that we’re in the process of we’ve already gone through the entitlements, so going through the permit process and documentation process right now. So it was a big chunk that enabled us to get access to land to move forward with the program. So that was really the primary driver. A lot of other stuff, just regular course of business, smaller LTAs, and we have that kind of backfills ready to go when a tenant wants to get out.

No real trend there of note. As it relates to the outlook for ’twenty six, with our watch list tenancy, obviously, it continues to narrow, think, because of the second round of bankruptcies that have sort of flushed through the system over the last couple of years as we’ve recently seen with Rite Aid being the most recent adjustment to auction last week. On a go forward basis, there’s a handful of tenants we continue to watch our exposure and ’26 is relatively limited on the rollover. We’re already engaged with them, engaged with alternatives to backfill. So right now we’re feeling pretty good about the outcome.

The tariff noise and concern from the first half of the year I think is more or less muted at this point. As you can see through our deal flow of over 175 new deals, which is incredible velocity and what we’re seeing already in the July forecast and numbers for executed deals. Retailers are really looking at the opportunity to expand their market share and use bankruptcy process as means and ways to do that. You saw Ross last week really for the first time participate in the bankruptcy process. That’s super interesting.

Obviously, they want to grab some market share. We’ve seen other retailers starting to expand into new trade areas. You have Bob’s Discount that’s moving south. He’s in into the Florida region for the first time. So it’s a fairly robust, healthy retail environment.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: I think just my last thing to add on the the watch list tenancy, it’s really the smallest it’s ever been. And then when you dive into it a bit deeper, as Dave mentioned, there’s some really strong individual operators in some of these categories where the weaker performers are losing market share. And because of that lack of new supply, you’re seeing some of the weaker, call it fitness operators, be gobbled up by some of the stronger operators that are looking for growth. You see the same with obviously Michael is doing better since Joann’s has filed. You’ve seen some of the soft goods players that are in the off price category continue to do quite well They’re taking market share from department stores.

So there’s I think there’s a real growing desire to grow their store fleet when they’re healthy and operating at a high level. And we continue to see with the Joann’s and the Party City boxes, the diversity of demand that we have. So whether it’s the large anchor boxes, we’ve done a number of new deals and have a large pipeline with BJ’s, you’ve got Dick’s House of Sports, you’ve got Walmart, you’ve got Costco, Home Depot, Lowe’s, you’ve got a number of big box players, including IKEA doing deals with us. And then the junior box is very robust. That’s where we see a tremendous amount of demand from not only the traditional off price players, but grocers and others.

And then our small shops continue to tick up as well. We’re seeing deal volume elevate quarter over quarter, meaning that we have continued momentum to push that all time high occupancy even higher. So our focus is continuing to obviously execute, and that watch list tenancy is getting smaller and smaller and those leases are typically significantly below market. So those are opportunities for us.

Conference Operator: Thank you. The next question comes from Ronald Cundam with Morgan Stanley. You may proceed.

Management Representative, Kimco Realty: Hey, just wanted to go back to the acquisition environment, just digging in a little bit more. Just can you talk about is there more product out there in the market? It’s just competition is so fierce, it’s hard to sort of win deals. And I guess when do you think that you would get to a point where Kimco starts to maybe land more of these of these transactions and so forth. So more product and what Kimco needs to do to sort of land some of these deals?

Thanks.

Management Representative, Kimco Realty: Sure. Yes, we definitely saw some pent up demand, so to speak, after a bit of a slowdown in April and the May. Going into the ICSC in Vegas in May and through the last couple of months, we’ve seen an increase of product in the market and definitely the demand continuing to increase. So I think you’ve seen it from a lot of our public peers, you’ve seen it from the private institutions, a lot of very aggressively priced both single assets and portfolio in the market. We’ve been very successful in terms of utilizing our ROFOs and our ROFRs, not just on the structured investment program, but also even within our joint venture program.

So when you think about the amount of product that we have the first and or the last look on, we have about $2,000,000,000 of gross asset value in the structured book and then upwards of $6,000,000,000 of assets within our joint venture program. So while we’re going to continue to be very selective and it comes in waves as to when those opportunities present themselves, we do have the inside track on a tremendous amount of real estate. We do look at assets that are being offered by third parties. Occasionally, we bid and we’re successful in winning those deals. But the nice part about being able to exercise a ROFO or a ROFR is these are assets that we’re invested in.

In many cases, we already manage and we’re involved in the operations. When you acquire one of those assets, there’s there’s virtually no new surprises. We we know exactly what we’re investing in. Whereas when you buy a third party asset, there’s gonna be some good surprises. There’s gonna be some, you know, not so great surprises along the way.

So we feel very comfortable acquiring from within assets that were already involved. And then selectively, we’ll take our spots where we want to buy from a third party.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: I think Ross puts it correctly where we’re poised to go on offense. But again, it all ties back to cost of capital. And so as you’ve seen us continue to be methodical and thoughtful about when to deploy capital accretively, it’s really match funding recycling efforts we have to accretively grow from selling our flat ground leases. And and if you give us a cost of capital advantage, think Ross outlined the ability we have to really go on offense and grow externally. Right now, obviously, with where our our stock is and where our cost of capital is, we continue to look internally and mine for recycling accretive opportunities.

Conference Operator: Thank you. The next question is from Michael Griffin with Evercore ISI. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty2: Great, thanks. Maybe just going back to the leasing pipeline and specifically on kind of small shop tenant demand, appreciate your comments there and the ability to kind of push on occupancy. But can we break that down a little bit? I know about a quarter of that comes from those national retailers that probably have a longer time frame that they need to realize to expand their real estate footprint. But for maybe some of those regional local players, not necessarily mom and pops, but small businesses that might have more uncertainty kind of projecting out their financials amid the tariff situation, are you still seeing good demand from that cohort as well?

Or is it predominantly the national brands? Thank you.

Management Representative, Kimco Realty: Yes, great question. I think you’re seeing a healthy demand across all categories as it relates to the financial strength from a corporate national to a regional to a local mom and pop. Again, they’re looking to open their business. They’re looking to this is their primary means in which to generate income. So they want to pick a great center, a great co tenancy and partner with a landlord that has the funds and the means available to make sure and ensure that their business has the opportunity to thrive.

So I think they continue to gravitate toward the Kimco Center and see that. You see a lot on the service side. I mean, over 75% of our deals in the trailing four quarters have been service related, that’s inclusive of restaurants, personal care, fitness, med. And so that is very much a combination of those that do franchises. Franchises is a very active broad category that enables the operator to just focus on running the business while the franchisor helps to develop and deliver the concepts.

And then on the restaurant QSR side, we’ve seen significant uptick from last year to this year, almost 3040% higher. And you’re seeing a lot of the trade out from the one point zero to the two point zero type QSR tenants, the Cabos, the Shake Shack, Raising Cane’s, In N Out expanding, Chick fil A obviously. So that’s more on the national side. But yes, we’re seeing that healthy balance across those three broad categories.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: This deal volume on the small shop side was 155 small shop deals. So when you think about the run rate typically for us is usually right around $115 call it. So it is elevated going and it continues to come from these are obviously spaces that because we’re at all time high occupancies, these are spaces that may have been dark for a while, may have been vacant for a while. So you’re seeing the breadth and depth of the demand, the ability for us to continue to push on the small shops because it’s really all about services that are just exploding into the shopping center. You know, services that we love because it gets you know, off the couch in your car to the shopping center and it has to be done in person, and it’s very much an e commerce resistant type use.

So we continue to like how the shopping center has evolved, and, you know, the small shop use case continues to to gravitate and attract really best in class operators that are looking to connect with consumers more conveniently and provide a value proposition.

Conference Operator: Thank you. Our next question comes from Craig Mailman with Citi. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty3: Hi, this is Sydney McInty on for Craig. So there’s obviously been good progress on backfilling in the quarter. Just curious if there’s any more color on the remaining party cities in Joann’s being marketed. Are you getting interest from single tenants on those or considering splitting boxes or anything that would be helpful there? Thank you.

Management Representative, Kimco Realty: Yes, we’re still getting really strong interest on the single tenant backfill opportunities. Obviously, I mentioned a handful of tenants that are now expanding into some of the markets where these boxes reside. When you look at like when we say resolved between assigned, executed at least or at a healthy stage of LOI, that’s over 90% for both. Just this week actually we signed three Joann boxes, two coming in late last night, both with TJX and we actually signed those deals in under ten days from when they approved it at REC Committee to when we actually had a fully executed deal, which is absolutely extraordinary. Again, shows the demand, but more importantly, shows the relationship and the partnership between the two companies and the way we all work together with conforming leases, getting well ahead of the construction schedules and the work letters and really, really approaching this as a true partnership.

So we anticipate that to continue through the back half of the year and it will feel pretty good that most of this will all be resolved and executed by the end of the year.

Conference Operator: Thank you. The next question is from Floris van Dijkum with Ladenburg. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty4: Hi guys. Thanks for taking my question. I had a my question I guess is a little bit

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty5: on

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty4: the operations are pretty impressive and the demand is clearly there. Maybe if you could talk about some of the initiatives that you are working on to improve your expense recovery ratios and where do you Presumably, they will go higher as you lease more of the vacant space. But are you also doing some other things operationally that should lift your expense recovery going on a going forward basis?

Management Representative, Kimco Realty: Yes. It’s a great question, Flores. Thanks. And you are right. As the occupancy increases and those tenants open, the recovery ratios should increase as well.

Obviously, when you just think of like basic human operating maintenance, we signed several recurring service contracts and we negotiated this heavily prior to the start of the year. And with multiyear contracts, it helps eliminate some of the noise in terms of inflationary effects and or increases year to year. So you’re able to get a good handle on your costs upfront and then plan accordingly to that. It’s really, I think, the amount of data that we have today and the way that we can really dive into the micro level on the account level on a site by site basis and pairing it closely with the asset strategy and the intention, you can just more closely monitor the expenses that you’re deploying out on the site that are essential, that are necessary to maintain a safe and healthy environment while also pairing it with the activity on the leasing side. So I think it’s just a more comprehensive approach that we’ve been taking.

Obviously, we work very, very close with our vendors. We have scale, so we have, in essence, some leverage on the negotiating table. But we want to always partner with the best the best providers that provide the best service, the most reliable service, which is really, really

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: important for our retail partners.

Management Representative, Kimco Realty: So it’s really a combination of a number of things. Obviously, we’re we’re using, you know, AI and analytics fairly heavily now as well internally to get a better understanding of where there’s opportunities to improve margin or ratio while not sacrificing obviously the quality and care of the center.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: Will, do you want to comment a little bit about our lease administration program as well and what we’ve done there?

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty5: Sure. Thanks, Connor. This is Will Teichman. Good morning, everybody. You know, we successfully executed on two public to public m and a integrations over the last few years and, exceeded synergy targets on both deals.

And really, that effort has allowed us to build a playbook for scalable efficiency and developing greater advantages of scale. And it’s something that Connor talked about a lot with the management team and and really drives them, with the team on a day to day basis. We’re really working to apply that playbook now to identify and prioritize other strategic platform innovation and transformation projects. One of the projects that focus for this year is transforming our lease administration function, which really plays a critical role behind the scenes in obstructing and managing lease data, doing the day to day billing and collections work with our retail partners. So

Management Representative, Kimco Realty: a lot of

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty5: work underway. We’re rethinking the organizational design. We’re simplifying process, and we’re deploying enabling technologies, including AI, to help enhance recovery rates and accelerate collection timelines. All of that really is is focused on, you know, obviously being a best in class operator and maintaining, a best in class G and A, you know, expense ratio in terms of how we operate.

Conference Operator: Thank you. The next question comes from Rajun Sanabria with BMO Capital Markets. You may proceed.

Michael Goldsmith, Analyst, UBS: Hi, good morning. Just hoping you could talk a little bit about the resi and entitlements that you guys have available to either harness for a longer term value and or to monetize and kind of how you’re thinking about that as part of the capital recycling you talked about selling some of the flat leases. But just curious if resi and entitlements is part of that or if that’s not the focus today?

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: That is part of it. I think what we’re trying to do is take each and every project and identify really the the opportunity set that we have. And so some entitlements, you know, we may look to monetize and take some some chips off the table, while some we may contribute as our land to a joint venture and ride that development with very little costs associated with the project other than just the land as our equity that we contribute it into. So we’re focused on trying to unlock the value and harness that value, and we’re trying to see how the fastest way to do that. And right now, as you’ve seen through our activation program, we’ve really taken a capital light approach where we’ve either ground leased the portion of the property that we own or we contribute the parking lot as land into the joint venture.

And I think as we look to the pipeline, we may look to see obviously where supply is and demand is across the country where these projects might sit and if it makes sense to activate a few more in the near term. So we’re working towards that as well as looking to see which ones could potentially be monetized.

Conference Operator: Thank you. Our next question comes from Rich Hightower with Barclays. You may proceed.

Michael Goldsmith, Analyst, UBS: Hi, good morning, everybody. Thanks for taking the question here. Just back on the capital allocation, if you’re able to repurchase stock at a 9% FFO yield with, call it, mid single digit growth on top of that, just where does the acceleration in that program fit in with the rest of the sort of manifold capital priorities for the company?

Management Representative, Kimco Realty: Thanks, Rich. It’s a great question. We have all the programs in place to deal with where the stock price is at any given point in time. As Conor mentioned, we’re obviously very focused on really what our cost of capital is and how we use it. When the stock got down, as all the havoc was happening with the tariffs in the April, at a nine yield, we thought it made sense to kind of make that a line of demarcation for us to say, it makes sense to buy some stock back here.

So we did that. Now the stock has recovered somewhat, right? Stock’s up over 10% from that point. We also have an ATM program, which last November, we used that when the stock was above 25% where it made sense. So we’re always watching.

We try to have the tools in place to be reactive. We built the balance sheet where you really can’t take advantage of dips when they happen or be an issuer where it really makes sense.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: I think one of the things we continue to monitor is the disconnect between public and private pricing. And we see a very wide spread between our implied cap rate and where we think our portfolio would trade in the private market. And so there is a pretty wide disconnect there that we continue to monitor. That being said, we have a lot of leasing going on, a lot of capital required for that leasing. We have a lot of growth obviously coming out of the portfolio.

But if and when we do see these massive dislocations, we typically are prepared to jump at it and take advantage of the dislocations.

Conference Operator: Thank you. The next question comes from the line of Cooper Clark with Wells Fargo. You may proceed.

Management Representative, Kimco Realty: Thank you for taking the question. I just wanted to circle back on the transaction market. Curious what types of private buyers you’re finding yourself competing with on new deals and any comments you could share on their yield hurdles or leverage profiles? And then also curious if you’re seeing more attractive opportunities for larger portfolio deals versus one off transactions on a cap rate basis, just given the scale and relationships you spoke to earlier on the call? Sure.

Happy to. Yes, a lot of capital on the private public side. I mean, we’re going up against pension funds, sovereigns, a whole bunch of groups that have been hanging around the retail sector for many years. In some cases, even conversations we’ve had with groups on the joint venture side that are looking at putting out capital on their own account. So there’s just been a tremendous amount of competition in capital that we’ve gone up against.

We have been able to pick our spots as you’ve seen and again leaning into the structured investments where we can be very flexible and create I think unique solutions for borrowers. I think interestingly this quarter on the couple of deals that we closed on, we were the lender in a senior position. So you’ve seen us be very flexible and adapt to the market depending on where those opportunities present themselves. In terms of the larger portfolios, the pricing has been pretty consistent on some of the portfolio transactions that we’ve seen trade versus some of the one offs. There’s been various points in the cycle where bigger was better or bigger was not necessarily better depending on your perspective as a buyer or seller.

Right now, I think that the portfolios are pricing as aggressively as the one offs. So no real sort of opportunity in terms of an arbitrage to buy larger versus single asset. You saw with our transaction with RPT at the 2024, that was a point in time where we felt that larger portfolios were trading at a significant discount and we took advantage of that. But at this current moment, we haven’t seen that exactly occur right now.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: There’s a few aggressive buyers that I think are sort of unique. Some of them are fund structures where they need to get capital out, where it’s coming to the end of their fund life and they’re leaning into the space. Some are building platforms and needing scale and putting capital out aggressively to race to get that scale. So those are obviously ones we take a step back and watch. But it’s clear that there’s a lot of capital and a lot of interest because if you look at the fundamental cash flow growth, it’s very strong even relative to other sectors.

Management Representative, Kimco Realty: And these are all primarily unlevered acquirers so that the debt cost isn’t necessarily factoring into their yield. I think for the most part investors for core products are backing into mid to high single digit IRRs.

Conference Operator: Our next question comes from the line of Hale St. Juste with Mizuho. So

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty6: a lot’s been covered, but I was hoping you could go back and maybe give us an update on the backfills of the Joann’s and the Party City boxes. How many are left to fill? How many LOIs you might have outstanding? What the new rents and spreads look like and how the CapEx spending is coming along? Thanks.

Management Representative, Kimco Realty: Yes, sure. Absolutely. So on

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty6: the Jo Anne side, as I mentioned, we

Management Representative, Kimco Realty: signed another three leases this week. So we have six executed, one assigned, one is under contract as part of a center to sell. And then we have 14 LOIs remaining outstanding. On the Party City side, we have almost 36 executed and then the remainder are at LOI or at least right now. So I’d say those are effectively resolved with just a couple left outstanding.

I mentioned a couple of the opportunities was with TJX this week when we really accelerated the deal flow there ended in under ten days. When you look at the overall mark to markets on on the Joann side, we’re seeing around a 20% overall. Obviously, ebbs and flows box to box and on Party City, just about 15% mark to market there. So feel very good about the momentum and in closing out both these both these opportunities by the end of the year.

Conference Operator: Thank you. Our next question comes from the line of Alexei Chen with Baird. You may proceed.

Management Representative, Kimco Realty: Hey, thank you for taking my question. When does Kim expect that redevelopment to flip into a tailwind for same store NOI?

Management Representative, Kimco Realty: Redevelopment into a tailwind, so the same

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: store NOI contribution was a drag this quarter versus a net positive. So I think when you look at, obviously, the some of the larger redevelopments that we have going, there’s a lot of it, you know, is is expanding square footage and GLA and taking that box down and looking for grocery conversions where we can add grocery. As you noticed in the first quarter, we did a big portfolio deal with Sprouts. We’ve seen a lot of activity with Trader Joe’s, a lot of activity with Aldi and Lidl, just, you know, executed a big deal with BJ. So there’s a lot of grocery coming into this shopping center space in in the portfolio, and that’s really where we’ve been focused on trying to add to the redevelopment pipeline.

And you’ll see that continue to deliver in the back half of this year where it becomes a positive.

Conference Operator: Thank you. Our next question comes from Mike Miller with JPMorgan. You may proceed.

Michael Goldsmith, Analyst, UBS: Yes. Hi. Glenn, how much of the guidance increase was driven by the higher same store outlook versus the onetime accounting item that you kind of referenced?

Management Representative, Kimco Realty: More than half of it is really related to just how the portfolio is operating and our expectations for rent commencements coming from the snow pipeline and the backfills that the team has been able to do on the JoAnn’s and the Party City boxes with them coming online. The bulk of it is really operational.

Conference Operator: Thank you. Our next question comes from Linda Tsai with Jefferies. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty3: Hi, thank you. A question for Ross. How has cap rates changed since ICSC across different property types? And which regions or shopping center formats are you seeing better opportunities?

Management Representative, Kimco Realty: Yes. It’s a good question because we’ve seen really aggressively priced and closed transactions with all sort of open air formats. You’ve seen some really high quality lifestyle that’s been trading aggressively. Obviously, core grocery continues to be the number one in terms of investor demand. Unanchored strips continue to grow in terms of investor demand and capital that is chasing those deals.

And we’ve also seen Big Box Power in the right location with the right tenancy trading aggressively. So I think everybody is sort of picking their spots and picking their lane. The nice thing I think about Kimco and one other differentiator that we believe is our diversification in terms of format. We’re very comfortable with all of those different formats, so we can sort of zig and zag and adjust depending on opportunity that we see or if there is one format and at one point in time starts to trade off, that’s something that we can be a little bit contrarian and lean into. But for the moment, we’ve seen all formats being really heavily pursued and priced aggressively.

Conference Operator: Our next question comes from Michael Garman with BTIG. You may proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty7: Yes. Thanks. Good morning. Just stepping back for a second here. Obviously, you’ve done a lot of work on portfolio in recent years.

You’ve grown the grocer exposure 15 percentage points over the past ten years. When you talk about record small shop occupancy, I’m kind of wondering what you think the upper bound is for this newer portfolio that you’ve built over the past decade? And how much of that is pushing into your expectations for rent escalators as you sign these new small shop tenants? Are they more pushing towards the high end of that 3% to 5% range you talked about in the presentation? And what that looks like going forward?

Thanks.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: Yeah. It’s a good question, Michael. Obviously, we’re in uncharted territory when you get to our small shop occupancy where it is today and what we can take it to. So we’re obviously optimistic that there’s still a lot more room to run. There’s no reason why we should cap out in the mid 92.5% occupancy range.

To your point, the economics of small shop deals are a lot stronger because the annual escalators are typically in that 3% to 5% range. And you’re seeing it in our stronger shopping centers being able to push the upper end of that range. So we’re the momentum is there. As I mentioned, the second quarter small shop volume was significantly higher. And these are on spaces that have been vacant or been sitting vacant for a while.

So I think you’re seeing just the breadth and depth of demand expand alongside us transforming the portfolio to more of a grocery anchored shopping center portfolio. So that combination, I think, is really working in our favor. And we’re doing a lot in terms of new tools for leasing. I think I mentioned it earlier where there’s really a lot going on behind the scenes that allows us to do portfolio type deals with these small shop operators, driving really good credit tenants into the shopping centers that we have, looking at all the different we have relationships, and expanding people not even in certain geographies but taking them to new geographies as well. And I think that’s the real benefit of Kimco and its scale and its advantages of scale, is showcasing that we can use our portfolio to take the best in class retailer from one geography and bring them to a new geography and do the lion’s share of that market share new deals that they’re going to do.

Management Representative, Kimco Realty: And I think, put you on top of that, it’s obviously the retention side too is essential and critical in order for you to continue gaining occupancy trends as we have in with the small shop side. And so we’re we’re retaining over 90% of the rollover schedule on a recurring basis now, which is incredible. Again, that’s just a testament to appreciate them appreciating that they’re doing well in their business, well in their location. We have a good partnership with them. They have with us, and so there there’s a cost to relocating, and they’ve opted not to take that relocation instead of continuing to stay with us around their business.

Conference Operator: Thank you. Our next question comes from Omotayo Okusanya with Deutsche Bank. Please proceed.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty8: Yes. Good morning, everyone. Congrats on the quarter. Really good execution here. The broader question I have is just, again, you just take a look at the group in general on stock performance relative to the broader REIT sector.

And it just kind of feels like investors are still pretty worried about the retail outlook and the implications for shopping centers going forward. I just wanted to ask you guys, do you think that’s valid? Do you think, again, ’26 when tariffs are kind of all settled and they’re clearly going to get higher rates, that really becomes an issue? Or are people just or investors just overly concerned just kind of given the strong operating and demand trends that you and in fact several of your peers continue to see?

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: Thanks for the question. I think a lot of what happened this year was there was a lot of noise to the beginning of the year that questioned the strength of the consumer, questioned the strength of the retailer demand, the operating margins on retailers. So there was obviously a lot out there to put a question mark on the strength of the underlying fundamentals. For Kimco, what we continue to focus on is to really be in that top quartile of FFO growth year in and year out. And that continues to be our our North Star.

And I think if we can continue to execute, we were one of only two companies last year to do over 5% FFO growth. The midpoint this year is now raised to over 5%. We feel like we have all the building blocks to put the numbers up, to let the numbers speak for themselves. I think there is a little bit of misperception going on when you think about the negative news cycle and when retailers sort of hit the skids. Typically, that’s a news story that runs.

But the underlying fundamentals and the strength of the demand that we see is not really covered in the news cycle. The private markets see it. The private markets recognize the cash flow growth. Private markets have capital to deploy into whatever sector they so choose, and they’re clearly taking advantage and notice of what’s going on in the underlying fundamentals of the sector. So we’re cautiously optimistic.

We’ll finish this year strong and have the building blocks to continue our momentum going forward.

Conference Operator: Thank you, ladies and gentlemen. We currently have no further questions. I would like to pass the conference back over to speaker David Buchineke for any closing remarks.

David Buchnicki, Senior Vice President of Investor Relations and Strategy, Kimco Realty0: I’d like to thank everybody that participated in today’s call. If you do have some follow-up questions or need further clarification, please don’t hesitate to reach out. Otherwise, I hope everybody enjoys their summer. Thanks so much.

Conference Operator: That concludes the Kimco Realty second quarter twenty twenty five earnings conference. Thank you for your participation. You may now disconnect your line.

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