Kimco Realty's Q1 2025 Earnings Call: Unpacking Contradictions on Credit Loss, Buybacks, and Leasing Strategies

Credit loss reserve and assumptions, stock buyback decision and timing, small shop occupancy goals and strategy, capital deployment strategy, and leasing performance and demand are the key contradictions discussed in Kimco Realty Corporation's latest 2025Q1 earnings call.



Strong Leasing Activity and Rent Growth:
- Kimco Realty signed 583 leases totaling 4.4 million square feet, achieving blended pro-rata cash rent spreads of 13.3%, with a remarkable new lease spread of 48.7%.
- Occupancy remained healthy at 95.8% pro-rata, with small shops climbing to 91.7%, driven by healthy leasing activity and demand for grocery-anchored shopping centers.

Successful Backfilling and Tenant Credit Loss Management:
- Kimco successfully resolved half of the 49 leases vacated by Party City, with a blended rent spread of approximately 35%, and secured leases for 3 Big Lots spaces with an average spread of 45%.
- Tenant credit loss remained favorable at 56 basis points, indicating the portfolio's diversity and stability, even amidst bankruptcies.

Transaction and Investment Activity:
- Kimco completed the $108 million acquisition of The Markets at Town Center in Jacksonville and capitalized on its structured investment program, creating a pipeline of unique investment opportunities.
- The company has a strong balance sheet with $2 billion in liquidity, enabling strategic investments and debt repayment, which improved its financial flexibility.

Guidance and Future Outlook:
- Kimco raised its full-year guidance for both net income and FFO per diluted share, reflecting strong first-quarter results and visibility into upcoming rent commencements.
- The company plans to continue driving strong leasing results, actively backfilling spaces, and maintaining its prudent approach to capital allocation and leverage to capitalize on opportunities.