Kimco's Q3 2025 Earnings Call: Contradictions in Retail Real Estate Demand, Redevelopment's NOI Impact, and Capital Strategy

Date of Call: October 30, 2025

Financials Results

• EPS: FFO $0.44 per diluted share (FFO $300.3M), up 2.3% YOY

Guidance:

• Raised full-year FFO guidance to $1.75–$1.76 per diluted share (from $1.73–$1.75), implying >6% FFO growth vs 2024.
• Maintaining full-year same-site NOI growth outlook of 3% or better.
• Revised credit-loss assumption to 75–85 bps (prior 75–100 bps).
• Signed-not-open pipeline of $71M (360 bps); ~20% to commence in Q4 adding $2–3M; ~60% expected to begin producing NOI in 2026.
• Board increased quarterly dividend 4% to $0.26/share.

Business Commentary:

• Strong Financial Performance and Leasing Activity:
• Kimco Realty Corporation (KIM) reported FFO of $0.44 per diluted share for Q3 2025, reflecting another quarter of performance ahead of expectations.

• The growth was driven by strong leasing activities with 427 leases totaling 2.3 million square feet, achieving a 11% blended leasing spread.

• Same-Site NOI and Credit Loss:

• Kimco's same-site NOI increased 1.9% for the quarter and 3% year-to-date, despite challenges from early recapture of large anchor boxes.

• Credit loss remained low at 75 basis points for the third quarter, better than expected, contributing to the stable growth in same-site NOI.

• Significant Pipeline and Redevelopment Projects:

• The company's signed not open (SNO) pipeline reached a record level of 360 basis points, totaling $71 million.

• This notable expansion is due to re-leasing and redevelopment projects, with a development and redevelopment pipeline now totaling approximately $600 million.

• Transaction and Investment Activities:

• Kimco successfully executed accretive transactions, including acquisitions and structured investments, with unlevered returns expected in the low double digits.
• The competition for quality open-air retail assets remains strong, but Kimco's ability to recycle capital at higher yields provides a competitive advantage.

Sentiment Analysis:

Overall Tone: Positive

• Management raised full-year FFO guidance, reported FFO $0.44/sh (+2.3% YOY), record $71M signed-not-open pipeline, sequential occupancy gains (pro rata 95.7%, small-shop 92.5%), and highlighted redevelopments yielding 10–13.7%, indicating positive operational momentum and confidence.

Q&A:

• Question from Caroline (Morgan Stanley): I was curious about the transaction environment and what you're seeing from an opportunity perspective. Are more deals coming to market and what are you seeing on the cap rate side?
  Response: Transaction market is extremely competitive with aggressive cap rates; Kimco sees ample deal flow across geographies and leverages structured programs/ROFOs to recycle capital accretively.

• Question from Michael Goldsmith (UBS): Can you walk through the puts and takes for 2026—what to focus on (SNO pipeline, same-property NOI, and debt refinancing) before formal guidance?
  Response: Primary 2026 drivers are the SNO pipeline (60% of current SNO to start in 2026) and redevelopments; interest expense is a headwind with ~$825M maturing next year, and the company will pursue refinancing options to minimize impact.

• Question from Alexander Goldfarb (Piper Sandler): Given your track record, should we expect a return to a steadier cadence of retailer investments like the Family Dollar deal, or are these opportunistic and infrequent?
  Response: Retailer investments are opportunistic and driven by attractive risk-adjusted returns and collateral; Kimco stays engaged with asset-rich retailers and will act when terms and security justify it.

• Question from Samir Khanal (BofA Securities): You mentioned one-time benefits in the quarter (e.g., $0.005 from Rite Aid). What's the total of one-time items YTD to factor into 2026 modeling?
  Response: One-time items total about $0.03 per share year-to-date; they are lumpy and not included in initial guidance.

• Question from Floris Gerbrand Van Dijkum (Ladenburg Thalmann): On capital recycling and dispositions, what can we expect later this year and how much will be land/zero-yield vs ground rent or other noncore assets?
  Response: Capital recycling will be a mix of low-yield ground-lease sales and non-income land dispositions; program ramped in 2025 and is expected to increase in 2026, with transactions pursued opportunistically to maximize value.

• Question from Michael Griffin (Evercore ISI): How confident are retailers on executing growth plans into 2026/2027 given macro/tariff noise—are they still pushing forward?
  Response: Retailer confidence remains intact; demand for space is strong (GLA executed ~30% higher vs prior year quarter) with active grocery redevelopments and continued small-shop expansion.

• Question from Richard Hightower (Barclays): How predictable are flows in the structured investment program and how should we think about the repaid capital vs reinvestment? Also, comment on the pause in buybacks in Q3.
  Response: Structured program cashflows are well-telegraphed with laddered maturities; repayments (e.g., $240M) are planned and subsequently diversified across multiple reinvestments; share buybacks are opportunistic and calibrated to stock price and balance-sheet priorities.

• Question from Cooper Clark (Wells Fargo): Any portfolio deals in the private market and appetite for larger deals in 2026?
  Response: Company will pursue large, accretive portfolio M&A if quality and returns meet thresholds, but competitive pricing makes large portfolio buys challenging; originating opportunities via JV/SIP has been the preferred route.

• Question from Haendel St. Juste (Mizuho): With the redevelopment pipeline up to ~$600M, how will you fund it—free cash flow, sales of entitlements, or other sources?
  Response: Near-term funding is covered by free cash flow and pro rata JV structures; multifamily projects are capital-light via partners (land+entitlement contributed by Kimco, majority funding from developer partners).

• Question from Juan Sanabria (BMO Capital Markets): Any stats on how redevelopments have impacted small-shop rents and potential upside from current record occupancy?
  Response: Redevelopments can lift small-shop rents into the high-teens to low-20s percentage range on a case-by-case basis; overall small-shop demand is strong and occupancy is a record 92.5%.

• Question from Caitlin Burrows (Goldman Sachs): On ground-up development, what are you seeing in the industry and could there be more opportunity for Kimco?
  Response: Ground-up development in the sector is minimal; Kimco pursues selective, derisked ground-up projects on legacy land only after leases are pre-executed—opportunistic and small-scale.

• Question from Michael Mueller (JPMorgan): What total development dollars could you invest in 2026 and 2027, and will development be largely residential going forward?
  Response: Near-term annual spend is consistent with current pacing (~$90–$110M this year) focused on retail redevelopments and capex-light multifamily activations with preferred equity partners; ground-up retail remains limited.

• Question from Alec Feygin (Robert W. Baird): How many Family Dollar locations do you currently have and what real-estate exposure are you targeting with retailer financings?
  Response: Kimco currently has five Family Dollar locations; the loan is asset-backed and underwriting focuses on the value of owned real estate and distribution assets rather than expanding store count exposure.

• Question from Greg McGinniss (Scotiabank): Does the structured investment repayment remove ROFRs, and how likely are repayments vs conversions to acquisitions?
  Response: Repayments do not eliminate the program's value; ROFO/ROFR rights remain meaningful and outcomes vary—Kimco is comfortable whether an investment is repaid, acquired, or taken over given underwriting.

• Question from Linda Yu Tsai (Jefferies): With 60% of SNO expected in 2026, how is that weighted between H1 and H2?
  Response: SNO production is weighted more heavily toward the second half of 2026.

Contradiction Point 1

Retailer Real Estate Needs and Leasing Demand

It involves differing perspectives on the demand for retail real estate from retailers, which is crucial for understanding Kimco's growth strategy and leasing prospects.

What are retailer real estate needs for 2026 and beyond? - Michael Griffin (Evercore ISI Institutional Equities, Research Division)

2025Q3: Retailer conversations focus on long-term growth strategies, not short-term disruptions. There's consistent demand for growth, especially into 2027. - Unknown Executive

Can you detail small shop tenant demand, including regional/local players amid tariff uncertainties? - Michael Griffin (Evercore ISI Institutional Equities, Research Division)

2025Q2: The demand is broad and deep, with a focus on services and experiences. Our small shop volume is elevated and we're driving occupancy with quality spaces. - Conor Flynn(CEO)

Contradiction Point 2

Impact of Redevelopment on Same-Store NOI

It pertains to the expected impact of redevelopment on Kimco's same-store NOI, which is a critical metric for assessing the company's operational performance and financial health.

Can you elaborate on the potential upside from redeveloping small shop lease rates? - Juan Sanabria (BMO Capital Markets Equity Research)

2025Q3: Redevelopment lifts small shop lease rates, with market increases often in the teens to low 20s. Completed projects have shown a clear upside benefit from repositioning. - Unknown Executive

When does Kimco expect redevelopment to become a tailwind for same-store NOI? - Alec Feygin (Robert W. Baird & Co. Incorporated, Research Division)

2025Q2: We're seeing notable redevelopment activity adding grocery space. As we complete these projects, they will flip into a tailwind, contributing positively in the second half of this year. - Conor Flynn(CEO)

Contradiction Point 3

Credit Loss Reserve and Bankruptcies

It involves the company's assessment of financial risks and recovery efforts from bankruptcies, which are critical for investors to understand the company's resilience and financial health.

What opportunities do you see in the transaction environment, and what are current cap rates? - Ron Kamdem (Morgan Stanley)

2025Q3: Kimco's geographic diversification and strategy allow for a wide range of deal flow. - Ross Cooper(CIO)

How much visibility is there for the 75-100 bps credit loss reserve at the start of 2025 and how it compares to pre-pandemic levels? - Michael Goldsmith (UBS)

2024Q4: We are actively backfilling with single-use operators, and the credit loss reserve is inclusive of both write-offs and potential loss rent. - David Jamieson(CFO)

Contradiction Point 4

Transaction Environment and Cap Rates

It involves differing perspectives on the transaction environment and cap rates, which are crucial for understanding Kimco's investment strategies and market conditions.

What opportunities do you see in the transaction environment, and what are current cap rates? - Ron Kamdem(Morgan Stanley)

2025Q3: The transaction environment is very competitive, with a substantial amount of capital chasing open-air retail. Kimco's geographic diversification and strategy allow for a wide range of deal flow. Cap rates are aggressive due to the competition, particularly from private sources. - Ross Cooper(CIO)

How are tenant conversations and leasing pace in April post-tariffs? - Nicholas Joseph(Citi)

2025Q1: We are maintaining a healthy pace in leasing, with non-anchored leasing ahead of last year. Retailers are focused on long-term growth plans, and we see good visibility into our pipeline. The demand remains strong for both anchored and non-anchored spaces. - Ross Cooper(CIO)

Contradiction Point 5

Capital Recycling and Disposition Strategy

It involves the company's capital recycling strategy and the prioritization of disposition opportunities, which are crucial for understanding Kimco's financial management strategy.

Can you clarify capital recycling plans and their potential impact on 2026? - Floris Van Dijkum (Ladenburg Thalmann & Co. Inc.)

2025Q3: We plans to continue recycling from low-growth assets and focus on maximizing value. - Ross Cooper(CIO)

What are the acquisition opportunities and funding sources now that the net acquisition for this year is complete? - Craig Mailman (Citi)

2024Q4: We plan to recycle capital through initiatives like the disposition of old dilutive ground leases and monetizing development entitlements. - Ross Cooper(CIO)