Kimco Realty Corp. BofA NY Global Real Estate Conference 2026

Why don't I kick things off, and then we can dive into Q&A. First, thanks for having us. We really are excited to be here and continue to resonate with the Kimco story. I think since our second quarter earnings call, the biggest change is it's just gotten better. The operating environment is one that is very healthy. Lack of new supply, I think, is something that's pretty well articulated across the retail sector, specifically in our markets. 0.2% of existing stock under construction is the lowest of any commercial real estate sector. There's more office being constructed today than there is shopping centers. We sit at an all-time high occupancy rate for our small shops, but our anchor occupancy is still 100 basis points below our all-time high. That's meaningful upside for us because I think a lot of people are talking about, well, you're full.

You don't really have any more upside to go in terms of leasing momentum. We actually think that's the case. Our spread between our physical occupancy and our economic occupancy, some people reference that as the SNO pipeline, the signed but not open pipeline, is 400 basis points. That's $75 million of just Annualized Base Rent that has not yet started cash flowing. So we are super excited about the future for Kimco because we think we are at the cross-section of a unique opportunity where we see margin enhancement, performance enhancement tied to the One Kimco platform where we're taking costs out of the business.

That's SNO pipeline delivering, so enhancing the cash flow, enhancing the margins, all while we trade at a meaningful discount to our net asset value from a multiple perspective and from a portfolio perspective and a balance sheet perspective, we think we offer a tremendous opportunity for investors. For the last three years, we've been running at near the top of the sector with over 5% FFO growth, over 3% same-site NOI growth, and with a balance sheet of an A-, A3 credit rating, all while our multiple is almost three turns lower than the next peer. We think that's a unique situation to take advantage of, and so we continue to articulate that there's a pretty wide disconnect between where the public and private pricing is today for our products.

We're highlighting that by showcasing, and we just produced our updated transaction report, where we just sold an asset for a 5.1 cap rate and continue to showcase that our stock is trading at north of a 7% implied cap rate, north of an 8% FFO yield. We think it's a unique opportunity to again showcase that we can buy back our stock at this type of spread as a great use of capital. I think from an overall transformation of the portfolio, that's another thing that we continue to be excited about. Kimco, for the lion's share of its history, was about 50% power center, 50% grocery anchored. We're up to 87% grocery anchored today. We have 28 grocery stores under construction. Just for reference point, Regency is 85% grocery anchored.

It is a unique transformation that we have seen, that we continue to see upside as that grocery anchor continues to create a flywheel of merchandising mix around that everyday shopper. That is, I think, a big thing that we deliver that I think is starting to become more valuable today with AI and all the technology. We offer a human experience. The U.S. consumer is a shopper. The U.S. consumer loves to treasure hunt, and that could be in our TJ Maxxes, our Marshalls, our HomeGoods, our HomeSense, our Burlingtons, our Ross, our Nordstrom Racks, our grocery stores. People love to look and feel the product, the produce, and then the services, the medical, the health and wellness, the fitness.

The everyday goods and services we provide is in your everyday path of travel, meaning that if you value your time and you value convenience, Kimco is that intersection that you drive by on a regularly scheduled basis. That is what continues to drive our traffic higher. Our traffic counts are over 3% higher than last year. Our leasing momentum continues across both small shop and anchor occupancy. We are constantly trying to improve the growth profile of our portfolio. That is a function of looking at the components of what the portfolio has. A unique attribute to Kimco is that 9% of our ABR is in flat ground leases. That is from the history of Kimco. We were ground leasing to The Home Depots, ground leasing to Costcos, ground leasing to Walmarts to take the risk out of the development cycle.

You would do that because Milton and Marty would follow the utility trucks to where household formations were occurring. How could you take risk out of the development cycle? By ground leasing a big portion of the asset to the best credit tenants. That has created, in a lot of ways, some unvalued portion of Kimco's portfolio that we are starting to shine a light on. Ross can go through some of the initiatives we have to reinvest that opportunity where we can sell very low growth, low cap rate, flat ground leases at five cap rates and reinvest it at a meaningful spread, both on a cap rate perspective, but even more importantly, on a growth rate perspective. Every one of those trades, we are selling at like a 6% IRR into north of a 9% IRR.

Every one of those transactions into a grocery anchor center is helping the growth rate, and we continue to see more opportunity. Another differentiator for Kimco is our over 12,000 entitled apartments. This is an initiative we put in place over five years ago to showcase the highest and best use of our parking lots are just not being valued. There is no cash flow coming from those entitled apartments, but we just round-tripped two apartment towers, sold them for a 4.9 cap and a 5.1 cap, and it gives us tremendous opportunity to say that can happen year in and year out in perpetuity. Because in essence, we have active projects in the ground coming up, delivering year in and year out, and we can start to monetize those and reinvest, buy back stock, or reinvest in a growth grocery anchored shopping center.

Those are the type of attributes that we think differentiate Kimco and that put us in a unique position to take advantage of dislocation. Sometimes it's good to be public, sometimes it's not good to be public, but there's always going to be opportunities. At this point, we think we have the balance sheet, the platform, the team, and the liquidity to take advantage of this dislocation.

Yeah, I'm happy to jump into that. As Conor indicated, part of our strategy is almost a bit of an addition by subtraction. We're able to sell really flat, low growth, single tenant assets at very attractive cap rates and redeploy that capital into higher yielding day one, but more importantly, about a 300 basis point CAGR spread between what those leases are producing and what the reinvestment is able to produce. This year, we'll do just about $150 million of ground lease dispositions. We think, to Conor's point, that we can continue to do that on a recurring basis as our baseline. While we have 9% of our ABR that's coming from these long-term ground leases, as we're selling, we're also signing new leases with these tenants that become a future pipeline for disposition that we can continue to recycle.

The other piece of the disposition pipeline that Conor alluded to was our multi-family entitlements and completed projects. We sold the first two multi-family projects. We own those in a joint venture, so we were 55% of the ownership of those. But the two projects that are Pentagon projects sold at a 4.9% and a 5.1% cap rate. With the structure that we've been undertaking to continue to create new multi-family projects, it's a CapEx-light approach where we've been contributing our land that's been entitled and shovel-ready into a joint venture. Our contribution sits in a preferred equity component of the capital stack. So we're actually earning while the construction is happening. At the same time, our partner, the developer, is responsible for the construction financing on their balance sheet.

It's a great structure that we can earn during the development phase, and then upon completion and stabilization, again, we'll crystallize that value, monetize it, get our percentage of the proceeds to then redeploy. We are utilizing, in most cases, 1031 exchanges to defer the taxable gains, which is something that we're very focused on. But again, able to continue to find that spread on the year one yield as well as the going forward growth so that we can continue to enhance the growth profile of the organization and the portfolio as the impact of all of this recycling compounds on itself year over year.