Company Reports

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of high-quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Kimco Realty reported funds from operations of $0.46 per share and same-store net operating income growth of 3.5% for the second quarter.

Kimco Realty reported funds from operations of $0.46 per share and same-store net operating income growth of 1.7% for the first quarter.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Kimco Realty reported funds from operations of $0.44 per share and same-store net operating income growth of 3.0% for the fourth quarter.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Kimco Realty reported funds from operations of $0.44 per share and same-store net operating income growth of 1.9% for the third quarter.

Kimco Realty reported funds from operations of $0.44 per share and same-store net operating income growth of 3.1% for the second quarter.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Kimco Realty reported funds from operations of $0.44 per share and same-store net operating income growth of 3.9% for the first quarter.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Kimco Realty reported fourth-quarter results that were mixed compared with our expectations, though we didn’t see anything in the quarter that would materially change our $26.50 fair value estimate for the no-moat company. Same-store occupancy fell 10 basis points sequentially to 96.3%, but we note the 96.4% figure reported in the third quarter matched the company’s all-time high, and occupancy in the fourth quarter was still up 20 basis points year over year. Re-leasing spreads were 11.4% in the fourth quarter, relatively in line with our estimate. Same-store minimum rent growth continues to accelerate due to six straight quarters of double-digit re-leasing spreads with Kimco reporting 3.8% minimum rent growth and 4.1% same-store revenue growth in the fourth quarter. Operating expenses were only up 3.3%, leading to same-store net operating income growth of 4.5% that beat our estimate of 3.3% growth. Kimco reported funds from operations of $0.42 per share in the fourth quarter, and while that was slightly below our $0.43 estimate we note that the company took a $3.3 million charge related to the cash tender offer on its preferred stock, which explains the difference.

Over the past few years, we have observed an inverse relationship between share prices in the REIT sector and interest-rate movements. We believe a major reason is that all commercial real estate valuations are connected to interest rates. Capitalization rates directly indicate the return expectations for a real estate investment and expectations for risk and growth. Historically, we have observed that commercial real trades at cap rates consistently spread above the 10-year US Treasury. If interest rates rise, investors will require a higher return, and thus a higher cap rate, to accept the risk associated with an investment in a real estate asset. Since return expectations have held relatively steady for most real estate sectors over the past few years, higher cap rates translate to falling prices for real estate.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

Third-quarter results for Kimco Realty were slightly better than we anticipated, leading us to reaffirm our $25.50 fair value estimate for the no-moat company. Same-store occupancy increased 20 basis points sequentially to 96.4%, which matches the company’s all-time high for occupancy and was better than our 96.0% estimate. Re-leasing spreads were 12.3%, slightly better than our 11.2% estimate. Kimco reported that minimum rent was up 3.7% and same-store revenue was up 3.3%. Same-store expenses grew a similar 3.5%, so same-store net operating income was also up 3.3%, slightly better than the 3.0% we expected for the quarter. The company reported funds from operations of $0.43 per share for the third quarter, which was $0.02 better than our $0.41 estimate and $0.03 higher than the $0.40 the company reported in the third quarter of 2023.

The REIT sector in the US offers many companies that should see relatively stable cashflow growth over the next several years. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years with many reaching historical levels of net operating income growth, the REIT sector underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that is due to the sector’s negative correlation with interest rates, as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. Still, we still view many of companies in the US REIT sector as being undervalued as the companies should continue to produce solid long-term growth.

Despite a rally over the past two months, we still view the US REIT sector as being undervalued. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors led combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years, with many reaching historical levels of net operating income growth, the REIT sector has underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that the cause has been due to the sector's negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. We believe that US REITs will continue to see share price movements that are inverse of interest rate movements.

Kimco Realty reported second-quarter results that were slightly better than our expectations, giving us confidence in our $25.50 fair value estimate for the no-moat company. Same-store occupancy sequentially improved 20 basis points to 96.2%, slightly better than our 96.0% estimate, and re-leasing spreads were 11.7% for the quarter, slightly better than our estimate of new rent terms being 10.2% higher than expiring rent. Minimum rents and same-store revenue both increased by 3.1%, while same-store operating expenses were up 3.3%, leading to same-store net operating income growth of 3.0% for the second quarter. Kimco reported funds from operations of $0.41 per share for the quarter, a penny better than our $0.40 estimate and two cents better than the $0.39 figure the company reported in the second quarter of 2023.

Retail real estate investment trust Kimco Realty owns and operates a geographically diversified portfolio of quality shopping centers. Its retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. The company has transformed dramatically, having sold over 400 properties for more than $6 billion since 2010, which has significantly improved the portfolio's quality. Currently, Kimco derives more than 80% of its annual base rent from major metropolitan markets. Management continues to strategically sell lower-quality assets and reinvest the proceeds in high-yielding development and redevelopment projects.

The US REIT sector remains significantly undervalued, in our perspective. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past two years, with many REITs reaching historical levels of net operating income growth, the sector has underperformed the broader equity markets over the past two years. We believe that the cause has been the sector’s negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, we don’t believe that higher rates significantly change our fair value estimates for the sector. Additionally, interest rates are down from the October 2023 highs, and REIT share prices have generally inversely followed the movements of the US 10-year Treasury.