Kimco Realty Corporation (HC)

Good day and welcome to the Kimco Realty Second Quarter 2025 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 Butchnicki, Senior Vice President of Investor Relations and Strategy. Please go ahead.

Good morning and thank you for joining Kimco's quarterly earnings call. The Kimco management team participating on the call today include Connor 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 SCC 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. Reconciliation 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 will 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.

Thanks Dave. Before we begin, I want to 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 Lepatner, a respected real estate executive at Blackstone and a fellow member of the Nary 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 Q2 highlights and I'll provide an update on our strategy going forward and address the macroeconomic environment. Ross will 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 .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 want to highlight the continued momentum in the RPT portfolio, where small shop occupancy has climbed to 90.3%, up 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 174 new leases, for 916,000 square feet at an average spread of 34% and completed 332 renewals and options covering 1.8 million square feet at a .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 As the majority of those locations are now either released 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 opened 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 our 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, grocery anchored shopping centers and 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.