Kimco Realty Corporation (HC)

keypad. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to the Kimco Realty team to begin. 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 CEO, Ross Cooper, President and Chief Investment Officer, Glenn Cohen, our CFO, Dave Jameson, 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 SEC 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. Reconciliations 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 was to 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.

Good morning, everyone, and thank you for joining us today. I'm pleased to report another quarter of consistent, high-quality execution, one that reflects the strength of our portfolio, the durability of our strategy, and the exceptional efforts of the Kimco team. For the third quarter, we delivered funds from operations of 44 cents per diluted share, reflecting another quarter of performance ahead of expectations. Based on our strong year-to-date results, and continued visibility into rent commencements, we are raising our full-year FFO outlook, underscoring our focus on delivering top quartile earnings growth within the sector. This outperformance was driven by continued strength across our grocery-anchored portfolio, healthy leasing spreads, and disciplined execution across every region. Our results demonstrate the resilience of the open-air model and the sustained demand we're seeing from retailers across all categories, which I'll further elaborate on shortly. In terms of our same-site NOI, it increased 1.9% for the quarter and 3% year-to-date, which is aligned with our expectations, given we had anticipated an impact from the early recapture of several large anchor boxes, as well as those spaces related to Party City, Joann's, and Rite Aid. Notwithstanding, our base rent growth and recoveries remained healthy, and when the related lost rents are isolated, it amounted to about 130 basis points of drag in the quarter. The good news is that the team has moved quickly to re-tenant all those spaces, often at meaningfully higher rents with stronger operators. The re-leasing of those spaces has been a meaningful contributor to the expansion of our pipeline of leases signed but not yet opened, of 360 basis points, totaling $71 million of future incremental rent growth. Both of these amounts are all-time high records for Kimco. Notably, credit loss did not materially affect our same-site NOI growth. In fact, credit loss overall has been better than expected, and we do not anticipate any near-term disruptions that would alter this. Importantly, leasing momentum accelerated across anchors and small shops alike, resulting in increased occupancy, making the second quarter the occupancy trough for the year, a clear inflection point driven by steady demand and disciplined execution. Specifically, pro-rata occupancy increased 30 basis points sequentially to 95.7%, anchor occupancy rose to 97%, and small shop occupancy reached a new all-time high of 92.5%, up 70 basis points year over year. It's worth noting that the small shop occupancy from the former RPT's portfolio saw a 90 basis point sequential increase and an overall 280 basis point increase since we acquired the portfolio in January of just last year. And we still see plenty of room for further growth of our small shop occupancy. I want to spend a few moments further highlighting the most critical part of our business, Leasing. Leasing activity this quarter was exceptionally strong, underscoring the depth and the quality of retailer demand across our portfolio. During the quarter, we completed 427 leases, totaling 2.3 million square feet, including 144 new deals for 822,000 square feet at a 21% spread and 283 renewals and options at an 8% spread for a blended leasing spread of 11%. Year to date, Lease GLA is up 8% over the same period in 2024. This leasing momentum remains robust given the limited available supply and is translating directly into future growth. This is the proven Kimco model in action, turning dislocation into opportunity, enhancing the quality of our income stream, and converting leasing strength into sustained earnings growth. In short, the leasing success we're achieving today is already building tomorrow's FFO growth. Redevelopment also continues to be a key pillar of long-term value creation strategy and one we intend to increasingly capitalize on moving forward. During the quarter, we elevated approximately $250 million of projects to active or near-term status, bringing our total development, redevelopment, and mixed-use pipeline to roughly $600 million. With our value creation pipeline, we currently have 25 grocery anchor projects, reflecting our focus on categories with proven traffic and rent durability. The pipeline is generating 10% to 12% unlevered returns, reinforcing the attractive risk-adjusted yields we can achieve by reinvesting in our own centers. Year-to-date, we've completed redevelopment projects with a blended yield of 13.7%. We also activated our next mixed-use project, the Chester, located in the fast-growing Daly City, California market in partnership with Bizzuto. This project is another example of how we aim to continue unlocking the value embedded in our entitlement program. To this point, we now have about $260 million of gross costs for multifamily projects under construction, including the 130-unit Coulter Avenue project at Suburban Square that will be completed early next year. Moving ahead, we expect to activate additional multifamily opportunities in our core markets over the next 12 to 24 months. With respect to our capital allocation priorities, they remain unchanged. Focused on further portfolio lease-up and expanding the number of high-return redevelopment projects continue recycling capital accretively from lower-growth ground leases into higher-yielding acquisitions and structured investments, maintain a strong and flexible balance sheet, and allocate capital towards initiatives that drive sustainable cash flow growth and long-term net asset value creation. Finally, as we look ahead, innovation continues to be a defining aspect of our culture and strategy. We formalized that commitment through the creation of the Office of Innovation and Transformation, led by Will Teichman as Chief Innovation and Transformation Officer. This new enterprise function unites our operational improvement, digital transformation, data, and AI efforts under one leader, allowing Kinco to align and better coordinate resources and investments to accelerate innovation. The overall focus of our Office of Innovation and Technology will be to drive strategic enterprise initiatives geared towards building new capabilities. harnessing the power of emerging technologies, including artificial intelligence, unlocking operational synergies, and driving new avenues for growth. Will has a proven track record leading our successful M&A integrations, partnering with information technology to develop and deploy digital leasing tools and developing key functions such as ancillary income, leasing operations, marketing and corporate responsibility, positioning him well to lead our new Office of Innovation and Transformation. To sum up, this was a solid quarter of progress that underscores the strength of our operating platform and the advantages of our grocery anchored strategy, while building a pipeline of high return projects that will support growth for years to come. At Kimco, we are capitalizing on strong retailer demand and translating leasing success into sustained earnings growth. With limited new supply, record small shop occupancy, and a disciplined redevelopment engine, we're well positioned to continue delivering at the top of the sector. Thank you to our entire team for their continued execution and to our shareholders for their support. With that, I'll turn the call over to Ross for an update on the transaction market, followed by Glenn to take you through the financial results and updated outlook. Thank you, Connor.

It was an active third quarter on the transactions front, and it is shaping up to be a busy year end as well. The competition for quality open-air retail has continued to strengthen, and Kimco has proven its ability to invest capital in an accretive manner. Even in an environment with a substantial amount of capital chasing our product type, our ability to recycle capital at higher yields and with a higher growth profile is a strong differentiator. During the quarter, we funded three sizable investments, all with a slightly different profile. First, we provided a senior loan under the Structured Investment Program on a high-quality Sprouts Anchored Center in Maryland for $97 million. Next, we funded $25.6 million for a structured investment on a Cubs food anchored center in an affluent submarket of Minneapolis with a value-add component. As with all of our structured investments, we will receive a right-of-first offer on both assets if they are ultimately sold. The third investment this quarter was the participation of $75 million in a loan to Family Dollar. The value of the collateral is well in excess of the loan, providing an attractive risk-adjusted return. This participation loan is the most recent example of Kimco's longstanding history of creating value and participating in investments associated with retailers that are real estate rich. While the most recent success story is with the Albertson supermarket chain, this strategy and track record goes back decades. These three investments made this quarter are expected to generate unlevered returns in the low double digits, and substantially offset the approximately $240 million repayment from one of our existing structured program borrowers we anticipated and subsequently received in October. Turning to acquisitions, we were also successful this quarter adding a dual grocery anchored asset in the affluent suburb of Hillsborough, Oregon. With very productive Safeway and Trader Joe's anchors, this provided a rare opportunity to acquire a dominant neighborhood grocery center with upside. The acquisition has a going-in yield that is 50 basis points higher than the single-tenant asset sales that funded the transaction, with over 200 basis points of higher compounded annual growth. We utilized 1031 exchange proceeds to offset gains from the Home Depot sale in California during the second quarter, as well as the sale of a Lowe's Home Improvement parcel in Owings Mills, Maryland, this quarter, at a 5.8% cap rate. Additionally, this asset was a JV buyout from an institutional partner looking for liquidity, further showcasing the value of the right of first refusals in both the structured program as well as the institutional joint venture program. The total gross asset value of our JV portfolio and structured investments is approximately $7.5 billion, offering us ample future acquisition opportunities. We anticipate further opportunities to recycle capital in the fourth quarter and into 2026 at compelling year one yield spreads, as well as higher long-term growth profiles ahead. While we don't anticipate any pullback in the fierce competition and investor appetite in our product, we are confident in our ability to continue generating attractive investment spreads given the strategic differentiators available to us. Now to Glenn for an update on the financial results for the quarter.

Thanks, Ross, and good morning. Our third quarter results once again highlight the consistency and resilience of Kimco's platform, which delivered solid operational and financial performance that exceeded expectations. For the quarter, FFO grew to $300.3 million or $0.44 per diluted share, 2.3% above last year. The improvement was primarily driven by $21 million of higher pro rata NOI, led by increases in minimum rent notwithstanding lost rents from the earlier recapture of spaces mentioned previously. Other rental property income also contributed to this growth. These increases were partially offset by $8 million of higher interest expense, mainly tied to our refinancing activity in 2024 and 2025. Importantly, as Connor shared, credit loss continues to track at the low end of our assumption range at 75 basis points for the third quarter, and 73 basis points for the first nine months, underscoring the durability of our rent roll. This quarter's FFO also included a modest one-time benefit of $3.2 million, roughly a half a penny per share, related to the recapture of below-market rents from two vacated Rite Aid spaces. Turning to the balance sheet, we ended the quarter with consolidated net debt to EBITDA of 5.3 times and 5.6 times on a look-through basis. Liquidity remains strong at over $2.1 billion, including over $160 million of cash on hand. Our credit profile continues to strengthen as well. During the quarter, S&P upgraded Kimco to A- with a stable outlook. Fitch affirmed its A- rating, and Moody's maintains its BAA1 rating with a positive outlook. This combination of balance sheet strength together with approximately 150 million of annual free cash flow generated after the payment of dividends and all leasing costs provide ample flexibility to fund additional redevelopment activities and pursue new opportunities such as those Ross just discussed. Based on our year-to-date performance and visibility into rent commencements, we are again raising our full-year FFO guidance range to $1.75 to $1.76 per diluted share, up from $1.73 to $1.75 previously. This represents FFO per share growth of over 6% compared to 2024. We are also maintaining our full-year same-site NOI growth outlook of 3% or better, which already incorporates the known bankruptcy impacts absorbed this year. Additionally, we have revised our credit loss assumption to a more favorable range of 75 to 85 basis points compared to the prior range of 75 to 100 basis points. This adjustment reflects the lower credit risk observed and projected for the remainder of the year. Our signed not open pipeline has reached a record level of 360 basis points, totaling $71 million. We anticipate that approximately 20% of these leases will commence in the fourth quarter, contributing $2 to $3 million in incremental rent. Given the continued strength of our leasing activity, there is potential for further growth in the snow pipeline by year end. This expansion will create a favorable tailwind as 60% of the current snow pipeline is projected to commence next year. As a result of our strong performance and continued growth expectations, our board approved a quarterly common stock cash dividend increase of 4%, to 26 cents per quarter. In closing, our third quarter results reflected steady progress and continued momentum across the business. We expect the benefits related to the retenanting of those spaces recaptured earlier this year, many at double-digit spreads, to be realized over the next several quarters. These embedded rent commencements, along with our disciplined capital allocation and a strong balance sheet, well-positioned Kimco to deliver sustainable long-term growth. A special thanks to our team for another quarter of excellent execution and to our shareholders for your continued support. We'll now be happy to take your questions.

Thank you. To ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2. When preparing to ask your question, please ensure your device is unmuted locally. We request that you ask one question with no additional follow-up questions. If you would like to ask an additional question, please rejoin the questions queue by pressing star followed by one. We have our first question from Ronald Candom from Morgan Stanley. Your line is now open. Please go ahead.

Good morning. This is Caroline on for Ron. I was just curious about the transaction environment and what you're seeing from an opportunity perspective. We generally say that there are more deals coming to market and what are you seeing on the cap rate side? Thanks.

Sure. Happy to answer that question. As I mentioned, it continues to be extremely competitive. I think one of the advantages that we have is the geographic diversification and the diversification of our strategy. So we're able to see a tremendous amount of deal flow all across the country. We look at it for acquisition opportunities. We look at it for opportunities to invest in the capital stack through our structured program. And as I mentioned, we have a tremendous amount of right of first offers and right of first refusals between our joint venture programs, as well as some of the structured deals that we're in. So we do think that there's plenty of opportunity for Kimco as it relates to assets on the market. There has been a healthy amount that has been out there, but it's extremely competitive. A lot of different capital sources, particularly on the private side, that's been formed chasing these deals. And with that has created some really aggressive cap rates. So for us, it's just really a matter of looking at our cost of capital, finding ways to recycle accretively, which we've been able to do in the third quarter and so far this year. And that's what we anticipate doing in the fourth quarter and as we look into 2026.

I think I just add, I think it's fair to say that our market intelligence has never been higher. You think about, you know, how we underwrite acquisition opportunities from a fee position, but now we're seeing a lot of transactions in the private market that don't necessarily hit the open market with our structured investment program. So I think our funnel has been opened up even further to get even more market intelligence.

Thank you. Our next question comes from Michael Goldsmith from UBS. Michael, your line is now open. Please go ahead.

Good morning. Thanks a lot for taking my question. Looking to the future, Glenn, you mentioned the sign that open pipeline has reached record levels and could continue to grow. The implied fourth quarter guidance suggests a return to say property at a lot of growth of 3% plus, but then you also have some debt refinancing next year. So can you walk through some of the puts and takes or early look at what we should be focused on in 2026 in broad strokes that don't reflect guidance? Thanks.

Sure, sure, Michael. As you know, we're not obviously going to issue guidance now. We will issue guidance with our fourth quarter results in February. But touching on some of the things, again, very focused on the snow pipeline and that coming online. As I mentioned, about 60% of the current snow pipeline should start to produce results during 2026. And that 60% should represent somewhere in the $24 million range, in addition to the snow that will come on during the fourth quarter of this year, which is probably, in 2026, be about another $12 million or so. So, you know, we're watching that, obviously, very closely. That's a key to the NOI growth. Again, we're not seeing a lot of bankruptcies at this point. The bankruptcy period, you know, we think we have a lot of that behind us. There's not a lot of visibility to a lot of tenants that we expect to file for bankruptcy. So, again, it's really about getting the rents flowing from the snow pipeline. It's getting our redevelopments flowing as well. There's a fair amount of NOI that will come from redevelopments as they come online during the year. And then separately, as you asked about on the debt side, again, we don't have any real maturities until August of next year. We do know that interest expense will be a headwind, similar to what it was this year. We have about $825 million of debt that's maturing next year. has an average rate yield of about 2.8%. So with that, we're going to do everything that we can to minimize that headwind. So we're going to look at all of our refinancing options that we have available to us as we go through the year. So those are really the major points to watch, but we feel good about heading into the year.

Thank you very much. Good luck in the fourth quarter.

Thank you. Our next question comes from Alexander Goldfarb from Piper Sandler. Your line is now open. Please go ahead.

Hey, morning out there. So the family dollar, certainly you guys have a long track record, Frank's, Conover, you know, obviously Albertson's long track record, but it's been a few years since you last made, you know, outside of Albertson's made a retailer investment. So can you just give an overview of the retailer environment, are there just very few deals out there or the deals that you've seen over the past few years, just, you know, you couldn't get the terms that you want. Just want to understand if, you know, we could see a return to a steady pace of these, or if these are, you know, back or if these are really just every few years to expect one of these, just again, given the success that you have had over the past few decades.

Yeah, it's a great question, and thank you for pointing out the track record and the history. As you alluded to, this is something that really is part of our DNA for many decades at this point. The family dollar deal itself, while it was a private loan that we were not quite at liberty to discuss all the details, we did see an opportunity with a group acquiring that chain for a heavy, heavy discount from where it was previously acquired. And with all of these deals, that particular retailer owned a tremendous amount of its own real estate. And really, that's what we're looking for in most of these deals. We want to see an opportunity that is collateralized by a tremendous amount of real estate, owned by a tremendous amount of real estate, where we could potentially participate in the future or, at a minimum, get an attractive return through the financing side of the equation by investing in that deal. There are other retailers that we're talking to regularly that own a fair amount of their own real estate. It needs to be at a point in time where they're ready to do something either by need or desire. So as the largest landlord for a vast majority of these retailers, we know that we're in that conversation all of the time. We're having active portfolio reviews with every single one of our retailers, particularly those that own a tremendous amount of their own real estate. So it is sort of opportunity driven. It's hard to predict when these may come about, but we're staying front and center with all of these retailers and know that we're going to be absolutely one of their first calls if there's a capital need on their end.

And it may seem like a long time ago, but we sold our last piece of Albertsons in early 2024. So we do stay active and we do think we have the track record. As you said, we continue to mine for those opportunities.

Thank you. Our next question comes from Samir Canal from Bank of America. Your line is now open. Please go ahead.

Thanks a lot. I guess, Glenn, maybe just expanding on that, on the 26 kind of outlook here. Can you remind us, you talked about the one-time benefits in the quarter. I think you said it was half a penny impact from Rite Aid. Just remind us, you know, kind of what the one-time benefits are worth throughout the year as we sort of sharpen our pencils on 26. Thanks a lot, guys.

Sure. Again, throughout the whole year, you've heard us, you know, through the first three quarters talk about some of these, you know, call them one-time items, whether they be extra lease termination agreements that we've received or some certain below-market rents that we've received. In total for the year, they've amounted to about $0.03. So kind of keep that in mind as you go through. Now, having said that at one time, they are part of the fabric of the business. They're the lumpy part. We don't know exactly when we're going to get LTAs. We don't know exactly when we're going to get some of these recaptures below market rents. So we point them out because they're very difficult to forecast. And we don't put them in our initial guidance when we put out our guidance each year.

And, Samir, one other thing I'll point out to you when you're thinking about run rates and looking ahead, We did have substantial prepayment in our structured finance that Ross touched on. It's in the earnings release. It was about $240 million. So just keep that in consideration when you're looking at our mortgage financing receivables line at the end of September.

Thank you. Our next question comes from Floris Van Dixum from Ladenburg Salmon. Your line is now open. Please go ahead.

Hey, morning. Question on the capital recycling. Encouraging news that you've sold a ground parcel and I think a ground lease as well. Could you maybe talk about other assets that you have in the market today? What can we expect later on this year? I know you talked about annual dispositions of $100 million to $150 million. going forward, how much of that will be the, you know, do you think you could achieve in terms of zero yielding lands versus ground rent versus some other non-core assets?

Yeah, thanks, Lars. As you know, that's a pretty significant part of our strategy is to continue to recycle from the low growth, low cap rate, flat single tenant asset ground leases that we have as well as some of the non-income reducing assets. So it'll continue to be a combination of those two factors. We really started ramping up that program earlier this year, and I think that we're pleased with the start and the progress that we've made thus far. We do anticipate as we look into the 2026 pipeline that we think we could do a bit more of that next year. So we're really focused on what that population looks like, how quickly we can start to ramp that up. We continue to go through certain negotiations with retailers where we believe that we need additional term to maximize value. Because at the end of the day, this is extremely opportunistic and it's intended to be. So we want to make sure that we're selling assets where we feel that we've really squeezed all the juice out of them before we look to monetize. And as part of that, our team is going through some processes with certain municipalities where we have to separately parcel in order to transfer the deed. We have a pretty significant universe with close to 9% of our ABR coming from these long-term ground leases, and we just want to make sure that we're maximizing value on each and every one before we look to exit them. So good start in 2025, and we think that we'll be able to juice a little bit more out of that in 26.

Yeah, the only thing I would add, Floris, is we do see this as a recurring program. I think that's the key because we're actually backfilling that ground lease pipeline as well as we've got leases going with Home Depot, Target, Lowe's, You name it, Walmart, Costco, they're all in active expansion mode. So even though we've been selling a few, we're backfilling a few with some new leases as well. So it's a nice recurring program that we think will just continue to enhance both the same site NOI of the organization as well as the FFO growth of the organization.

Thank you. Our next question. Our next question is from Michael Griffin from Evercore ISI. Your line is now open. Please go ahead.

Great, thanks. I'm wondering if you can give us a sense of how your conversations with retailers have been recently as they look toward their real estate needs for 26, 27, and even beyond. It seems like at this point, tariffs are probably underwritten into their business plan somewhat. Would you say there's more confidence on the retailer side that they need to execute on their growth objectives? Or is there still this sense of, you know, maybe wait and see where things might finally shake out from a tariff perspective? Thank you.

Yeah, sure. I appreciate the question. Well, I'd say the confidence hasn't changed throughout the course of this year. Our retailer conversations were not about a let's wait and see and see how the tariffs play out. It was very much an understanding that you always have to deal with short-term disruptions in the macro markets, but you have to have a long-term view on your growth strategy. And what we saw consistently throughout the course of this year was that continued push to find new opportunities, to grow market share, to expand into new markets, um and to continue filling a pipeline you know into 26 and really we're talking about 27 now as well so when i look back on sort of where we're tracking today just in this quarter alone you know quarter today we're about 30 higher on our gla executed deals versus where we are last year as a continuation of the momentum that we've seen through the first three quarters connor mentioned you know a handful of large anchor spaces that naturally expired um this this last quarter uh which which TAB, Ryan Schuchard, LCSW, Manager of Avenidas Care Partners, reduce our economic occupancy a little bit as expected, but it's also helped contribute to the growth of our of our snow pipeline and in those deals to have those three deals. TAB, Ryan Schuchard, LCSW, Manager of Avenidas Care Partners, We actually executed within the same quarter we lost that space, and this is about 300,000 square feet, inclusive of a deal that we actually pre leasing Q2 for one of those natural expirations. TAB, Ryan Schuchard, LCSW, Manager of Avenidas Care Partners, Well those together that's about a 40% spread on previous rent to new rents going forward. So there is tremendous demand, and that's on the big box side. When you look at the grocery side, we also have alluded to that we have over 25 active or near-term activations on the grocery redevelopment and repositioning side. It's extremely robust. It's well diversified in terms of the names that are growing on the grocery side. So we feel fairly good about where the sentiment is. On the small shops, we're at 92.5. We continue to exceed our high water marks. And we see that there's room to run as we complete these projects, these redevelopment projects. It tends to create a meaningful halo, at least up the balance of the small shop space at those locations. So we'll continue to push that. So obviously, we're going into New York ICSC in December. NASCAR is pretty full at this point. And we are going to be talking more about not only filling the voids of the 26 pipeline, but really focused on 27 as well.

Thank you. Our next question comes from Rich Hightower from Barclays. Your line is now open. Please go ahead.

Thank you. Good morning, guys. I guess one question on capital allocation with two parts, if you don't mind. But just as far as back to the SIP pipeline and program and some of the sort of flows in and out of that bucket, help us understand maybe the level of predictability in those flows. Obviously, they were quite sizable last quarter. And just, you know, what does it correlate with? How should we think about it from the outside? And then the second part is, you know, you repurchased shares in the second quarter, didn't repurchase any shares in the third quarter. So where does that fit into the overall capital allocation framework? Thank you.

Sure, I'll take the first part. So, yeah, the structured investment program, I mean, we're really focused on maintaining strong levels of communication with all of our borrowers, maintaining a well-laddered maturity profile. So we have a very good sense as to when the maturities are, when we anticipate getting repaid. This particular reinvestment or repayment of the $240 million was well notified in advance. So we had been planning for it. We anticipated it. For that one, one particular asset was $200 million of the $240 of the repayment. It was a wonderful investment. I don't think we would change anything or do anything differently, but I think what we have determined on a go-forward basis is that we want to make sure that we're spreading that capital out over multiple deals. So as you saw on the reinvestment, that $240 million was essentially spread out over three different investments. So we're going to make sure that we continue to have good visibility into the repayment, have a tremendous amount of real estate that these are spread out over. As mentioned, it's about $1.5 billion just in the structured investment program that we have writer-first offers or writer-first refusals. So it is well telegraphed. We plan for it, we account for it, and we think that it's a tremendous differentiator for us.

So on the second question about the share buybacks, again, the stock, we obviously watch the stock price performance. That's a key indicator of whether or not we would buyback shares, or for that matter, whether we'll use our ATM program or other types of equity issuance. The stock performed better during the third quarter. When we bought back the shares, the average price on the share buyback was $19.61. We're happy that we're above that and looking for further performance forward. But we keep all the tools available to us to find the highest yield where it makes the most sense. And obviously keeping

balance sheet metrics uh you know in consideration as well so we'll we'll watch it closely and use it where it's opportunistic thank you our next question comes from cooper clark from wells fargo your line is now open please go ahead great thanks for taking the question you highlighted in your investor presentation the strong execution on larger deals in recent years hoping you could provide color on any portfolio deals in the private transaction market today and pricing, along with thoughts on your appetite for potentially larger deals in 2026?

Sure. Yeah, I mean, we're extremely focused on cost of capital. And as mentioned, it's very competitive out there. That's on the single asset side. That's on the portfolio side. So we keep a wide range of opportunities. We've acquired multiple portfolios in the last five years. two large M&A transactions, a large portfolio acquisition on Long Island several years ago. So that's certainly part of the playbook, but it needs to be accretive and it needs to be the quality that we'll be looking for that's additive to our existing portfolio. Right now, it's a very competitive environment that makes it difficult to acquire large portfolios. So we've been able to generate opportunities from within where we already have investments and assets, whether it's from our institutional joint venture program or a structured investment program. And for us right now,

I think the interesting dynamic in the transaction market today is because of the all-time high occupancies for the sector, there's really the value-add buyer is actually looking to acquire assets that have watch list tenants in the tenant rent role so that, in essence, they have an opportunity to re-tenant and get that mark-to-market that we've been able to showcase when we take our below-market watch list tenants and replace them with best credit and a mark-to-market that is sizable spread.

Thank you. Our next question comes from Heindel Sanjuste from Mizuho. Your line is now open. Please go ahead.

Sanjuste, I love it. Hey, good morning, guys. Wanted to talk about the big jump in the REDAP pipeline you mentioned, going up to about $600 million. Can you discuss some of the, not only the projects being added and the yields you're underwriting and how they compare to the prior pipeline, but how you plan to fund? It seems like it'll require more than just free cash flow. I'm curious how maybe selling some apartment entitlements may play a role. Thanks.

Yeah, sure. When you look at the spend itself, as we forecasted this year, we're on $90 to $110 million of spend. And so when you look at the free cash flow after payouts of deal costs, leasing commissions, property capbacks, we have sufficient funding there to address near-term funding commitments on an annualized basis. It's also important to note that the gross pipeline, there are pro-rata components to that. Obviously, we have ventures as part of some of these locations and some of these investments. In addition, obviously, the multifamily pipeline is a gross investment of 250, but the way we've structured it is a capital light version where we're contributing the land, our entitlement costs, and then partnering with a partner, in this case, Bizzuto, for both. um where um the majority of the funding is coming from from that side of the relationship so we have ways and means in which to fund it internally right now and we'll continue to keep an eye on it as it relates to the expansion itself we've always been focused on what's best for the site as you can see we're heavily grocery focused we believe that that creates the best additive contribution to the site long term not only for the stickiness of the grocer themselves, but the halo effect, as I mentioned earlier, to drive shop rent growth around it. So we'll continue, as we always have, continue to explore and mine for value within the real estate. And it's time, and right now, it's a great opportunity to take advantage of that. And we'll continue to push forward as much as we can in conjunction with our traditional leasing activity, which is very, very robust, as you know.

Thank you. Our next question comes from Juan Sinaloa from BMO Capital Markets. Your line is now open. Please go ahead.

Hi. Thanks for the time. Just hoping to talk a little bit more about the small shop and the potential upside above and beyond kind of the already record levels. I talked about the halo effect of REDEV, so I'm not sure if there's any stats you can quote on what redevs have done to the small shop lease rates and how that may translate into further upside from already robust levels.

Yeah, in terms of the completed projects, you know, you're continuing to see lifts if the small shops, you know, small shops are typically closer to market, but when you add the grocer in, you can see, you know, upwards in the, you know, the teens to low 20s on the lift dependent on what the liquidity is at the time. But again, it's very much a case-by-case basis. And so when we look at, you know, a handful of our projects where there's the demolition or reconstruction of a majority of the site, we're going through that leasing activity now. From where the market was to where it is today, there's significant gains to be made there. And we're executing those leases as we start to activate those projects. So it's, you know, Again, generally speaking, we've seen it as a clear upside benefit.

I think the demand drivers for small shop leasing continues to evolve. I think we have more uses today for small shops than we ever have before. And we're, again, continuing to see that momentum continue There's no real reason to think that we've hit our cap in terms of occupancy on small shops because, again, of that demand driver and the lack of new supply. You've got to remember, we're in a sector. There's not many commercial real estate sectors out there that have the limited supply growth like open-air shopping centers. And then when you look at the finite amount of space that's available today, especially in high-quality real estate, It really narrows down the opportunity set for good quality credit small shop tenants to grow, and we're seeing a lot of services. I think that really continues to be a major driver of the small shop occupancy lift that we continue to see going forward.

Thank you. Our next question comes from Caitlin Burrows from Goldman Sachs. Your line is now open. Please go ahead.

Hi. Good morning, everyone. Just on the ground-up development side, and Connor, you mentioned it in passing in that last question, but you have those two projects listed in the supplement. I think they're relatively small. Can you talk about what you're seeing in the industry in terms of new development? What's popping up, and could there be further opportunity for Kimco there?

Yeah. In both the cases with the ground-up projects that were listed, North Town and Gordon Plaza, North Town is... is a legacy site that we acquired via one of the M&A deals. And we had the legacy land there. There's a single large anchor on the asset pre-existing with some shop space, and there's a lot of parcels that are yet to be developed. So it was waiting for the market to come to us, and we found this opportunity to execute on that plan, again, tied to grocery of Sprouts. So Sprouts could be a catalyst for future growth. But what we're doing is really approaching it in a very – um thoughtful and de-risked strategy and where we're executing these leases prior to us actually putting a shovel in the ground so very different than decades past of the large development pipeline this is very select in nature it's opportunistic driven by leasing demand of which you're pre-executing those leases prior to putting a shovel of ground and they're not large at scale and this is all land that we've had in-house for an extended period of time gordon plaza Back to the previous question, too, about repositioning an asset and mining for value. Dealing with sort of obsolete shop space and vacancy, we're able to demolish the entire site and build it from the ground up with a chase at Home Depot and an Aldi. So very controlled in nature, extremely high credit. Again, pre-executed all those leases before a shovel on the ground. So I think what you would see from us, is the activation of that legacy land when it makes sense based on the leasing demand.

There's really not a lot of active ground-up development the market today um if you look at like sort of the whole sector i think we're at 0.3 percent of of existing stock under construction which is the lowest of any commercial real estate sector so you know we've done a lot of work to identify how much rents have to rise in our markets to really see any wave of new supply and it's in a range of 50 to 60 percent of rent growth that needs to occur so i think it's a pretty sizable time frame before we see a real roundup development come back to the space. And then, you know, where our position for our strategy, our first ring suburb strategy, you know, again, it's really hard to make the economics work if the area is being densified. You know, it's very rare to find a parcel that can justify a ground up economic deal where, you know, 80% of the shopping center is parking lots. That's not generating any revenue. So usually those parcels have to be much more dense a lot of different uses, and it's rare to find those that make economic sense with the cost of land, cost of labor, everything going up. And so we feel really good about that level of safety we have of being disrupted from a new wave of supply being very, very minimal.

Thank you. Our next question comes from Craig Mailman from Citi. Your line is now open. Please go ahead.

I just want to circle back, Connor, your commentary about the promotion of will and the formalization of that initiative there. I'm just kind of curious, beyond just the formalization of the org chart there, what kind of resources do you guys plan to put into this initiative? Are you guys putting a lot of money behind AI, behind the scenes to increase productivity and You know, what do you think the return on those type of initiatives could be long-term from a NOI margin or headcount perspective? And are there any other big tech initiatives like an overhaul of the accounting system or anything else there that we should be thinking about from a capital use perspective over the next couple of years?

Yeah, it's a great question, Craig. So as you know, we're big believers in making the Kimco platform best in class. We believe we've taken a lot of initiatives to integrate the business organization with the best technology tools available. And we've been doing it now for a number of years. And now we've formally fused the two together with Will running that organization. And I'm a big believer that, you know, scale is an advantage. when you have the ability to use the technology tools to allow you to increase margins, to allow you to get more efficient, to allow you to increase productivity. And when you look at our GNA line and you look at how much we've been able to do over the last three years without really moving the GNA line, we bought a public company, we bought big portfolios, big assets, and we're still at, I think, first innings. of productivity increasing from what we see in the dawn of sort of the platform and where we're investing. So I'll hand it over to Will to give you a little bit of a snippet of what to anticipate, but we're really excited about the future and we're investing in our people, we're investing in our platform to, again, take advantages of the scale that we currently have and that we anticipate to have in the future.

Thanks, Connor. Good morning, Craig. Yeah, just to add a little bit of additional color, This really does align our strategic planning, operational improvement, digital technology, and change management resources all under one coordinated structure. And it's important to focus on how we organize ourselves as you think about, you know, the opportunity set that is emerging in front of us. One of the things that we've learned over the last couple of years of doing this type of work through our M&A integration projects, through technology implementations and other organizational transformation projects, is the importance of a multidisciplinary approach to being successful in delivering. A lot of these projects can be complex. They can be costly in terms of the investment. And success is not guaranteed. And so thinking and being very intentional about how we approach these things, we've been able to develop some playbooks and some successful tactics and a track record that I think we'll be able to continue as we look to formalize this OIT structure going forward. As it pertains to level of investment, while we don't want to get into specifics today, I will just say that from an approach perspective, as we think about innovation and transformation, it's the same type of ROI type calculus that we utilize in all of the other parts of the business. So as we think about making investments in digital technology, we're looking for a return on that investment. Sometimes those returns come in the form of expense efficiencies. Sometimes those returns come in the form of growing our pipeline of opportunities with our retailers or the transaction opportunity set that Ross mentioned earlier. So we're staying diligent. I do think that we are focused on continuing to invest in the technology stack. As Connor said, I feel confident that the investments that we've already made over the last 10 years really position as well and give us a head start. And if this new structure will help us to accelerate that, you know, over the decade to come.

Thank you. Our next question comes from Mike Mueller from JP Morgan. Your line is open. Please go ahead.

Yeah, hi. Just a quick one following up on development. What's the total expected development dollars that you could see yourself investing in 26 and 27? I know you talked about a retail opportunity, but should we basically think of this as being largely resi going forward?

Separating the two parts, the ground up retail development, as I mentioned before, is relatively small and controlled, and it's going to be opportunistic based on lease activity and signing and executing those leases before we put a shovel in the ground. So again, we have some legacy land. We are looking at another project that's in the near-term pipeline that could be activated relatively soon because we're near completing the execution of those leases. You don't see a whole lot of meaningful growth out of that category versus our really reinvestment and repositioning of the redevelopment pipeline and repositioning and strengthening our existing asset base. On the multifamily side, obviously we activated the Westlake project this last quarter, the Chester, and we do have some near-term opportunities in the next 12 to 24 months that we will continue to Look to activate as well, following our proven strategy on the structured side that we've done it with a preferred partner. And so we'll continue to look in mind for those opportunities in the select core markets that make sense for us.

Mike, I think the easy way to think about it is the continuation of what we have today. Priority on the high double, you know, high single, low double digit retail expansions, redevelopments that we showcased in the grocery portfolio that we can unlock. Very limited, like phase two type activation of ground up development. And then the preferred equity structure we have for activating our multifamily entitlements where we take our land, plus the entitlement costs and use that as our capital to activate those projects. So again, using a capex-like approach where we can activate those projects with a multifamily partner so that, again, we can focus on the highest level of return for our capital that's going out the door.

Thank you. Our next question comes from Alex Fagan from Bard. Your line is now open. Please go ahead.

Hey, thank you. Most of my questions have been asked, but kind of going back maybe to the family dollar investment. How many family dollars does Kim have currently in the portfolio? And, you know, for the real estate side, you know, what are you targeting? What kind of locations if they, you know, manifest some sort of deal?

We only have a handful of Family Dollar locations. It's less related to actually doing more deals necessarily with Family Dollar. It's looking at the structure program and what they have within the real estate holdings that backstop the loan that we're issuing as part of this consortium. So when we're looking at the risk-adjusted basis to what we're investing and what we can potentially get back, it's fairly well-measured and asset-backed is what we like, and they also have a handful of distributions I think associated with that as well.

You know, we have five family dollar locations currently. The loan was, the way we look at this is, you know, if the operations are dark, how much is the real estate worth that's owned? And that's how we underwrite. And so the loan is, in essence, backed by the owned real estate, which we're very, very comfortable with.

Thank you. Our next question comes from Greg McInnis from Scrooge Bank. Your line is now open. Please go ahead.

Hey, good morning. I'm curious, on the structured investment program, does this repayment from the RIM remove any existing ROFAs there? And how do you generally think about the likelihood of repayments in the structured investment program versus in converting into a potential acquisition opportunity?

Yeah, it's a good question, and I think that's the beauty of the program for us is that we are very comfortable with any of the potential outcomes. The ROFOs and the ROFRs have a tremendous amount of value and potential future acquisition opportunity. We did acquire one asset earlier this year in Jacksonville that came directly from this program. We think that there's probably another one in the, call it, year to medium term that we're discussing with the existing borrower today. It's never certain whether the ultimate outcome is an acquisition, but at our basis, the way that we underwrite it, we really view these and underwrite them as an operator and a manager. So at our basis, we're very happy if we have the opportunity to buy it. We're very happy if we ultimately get repaid after generating a very attractive return. And in the unlikely event that we have to take over at our basis, we're very comfortable with that outcome as well. So we view it essentially as a win-win-win, regardless of how it ultimately plays out in the end.

Thank you. Our next question comes from Linda Tsai from Jefferies. Your line is now open. Please go ahead.

Hi. With 60% of your snow pipeline coming online in 26, What does the cadence look like in terms of when it comes on, and how would it impact the weighting of St. Store NOI next year between the first half and the second half?

Yeah, I mean, it's weighted more towards the second half of the year. You'll get some in the first half, but it's more heavily weighted towards the second half of the year.

Thank you. We currently have no further questions, so I'll hand back to David Prusnecki for closing remarks.

Just like to thank everybody that participated in our call today, so thank you so much. We appreciate it.

This concludes today's call. Thank you for joining. You may now disconnect your