Kimco Realty Corporation (HC)

Hello, everyone. Thank you for joining us and welcome to Kimco Realty's first quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to David Bushnicki, Senior Vice President of Investor Relations and Strategy. David, 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 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, and thanks for joining us today. When we spoke in February, I laid out a clear set of priorities for 2026. Convert our record signed but not open pipeline into cash flow. Recycle capital aggressively to close the gap between our public and private market valuations. Modernize the operating platform to drive speed and efficiency while continuing to push occupancy and same site NOI growth. All underpinned by the structural strength of our grocery anchored portfolio. Three months in, I'm pleased to report we are executing on each of these fronts. Let me walk you through the highlights. Dave Jamieson will provide additional detail on leasing. Ross will cover the transaction market. And Glenn will take you through our financial results and outlook. The momentum we built in 2025 has carried into 2026. For the first quarter, we outperformed as we delivered FFO of 46 cents per diluted share, a 4.5% increase over the prior year, driven by higher minimum rents, strong tenant retention, and favorable credit loss. Same property NOI grew 1.7%, which is consistent with the cadence we outlined in February, that the first quarter would mark the low point of the year as we lapped prior year rents related to Joann's, Party City, Big Lots, and Rite Aid. Our tenant credit profile is also as strong as I can ever remember. Customarily, credit loss tends to be higher during the first quarter as challenged retailers look to get through the holiday season. This year, we didn't experience any meaningful bankruptcy activity and don't foresee that materially changing over the course of the year. As we look ahead, we anticipate accelerating same-site NOI growth through the balance of the year as rents commence from our signed but not open pipeline. Speaking of leasing, our team delivered 576 deals totaling 4.4 million square feet, with new lease spreads of 23.8% and combined spreads of 11.3%. That volume reflects the deep, broad base demand that characterizes our markets. Most importantly, our signed but not open pipeline grew to 77 million of annual base rent, a new all-time record for Kimco, representing 410 basis points of leased versus economic occupancy spread. That is contracted, visible cash flow sitting in the pipeline waiting to convert, and it's the single clearest indicator of where our earnings are headed. occupancy came in at 96.3% pro rata, 50 basis points higher than a year ago and down just 10 basis points from our all-time high at the end of last year. I'll let Dave provide more detail on leasing in a moment, but I want to highlight a milestone that speaks directly to the power of our platform. When we closed the RPT transaction just two years ago, that portfolio carried an occupancy gap of roughly 130 basis points lower than Kimco's legacy assets. At the end of the first quarter, we not only closed the gap, we surpassed it, as the RPT portfolio occupancy is slightly higher than Kimco's. Importantly, even at these occupancy levels, the portfolio continues to have a meaningful runway of below-market rents, providing a significant mark-to-market opportunity as leases roll. Now allow me to touch on the macro environments. Geopolitical uncertainty has injected some volatility into the broader economy in near-term retail sentiment, including the rise of fuel prices and its impact on the consumer. We are not dismissing that. But it is also where the durability of Kimco's portfolio becomes more apparent. Our tenant base is anchored in discount and necessity-driven retail, grocers, off-price, fitness, and everyday services, the categories that have historically demonstrated resilience precisely when discretionary spending comes under pressure. The first quarter validated that thesis, as our traffic at our centres was up more than 2% year-over-year. Retailers are looking beyond the near-term macro issues and remain focused on the long-term, as demand for quality space remains strong, supported by the scarcity of high-quality vacant space and virtually no new supply entering our markets. The structural backdrop remains squarely in Kimco's favour, and our leasing performance reflects that. Demand across the portfolio is strong, spreads are healthy, and we see no signs of that changing. In closing, Kimco entered 2026 with the strongest operational foundation in our company's history, and the first quarter reinforced the financial power of our platform. Strong demand, a record-signed but not open pipeline, disciplined capital recycling, the strongest balance sheet we've ever had, and one of the most resilient tenant bases in the sector give us the billing blocks to continue delivering at the top of the shopping center space. I'll now turn it over to Dave for an update on leasing activity in the operating portfolio.