The paragraph is an introduction to Kimco Realty Corporation's fourth quarter 2024 earnings conference call. It informs participants that the call is in listen-only mode with a question-and-answer session following the presentation. The call is recorded, and it features various members of Kimco's management team, including CEO Conor Flynn and other executives. It warns that forward-looking statements may differ from actual results due to various risks and uncertainties. The paragraph also mentions that non-GAAP financial measures will be discussed, and reconciliations can be found on Kimco's investor relations website. In case of technical issues, updates will be posted on the IR website.

The paragraph features Conor Flynn discussing changes in Kimco Realty Corporation's leadership and board. Milton is retiring from his role as Executive Chairman and Director, but will remain as Chairman Emeritus to continue contributing to the company. Richard Saulsman is appointed as the new Chairman, bringing experience and understanding of the company's history. Ross Cooper and Nancy Lechine join the board, with Ross known for his leadership and reputation in the industry, and Nancy bringing her expertise in capital markets and real estate.

The paragraph discusses Kimco Realty Corporation's strategic positioning and performance. It highlights significant leasing momentum due to limited new retail supply and low national vacancy rates. Kimco's long-term strategy involves focusing on first-ring suburbs with natural barriers to entry, enhancing pricing power and reducing competition. Population growth in these areas supports demand for their retail centers. The company has successfully entitled 12,000 apartment units, ahead of schedule, to expand its mixed-use portfolio, which is primarily grocery-anchored. This positions Kimco favorably within the retail and multifamily sectors, with a merchandising mix appealing to their consumers.

The paragraph discusses Kimco Realty Corporation's strong performance, with year-over-year traffic and sales increases, partly due to lower unemployment rates and a strategic mix of grocery and off-price anchors that encourage cross-shopping. The portfolio, positioned in areas with limited supply and high growth, includes a rising number of internet-resistant retailers like medical and wellness services. The company's strategic curation is aimed at growth and shareholder value. Ross Cooper, newly added to the board, reflects on successful capital allocation and highlights the efficient integration of the RPT Realty acquisition in 2024.

The paragraph discusses the successful acquisition and management of RPT properties, highlighting an opportunistic purchase at an 8.5% cap rate and improved cost synergies. The company sold ten non-core properties for $248 million, maintaining the same cap rate. Operational successes include signing new leases with significant rent spreads and improving occupancy rates, leading to a 6.2% growth in same-site NOI. In the fourth quarter of 2024, Kimco Realty Corporation acquired Waterford Lakes Town Center, benefiting from favorable pricing dynamics. The announcement of a retail acquisition by Blackstone in November marked increased interest in the shopping center sector as a strong investment opportunity moving into 2025.

The paragraph discusses Kimco Realty Corporation's successful investment strategy, highlighting their acquisition of Markets and Town Center in Jacksonville, Florida. Initially a mezzanine financing deal, it was converted into equity ownership in 2025 for $108 million at a low 7% cap rate. This aligns with their strategy of acquiring high-quality real estate for outsized returns. The property's favorable location next to St. John's Town Center in a growing trade area presents significant long-term value opportunities, especially with competitive rents. Kimco plans to continue pursuing structured investments and acquisitions while enhancing tenant quality and pushing rents.

The company plans to be selective with core acquisitions and structured investments, without engaging in significant disposition activity due to strong portfolio performance. In 2025, they will initiate two strategies: disposing of long-term flat ground leases at aggressive cap rates and monetizing development entitlements by selling rights to developers. Capital from these disposals will be reinvested into core investments that provide recurring income streams. The financial update from Glenn Cohen highlights strong fourth-quarter 2024 results, including a 7.7% increase in FFO per share and a 17.8% increase in total pro-rata NOI. The company has substantial liquidity and minimal upcoming debt maturities, positioning them well into 2025.

The paragraph outlines the key factors driving the NOI (Net Operating Income) growth, primarily due to acquisitions and increased rents from the existing portfolio. The RPT acquisition and other acquisitions contributed significantly to the growth, despite being offset by higher interest expenses from increased debt levels. The operating portfolio ended the year strongly with a 96.3% occupancy rate, despite challenges from store closures. Same-site NOI growth for the fourth quarter was 4.5%, mainly from higher minimum rents and lower credit losses. For the full year 2024, same-site NOI growth was 3.5%, surpassing previous projections, with the increase attributed mostly to higher minimum rent. Rent commencements accelerated, narrowing the gap between leased and economic occupancy.

The company expects to receive $25 million in rent from its signed pipeline by 2025 and maintains strong financial metrics with a consolidated net debt to EBITDA of 5.3 times. In the fourth quarter, it raised $136.3 million through an equity offering, which was invested in a property acquisition. The company also reduced its preferred stock liability by tendering a portion of shares. It ended the year with $690 million in cash and full access to a $2 billion credit facility. The cash balance includes $500 million from a long-term bond, which was used to pay off a previous bond. Credit rating agencies have given favorable ratings, with Moody's changing the outlook from stable to positive. Despite some economic uncertainties and tenant bankruptcies, the company is optimistic about its future growth and financial positioning.

The paragraph provides a 2025 financial outlook for FFO per share, projecting a growth of 3% to 4.2% based on several assumptions. These include a same property NOI growth of over 2% while factoring in credit losses similar to 2024 levels due to several tenant bankruptcies. The company anticipates recapturing vacated spaces to increase rents and improve tenant quality. Additional assumptions include lease termination income of $6 million to $9 million and a decrease in interest income from cash on hand. The outlook also includes net acquisitions of $100 million to $125 million, anticipated financing costs between $354 million and $363 million, and annual G&A expenses of $131 million to $137 million with savings from a board transition. The forecast excludes any redemption charges or new common equity issuance.

The paragraph is part of a Q&A session following a corporate presentation. Michael Goldsmith from UBS asks about the company's credit loss reserve and exposure to potentially troubled tenants as they approach 2025. Glenn Cohen responds by discussing the current situation with tenants like Big Lots, Party City, and Joanne, which are going through bankruptcy processes. He notes that these issues will impact the company by about 130 basis points, with 10 basis points already absorbed in 2024. He mentions that auctions and bids are underway for remaining properties leased by these companies.

The paragraph discusses Joanne's ongoing process of collecting going concern bids and plans for an auction in late April. The speaker explains their strategy of adjusting budgets based on expected outcomes from these auctions and highlights strong demand in various retail sectors such as dollar stores, footwear, and groceries. They note potential opportunities for retailers to expand using second-generation spaces, emphasizing the strong relationship between landlords and retailers. The discussion also touches upon the stability of their watch list, mentioning repeat bankruptcy cases where they managed to negotiate favorable terms. Overall, they express optimism about the opportunities and collaborations in the retail market.

In the paragraph, Glenn Cohen discusses the company's revenue expectation of $2.2 billion and the anticipated credit loss range of $17 million to $22 million, which includes write-offs and potential losses from bankrupt retailers. David Jamieson clarifies the components of the credit loss. Craig Mailman from Citi asks about the company's acquisition activities and their approach to funding these, with Ross Cooper responding that they have already completed significant acquisitions, primarily through market activity. Looking ahead to 2025, the company plans to match fund through various initiatives without additional equity being part of their current plan.

The paragraph outlines a strategy for managing capital by focusing on recycling it accretively, rather than disposing of assets at higher cap rates, which could be dilutive. The company plans to leverage long-term ground leases and densification opportunities for generating capital, evaluating factors such as foot traffic, lease terms, and geographic priority. They are comfortable with their current capital sources and intend to reinvest in new opportunities, continually exploring a broad range of acquisition possibilities.

The paragraph discusses a company's strategy for geographic and format diversification in its investments, focusing on larger format, grocery-anchored properties with lifestyle components for better yields. With increased market capital, the company plans to explore other formats or geographies for improved yields and differentiation. Through its structured investment program, the company sees opportunities for smaller investments, typically $15 to $25 million, that can lead to significant acquisitions over $100 million. CFO Glenn Cohen highlights that the company expects around $140 million in free cash flow after dividends, CapEx, and tenant improvements, providing additional low-cost capital. The paragraph concludes with a question from Alexander Goldfarb regarding small shop occupancy rates.

The paragraph is a discussion between David Jamieson and Alexander Goldfarb regarding the small shop leasing strategies of Kimco Realty Corporation. Jamieson explains that the acquisition of RPT resulted in a year-over-year flat performance in small shop occupancy due to the lower occupancy rates of RPT compared to Kimco. However, they have managed to grow the RPT small shop portfolio by 50 basis points. The focus is on improving the balance of the small shop portfolio, specifically targeting spaces between 6,000 to 9,000 square feet, as retailers seek flexible formats. The goal is to surpass the current occupancy level of 91.8%, and the deal teams are incentivized to achieve this growth.

In the article paragraph, Glenn Cohen and Ross Cooper discuss factors affecting their financial guidance. They mention a reduction of around $4 million in general and administrative (G&A) expenses, largely due to the transition of a key executive, Milton, leaving the board. Cohen clarifies that capitalized interest is minimal, as there is not much development activity, and they emphasize cost control efforts, resulting in a stable G&A budget despite annual increases. They note that there are few one-time events forecasted for the year, aiming for steady business operations. Ross Cooper adds that the range in earnings guidance reflects potential market impacts related to bankruptcy proceedings. The operator then introduces a question from Greg McGinniss of Scotiabank.

In the paragraph, Greg McGinniss inquires about the company's focus on redevelopment spending versus acquisitions, questioning if mixed-use projects might be sold, joint ventured, or ground leased. David Jamieson clarifies that there was no actual drop in yield for CulturePlace; they simply tightened their guidance range. He explains that redevelopment remains a retail-driven focus, highlighting opportunities to backfill existing spaces to maximize cash flow with minimal disruption. He confirms their ongoing commitment to redevelopment where it makes financial sense, and notes that the company surpassed its corporate goal of 12,000 multifamily units a year ahead of schedule.

The paragraph discusses a company's strategy regarding potential projects and investments, emphasizing the challenge of balancing the cost of capital and return on investments, particularly in mixed-use developments. Conor Flynn mentions the benefit of adding residential units to retail centers but notes the lower returns from apartment developments compared to other market opportunities. The company aims to prioritize high-return investments and creatively structure entitlements to maximize benefits. Andrew Reel from Bank of America inquires about the company's handling of repossessed retail spaces, such as those from Bed Bath and Beyond and Party City, which vary in size, and David Jamieson responds that they are primarily looking to backfill these spaces with single-use tenants, similar to previous cases.

The paragraph discusses the opportunities for retailers due to varied store sizes and the lack of new supply in the commercial real estate sector. Despite stores like Joanne and Party City closing spaces, there is confidence in filling these vacancies with single-use operators at higher rents. The conversation also addresses concerns about credit loss reserves, questioning assumptions about losses from Party City and Joanne, which comprise 1.1% of the Adjusted Base Rent (ABR). Additionally, there is an inquiry about the timing of debt impacts, particularly in light of recent bankruptcies and auctions affecting these retailers. Despite these factors, the speaker expresses confidence in managing potential credit losses.

The paragraph discusses uncertainties related to the future of Joanne's and Party City, particularly regarding their going-out-of-business (GOB) sales and bankruptcy situations. It mentions that Joanne's hasn't started its GOB sales yet, which affects rent timelines, potentially extending into the second quarter. There's uncertainty about whether a buyer will emerge for some of their locations, contributing to a range of possible outcomes for the company. Additionally, it addresses guidance on financial performance, mentioning acquisition volumes versus dispositions, and discusses the tight range in funds from operations (FFO) guidance. Glenn Cohen remarks that despite the narrow penny range, there's a $20 million range in total, with good visibility and no significant one-time factors impacting predictions.

The paragraph discusses a strategic approach to managing retail spaces leased by tenants facing potential bankruptcy, like Party City and Joanne, similar to experiences with Bed Bath. The company is proactive, marketing these spaces well before any bankruptcy filings by closely monitoring at-risk tenants and seeking to upgrade tenancy in advance. For Party City, they have preemptively secured several new leases before bankruptcy filing, due to an adjustment in lease terms, which provided a defined end date and confidence in recapturing those spaces for new opportunities.

The paragraph discusses the strategic approach of Kimco Realty Corporation towards upgrading their tenancies and managing their apartment entitlements. They are achieving significant yields from their tenant mix, including Big Lots, Party City, and Joanne's, as well as dealing with older leases like Bed Bath, which were significant but replaced with single tenants. Floris van Dijkum inquires about capital allocation regarding their 8,900 entitled apartments and future plans. Ross Cooper explains that prioritizing these entitlements involves detailed analysis, considering market feasibility, timing, supply-demand dynamics, and geographic trends, rather than simply the size of the projects. The goal is to determine the most viable projects to pursue or possibly joint venture or sell off.

The paragraph discusses Kimco Realty Corporation's strategic approach to capital allocation and project investment. They evaluate investment alternatives based on market intelligence, cost of capital, and project suitability, considering options like direct investment, ground leasing, joint ventures, or selling. With geographic diversification and various entitlements, they can selectively activate projects. Two large master plans in Kedlin's and Pentagon demonstrate this approach, wherein entitlements allow for securing a large residential allocation. These allocations can be developed in phases to manage supply and market absorption over time, allowing flexibility in activating each phase according to market conditions and financial strategies.

The paragraph features a discussion between Conor Flynn and others about Kimco Realty Corporation's strategies for incorporating multifamily units into their portfolio. Flynn mentions the goal of having 10% of income from apartments, although current capital constraints limit multifamily activations. They plan to use approaches like ground leases and joint ventures to remain capital expenditure-light while meeting return targets. They have already activated over three thousand units. Steve Sakwa then asks about Kimco's stance on ground-up retail development, considering industry challenges. David Jamieson responds that such development is mainly in outer suburbs of areas like Arizona and Texas, as more central suburban rents need to be higher to justify development costs.

The paragraph discusses opportunities in retail market dynamics, particularly focusing on backfilling second-generation spaces and expanding market shares by narrowing store radius. It mentions confidence in credit loss reserves due to limited retailer options, and opportunities arising from bankrupt tenant spaces undergoing auction. There is a mention of high retailer activity in bankruptcy processes, with some outbidding attempts for acquisition. The paragraph also refers to projected savings from management changes and queries about their timing, either starting in January or at the time of the annual meeting.

In the article's paragraph, Conor Flynn and Glenn Cohen discuss their approach to bidding on retail spaces during bankruptcy auctions. They emphasize evaluating each opportunity and talking to retailers in different stages of the bankruptcy process. The strategy involves being selective with acquisitions, pursuing those that can enhance asset values, especially when combined with existing properties. When outbid in auctions, Cohen mentions that the winning tenant assumes the responsibility of back rent and future lease obligations, which allows them to be in a favorable position. The conversation shifts to Paulina Rojas asking about the impact of recent bankruptcies on rental rates and market dynamics, particularly focusing on how these developments might alter the opportunities compared to a scenario without such bankruptcies.

In the article paragraph, Conor Flynn discusses the impact of supply availability on pricing power in certain submarkets, emphasizing that the availability of retail locations is limited, thus maintaining strong pricing power due to high occupancy and low vacancy rates. He notes that retailers often compete for scarce, high-quality retail spaces, sometimes engaging in auction and package deals across different subsectors. Following this, Mike Mueller inquires about the demand for medical and wellness spaces, and Glenn Cohen responds by highlighting the stability and low risk of bad debt from medical tenants, who typically invest heavily in their spaces and remain long-term occupants.

The paragraph features a conversation among Conor Flynn, Mike Mueller, and others regarding the integration of medical services in shopping centers and their impact. Conor Flynn mentions the increasing presence of urgent care, pediatric urgent care, and other medical facilities in shopping centers, citing their ability to drive traffic and attract convenience-seeking shoppers while being resistant to internet competition. The discussion shifts when Michael Gorman asks about the financial strategy involving match funding from sales of ground leases or entitlements in 2025. Ross Cooper responds, confirming that these proceeds include structured investments and detailing how these investments, generally ranging from $15 to $25 million, help diversify the risk profile of the business.

The paragraph discusses the company's confidence in their underwriting strategy for investing in properties, particularly focusing on structured investments with variable timelines. They emphasize the importance of managing the rollover schedule and recycling capital from prior investments to fund new opportunities. The program is currently 2% of their enterprise value, and they aim to grow it gradually. Following this, Linda Tsai from Jefferies asks about refinancing plans for 2025 and 2026, focusing on timing and cost impacts. Glenn Cohen responds by detailing the debt maturing in 2025, including a $290 million debt, a $50 million mortgage due in March, and a $140 million bond due in June. He mentions various ways to address these, such as using free cash flow or proceeds from asset dispositions.

The paragraph discusses the financial strategy and current borrowing situation of a company. They find their current borrowings to be favorably priced compared to long-term options and have opportunities lined up. Regarding 2026 maturities, they have $750 million that doesn't mature until August, giving them ample time to address it. Conor Flynn expresses optimism about the potential for improved credit ratings from S&P and Moody's, which could align with refinancing opportunities to secure better pricing. Glenn Cohen mentions the favorable pricing if they accessed the bond market today. The conversation transitions to a question from Ronald Kamdem of Morgan Stanley about the impact of 2024 closures on 2025's same-store net operating income (NOI). Glenn Cohen and David Jamieson explain that the 2% plus NOI guidance accounts for these vacancies, which are not included in other financial metrics like straight-line rents or lease termination fees.

In the discussion, Ronald Kamdem asks about the transition from a 3.5% to 2% same-store NOI, questioning the main factors affecting this change. Glenn Cohen responds by explaining that factors such as bankruptcies, especially from stores like Joanne's or Party City, could influence the financial outcomes. He reassures that 2% is viewed as a safe minimum, with adjustments dependent on future developments. David Jamieson adds that initial forecasts can vary, using past projections of the snow pipeline as an example, which initially estimated $15 to $20 million but ended up near $35 million. He notes they start the year with a $25 million estimation for the snow pipeline, indicating that while the floor is secure, the ceiling is uncertain. Ronald Kamdem further inquires about net acquisition guidance and potential disposals, asking how much could be expected, ranging from $50 million to $300 million.

In the article's paragraph, Ross Cooper discusses the potential opportunity on the sales side, explaining that approximately 10% of income comes from ground leases, which serve as a match funding mechanism. The amount pushed into the market for sale will depend on new investment opportunities, and updates will be provided as the year progresses. Omotayo Okusanya from Deutsche Bank then inquires about creative strategies to enhance shareholder value in the retail sector over the next 12 to 18 months, similar to past initiatives. Conor Flynn responds by highlighting the importance of balance sheet strength in taking advantage of market dislocation or mispricing, noting that while the current economy lacks significant mispricing, the organization's strong balance sheet is poised to capitalize on future opportunities.

The paragraph discusses the challenges faced by individual retailers with limited owned real estate and highlights a strategy focusing on real estate-rich retailers for unique opportunities, such as the successful Albertsons deal. Omotayo Okusanya asks about interest rates on assumed debt from the Waterford acquisition, and Glenn Cohen confirms it at 4.86%. Caitlin Burrows inquires about the CapEx guidance for 2025, which is lower than 2024, attributed to tenant funding processing and a compressed pipeline. David Jamieson suggests further investment in bankruptcies might occur in 2026. Lastly, Ki Bin Kim asks about the structure of a deal involving office tenant Spirit at Daniel Point.

In the paragraph, David Jamieson confirms that Spirit owns their headquarters, which they purchased and built themselves, and they have a ground lease with Spirit on a multifamily property that is currently up to date. Although Spirit is in bankruptcy proceedings, they expect to emerge from it. There are also reports that Frontier is reconsidering Spirit. Operations continue with around 900 employees at the headquarters. The conversation concludes with David Bujnicki thanking participants for joining the call and expressing anticipation of future meetings. The conference then ends.

This summary was generated with AI and may contain some inaccuracies.