Weekly Real Estate News
Kimco Realty reported record shopping-center occupancy and accelerating rental income growth Thursday, raising its full-year earnings outlook as demand remained strong for space in grocery-anchored retail properties.
The Jericho, New York-based real estate investment trust said portfolio leased occupancy reached an all-time high of 96.6% in the third quarter ended September 30, up 90 basis points from a year earlier. Small-shop occupancy was 92.9%, matching its record.
Kimco released its results October 29 at 6:50 a.m. Eastern. The company reported funds from operations of $316.2 million, or $0.47 per diluted share, compared with $300.3 million, or $0.44 per share, a year earlier. FFO is a commonly used non-GAAP measure for REITs and differs from net income.
Higher rents support operating growth
Same-property net operating income increased 4.9% year over year. Kimco signed 444 leases totaling 2.7 million square feet during the quarter, reporting a 31.5% pro-rata cash rent spread on comparable new leases and a 12% blended spread across comparable leasing activity.
Net income available to common shareholders rose to $272.5 million, or $0.41 per diluted share, from $130.2 million, or $0.19 per share. The company said gains from property sales were a major contributor to the increase, so the GAAP profit change should not be read as entirely recurring operating growth.
Guidance raised
Kimco raised its full-year 2026 FFO guidance to $1.84 to $1.86 per diluted share, up from $1.83 to $1.84. It also increased its expected same-property NOI growth range to 3.5% to 3.8% from 3% to 3.5%.
The company said $76 million in annual base rent was associated with signed leases that had not yet commenced. That future rent is not equivalent to cash collected during the reported quarter.
Property sales and capital recycling
During the quarter, Kimco sold The Witmer, a 440-unit multifamily property in Pentagon City, Virginia, for $211.5 million. Its pro-rata share of the sale price was $116.3 million. It also sold four Costco-anchored assets for approximately $127 million and acquired shopping centers in Florida.
The company repurchased $150 million of common shares and approximately $74 million of preferred stock. It reported more than $2.5 billion in immediate liquidity at quarter-end.
What it means for retail real estate
Kimco’s results point to continued strength in well-located, open-air shopping centers despite broader uncertainty in commercial property markets. Grocery-anchored retail properties have different demand drivers from office buildings and other property types facing greater leasing challenges.
Occupancy and rent growth are positive signals for landlords, but they do not eliminate financing, redevelopment or consumer-spending risks.
Source: Kimco Realty’s October 29 earnings release.
