Kimco Realty(KIM)2025-02-07 18:10Financial Data and Key Metrics Changes - FFO for Q4 2024 was 0.42 per diluted share, up from 0.39 per diluted share in Q4 2023, representing a per-share increase of 7.7% [35] - Total pro-rata NOI increased by 403.4 million compared to the same period last year [35] - Year-end portfolio occupancy stood at 96.3%, reflecting a year-over-year increase of 10 basis points [37] Business Line Data and Key Metrics Changes - Same-site NOI growth for Q4 was 4.5%, driven primarily by higher minimum rent contributing 3.8% [38] - RPT same-site NOI growth reached 6.2%, with occupancy increasing by 120 basis points [23] - Internet-resistant retailers now account for over 50% of new lease volume, with a surge in leasing to medical and wellness tenants [19] Market Data and Key Metrics Changes - National vacancy rate remains near record lows, facilitating strong leasing momentum [13] - The lack of new supply is measured at just 0.3% of existing retail stock, contributing to favorable supply and demand dynamics [13] - The average unemployment rate across the portfolio is 20 basis points lower than the national average, supporting increased sales at retailers [16] Company Strategy and Development Direction - The company is focused on repositioning its portfolio into first-ring suburbs to leverage natural barriers to entry and pricing power advantages [14] - Kimco Realty Corporation aims to transform its portfolio into a grocery-anchored and mixed-use portfolio, capitalizing on demographic trends [15] - The company plans to selectively dispose of long-term flat ground leases and monetize select development entitlements to enhance growth [32] Management's Comments on Operating Environment and Future Outlook - Management remains confident about growth prospects despite economic uncertainties and recent tenant bankruptcies [43] - The initial 2025 FFO per share outlook range is 1.72, representing a growth range of 3% to 4.2% [43] - The company anticipates same property NOI growth of 2% plus, factoring in potential credit loss from bankruptcies [44] Other Important Information - The company achieved its goal of entitling 12,000 apartment units a year ahead of schedule, expanding its mixed-use portfolio [15] - The liquidity position remains strong with 2 billion revolving credit facility [41] - Moody's affirmed the company's Baa1 unsecured debt rating with a positive outlook [42] Q&A Session Summary Question: Can you talk about the credit loss reserve and exposure to potential trouble tenants? - Management indicated a credit loss reserve of 75 to 100 basis points, with a 130 basis point impact from tenants in bankruptcy [51][60] - The company has already absorbed a 10 basis point impact from Big Lots in 2024, with ongoing efforts to backfill spaces [52][56] Question: What does the opportunity set look like for acquisitions? - Management stated that they have already identified and closed on net acquisition activity, with plans to recycle capital from dispositions into new opportunities [67][69] Question: Can you provide more color on the assumptions for credit loss reserves? - Management expressed comfort with the credit loss range, considering the ongoing bankruptcy processes for Party City and Joanne's [111][112] Question: What is the focus on development and redevelopment spending? - Management emphasized a retail-driven focus for redevelopment, with opportunities to backfill existing spaces rather than extensive new development [96][99] Question: How are you planning to market spaces from bankrupt tenants? - The company markets spaces well in advance of any bankruptcy filings, with ongoing efforts to upgrade tenancy and secure new leases [125][126]