Kimco Realty Corporation (hc) · NYSE:KIM
Kimco Realty Corporation (hc) — Q2 2023 Earnings Presentation
40 slides from Kimco Realty Corporation (hc)'s earnings presentation, Jul 27, 2023
Slide 1: Investor Presentation Second Quarter 2023
Investor Presentation First in Last Mile Retail Second Quarter 2023 Fellsway @ 630 Medford, Massachusetts
Slide 2: Safe Harbor
Safe Harbor This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company intends such forward-looking statements to be covered by the safe ha
Slide 3: Kimco Realty at a Glance: Strategy
Kimco’s Kimco’s KIMCO REALTY® AT A GLANCE Strategy Strategy • Own and operate open-air, grocery-anchored • Grocery Anchored shopping centers and mixed-use assets where we can benefit from economies of scale. Shopping Centers • Maintain and grow our nationally diversified portfolio located in the hig
Slide 4: Well-Positioned, Grocery Anchored Portfolio in Major Sun Belt & Coastal Markets
Well-Positioned, Grocery Anchored Portfolio KIMCO REALTY® AT A GLANCE in Major Sun Belt & Coastal Markets 85% of Annual Base Rent (ABR) comes from Our Top Major Metro Markets 1 Major Metro Markets ABR Contribution Denver 83% Coastal and Sun Belt Markets Seattle 1 Boston 3 New York 2% Other Major Met
Slide 5: Strategic Goals
Strategic Goals KIMCO REALTY® AT A GLANCE Financial & Operating 2025 Goals 3.0-5.0% 85% AFFO GROWTH ABR FROM GROCERY RATE ANCHORED PORTFOLIO 2020-2022: >36.7% CAGR 2Q23: 82% 2.5%+ 15% SAME PROPERTY NOI ABR FROM MIXED-USE GROWTH RATE PORTFOLIO 2Q23: 2.3% 2Q23: 13% 6.0-6.5x 12,000 LOOK-THROUGH MULTI-F
Slide 6: 2Q Snapshot
2Q Snapshot KIMCO REALTY® AT A GLANCE 95.8% 2.7M +25.3% 5.9x Operating Portfolio Square Feet Pro-rata rent spread on Net Debt to EBITDA on a Occupancy Leased comparable new leases in 2Q Look-through basis1 2.3% 91.0% 9.3 YR $2.5B+ SSNOI Growth Small Shop Occupancy, Debt Maturity Immediate over 2Q22
Slide 7: Operations Update
Operations Update KIMCO REALTY® AT A GLANCE Occupancy Rent Per Square Foot Reapproaching All-Time Highs $20.00 96.4% $19.66 $19.86 $19.12 95.8% 95.7% 95.8% 95.8% $17.99 $18.19 $17.35 94.4% 93.9% 2018 2019 2020 2021 2022 1Q23 2Q23 2018 2019 2020 2021 2022 1Q23 2Q23 Comparable Leasing Spreads Same-sit
Slide 8: Multiple FFO Growth Drivers
Westlake S.C. Daly City, CA Multiple FFO Growth Drivers KIMCO REALTY® AT A GLANCE ESG: Strong commitments in Organic Growth the areas of (Rent Bumps) climate change, DEI and small business support Leasing and Mark Redeployment to Market of Albertsons Opportunities Investment Accretive (Re)developmen
Slide 9: Solid Fundamentals
Frontier Village S.C. Lake Stevens, WA Solid Fundamentals Investor Presentation | Second Quarter 2023 9
Slide 10: Favorable Outlook for Shopping Centers
Favorable Outlook for Shopping Centers SOLID FUNDAMENTALS • Open-air gets retailers Shift to Open-Air closer to their customers Record • Historically low new • Higher trip frequency retail development Grocery Anchored driven by necessities Low Supply • New store openings • Lower total cost of outpac
Slide 11: Record Low Supply
Record Low Supply SOLID FUNDAMENTALS Historically Low New Retail Development Store Closures Near Historic Lows Retail Completions Lowest Since Q1 2011 (in '000s)1 “Store closings in 2023 so far is coming close to 2022's number but remains below the historical average”3 14,000 “As a percentage of exi
Slide 12: Expanding Retailers
Expanding Retailers SOLID FUNDAMENTALS Tenants Expanding Today1 Substantial Demand Grocer Health/Beauty Products Personal Services Over 85% of 2023 planned openings favor open-air formats2 Category Retailers Locations Discount Dollar Tree, Five Below 1,900 Automotive Auto Zone, O’Reilly Automotive,
Slide 13: Grocery Advantage
Grocery Advantage SOLID FUNDAMENTALS Current Remaining Highly Productive Grocers, Grocery Anchored / Component 85% Non-Grocery Above the Peer Group1 Average ~$770/SF GOAL 82% of ABR AVG Grocery Sales CURRENT in our centers2 Store proximity remains key as click-and-collect Stronger Grocery Portfolio
Slide 14: Retailers are Going Off-Mall
Retailers are Going “Off-Mall” SOLID FUNDAMENTALS Shift to Open-Air “We're definitely exploring the [neighborhood-based store] Dania Pointe strategy further…versus just strictly inside a mall…You’re seeing Dania Beach, FL that strategy work.”1 “Long term, we remain bullish about the small format sto
Slide 15: Omni-Channel: First In Last Mile
Omni-Channel: First In Last Mile SOLID FUNDAMENTALS “More than 97% of our sales were fulfilled by our stores.”1 ”…if [shoppers]…use our BOPIS experience, [we see] greater loyalty and they reward us with a higher share of wallet.”2 “31% of digital orders in 2022 were fulfilled by stores.“ 3 “We execu
Slide 16: Close to Home: Retailers Focus on First Ring Suburbs
Close to Home: Retailers Focus on First Ring SOLID FUNDAMENTALS Suburbs With more interest in suburban locations comes rising competition for good real estate locations1 Asking rent growth in the suburbs also outpaced urban areas last year2 For the 1st time 10.5% 45% Since 2013, urban retail Growth
Slide 17: Operational Momentum
Operational Momentum SOLID FUNDAMENTALS Leased To Economic Occupancy Spread = Visible Spread Translates Future Cashflow Growth To ~$50M of ABR with ~$24M to flow by end of 20231 All-time high 97% 96% 96.0% 95.6% 95.7% 95.8% 95.8% Mark To Market 95.3% 95.1% 94.6% 94.7% • Anchor Leasing 95% 94.4% Spre
Slide 18: High Quality, Diversified Portfolio
Publix at Princeton Lakes Atlanta, GA High Quality, Diversified Portfolio Investor Presentation | Second Quarter 2023 18
Slide 19: Strong Tenant Base
Strong Tenant Base HIGH QUALITY, DIVERSIFIED PORTFOLIO Top Tenants By ABR S&P/MOODY’S A/A2 3.7% A/A2 2.1% 7 released at +28% spread AA/A1 1.9% BBB+/A2 1.9% BB/Ba2 1.9% • Recapturing a below market portfolio / • Upgrading tenant mix to drive traffic at our centers • Limiting downtime and capex by bac
Slide 20: Anchor & Small Shop Tenant Exposure
Anchor & Small Shop Tenant Exposure HIGH QUALITY, DIVERSIFIED PORTFOLIO 47% of Kimco’s ABR is derived from small shop tenants (<10K SF), comprised primarily of: • Restaurants, including quick serve, fast casual and full service • Other uses, such as dollar stores, electronics, liquor/tobacco and oth
Slide 21: Top Small Shop Tenants by Pro-rata ABR%
Top 50 Small Shop Tenants by Pro-rata ABR% HIGH QUALITY, DIVERSIFIED PORTFOLIO Top 50 100% 2,000+ 28% 13% Pro-rata Pro-rata Small Shop Tenants National Stores Portfolio ABR Small Shop ABR Top 50 Small Shop Tenants by Pro-rata ABR % 1 JPMorgan Chase & Co. 11 Wells Fargo & Company 21 McDonald's Corpor
Slide 22: Local Tenant Exposure
Local Tenant Exposure HIGH QUALITY, DIVERSIFIED PORTFOLIO 22% of Kimco’s ABR is Total Portfolio Composition Local Portfolio Composition derived from local tenants, % of Pro-rata ABR % of Pro-rata Local ABR comprised primarily of: • Restaurants, including Hobby/Pet Grocery/Pharmacy quick serve, fast
Slide 23: Accretive Capital Allocation
Village Plaza at Bunker Hill Houston, TX Accretive Capital Allocation Investor Presentation | Second Quarter 2023 23
Slide 24: Why Mixed-Use
River Oaks S.C. Houston, TX Why Mixed-Use • ACCRETIVE CAPITAL ALLOCATION Diversifies portfolio cashflow • Hedges Inflation • Residential leases = short duration leases that regularly mark-to-market Current • Offers a higher CAGR than retail-only sites Mixed-Use Centers 15% Goal • Improves property v
Slide 25: Disciplined Mixed-Use Redevelopments to Drive Future NOI Growth
Disciplined Mixed-Use Redevelopments to ACCRETIVE CAPITAL ALLOCATION Drive Future NOI Growth ACTIVE PROJECT FUTURE OPPORTUNITY FUTURE OPPORTUNITY FUTURE OPPORTUNITY SUBURBAN SQUARE: Coulter Ave. EAST BANK S.C. WESTLAKE S.C. (South Phase) MILL STATION Ardmore, PA (Philadelphia MSA) Aurora, CO (Denver
Slide 26: Value Creation Through Redevelopment
Value Creation Through Redevelopment ACCRETIVE CAPITAL ALLOCATION Towson Place, Towson, MD Walmart anchored Other Notable Retail Completions During 2023 Before Current Building Description Meadowbrook Backfill former Modell's with Burlington Commons Copperwood Backfill former Shoe Expo with dd's Dis
Slide 27: Future Mixed-Use Opportunities
Future Mixed-Use Opportunities ACCRETIVE CAPITAL ALLOCATION Opportunities are distributed across the portfolio, diversifying against market-specific circumstances Embedded Value Creation: ~$120M to $200M additional value from land entitled for the development of 7,135 multi-family units and keys (~$
Slide 28: Kimco Plus: Opportunistic Investing
Kimco Plus: Opportunistic Investing ACCRETIVE CAPITAL ALLOCATION Decades of retail property experience, financial acumen, and strong retailer relationships have resulted in unlocking real estate value for both real estate rich retailers and property owners Albertsons (NYSE: ACI) - Monetization • $19
Slide 29: 2023 Capital Allocation Priorities
2023 Capital Allocation Priorities ACCRETIVE CAPITAL ALLOCATION Third Party Acquisitions, Partnership Buyouts & Structured Investments +/- $100M Net of dispositions Leasing and Capex Costs $200M TO $250M Including tenant improvements, leasing commissions and landlord work ~$10 to $15 million earmark
Slide 30: Significant Financial Strength
Hilltop Village Center Alexandria, VA Significant Financial Strength Investor Presentation | Second Quarter 2023 30
Slide 31: $2.5+ Billion of Financial Capacity to Support Growth
$2.5+ Billion of Financial Capacity to SIGNIFICANT FINANCIAL STRENGTH Support Growth COMMITTED TO SOURCES USES ▪ Investment grade credit rating of: ▪ ACI Stock: Monetized $144.9M in Q2, ▪ No remaining mortgage debt BBB+ S&P / Baa1 Moody’s 14.2M shares remain maturing in 2023 ▪ Net/Debt to EBITDA of
Slide 32: Well-Staggered Debt Maturity Profile with Significant Liquidity Position
Well-Staggered Debt Maturity Profile with SIGNIFICANT FINANCIAL STRENGTH Significant Liquidity Position Liquidity Debt Profile: Consolidated/JV Value of remaining ACI Shares Fixed Rate (99.7% of outstanding Cons. Debt) 3.49%1 5.06%1 2,800 Cash and cash equivalents Floating Rate (0.3% of outstanding
Slide 33: ESG Leadership
Mendenhall Commons Memphis, TN ESG Leadership Investor Presentation | Second Quarter 2023 33
Slide 34: ESG Strategic Areas of Focus
ESG Strategic Areas of Focus ESG LEADERSHIP Our Pillars Our Strategy COMMUNICATE Maintain regular engagement with key stakeholder Openly With audiences, reporting information on issues of relevance Our Stakeholders to those audiences Kimco ESG Report EMBRACE Foster a sense of place at our shopping c
Slide 35: Recent Results & Recognition
Recent Results & Recognition ESG LEADERSHIP Our Pillars Recent Results Recognition COMMUNICATE Awarded Nareit's 2022 “Leader in the Retained position as a constituent Dow Jones® Nareit ® Sustainability Indices Openly With Light” Award for outstanding ESG of the DJSI North America Index Our Stakehold
Slide 36: Appendix
Westminster Center Westminster, CA Appendix Investor Presentation | Second Quarter 2023 36
Slide 37: Reconciliation of Non-GAAP Measures: Net Debt/EBITDA
Reconciliation of Non-GAAP Measures APPENDIX (Unaudited, in thousands) Net Debt/EBITDA Calculations Net income/(loss) $ 109,270 Interest 60,674 Net Debt / EBITDA Calculation Depreciation and amortization 129,245 Gain on sale of properties (13,170) Net Debt $ 6,598,212 Gain on sale of joint venture p
Slide 38: Reconciliation of Non-GAAP Measures: FFO/Share
Reconciliation of Non-GAAP Measures APPENDIX (Unaudited, dollars in thousands, except per share data) FFO/Share Reconciliation (1) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income/(loss) available to the company's common shareholders $ 100,426 $ (125,751) $ 383,93
Slide 39: Reconciliation of Non-GAAP Measures: Same Property NOI
Reconciliation of Non-GAAP Measures APPENDIX (Unaudited, in thousands) Same Property NOI Reconciliation (1) (2) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income/(loss) available to the company's common shareholders $ 100,426 $ (125,751) $ 383,938 $ 105,197 Adjustm
Slide 40: Investor Presentation | Second Quarter 2023
Publix at Princeton Lakes Atlanta, GA Investor Presentation | Second Quarter 2023
Kimco Realty Corporation (HC) — Q2 2023 Earnings Presentation on 6ix