Kimco Realty Corp. KIM has reported third-quarter 2024 funds from operations (FFO) per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The metric grew 7.5% from the year-ago quarter.

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This retail REIT clocked in revenues of $507.6 million, which topped the consensus mark of $500.3 million. The figure improved 13.8% year over year.

Although Kimco reported year over year revenue growth, a rise in interest expenses acted as a dampener.

According to Conor Flynn, CEO of Kimco, "The ongoing positive supply and demand fundamentals in both the open-air sector and Kimco's portfolio continue to be a cause for optimism and confidence. Our high-quality, grocery-anchored properties continue to deliver outsized growth, record occupancy and advantageous pricing power. With a favorable environment, best in class platform and a rock-solid balance sheet, we are again raising our financial outlook for the year.”

Quarter in Detail

Pro-rata portfolio occupancy at the end of the third quarter was 96.4%, reflecting increases of 90 basis points (bps) year over year and 20 bps sequentially.

Pro-rata anchor occupancy at the end of the quarter was 98.2%, reflecting an expansion of 100 bps year over year and 10 bps from the previous quarter. Pro-rata small shop occupancy at the end of the quarter was at an all-time high of 91.8%, representing an uptick of 70 bps year over year and 10 bps sequentially.

Kimco executed 451 leases, aggregating 2.4 million square feet in the quarter. Blended pro-rata cash rent spreads on comparable spaces generated was 12.3%, with pro-rata cash rent spreads for new leases climbing 41.9%, and renewals and options rising 6.8%.

Same-property net operating income (NOI) grew 3.3% year over year to $383.4 million, backed by a rise in the minimum rent of 3.9%.

Interest expenses were up 26.1% year over year to $76.2 million in the reported quarter.

Portfolio Activity

Subsequent to the quarter end, the company acquired Waterford Lakes Town Center, a 976,000-square-foot grocery-anchored lifestyle center in the Orlando market, for $322 million.

In the reported quarter, KIM achieved an “A-” credit rating from Fitch Ratings and a “Positive” outlook from S&P Global Ratings.

Balance Sheet Position

This retail REIT exited the third quarter of 2024 with $2.8 billion of immediate liquidity. This included full availability on its $2-billion unsecured revolving credit facility, and $790 million of cash and cash equivalents.

Its net-debt-to-EBITDA was 5.6X on a look-through basis as of Sept. 30, 2024, down from 5.9X in the prior-year quarter.