Q4 2021 Kimco Realty Corp Earnings Call

Good morning, and welcome to Kim COSE fourth quarter 2021 earnings conference all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.

Speaker 1: Good morning, and welcome to Kim Co's fourth quarter 2021 earnings conference.

Speaker 1: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions.

On your telephone keypad.

After todays presentation, there will be an opportunity to ask questions to ask the question. You May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded.

Speaker 1: To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to David F. Bujnicki, Senior Vice President, Investor Relations and Strategy. Please go ahead.

I would now like to turn the conference over to David F, which Nicky Senior Vice President Investor Relations and strategy. Please go ahead.

Good morning, and thank you for joining kimco This quarterly earnings call at Kimco management team participating on the call today include Conor Flynn Kimco CEO .

Speaker 1: Good morning and thank you for joining Kimco's quarterly earnings call. The Kimco management team participating on the call today include Connor Flynn, Kimco CEO , Ross Cooper, President Chief Investment Officer, Glenn Cohen, our CFO , Dave Jamison, Kimco's Chief Operating Officer, as well as other members of our executive team that are also available to answer questions during the call.

Ross Cooper, President and Chief Investment Officer Glenn.

Glenn Cohen, our CFO Dave.

Dave Jamieson Kimco as Chief operating officer.

As well as other members of our executive team are also available to answer questions during the call.

As a reminder, statements made during the course of this call may be deemed forward looking and it's important to note that the company's actual results could differ materially from those projected in such forward looking statements due to a variety of risks uncertainties and other factors.

Speaker 1: As a reminder, statements made during the course of this call may be deemed forward-looking, and it is important to note that the company's actual results could differ materially from those projected in such forward-looking statements due to a variety of risks, uncertainties, and other factors.

Speaker 1: Please refer to the company's SEC filings that address such factors.

Please refer to the company's SEC filings that address such factors.

Speaker 1: During this presentation, management may make reference to certain non-GAAP financial measures that we believe help investors better understand Kinko's operating results.

During this presentation management may make reference to certain non-GAAP financial measures that we believe help investors better understand kimco operating results.

Speaker 1: Reconciliations of these non-GAAP financial measures can be found in the investor relations area of our website.

Reconciliations of these non-GAAP financial measures can be found in the Investor relations area of our website.

Speaker 1: Also, in the event our call were to incur technical difficulties, we'll try to resolve as quickly as possible, and if the need arises, we'll post additional information to our investor relations website. And with that, I'll turn the call over to Connor.

Also in the event our call were joined Kirk technical difficulties, we'll try to resolve as quickly as possible and if the need arises we will post additional information to our Investor Relations website.

I'll turn the call over to Conor.

Good morning, and thanks for joining us today I'll recap our operating results for the fourth quarter provide an update on our strategic merger with Weingarten and outline our key goals for the year ahead.

Speaker 1: Good morning and thanks for joining us. Today I'll recap our operating results for the fourth quarter, provide an update on our strategic merger with Winegarden and outline our key goals for the year ahead. Ross will give an update on the transaction market and Glenn will cover our earnings results and guidance for 2022.

Ross will give an update on the transaction market and Glenn will cover our earnings results and guidance for 2022.

Speaker 1: We continue to focus on execution, as reflected by our strong fourth quarter performance.

We continue to focus on execution as reflected by our strong fourth quarter performance leasing leasing leasing has been is now and will continue to be our first second and third priority.

Speaker 1: leasing, leasing, leasing has been, is now, and will continue to be our first, second, and third priority.

Speaker 1: Our entire team has worked tirelessly to create a one of a kind platform that utilizes our scale, portfolio quality, relationships, procurement abilities, data analytics, tenant support programs, last mile infrastructure, and pricing power. This platform has proven to be resilient when times are tough and shown to generate growth when the economic climate is favorable.

Our entire team has worked tirelessly to create a one of a kind platform that utilizes our scale portfolio quality relationships procurement abilities data analytics tenant support programs last mountain infrastructure and pricing power. This platform has proven to be resilient when times are tough and shown to generate growth.

When the economic climate is favorable.

Speaker 1: It is a key reason why we have been successful in releasing pandemic induced vacancies while simultaneously attracting best in class operators that have embraced the future of last mile omni channel retail. Now for some

It is a key reason why we have been successful in re leasing pandemic induced vacancies while simultaneously attracting best in class operators that have embraced the future of last mile Omnichannel retail.

Now for some details on the quarter.

Speaker 1: Pro Rata occupancy increased to 94.4% up 30 basis points from last quarter and 50 basis points from a year ago. Anchor occupancy grew 20 basis points from last quarter to 97.1% and was up 40 basis points year over year.

Pro rata occupancy increased to 94.4% up 30 basis points from last quarter, and 50 basis points from a year ago.

Anchor occupancy grew 20 basis points from last quarter to 97, 1% and was up 40 basis points year over year.

Speaker 1: Small shop occupancy also increased and is now at 87.7% of 40 basis points from last quarter and 160 basis points from a year ago.

Shop occupancy also increased and is now at 87, 7% up 40 basis points from last quarter, and 160 basis points from a year ago.

Speaker 1: Our portfolio continued to exhibit strong pricing power during the fourth quarter, as illustrated by the solid increase in new leasing spreads, which were up 14.1%. Based on 152 deals and 588,000 square feet.

Our portfolio continues to exhibit strong pricing power during the fourth quarter as illustrated by the solid increase in new leasing spreads, which were up 14.1% based on 152 deals and 588000 square feet blended spreads on renewals and options also increased by a healthy 7% comprised of four.

Speaker 1: Blended spreads on renewals and options also increased by a healthy 7%, comprised of 4.1% for renewals and 13.1% for options.

1% for renewals and 13, 1% for options. These spreads were based on 286 deals covering one 5 million square feet overall, our combined leasing spreads grew eight 1% based on 438 deals covering nearly $2 1 million square feet.

Speaker 1: These spreads were based on 286 deals covering 1.5 million square feet. Overall, our combined leasing spreads grew 8.1% based on 438 deals covering nearly 2.1 million square feet. A couple of things to note about our strong results. First, the suburbanization trend spurred by the pandemic helped to increase retailer sales and supported our efforts to push rents at our high barrier entry locations.

A couple of things to note about our strong results first the suburbanization trend spurred by the pandemic helped to increase retailer sales and supported our efforts to push rents are high barrier to entry locations second our portfolio continues to benefit from the pandemic induced work from home trend as people are eating more takeout and home cooked meal.

Speaker 1: Second, our portfolio continues to benefit from the pandemic induced work from home trend as people are eating more takeout and home cooked meals, which is driving more frequent visits to our restaurants and groceries.

<unk>, which is driving more frequent visits to our restaurants and grocery stores as a result of this activity our traffic counts have exceeded 2019 levels. We expect this trend to continue in the post pandemic.

Speaker 1: As a result of this activity, our traffic counts have exceeded 2019 levels. We expect this trend to continue in the post pandemic. New normal as shopping centers continue to play a critical role in omnichannel retail.

New normal is shopping centers continue to play a critical role in Omnichannel retailer.

Speaker 1: Our strategy to have a grocery and mixed use portfolio surrounding the first string of our top 20 major metropolitan markets in the US continues. When we started this strategy over five years ago, it was nearly a 50 50 split of our annual base rent coming from our grocery anchored shopping centers versus our non-growth.

Our strategy to have a grocery and mixed use portfolio surrounding the first string of our top 20 major metropolitan markets in the U S continues when we started this strategy over five years ago. It was nearly a 50 50 split of our annual base rent coming from our grocery anchored shopping centers versus our non grocer.

Speaker 1: Today, 80% of our annual base rent comes from shopping centers that have a gross...

Today, 80% of our annual base rent comes from shopping centers that have a grocer.

Speaker 1: We have continued to successfully invest in our assets and over the past year, signed eight new grocery leases, two of which converted non-grocery spaces. The other six leases backfilled former grocers who vacated. And with the Winegarden merger now complete, we have further solidified our dominant grocery portfolio in the major sunbelt market.

We have continued to successfully invest in our assets and over the past year signed eight new grocery leases two of which converted non grocery spaces. The other six leases backfield, former grocers, who vacated and with the Weingarten merger now complete we have further solidified our dominant grocery portfolio and a major sunbelt markets. In addition, we.

Speaker 1: In addition, we've taken a deep dive into every asset we own and believe there continues to be further opportunity to push our AVR from the portfolio to 85% from grocery anchor centers and increase our mixed use over the next five years with a combination of strategic redevelopment leasing acquisitions and to a smaller extent, dispositions. The Winegarden merger was a perfect fit for our strategic vision. And I am happy to report that our fourth quarter results from the Winegarden portfolio exceeded all of our underwriting assumptions.

Taking a deep dive into every asset we own and believe there continues to be further opportunity to push our ABR from the portfolio to 85% from grocery anchored centers and increase our mixed use over the next five years with a combination of strategic redevelopment leasing acquisitions and to a smaller extent dispositions. The weingarten merger was a per.

Perfect fit for our strategic vision and I'm happy to report that our fourth quarter results from the Weingarten portfolio exceeded all of our underwriting assumptions.

Speaker 1: We were ahead on leasing spreads, occupancy gains, retention rates, and cash flow. In addition, we have exceeded the high end of the energy forecast range of 35 to 38 million, and we will continue to mine for additional savings throughout 2022. With our first full quarter as a combined entity complete, we demonstrated that our proactive efforts to ensure a seamless integration really paid off, resulting in outperformance, including enhanced margins and cash flow.

We were ahead on leasing spreads occupancy gains retention rates and cash flow. In addition, we have exceeded the high end of the synergy forecast range of 35% to $38 million and we will continue to mine for additional savings throughout 2022.

With our first full quarter as a combined entity complete we demonstrated that our proactive efforts to ensure a seamless integration really paid off.

Resulting in outperformance, including enhanced margins and cash flow I want to thank all the new and existing kimco employees for their ongoing commitment and contributions without skipping a beat during the integration.

Speaker 1: I want to thank all the new and existing Kimco employees for their ongoing commitment and contributions without skipping a beat during the integration.

Speaker 1: In closing, we have a good visibility into our leasing momentum and continue to see strong demand across our portfolio in all categories. We remain committed to strengthening our long-term earnings growth through the portfolio by curating the right merchandising mix that will drive traffic at all points of the day. Ultimately, we expect to be first in the last mile retail by attracting tenants that can plug in to the supply chain and deliver goods and services to the consumer in the most flexible and convenient way possible.

In closing we have a good visibility into our leasing momentum and continue to see strong demand across our portfolio in all categories.

We remain committed to strengthening our long term earnings growth through the portfolio by Curating. The right merchandising mix that will drive traffic at all points of the day ultimately, we expect to be first and last mile retail by attracting tenants that can plug in to the supply chain and deliver goods and services to the consumer and the most flexible and convenient way.

<unk>, we believe that this ongoing approach is the best way to generate long term growth and value creation now I'll turn it over to Ross.

Speaker 1: We believe that this ongoing approach is the best way to generate long-term growth in value creation. Now, I'll turn it over to Rob.

Speaker 2: Thanks, Connor, and good morning, everyone. 2021 was a banner year on many fronts, and we are incredibly excited about the positioning of Kimco and the platform we have built that will support future growth.

Thanks, Conor and good morning, everyone 2021 was a banner year on many fronts and we are incredibly excited about the positioning of kimco and the platform. We have built that will support future growth.

Speaker 2: Today I will discuss our fourth quarter activity and then make a few comments on current market conditions and our expectations for 2022.

Today, I will discuss our fourth quarter activity and then make a few comments on current market conditions and our expectations for 2022.

Speaker 2: As outlined on previous earnings calls, our Q4 transaction activity came mostly from partnership buyouts and structured investments.

As outlined on previous earnings calls, our Q4 transaction activity came mostly from partnership buyouts and structured investments.

Speaker 2: Buyout activity included two grocery anchored assets in California for a gross value of 134 million increasing our ownership from 15% to 100%.

Note activity included two grocery anchored assets in California for a gross value of $134 million, increasing our ownership from 15% to 100%. The previously announced buyout of Jamestown and subsequent formation of a new 50 50 partnership with Blackstone's be read on our portfolio of <unk>.

Speaker 2: The previously announced buyout of Jamestown and the subsequent formation of a new 50-50 partnership with Blackstone's B-Read on our portfolio of six high quality Publix Anchor Centers in South Florida and Atlanta.

High quality publics anchored centers in South, Florida at Atlanta based upon a gross valuation of 425 $75 million. This deal increased our ownership level from 30% to 50% and the buyout of our partner's 10% interest in the Central Arlington Project, a 366 unit class a.

Speaker 2: Based upon a gross valuation of $425.75 million, this deal increased our ownership level from 30% to 50%, and the buyout of our partners 10% interest in the Centro Arlington project, a 366 unit class A mixed use residential asset in Arlington, Virginia, for a pro rata price of $26 million, increasing the Kimco ownership on this signature series asset to 100%.

Mixed use residential asset in Arlington, Virginia for a pro rata price of $26 million, increasing the kimco ownership on the signature series assets to 100%.

Speaker 2: A major benefit of our joint venture program is the ability to acquire assets throughout the cycle, while typically having both the first and last look when the partnership decides it is the appropriate time to exit.

A major benefit of our joint venture program is the ability to acquire assets throughout the cycle, while typically having both the first and last month when the partnership. Besides it is the appropriate time to exit.

While we have had success acquiring portions of several JV assets that we didn't previously own we remain prudent in our valuation.

Speaker 2: While we have had success acquiring portions of several JV assets that we didn't previously own, we remain prudent in our evaluation.

To that point in the fourth quarter, we sold our interest in several minority owned joint venture assets, where pricing was very aggressive.

Speaker 2: To that point in the fourth quarter, we sold our interest in several minority owned joint venture assets. Where pricing was very aggressive.

We anticipate selling a few more joint venture assets in the first quarter of 2022 as the market remains extremely hot for all open air retail centers.

Speaker 2: We anticipate selling a few more joint venture assets in the first quarter of 2022, as the market remains extremely hot for all open air retail centers.

Speaker 2: On the structured investment side, we closed on a $15 million mezzanine financing investment in a sprouts anchored center in Jacksonville, Florida, adjacent to the dominant St. John's Town Center.

On the structured investment side, we closed on a $15 million mezzanine financing investment and a sprouts anchored center in Jacksonville, Florida adjacent to the dominant St. Johns Town Center.

Speaker 2: As with prior mezzanine financings, we will retain a right of first refusal in connection with any future sale while achieving a double-digit current return in the environment.

As with prior mezzanine financings, we will retain a right of first refusal in connection with any future sale, while achieving a double digit current return in the interim.

Speaker 2: We expect to allocate additional capital towards our structured investment platform and will selectively add assets into the program that fit our criteria for quality locations, tendency, demographics and sponsors.

We expect to allocate additional capital towards our structured investments platform and we will selectively add assets into the program that fit our criteria for quality locations tenancy demographics and sponsors.

Speaker 2: Since the inception of the preferred equity and mezzanine financing programs in late 2020, we have invested $126 million at double digit returns with an option to acquire each of the assets in the future. All of these investments are currently performing as expected. As we've entered 2022, a very different landscape exists than at this time last.

Since the inception of the preferred equity and mezzanine financing programs and late 'twenty 'twenty, we have invested $126 million at double digit returns with an option to acquire each of the assets in the future. All of these investments are currently performing as expected as we've entered 2022, a very different land.

Scape exists and at this time last year.

Speaker 2: Rent rolls are more predictable and reliable. Open air retail has undoubtedly proven its relevancy for retailers and shoppers alike. And capital continues to flow into our sector.

Rent rolls are more predictable and reliable open air retail has undoubtedly proven its relevancy for retailers and shoppers alike and capital continues to flow into our sector.

I would classify the investment landscape today is ultra competitive with very crowded bidding by qualified buyers with an abundance of capital that they are ready to put to work.

Speaker 2: I would classify the investment landscape today as ultra-competitive, with very crowded bidding by qualified buyers with an abundance of capital that they're ready to put to work.

The relatively modest level of increase in interest rates. So far this year has not created any pause in the transaction market with equity investors or lenders at this stage.

Speaker 2: The relatively modest level of increase in interest rates so far this year has not created any pause in the transaction market with equity investors or lenders at this

While this is a positive sign for the industry at large it creates a challenge for us when seeking external growth opportunities.

Speaker 2: While this is a positive sign for the industry at large, it creates a challenge for us when seeking external growth operations.

To illustrate this point, we've seen deals trading at sub 5% cap rates regularly, including one off assets and portfolios on the West Coast Metro D C, Florida, Boston, New York, Charlotte and elsewhere.

Speaker 2: To illustrate this point, we've seen deals trading at some 5% cap rates regularly, including one-off assets and portfolios on the West Coast, Metro DC, Florida, Boston, New York, Charlotte, and elsewhere.

Speaker 2: Buyers consist of our public REIT peers, non-traded REITs, pension funds, and 1031 exchange buyers.

<unk> consist of our public REIT peers, non traded Reits pension funds and 10 31 exchange buyers.

In many cases, we are competing with investors who are agnostic on asset class and see a wonderful risk adjusted return and open air retail when compared to industrial multifamily self storage or a life science, which are trading in the twos and threes.

Speaker 2: In many cases, we are competing with investors who are agnostic on asset class and see a wonderful risk-adjusted return in open-air retail when compared to industrial, multifamily, self-storage, or life science, which are trading in the 2s and 3s.

We will continue to be selective and disciplined from an acquisition perspective, and ensure that there is a strategic fit or a unique circumstance that helps further differentiate kimco in this environment.

Speaker 2: We will continue to be selective in disciplines from an acquisition perspective and ensure that there is a strategic fit or a unique circumstance that helps further differentiate Kimco in this environment. 5 am to 10 pm Trueaima will continue His time with a

Speaker 2: There is no question that we are extremely fortunate to have multiple avenues of investment opportunity that not only provide a slightly greater yield than current market, but a higher likelihood of success than simply participating in a bidding war.

There is no question that we are extremely fortunate to have multiple avenues of investment opportunity to not only provide a slightly greater yield than current market, but a higher likelihood of success and simply participating in a bidding war.

Speaker 2: As such, we will continue to work through partnership buyouts and structured investments as our main source of external growth with perhaps a few select third party assets in the 2022 pipeline as well.

As such we will continue to work through partnership buyouts and structured investments as our main source of external growth with perhaps a few select third party assets in the 2022 pipeline as well.

Speaker 2: Given what we see ahead of us and currently have in the works, we are comfortable to initially guide towards being a net acquirer of real estate investments for this year.

Given what we see ahead of US and currently have in the works. We are comfortable to initially guide towards being a net acquirer of real estate investments for this year.

Speaker 2: Depending on the opportunity set, market conditions, and our cost of capital, we will update you on our progress towards this goal as the year continues.

Depending on the opportunity set market conditions and our cost of capital we will update you on our progress towards this goal as the year continues.

Speaker 2: I am now happy to pass it over to Glenn to review our financial results and provide our expectations for the year ahead.

I am now happy to pass it over to Glenn to review, our financial results and provide our expectations for the year ahead.

Thanks, Russ and good morning.

Speaker 3: We finished 2021 with strong fourth quarter results produced from increased occupancy, strong same site NOI growth, further improvement in collections and credit loss, and a full quarter of better than expected contribution from the Weingarten Act.

We finished 2021 with strong fourth quarter results produced from increased occupancy strong same site NOI growth further improvement in collections and credit loss and a full quarter of better than expected contribution from the Weingarten acquisition for the fourth quarter NAREIT <unk> was 240.

Speaker 3: For the fourth quarter, NAIRIT FFO was $240.1 million, with $0.39 per diluted share, and includes $3 million of income, or about $0.01 per diluted share related to the valuation adjustment of the one-guard pension.

$1 million was 39 cents per diluted share and includes $3 million of income or about one cent per diluted share related to the valuation adjustment of the weingarten engine.

Excluding the pension valuation adjustment NAREIT <unk> would have been 38 cents per diluted share either way. This compares favorably to the $133 million with 31 cents per diluted share reported for NAREIT <unk> for the fourth quarter of 2020.

Speaker 3: excluding the pension valuation adjustments, NAIRIT FFO would have been $0.38 per diluted share. Either way, this compares favorably to the $133 million or $0.31 per diluted share reported for NAIRIT FFO for the fourth quarter of 2020.

Speaker 3: The increase in FFO was primarily driven by higher NOI of 124.2 million, of which the Weingarten acquisition contributed 91 million.

The increase in <unk> was primarily driven by higher NOI of $124 2 million of which the Weingarten acquisition contributed $91 million.

In addition, NOI benefited from improvements in credit loss abatements and straight line rent reserves of $28 million compared to the fourth quarter last year.

Speaker 3: In addition, NOI benefited from improvements in credit loss, abatements, and straight line rent reserves of $28 million compared to the fourth quarter last year.

Speaker 3: Higher cash collections returning to pre-pandemic levels were the primary driver, including $7.8 million from cash basis accounts receivable, which were previously reserved.

Higher cash collections, returning to pre pandemic levels were the primary driver, including $7 8 million from cash basis accounts receivable, which were previously reserved.

Speaker 3: FFO was impacted by higher interest expense of $11.6 million, resulting from the $1.8 billion of debt assumed with the wine garden.

<unk> was impacted by higher interest expense of $11 6 million, resulting from the $1 8 billion of debt assumed with the Weingarten acquisition. In addition, G&A expense was higher due to increased staffing levels to support the weingarten portfolio and higher bonus accrual based on the company's operating performance.

Speaker 3: In addition, G&A expense was higher due to increased staffing levels to support the Weingarten portfolio and higher bonus approval based on the company's operating performance as compared to the fourth quarter last year.

Compared to the fourth quarter last year.

We collected 79% of rents due from cash basis tenants for the fourth quarter 2021, our cash basis tenants now comprise only six 8% of annualized base rents down from the nine 1% at the end of the third quarter. The operating portfolio continues to deliver strong results with <unk>.

Speaker 3: We collected 79% of rents due from cash basis tenants for the fourth quarter 2021. Our cash basis tenants now comprise only 6.8% of annualized base rents down from the 9.1% at the end of the third quarter. The operating portfolio continues to deliver strong results with same site NOI growth of 12.9% for the fourth quarter 2021.

<unk> site NOI growth 12, 9% for the fourth quarter of 2021.

Inclusive of the Weingarten sites for the first time the primary drivers of the same site NOI growth were higher minimum rents contributing three 4% and improved credit loss and lower abatements, adding nine 4%. In addition redevelopment sites provided an additional 50 basis points turning to the balance sheet.

Speaker 3: inclusive of the Weingarten sites for the first time. The primary drivers of the same site and a wide growth were higher minimum rents contributing 3.4% and improved credit loss and lower abatements adding 9.4%.

Speaker 3: In addition, redevelopment sites provided an additional 50 bases.

Speaker 3: Turning to the balance sheet, we ended 2021 with a very strong liquidity position comprised of over 330 million in cash and full availability of our $2 billion revolving credit.

We ended 2021 with a very strong liquidity position comprised of over $330 million in cash.

And full availability of our $2 billion revolving credit facility. In addition, our marketable securities investment in Albertsons was valued at over $1 1 billion and all restrictions are scheduled to expire in June of this year.

Speaker 3: In addition, a marketable securities investment in Albertsons was valued at over $1.1 billion, and all restrictions are scheduled to expire in June .

Speaker 3: As of year end 2021, our consolidated net debt to EBITDA was 6.1 times. And on a look through basis, including our pro rata share of joint venture debt and perpetual preferred stock outstanding was 6.6.

As of year end 2021, our consolidated net debt to EBITDA was six one times and on a look through basis, including our pro rata share of joint venture debt and perpetual preferred stock outstanding was $6 six times, the lowest reported level since the company began disclosing this metric in 2009.

Speaker 3: the lowest reported level since the company began disclosing this metric in 2009.

Hi.

Speaker 3: On a pro forma basis, if the Albertsons investment were converted to cash, these metrics would improve by 0.7 times, bringing look through net debt to EBITDA below six times. Now for our 2,000...

On a pro forma basis, if the Albertsons investment were converted to cash these metrics would improve by <unk> seven times, bringing look through net debt to EBITDA below six times now.

Now for our 2022 outflow.

Speaker 3: While the pandemic and its effects on certain of our tenants continues, we are in a much better position than a year ago, given our strong balance sheet and highly diversified and well-located open-air shopping center portfolio.

While the pandemic and its effects on certain of our tenants continues we are in a much better position than a year ago, given our strong balance sheet and highly diversified and well located open air shopping center portfolio.

Consumers continue to frequent our high quality centers, which often necessity based everyday goods and services.

Speaker 3: Consumers continue to frequent our high quality centers, which offer necessity based everyday goods and services.

Speaker 3: Our initial 2022 Navy FFO per share guidance range is $1.46 to $1.50.

Our initial 2020 to NAREIT <unk> per share guidance range is $1 46 to $1 50.

The guidance range is based on the following assumptions.

Speaker 3: Same property NOI growth will be positive. Please keep in mind the robust comps we will have for the last three quarters of 2022 are against varying levels of significant improvement in credit loss during the same periods in 2000.

Same property NOI growth will be positive. Please keep in mind the robust comps we will have for the last three quarters of 2022 are against varying levels of significant improvement in credit loss. During the same periods in 2021, our normalized credit loss for 2022 of 100 basis points or.

Speaker 3: a normalized credit loss for 2022 of 100 basis points, or approximately 18 million.

The $18 million.

Speaker 3: No additional income from the collection of prior period accounts receivable, attributable to cash basis tenants or reinstatement of straight line rent.

No additional income from the collection of prior period accounts receivable attributable to cash basis tenants or reinstatement of straight line rent receivables.

Speaker 3: No redemption charges or prepayment charges associated with callable preferred stock outstanding or early repayment of debt options.

No redemption charges or prepayment charges associated with callable preferred stock outstanding or early repayment of debt obligations.

No monetization of Albertsons shares, but inclusive of the expected dividends from the investments.

Speaker 3: No monetization of Albertson shares, but inclusive of the expected dividends from the investor.

Speaker 3: Total real estate acquisitions net of dispositions of 100 million subject to time.

Total real estate acquisitions net of dispositions of 100 million.

Subject to timing.

Speaker 3: annual G&A expenses of approximately $105 million to $112 million, with the first quarter higher due to the timing of annual.

Annual G&A expenses of approximately $105 million to $112 million with the first quarter higher due to the timing of annual equity awards.

Annual financing expenses of $248 million to $258 million from debt and perpetual preferred stock outstanding and no issuance of common equity.

Speaker 3: annual financing expenses of $248 million to $258 million from debt and perpetual preferred stock outstanding, and no issuance of common

Speaker 3: Based on our expected performance during 2022, the board has raised a quarterly cash dividend on the common stock to $0.19 per share, representing an 11.8% increase in the stock market.

Based on our expected performance during 2022, the board has raised the quarterly cash dividend on the common stock to <unk> 19 per share representing an 11, 8% increase.

This dividend level is based on anticipated REIT taxable income for 2022 and represents an <unk> payout ratio in the low 50% area based on our 2020 to NAREIT <unk> guidance range.

Speaker 3: This dividend level is based on anticipated re-taxable income for 2022 and represents an FFO payout ratio in the low 50% area based on our 2022 neary FFO guide.

Speaker 3: Looking back, 2021 was an incredibly successful year, despite the ongoing pandemic. We fully integrated the $6 billion one-garden portfolio, successfully onboarded close to 100 associates, improved occupancy levels, produced positive leasing spreads all year, and made significant progress on our leverage.

Looking back 2021 was an incredibly successful year, despite the ongoing pandemic.

We fully integrated the $6 billion Weingarten portfolio successfully on boarded close to 100 associates improved occupancy levels produced positive leasing spreads all year and made significant progress on our leverage metrics. There is a lot to be proud of and we thank the entire kimco team for all their hard work.

Speaker 3: There's a lot to be proud of, and we thank the entire Kimco team for all their hard work and commitment. We look forward to another successful year in 2022. And with that, we're ready to take it.

<unk>.

We look forward to another successful year in 2022 and with that we're ready to take your questions.

Speaker 1: In terms of the Q&A, we have a pretty deep sign up today to make an efficient process. We encourage you just to ask one question with an appropriate follow up, and then you're more than welcome to rejoin the queue. Andrew, you can take the first caller.

In terms of the Q&A, we have a pretty deep enough today to make it an efficient process and encourage you just to ask one question with an appropriate follow up and then you're more than welcome to rejoin the queue. Andrea you can take the first caller.

Okay.

Speaker 4: Okay, the first questioner is Rich Hill from Morgan Stanley . Consumer collector.

The first questioner.

Questioner is rich Hill from Morgan Stanley . Please go ahead.

Speaker 5: Hey, good morning, guys. I wanted to just come back to the guide for a little bit and talk about the same story in a Y guide of being positive. I think that's well below maybe some of the expectations and even some of the long-term forecasts that you'd put out. And so while I appreciate the desire to be conservative, and I do appreciate the tough comments, maybe you can just elaborate on that a little bit more and help us unpack it and maybe provide a little bit more of a bridge.

Hey, good morning, guys.

Wanted to just come back to the guide for a little bit and.

And talk about the same store NOI guide of being.

Being positive I think that's well below maybe some of the expectations and.

Even even some of the long term forecast that you had put out and so while I appreciate the desire to be conservative and I do appreciate the tough comps.

Comment maybe you can just elaborate on that a little bit more and help us on packet and maybe provide a little bit more of a bridge.

Sure Rich plan, how are you doing.

Speaker 3: Sure, Rich. It's Glenn. How you doing? Again, we do expect it to be positive for the full year, but as we've talked about, the metric itself is a little bit tough because of all the noise that's in the credit loss aspect of it between reserves, straight-line rents coming back.

Again, we do expect it to be positive for the full year, but as we've talked about the metric itself is a little bit.

All the noise that's in the credit was aspect of it.

Reserve straight line rents coming back.

Speaker 3: And so you have to have that. So it is a challenge to really pinpoint a really specific range. If you took all the credit loss out on both sides of it, same-side NOI growth would be somewhere close to the 3% range. That'll give you a feel for where it is. But to pinpoint a specific range today, it's just very challenging. However, we are comfortable and confident that it will be positive.

So you have to have that so it is a challenge really endpoint really specific range. If you. If you took all the credit was out on both sides of it.

Same site NOI growth would be somewhat close to the 3% range. So that'll give you a feel for where it is but it pinpoint a specific range today. It's just very challenging. However, we are comfortable and confident that it will be positive.

Okay. That's helpful. I appreciate that and just one more follow up regarding the guide I noted that youre not including Albertsons.

Speaker 5: Okay, that's helpful. I appreciate that. And just one more follow up regarding the guide. I noted that you're not including Albertsons in it, which I understand. And I also understand that Albertsons monetization wouldn't go into FFO. But given where your net debt to EBITDA is, maybe, Conor, this is a question for you. What would you do with the monetization? It sounds like the buying assets is really competitive right now. Your debt levels are at a good level. When you think about deploying that capital and recognize you want to maintain maximum flexibility, could you maybe just walk through the capital allocation process?

And at which I, which I understand and I also understand that Albertsons monetization Wouldnt go into F. F O, but given where your net debt to EBITDA is maybe Conor. This is a question for you what would you do with the monetization.

Sounds like the buying assets is really competitive right now your debt levels are at a good level.

When you think about deploying that capital and recognize you want to maintain maximum flexibility, but could you maybe just walk through the capital allocation process.

Sure. Thanks rich for the question.

Speaker 1: Sure, thanks Rich for the question. You know the beauty of the Albertsons investment, it gives us a menu of different options to utilize that capital. We do have some, two bonds actually coming due this year. We have two callable preferred.

Beauty of the Albertsons investment and it gives us a menu of different options to utilize that capital. We do have some two bonds actually coming due this year, we have two callable preferreds. So that's obviously a piece of the menu. We do have some opportunities on external growth as Ross outlined in his script, we like our strategy. There I'm looking at you know buying out joint venture part.

Speaker 1: So that's obviously a piece of the menu. We do have some opportunities on external growth, as Ross outlined in his script. We like our strategy there of looking at buying out joint venture partners, looking at core properties, as well as the Meas and Pref.

Looking at our core properties as well as the Mezz impressed investments that we've been making we have a lot of leasing and redevelopment spend to do there's there's no doubt about it you've seen the uptick in the leasing volumes and that continues to be wind at our back and say well I think we're really in the sweet spot in terms of last mile retail and where retailers want to invest.

Speaker 1: investments that we've been making. We have a lot of leasing and redevelopment spend to do. There's no doubt about it. You've seen the uptick in the leasing volumes and that continues to be wind at our back. I think we're really in the sweet spot in terms of last mile retail and where retailers want to invest.

Speaker 1: not only in the existing store fleet, but in that new store. So we've got a great menu of options. We'll continue to see as the year progresses how that Albertsons investment continues to perform. But we feel very fortunate to have that as an additional almost free equity raise that we will let this apply freely.

<unk> not only in the existing store fleet, but the net new stores. So we've got a great menu of options will continue to see you know as the year progresses, how we how that Albertsons investment continues to perform but we feel very fortunate to have that as you know an additional almost free equity raised we will look to deploy freedom.

Perfect. Thanks, guys.

Yes.

The next question comes from Michael Goldsmith with UBS. Please go ahead.

Speaker 4: The next question comes from Michael Goldsmith with UBS. Please go ahead.

Good morning, Thanks, a lot for taking my questions.

Speaker 6: Good morning. Thanks a lot for taking my questions. They're really nice acceleration on the releasing spread. And that was both on the new leases and renewals. Can you walk through what's driving the gains? Were they broad based? Were they concentrated in certain markets, like any way to dig into, you know, where the strength is coming from would be really

Really nice acceleration on the releasing spread and that was up both on the new leases and renewals can you walk through what's driving the gains were broad based with a concentrated in certain markets like any willing to to dig into.

Where the strength is coming from would be really helpful.

Sure Yeah. This is Dave Jamieson.

Speaker 2: Sure, yeah, this is Dave Jamieson. It is broad-based, but I would say that the majority of our leases, 95% of our leases that were executed in 2021 came from the Sunbelt and Coastal markets. That's a substantial majority of our portfolio at this point. So when you look at geographic concentration, it's about a quarter of a percent of our population.

It is broad based but I wouldn't say that you know the majority of our leases 95% of our leases are executed in 'twenty. One came from the sunbelt sunbelt in coastal markets.

Substantial majority of our portfolio at this point. So when you look at geographic concentration, that's where we're seeing a significant uptick in activity.

Speaker 2: That's where we're seeing a significant uptick in activity. You know, in terms of our ability to push rents, you know, you've seen it through the course of this year. You have muted. You have no new supply developed from development that's come online. You have this COVID inventory that's getting absorbed.

In terms of our ability to push rents.

And through the course of this year you have you Didnt you have no new supply developed from development that's come online.

This COVID-19 inventory that's getting absorbed.

Speaker 2: Relatively quickly, as a result of what Connor mentioned, the value of last mile distribution and the utility of brick and mortar retail has really come into its own through the pandemic. And so you have these demand drivers that are pushing it with muted supply that's helping us push rents further north. So we're very encouraged by.

Relatively quickly.

As a result of what Conor mentioned the value of last mile distribution and the utility of brick and mortar retail has really come into its own through the pandemic and so you have these demand drivers that are pushing it with muted supply that's helping us push rents further north so we're very encouraged by.

The spreads this quarter I always say those spreads are lumpy you know, it's all about the deals that qualify as comp deals in any given quarter. So it does go up it does go down but when I look at the net effective rents is really what we're focused on because that factors in cost as well.

Speaker 2: spreads this quarter I always say the spreads are lumpy you know it's all about the deals that qualify as comp deals in any given quarter so it does go up it does go down but when I look at the net effective rents is really what we're focused on because that factors in cost as well but we're up over 9% when we look at our trailing four quarters in Q4 and we're up at 12% year over year so that to me is a better indicator where we're going that's factoring in the cost

Over 9% when we look at our trailing four quarters and Q4 and were up 12% year over year. So that to me is a better indicator of where we're going that's factoring in the cost.

As well.

That's really helpful and as a relevant follow up as we think about the drivers of leasing have we hit the point, where the pent up demand has dried up and what's left is I don't know good old fashion underlying demand rather than a catch up that we had kind of been seen in the past.

Speaker 6: That's really helpful. And as a relevant follow up, as we think about the drivers of leasing, can we hit the point where the pent up demand has dried up and what's left is I don't know, like, good old fashioned underlying demand, rather than a patch up that we had kind of been seeing in the past.

Speaker 2: So I think you still have pent up demand that's flushing through the system, but more importantly, retailers redefining.

So I think you still have pent up demand that's flushing through the system, but more importantly, it's retailer is redefining.

Speaker 2: their strategy and how they utilize brick and mortar. And you have some of the leaders like Target, who have been at the forefront for years now, continuing to find ways to repurpose their small format, as well as their full-size store. They're continuing to make investments to test how they can better connect with the customer.

Our strategy and how they utilize brick and mortar and you have some the leaders like target who had been at the forefront for years now continuing to find ways to re purpose, they're small format as well as our full size store.

They are continuing to make investments.

Test how they can better connect with the customer I think you are then starting to see that trickle down into the other national regional and local players you're seeing digitally native brands come into the market appreciates that brick and mortar has valued the margins are better in distribution to the customer. So you are seeing this is somewhat reinvention of how.

Speaker 2: I think you're then starting to see that trickle down into other nationals, regional and local players. You're seeing digitally native brands come into the market.

Speaker 7: appreciating that brick and mortar has value, the margins are better in distribution to the customer. So you are seeing this

Speaker 7: somewhat reinvention of how people are utilizing the box. Micro-fulfillment within the store is becoming a component when you look at the grocery stores carving out 10,000 to 15,000 square feet of their box and or leasing adjacent space to accommodate this new use. So you're beyond just the pent up demand, which still takes time to absorb. You are seeing new utility.

People are utilizing the box micro fulfillment within the store is becoming a component when you look at the grocery stores carving out 10 to 15000 square feet of their box and our leasing adjacent space to accommodate this new use.

So you're you're beyond just the the pent up demand. We're still takes time to do it or are you are seeing new utility.

Speaker 7: for the box and and and the shopping center, which I think is really encouraging as we move into you know What I consider, you know the next iteration of the open-air sector Yeah Just one thing to add on that is if you if you watch our retailers and I anticipate this to occur not just this quarter But to the next few quarters, you'll see a capital allocation shift

For the box and the shopping center, which I think is really encouraging as we move into what I consider the next iteration of the open air sector.

One thing to add on that is if you if you watch our retailers and I anticipate this to occur not just this quarter, but for the next few quarters, you'll see our capital allocation shift really towards last mile retail and I think that's where you're going to start to see significant dollars being invested in existing stores, because they're hard to replace as well as net new store.

Speaker 1: really towards last mile retail. And I think that's where you're gonna start to see significant dollars being invested in existing stores because they're hard to replace as well as net new stores. And I think that's gonna be a big shift from prior years where they were probably more focused on the e-commerce platform and are now really starting to shift more the additional dollars towards that last mile retail.

And I think that's going to be a big shift from prior years, where they were probably more focused on the E. Commerce platform and are now really starting to shift more there that the additional dollars towards that last mile retail.

Thank you very much good luck in 2022.

Yeah.

Okay.

The next question comes from Samir Khanal with Evercore ISI. Please go ahead.

Speaker 4: The next question comes from Samir Kanal with Evercore ISI. Please go ahead.

Hey, good morning, everybody.

Speaker 3: Yeah, good morning everybody. So, Connor, I just wanted to kind of dig deep a little bit more into this guidance here. What are you assuming from from wine garden? I know we've talked about. You know, the overhead savings before, but I'm just trying to understand in terms of additional opportunities, you know, the margins that. You know, from line gardens perspective, I remember at that time, their occupancy rate was probably about 100 base place lower. Just trying to see what's baked in the guidance. What are the opportunities that exist there in the portfolio today?

So Conor I, just wanted to kind of dig deeper a little bit more into this guidance here.

What are you assuming from from wine Garden, I know we've talked about.

The overhead savings before but I'm just trying to understand in terms of additional opportunities the margins there.

From <unk> perspective.

Remember at that time their occupancy rate was probably about 100 basis points lower I'm, just trying to see whats baked in the guidance what are the opportunities that exist there and the portfolio today.

Yeah. Good question. So the weingarten portfolio did have lower occupancy when we announced the deal within the timeframe by the time, we announced it versus when we closed the occupancy actually caught up to him goes occupancy level. So we're sort of in tandem now as we go forward the nice part about as Dave mentioned in them.

Speaker 1: Yep, good question. So the Weingarten portfolio did have lower occupancy when we announced the deal. Within the time frame of by the time we announced it versus when we closed, the occupancy actually caught up to Kimco's occupancy level. So we're sort of in tandem now as we go forward. The nice part about, as Dave mentioned, on the demand side of it, the leasing is robust across the Sunbelt and the coastal markets. And we continue to lean into our strategy thereof.

The demand side of it leasing is robust across the Sun belt in the coastal markets and we continue to lean into our strategy there of portfolio reviews, using our size and scale using our ability to tap our network for new new concepts and continue to think that that's really going to be the driving force of the earnings growth going forward there will be some synergies.

Speaker 1: portfolio reviews using our size and scale, using our ability to tap our network for new concepts.

Speaker 1: I continue to think that that's really gonna be the driving force of the earnings growth going forward. There will be some synergy savings, as I mentioned in my script going forward, that are above our targeted range that we're mining for. We've been very focused on the integration. We've hit the ground running. As you've seen with our results, there hasn't been any sort of bubble of any type to where we hit a pause. We've hit the ground running and think that there's more opportunities on the redevelopment side.

As I mentioned in my script going forward that are above our targeted range that we're mining for we've been very focused on the integration we've hit the ground running as you've seen with our results there hasn't been any sort of bubble or of any types of like the where we hit a pause we've hit the ground running and think that theres more opportunities on the redevelopment side.

We're focused on entitlements on their major mixed use projects as well Ross mentioned buying out the JV partner and the mixed use asset near our Pentagon project. So we have a nice cluster. There are mixed use assets that continue to define our strategy in the D. C market. So theres a number of different levers to pull for growth from the weingarten portfolio first in <unk>.

Speaker 1: We focused on entitlements on their major mixed use projects as well. Ross mentioned buying out the JB partner and the mixed use asset.

Speaker 1: near our Pentagon project, so we have a nice cluster there of mixed-use assets that continue to define our strategy in the DC market. So there's a number of different levers to pull for growth from the Weingarten portfolio. First and foremost is the leasing side of it, second is obviously the redevelopment side of it, and then the JV buyouts as I mentioned before. So it's a nice menu of options to help our growth profile going forward and obviously the Sunbelt continues to shine.

Most of the leasing side of it you know second is obviously the redevelopment side of it and then the JV buyouts as I mentioned before so it's a nice it's a nice menu of options to help our growth profile going forward and obviously the sunbelt continues to shine.

Speaker 3: And my second question, I guess, for Glenn is just in terms of prior period rent collections that you could potentially collect in 22. How big is that bucket today? Please remind us on that. And then maybe of that bucket, what percentage of those tenants are sort of still active today in the business?

And my second question I guess for Glenn is just in terms of prior period rent collections that you could potentially collect in and then in 'twenty two with minimal how big is that bucket today. Please remind us on that and then maybe of that bucket you.

You know what percentage of those tenants are sort of still active today in the business.

This is something that's actually Kathleen and I'll jump in and answer your question.

Speaker 8: So Samira, it's Ashley Kathleen, and I'll jump in and answer your question. So I think, you know, of course we all wish we had a crystal ball and we don't, but I think the best way to look at it is right now, our cash basis tenants have a reserve of about $35.5 million. And so in that number, about $7 million of it relates to our deferred receivables.

Yeah of course, the outlets, we had a crystal ball and we tell them, but I think the best way to look at it is right now our cash basis tenants have a reserve of about $35 $5 million.

So in that number about $7 million of that remains trying to foreign receivables and then about a quarter of it is related to vacating tenant. So you know when you're narrowing down what we're looking at on a cash basis perspective, let's start with that 35.5, just want to reserve it and then any questions on that.

Speaker 8: And then about a quarter of it is related to vacated tenants. So, you know, when you're narrowing down what we're looking at from a cash basis perspective, you start with that 35.5, which is what the reserve is. And then any collections on that, you know, is on the plus side.

On the buy side.

I'll just I'll just add again as I mentioned inside the guidance, we're not anticipating any further collections from them. So.

Speaker 3: I'll just add again, as I mentioned, inside the guidance, we're not anticipating any further collections from that. So, you know, to the extent that we pick up some of it, it'll just be additive to where we are.

To the extent that we can pick up some of it it will just be additive to where we are.

Thanks, so much guys.

Yeah.

Speaker 4: The next question comes from Craig Schmidt with Bank of America. Please go ahead.

The next question comes from Craig Schmidt with Bank of America. Please go ahead.

Speaker 9: Thank you. The off price category seems particularly aggressive in terms of store opening. I think between TGX, Ross and Burlington, they plan on opening over 350 stores. I wonder how you can if you could tell us how many of these stores are entering into the Kimco portfolio in

Thank you.

The off price category seems particularly aggressive in terms of store opening.

I think between T G X.

Ross and Burlington They plan on opening over 350 stores I Wonder how you could if you could tell us how many of these stores are entering into the kimco portfolio in 'twenty two.

Speaker 7: Yeah, so off-price and combined with some dollar stores actually represented in 21, almost 25% of the deal flow. So you're seeing a substantial push from the off-price category. And I would anticipate that that demand will continue through 22. You know, TJ has multiple brands, all of which they're pushing. They've been really encouraged by the signs that they saw through the pandemic. TJ Maxx, Marshall's, HomeGoods, HomeSense is now expanding to new markets. They are trading as well.

Yeah, so on pricing.

Combined with some dollar stores actually represented 21, almost 25% of the deal flow. So you have seen a substantial right from the off price category and I would anticipate that that demand will continue through 'twenty two.

T J has multiple brands all of which they're pushing they've been really encouraged by the signs that they saw during the pandemic T. J Maxx Marshalls home goods homes tens is now expanding into new markets you are trading as well.

Speaker 7: So, you know, they see a lot of runaway, a lot of white space that they can fill and also

So they they see agency a lot of runway and a lot of white space that they can fill and also.

Create a greater density and pockets of concentration to grab market share same with Burlington Burlington continues to modify their footprint they are becoming much more efficient and the utility of the box. So it gives them more flexibility to penetrate a market that may otherwise not have been available to them in the past.

Speaker 7: create a greater density and pocket the concentration to grab market share. Same with Burlington. You know, Burlington continues to modify their footprint. They're becoming much more efficient in the utility of the box. So it gives them more flexibility to penetrate a market that may otherwise not have been available to them in the past.

Speaker 7: So I think you're going to continue to see them grab market share where they can, appreciating that they really are in the sweet spot. People love the treasure hunt, price point's appropriate, they have goods and services, they have a good supply chain, merchandise mix.

So I think youre going to continue to see <unk>.

Grab market share where they can appreciating that they really are in the sweet spot people love the treasure hunt price points appropriate they have goods and services. They have a good supply chain merchandize mix. So.

Yeah.

Alright, good position right now.

Yeah.

Speaker 9: Yeah, and Kinko also has been trying to add grocers to the portfolio. Can you give us an update on the number of grocers you've been able to add?

Kimco has been trying to add groceries to the portfolio can you give us an update on the number of brokers you've been able to add.

Yeah. We we added we did 88 grocery deals in in 'twenty, one and we converted a couple of those non grocery centers into grocery anchored centers in terms of the grocery demand. It really is across the board as well sprouts, expanding our fresh market expanding.

Speaker 7: Yeah, we added we did eight grocery deals in 21 and we converted a couple of those non grocery centers into grocery anchored centers. In terms of the grocery demand, it really is across the board as well. You have sprouts expanding, you have fresh market.

Speaker 7: We have new seasons in Pacific Northwest looking to do new deals. You have ALDI, on the more value-oriented side, expanding. So brochures have appreciated that. Obviously, they were in vogue during the pandemic. They're continuing to be able to retain customers. So some of Connor's earlier points about the change in

New seasons of Pacific Northwest looking to do new deals you have all T. All of these sorry.

On the more the value oriented side are expanding so groceries have appreciated that obviously they are in both during the pandemic.

Their engineering able to retain customers. So some corners earlier points about the change in behavior with the with this hybrid work from home go to work structure now it does increase maybe your shops, one time, a week Walmart meal at home that has a material.

Speaker 7: behavior with this hybrid work from home, go to work structure now. It does increase maybe your shops one time a week, one more meal at home. It has a material impact when you scale it across the country. So I think you'll continue to see that expand through. And obviously Amazon and their grocery initiative as well is fairly aggressive.

Pact when you scale it across the country. So I think you'll continue to be that expansion and then obviously Amazon and their grocery initiative as well as it was fairly aggressive.

Thank you.

The next question comes from.

Speaker 4: one Sanabria with DMO. Please go ahead.

One <unk>.

<unk> <unk> with BMO. Please go ahead.

Speaker 6: Hi, good morning. Thanks for the time. I'm just hoping you could talk a little bit about expectations or range of expectations.

Hi, good morning, Thanks for the time I was just hoping you could talk a little bit about.

Expectations of range of expectations underlying our guidance for both occupancy and spread too.

Speaker 6: Underline the guidance for both occupancy and spread to the cadence indoor

The cadence indoor trends.

Speaker 6: from 21 into 22 and, and, um,

From 'twenty one into 'twenty two.

And.

Speaker 10: And how you think we should be looking at that given a robust environment to start the year.

And how do you think we should be looking at that I'm, keeping a robust environment to start the year.

Yeah, So Joe occupancy when we came out of we try to look back to look forward and when we look back on the great recession, we had noticed around a 10 to 30 basis point gain quarter over quarter.

Speaker 7: So, occupancy when we came out of, you know, we try to look back to look forward. And when we look back on the Great Recession, we had noticed around a 10 to 30 basis point gain, quarter over quarter on the recovery rate. Obviously, this last year we had a, you know, about a 50 basis point gain on the recovery year over year. In 21, you know, we're going to hold within that range of that 10 to 30. You know, it can be lumpy at times. Obviously, Q1.

The recovery rate obviously this last year, we had a yeah about a 50 basis point gain on the recovery year over year and 'twenty, one we're going to hold within that range of that 10 to 30. It can be lumpy at times, obviously Q1 <unk>.

Speaker 7: historically been a little more muted, you know, as it's always the jingle mail you get back post-holiday. So you'd have to manage that and then...

We've been a little more muted it's always the jingle mail you can get back post holiday.

So you'd have to manage that and then yeah.

Speaker 7: As you play it out through the course of the year, that's sort of where we're seeing it today. Demand is strong, as we've already talked about.

As you play it out through the course of the year, that's that's sort of where we're seeing it today.

But demand demand as strong as we've already talked about.

Any color on spreads.

Speaker 7: You know, spreads again, I mentioned it before, spreads are lumpy. It really depends on what falls into that, you know, that category on a quarterly basis. What I would say is when you look at our 22 and 23 anchor rollover schedule, it's about $12 a foot in rent. Our average AVR on anchors signed last year was $17, so you have a nice window there. I don't know if that14

Spreads again, I mentioned it before spreads are lumpy and it really depends on what falls into that yeah that category on a quarterly basis, what I would say is when you look at our 22 and 'twenty three anchor rollover schedule, it's about $12 a foot in rent our average APR on anchors signed last year was 17.

So you have a nice window there.

Speaker 7: to continue to see growth in the rents. And again, we're highly focused on NER.

It did continue to see growth in the rents.

And again, we are highly focused on any arm.

Speaker 3: And that's where we're seeing some encouraging signs as well. I would just add, you know, we still as a portfolio have large amount of below market rents. So as those come due, they add pretty considerably to the portfolio. But to Dave's point, you know, they are lumpy.

And that's where we're seeing some encouraging signs as well I would just add you know we still as a portfolio.

Large amount of below market rents so as those come due and they had pretty considerably to portfolio, but today's point yeah. They are lumpy.

Yeah.

And then just my last question just on the joint venture buyouts and or sales.

Speaker 10: And then just my last question just on the joint venture buyouts and or sales.

Speaker 10: Any quantum that you can give us in terms of the potential opportunity or how you guys are thinking about it on both the acquisition and or sales side, it seems you kind of hinted at some dispositions here in the first half of the year.

Any quantum that you can give us in terms of the potential opportunity or how you guys are thinking about it on both the acquisition and or sales side.

You kind of hinted at some dispositions here in the first half of the year.

Speaker 10: particular on that and any color around size and or pricing around those potential transactions.

Particularly on that and any color around size under pricing around those potential transactions.

Speaker 2: Yeah, I mean it is a little bit difficult to predict. We keep in very close contact with each and every one of our partners, and they all have varying degrees of views on...

Yes, I mean, it is a little bit difficult to predict we keep in very close contact with each and every one of our partners.

And they all have varying degrees of views.

Use on.

Speaker 2: time horizon on their investment strategy. So we are having active conversations with several. We don't know necessarily which ones will hit this year, next year, or, you know, even five years into the future. So

Time horizon on their investment strategy. So we are having active conversations with several we don't know necessarily which ones will hit this year next year or even five years into the future. So we try to maintain it.

Speaker 2: try to maintain a pretty conservative view on our acquisition and disposition guidance. What I can tell you is that several partners are active today. As I mentioned, we have sold a couple of joint venture minority interests that we own in the fourth quarter and already here in the first quarter thus far. We do anticipate a few more on both the acquisition and disposition side. We'll update you as the year progresses in terms of what the volume is, but there are substantial active conversations ongoing.

Pretty conservative view on our acquisition and disposition guidance, but what I can tell you that several partners are active today as I mentioned, we have sold a couple of joint venture minority interest that we own in the fourth quarter and already here in the first quarter, thus far and we do anticipate a few more on both the acquisition and disposition side.

Well, we'll update you as the year progresses in terms of what the volume is but there are substantial active conversations ongoing.

Thank you.

The next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead.

Speaker 4: The next question comes from Kaitlin Burrows with Goldman Sachs. Please go ahead.

Hi, Good morning, maybe just a question back on the credit loss I'm just a guy.

Speaker 11: Hi, good morning. Maybe just a question back on the credit loss. So, guidance is assuming a headwind of 100 basis points. Can you go through how this would compare to pre-pandemic years and to what extent this is based on specific tenants that you have concern about versus the more general unknown bucket?

Since assuming a headwind of 100 basis points can you go to how this would compare to pre pandemic yours and to what extent. This is based on specific tenants that you are concerned about versus the more general unknown bucket.

Speaker 2: Yeah, hi, Caitlin. I mean, again, credit loss, if you look pre-pandemic, we were in a range of somewhere in the 75 to 85 basis points in a given year. Again, very hard to predict early on, but so we take an approach of 100 basis points in our guidance. And then, yeah, obviously we'll report quarter by quarter, but...

Yeah, Hi, Kaitlin I mean again credit loss, if you look pre pandemic we were.

In a range of somewhere in the 75 to 85 basis points in a given year again very hard to predict early on but you know so we've taken approach of 100 basis points in our guidance.

And then obviously, we will report quarter by quarter, but.

We think it's a good starting point.

Speaker 2: We think it's a good starting point, and we do feel pretty good about where the collection levels are because they are back to more pre-pandemic levels.

And we do feel pretty good about where the collection levels because they are back.

Two more pre pandemic levels and I would say that the tenant base is certainly very very strong today.

Speaker 3: And I would say the tenant base is certainly very, very strong today. The pandemic was able to, you have a lot of tenants that went away that probably needed to go away. And the team's just done a great job replacing that. And you have uplift coming certainly from the occupancy side from the low that we hit. So we think that's really the right starting point.

The pandemic was able to you know you have a lot of tenants that went away that probably needed to go away.

And the team's just done a great job, replacing that and you'll have uplift coming suddenly from the occupancy side from the low that we did so.

We think that's really the right starting point.

Okay got it and then maybe just one back to Albertsons I was wondering if you could go through what the kind of assets that would tax implications could.

Speaker 11: Okay, got it. And then maybe just one back to Albert since I was wondering if you could go through what the kind of FFO tax implications could be when there is a monetization. Given the time you've waited, to what extent are you able to manage and avoid a more significant impact or not?

Could be when there is monetization nothing given the tiny wait it out and to what extent are you able to manage and avoid a more significant impact or not.

Speaker 9: That's a great question. I think as I mentioned previously, in any given year, the way the investments held today, we could sell and absorb a gain in the reach of around $350 million.

That's a great question I think as I mentioned previously in any given year the way the investments held today, we can sell and absorb the gain in the REIT of around $350 million.

Speaker 3: And we could do that to stay a reach, right? The key there is the gross receipts test, the 75% gross receipts test.

And we can do that to state a REIT right to keep the key there is the gross receipts tax the 75% gross receipts test. So if you look at overall gross receipts of the company today is somewhere in that $1 billion 7 billion a range, we could do around $350 million of gain and we would be.

Speaker 3: So if you look at overall gross receipts of the company today, it's somewhere in that billion seven, billion eight range.

Speaker 3: could do around 350 million of gain and we would be fine. From an FFO standpoint, again, we're not including gains on marketable securities and FFO. So it's not an FFO issue, but obviously the cash would come in and how we utilize that cash would have some impact on FFO. Bear in mind though, whatever we sell, the dividend that we're earning which is baked in the guidance would fall away.

Fine from an <unk> standpoint, again, we're not including gains on marketable securities and <unk>. So it's not an <unk> issue, but obviously the cash would come in and how we utilize that cash would have some impact on it so bear in mind that whatever we sell the dividend that we're earning which is baked in the guidance.

All the way.

Speaker 9: So we have room. If, you know, again, we also have strategies that if something was larger, we can move part of the investment back into a TRS. That has other tax implications. So we're going to monitor the investment and try and be as opportunistic as we can in monetizing over time.

So we have room. If you know again, we also have strategies that if something was larger we can move part of the investment back into a Trs that has other tax implications.

So we're going to monitor the investment then try and be as opposite to mystic as we can.

Monetizing it overtime.

Okay. Thank you.

The next question comes from Greg Mcginniss with Scotiabank. Please go ahead.

Speaker 4: The next question comes from Greg McGinnis with Scotiabank. Please go ahead.

Speaker 12: Hey, good morning. I was hoping to talk about the development pipeline just for a moment, which kind of appears to be going down quarter over quarter as you continue to deliver projects.

Hey, good morning.

I was hoping to talk about the development pipeline.

For a moment, which kind of appears to be.

Going down quarter over quarter as you continue to deliver projects.

Yeah.

Speaker 12: But has that become a less important aspect to the growth story relative to external growth? Or how should we think about the potential for adding projects, especially given the mixed use entitlements you already have?

But has that become a less important aspect to the growth story relative to external growth or how should we think about the potential for adding projects, especially given the mixed use entitlements you Horton.

Yes.

Speaker 7: Yeah, it's a great question. Obviously accurate observation. The, I would say where you're seeing the strategic shift on our investment strategy on the development redevelopment side is less of an influence on a go-for basis on ground up development and more of an emphasis on redevelopment. Redevelopment broken into two distinct categories. The first one being our core retail redevelopment has been part of our DNA for

Great question, obviously accurate observation the.

I'd say, where you're seeing the strategic shift on our investment strategy under development redevelopment side, it's less of an influence on a go forward basis on ground up development and more of an emphasis on redevelopment and redevelopment broken into two distinct categories.

First one being our core retail redevelopment.

Been part of our DNA for.

Last 10, 15 years, and that's really the repositioning our retail within the center, adding about parcels anchor repositioning which are a very big focus of ours right now coming out of Covid and tobacco space.

Speaker 7: Last 1015 years and that's really the repositioning of retail within the center adding about parcels anchor repositioning which are a very big focus of ours right now coming out of COVID and the backbone space.

Speaker 7: The second part of that is the activation of our entitlements, the mixed use pipeline. So, as you can see in the stuff, we obviously have the Milton that's currently under construction, phase two at Pentagon Center, which is across from the Amazon HQ campus.

Second part of that is the activation of Arvind our entitlements to mixed use.

Pipeline. So as you can see in the stuff. We obviously have the Milton that's currently under construction phase II Pentagon centre, which is across the Amazon HQ campus.

Speaker 7: in Arlington, Virginia. In addition to that, though, we do have a couple ground leases, one in Camino Square, which is in South Florida, as well as the Avery Tower 2, which is part of the Damien Point Project. That's another 600 or so residential units. So we almost have about 1,000 units.

In Virginia. In addition to that though we do have a couple of ground leases wanting Camino square, which is in south, Florida as well as the Avery tower too, which is part of the Dania Pointe project. That's another 600 residential units. So we almost have about a thousand units under construction in either through already.

Speaker 7: under construction either through our joint venture structure at Pentagon or as a ground strategy.

Our joint venture structure at the Pentagon or ground lease structure will see us continue.

Speaker 7: We'll continue to focus on the opportunity to activate some of those entitled projects in the future. The time and how the structure is will be conditioned on the market, and what we see is the most opportunistic way to proceed. That's definitely where we're going to apply our.

Continue to focus on the opportunity to activate some of those entitled projects in the future.

Time, and how the structure is will be conditioned on the market and what we see as the most opportunistic way to proceed but that's definitely where we're going to apply our focus going forward.

So is there any like level of guidance you can give them kind of expected pipeline size or in terms of future development or future spends that expected to stay around the same level.

Speaker 12: So is there any level of guidance you can give on expected pipeline size in terms of future development or future spend that's expected to stay around the same level and just recycle as you finish up assets? Or do we expect some growth in the level of pipeline size and spend each year?

Recycle as you finish up assets or do we expect some growth in the level of a.

Pipeline sizing and spend each year.

Okay.

Speaker 9: I would say from a future spend standpoint, somewhere between 100 and 125 million a year on redevelopment is what we've baked into our plan.

Oh, I would say from the from a future spend standpoint somewhere between 101 hundred $25 million a year on redevelopment is what we baked into our plan.

Speaker 9: So pretty similar to what you've seen previously, but again, we're going to be, you know, very methodical and disciplined about how we start executing on those projects.

So pretty similar to what you've seen previously, but again, we're going to be you know very methodical and disciplined about how we start.

Executing on those projects.

Okay. Thanks.

The next question comes from Katy Mcconnell with Citi. Please go ahead.

Speaker 4: The next question comes from Katie McConnell with Citi. Please go ahead.

Hey, it's Michael Bilerman here with Katie maybe.

Speaker 3: It's Michael Bellarmine here with Katie. Maybe Glenn's sticking with you. I just wanted to circle back on the guidance just to make sure that we all have it correctly. You know, coming out of the fourth quarter, I think you said the 39 cents was really 38. We knew just for the Wine Garden a benefit on the G&A. So call it about $1.52 going into next year.

Maybe Glenn sticking with you I just wanted to circle back on the guidance just to make sure that we all have it correctly, you know coming out of the fourth quarter.

No I think you said the 39 cents was really 38, when you adjust for the Weingarten.

A benefit on the G&A so call it about a buck 52 going into next year.

Speaker 3: It appears as credit loss reserve, you know, obviously you had a benefit in the third, in the fourth quarter, which probably added one to one and a half cents.

Appears this credit loss reserve, obviously, you had a benefit in the third and the fourth quarter, which probably added one to one and a half cent. So maybe the run rate 36 and a half.

Speaker 3: So maybe the run rate is 36 and a half.

<unk>, which is effectively the low end of your guidance and so I'm just trying to put it all together because it sounds like everything is really positive you have increased synergies going into next year from one garden you have positive same store you have positive net investment income you have the benefit of the investments you made in the fourth quarter.

Speaker 9: which is effectively below the guidance. And so I'm just trying to put it all together because...

Speaker 9: It sounds like everything is really positive. You have increased energy is going next year from Wine Garden. You have positive same store. You have positive net investment income. You have the benefit of the investments you made in the fourth quarter.

Speaker 3: So I guess I'm struggling a little bit to sort of comprehend the 146 to 150 and why that really shouldn't be up towards 150 to 154.

I guess I'm struggling a little bit to sort of comprehend the $1 46 to $1 50, and why that really shouldn't be up towards 150 to $1 54.

Speaker 9: So, so Michael, I guess she was sitting in the room with me when we were doing guidance because your math is pretty accurate.

So Michael I guess he was sitting in the room with me when we were doing guidance because your math is pretty accurate.

Speaker 9: Again, you hit on the points that are important, right? The Weingarten pension accrual is a one-time thing.

Again, you hit on the points that are important right, the weingarten and shouldn't accrual as a one time thing.

Speaker 9: So again, that's why we pointed it out. So you do need to pull that, you know, roughly penny out for that. We did have as I mentioned about 7.8 million of collections of prior period.

So again, that's why we pointed it out so you do need to pull that roughly any out for that we did have as I mentioned about $7 8 million of collections of prior period.

Speaker 9: you know, cash basis tenants that came during the quarter. So again, in our guidance, as I mentioned, that's not in there. So to the extent that we collect some of that, you're right, there is some room for outside.

Cash basis tenants that came during the quarter. So again in our guidance as I mentioned, that's not in there so to the extent that we can let some of that Youre right. There is some room for upside and your run rate is kind of where you're at I, that's right too.

Speaker 9: And your run rate is kind of where you're at. That's right too.

Speaker 9: This is where we're going to start out. We feel good about where things are. We have put credit loss back in, which is a pretty significant number, right? We're using 18 million.

This is where we're gonna start out we feel good about where things are we have put credit loss back in which is a it's a pretty significant number right.

Using 18 million of credit loss in the numbers for this year, where we had net net about $7 million of income so year over year, you're looking at like a $25 million swing, which as you know four or five so.

Speaker 9: credit loss in the numbers for this year where we had net net about seven million dollars of income.

Speaker 9: So year over year, you're looking at like a $25 million swing, which is, you know, four or five cents. So.

Speaker 1: That's kind of the math as we'll go forward. We'll see where things fall out and we'll make adjustments accordingly. Yeah, Michael just remember we are in the midst of a pandemic and we felt like this was the appropriate starting spot. Now you've seen before it's not how you start, it's how you finish. And so I think we're focused on that and we feel like as we sit in still the midst of a pandemic we feel like it's a good starting spot.

That's kind of the math.

We will go forward and we'll see where things fall out and we'll we'll make adjustments accordingly, yeah. Michael just remember we are still in the midst of the pandemic and we felt like this was the appropriate starting spot now you've seen before it's it's not how you start to tell you finish and so I think we're focused on that and we feel like as we sit and still in the midst of a pandemic.

Feel like it's a good starting spot.

Speaker 3: So it sounds like there's nothing else other than this credit loss of 100 basis points.

So it sounds like there's nothing else other than the credit loss of 100 basis points.

Speaker 3: that obviously would be probably an incremental drag relative to where street estimates are probably in the range of at least two to three cents.

That obviously would be probably an incremental drag relative to where street estimates are probably in the in the range of of at least two to three cents.

Speaker 3: relative to probably what people were expecting. Is there anything else in your numbers that is acting as a negative surprise or conversely are there things out there other than credit loss that could be a positive surprise? I'm just trying to make sure that there's nothing else that we're missing in the numbers.

Relative to probably what people were expecting.

Anything else in your numbers that is.

Acting as a negative surprise or Conversely are there things out there other than our credit loss that could be a positive surprise and I'm just trying to make sure that there's nothing else that we're missing.

In the numbers.

Well I think Theres a couple of things right I mean, we're early on in the year, we talked about the fact that there is a fair amount of refinancing that needs to be done so depending on where interest rates are at the time, we do it that could have some some level of impact, one where where everything falls out and where things go forward and again.

Speaker 9: Well, I think there's a couple of things, right? I mean, we're early on in the year. We talked about the fact that there is a fair amount of refinancing that needs to be done.

Speaker 9: So depending on where interest rates are at the time we do it, that could have some level of impact on where everything falls out and where things go forward. And again, Albertson's again is not really baked into the numbers at this point. So anything that happens there has some impact as well. So again, it's early on. We tried to lay out all the pieces of, you know, the way we're thinking about it. And again, as we move along through the year, we will continue to update it..

Albertsons again is not really baked into the numbers at this point so anything that happens there has some impact as well. So again, it's early on we tried to lay out all the pieces of the.

We're thinking about it and again as we move along through the year, we will continue to update it.

Okay, Katy other questions as well.

Speaker 11: Hi, everyone. It's Katie. Just wanted to go back to capital allocation again. The acquisition guidance is a pretty light start. I'm just wondering how much you think you could potentially allocate this year to debt or preferred pay down to refi for your upcoming maturity.

Hi, there on the kidney.

Just wanted to go back to capital allocation again.

This guidance is pretty like sorry, I'm, just wondering how much. He calls me could potentially allocate this year, it's a debt or preferred pay down to refi.

Tried it.

Okay.

So our capital plan is to really refinance obviously the bonds that we have the company today is forecasted to generate.

Speaker 9: So our capital plan is to really refinance, obviously, the bonds that we have. The company today is forecasted to generate around $200 million of free cash flow after dividends. I mean, again, cash is fungible, but to the extent that the plan ran exactly as is, we would expect that for the most part we could use a good portion of that cash towards debt. Again, it's fungible, but towards debt-re

Around $200 million of free cash flow after dividends.

Again cash is fungible, but to the extent that the plant ran exactly as we would expect that for the most part we could use a good portion of that cash towards debt you know again, it's fungible, but towards debt repayment. So overall again depending on.

Speaker 9: So overall, again, depending on how the whole year goes, we are not expecting debt levels, absolute debt levels, really raw.

How big a whole year goes we are not expecting debt levels absolute debt levels really rise.

Speaker 9: Got it. Okay, thanks. I just want to add one other point, again, just back to Michael a little bit. I think I've said in my prepared remarks, there are no charges baked into this plan for the redemption of preferred.

Got it okay. Thanks, so much.

I think I just wanted to add one other point against back to Michael a little bit I think I've said in my prepared remarks, there are no charges baked into the plan or the redemption of preferreds.

Or any prepayment charges related Randy is that should any of that a car.

Speaker 9: or any prepayment charges related to the random Indian debt. Should any of that occur, obviously we'll make adjustments to the headline FFO guidance, but that is not incorporated in the plan.

We will make adjustments to the headline is our full guidance, but that is not incorporated in the plan today.

Speaker 3: But is the refinancing and the accretion or dilution embedded in the numbers? I mean, do you have anything from the net effect of it? Forget about the charges for a second.

But as the refinancing and the accretion or dilution embedded in the numbers may do you have anything from the net effect of it forget about the charges for a second.

Speaker 9: Yes, yes we do. There's a modest amount that's baked into it but remember most of it is later in the year.

Yes, yes, we do there's a there's a modest amount that's baked into it but remember most of it is later in the year.

Speaker 9: Yeah, right so the first preferred isn't callable until middle of August and the second preferred isn't callable until December 20th. So you're going to have very little impact for 2022 as it relates to that. The bonds don't mature until October 15th and November 1st. So a similar situation where

Yeah.

First preferred isn't all bulk until middle of August and the second preferred isn't callable until December 20th So youre going to have very little impact for 2022 as it relates to that.

Bonds don't mature until.

October 15th in November 1st So a similar situation, where you know the the refinancing of those items is really late in the year. So more of a well we'll get to it later, but support for 'twenty three it impact and we'll see where the refinancings of those a car at the time.

Speaker 9: The refinancing of those items is really late in the year. So more of a, we'll get to it later, but it's more of a 23 impact. And we'll see where the refinancings of those occur at the time.

Okay. Thank you.

Yeah.

The next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Speaker 4: The next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Speaker 2: Hey, good morning and Dave, maybe you'll permit me to use my book. Michael Bellarmine two plus one question.

Hey, good morning, and Dave maybe you will permit me to he is Mike Michael Bilerman, two plus one question.

Speaker 1: So just following up on Michael's question, just for simplicity, what is the abnormal or sort of the one-time benefit in 2021? Because obviously you guys collected a lot of background, et cetera. So as we think about the pace of existence in 2021, let's say you took a

So just following up on Michael's question just for simplicity.

What is the abnormal or sort of a one time benefit in 2021, because obviously you guys collected a lot of background et cetera. So as we think about the base run rate heading into 2022, how much was 2021 inflated by you know the one timers that catch up repayment of Pryor.

Do rent et cetera.

Speaker 8: Yeah, this is Kathleen. So, for 2021, if you include AR deferred and straight line, it's closer to 7.3 million is the income that we did record related to those items.

Caffeine for 'twenty 'twenty. One if you include a are deferred and straight line, it's closer to $7 3 million at the end.

From that we get required related to those items.

Speaker 1: just 7.1. So basically we're thinking about the comp to get to the guidance for 2022. We would take out

Once you basically were thinking about the comp to get to the guidance for 2022, we would take out seven call. It.

Speaker 12: cost seven and a half million of FFO to start the debate.

Seven 5 million of assets out to start the debates.

And then add in 100 basis points from the credit loss that we had built into the protection right.

Speaker 8: and then add in the 100 basis points from the credit loss that we have built into the project.

Speaker 9: Right. So you really have a spread of, as I was mentioning, a spread of about $25 million when you're looking at the guy...

Yeah, Yeah, you really have a do you have a spread that I was mentioning a spread of about $25 million when you're looking at the guidance.

Speaker 1: Okay, okay. Now for my two questions. The first is, you know, obviously we got the CPI print, you know, seven half percent, which is just crazy. But you mentioned that the bidding for shopping centers is intensifying no real change in cap rates.

Okay. Okay.

Now for my two questions.

The first is.

You know obviously, we got the CPI print seven 5%, which is just crazy.

But you mentioned that the bidding for shopping centers is intensifying no real change in cap rates couldn't you make the argument that given there's been no supply and like 15 years and you have a lot of tenants finally coming back to their store fleets that we'll actually see cap rates continuing to compress as.

Speaker 1: Couldn't you make the argument that given there's been no supply in like 15 years and you have a lot of tenants finally coming back to their store please?

Speaker 3: It will actually see cap rates continue to compress as institutional buyers try and buy up.

Institutional buyers try and buy up.

Speaker 1: that inflationary mark to market and that, you know, maybe with that, you know, Albertsons proceeds that you guys

That inflationary mark to market and that maybe with that you know albertsons proceeds that you guys would want to go on a buying like be more aggressive in buying because of what potentially could be happen as far as that inflationary mark to market and cap rate compression or is your view that that's not.

Speaker 1: you know, would want to go on a fine, like be more aggressive in buying because of what potentially could be happening as far as that inflationary mark to market cap rates impression, or is your view that that.

Speaker 3: probably what's going to happen or that's not a reasonable assumption to be, you know, going out and making acquisition decisions based on.

Probably the what's going to happen or that's not a reasonable assumption to be going out and making the acquisition decisions based on.

Yeah, no. It's a good point I mean, I think we like to be selectively aggressive and really pick our spots you have sort of counter balancing impacts from inflation and the impact on interest rates. So we obviously are watching that closely but my point wasn't to say that the pricing and the cap rates are not justified the the low.

Speaker 2: Yeah, no, it's a good point. I mean, I think we like to be selectively aggressive and really pick our spots. You have sort of counterbalancing impacts from inflation and the impact on interest rates. So we obviously are watching that closely. My point wasn't to say that the pricing and the cap rates are not justified. The low cap rates and what we're seeing transacting regularly in the 4s, there's good reason.

Cap rates and what we're seeing transacting regularly in the fours. There's good reason for it there is substantial growth in a lot of these assets and frankly, when we look at acquisition opportunities cap rate as one of multiple metrics that we're looking at obviously CAGR at a compounded annual growth rate is critical and where do you land in IRR versus just going.

Speaker 2: There is substantial growth in a lot of these assets and frankly when we look at acquisition opportunities, cap rate is one of multiple metrics that we're looking at.

Speaker 2: Obviously CAGR, the compound annual growth rate is critical. Where do you land an IRR versus just the going in cap rate, cash on cash, FFO impact. And then again when compared to other asset classes which is who we're competing with and a lot of these deals are buyers of other asset classes.

And cap rate cash on cash <unk> impact, so and then again when compared to other asset classes, which is who we're competing with a lot of these deals are buyers of other asset classes. There's no real reason that they see a very solid risk adjusted return and grocery anchored retail so we expect that the market.

Speaker 2: there's a real reason that they see a very solid risk adjusted return in grocery-anchored retail. So we expect that the market is going to continue to be very aggressive throughout this year, notwithstanding where interest rates go for a variety of reasons, including what you just pointed out. And we'll take our spots. We will definitely be active.

Is it going to continue to be very aggressive throughout this year, notwithstanding where interest rates go for a variety of reasons, including what you just pointed out and we'll pick our spots we will definitely be active we will be putting out money, we do anticipate.

Speaker 2: we will be putting out money. We do anticipate being an acquirer. To what extent will depend on the opportunity set and where our cost of capital is and a variety of other factors. But your point is well taken. Just one other point.

But to what extent will depend on the opportunity set and where our cost of capital is and in a variety of other factors, but your point is well taken.

They're going to add.

Speaker 1: the capital formation for our product. I mean, the private REITs, some of them are putting a toe in the water, some are just getting started. And I think that's gonna be a major impact on cap rates in 2022, when they really start to put a lot of capital to work. As Ross said, the relative returns are still pretty juicy relative to other food groups.

The capital formation for our product I mean, the private read some of them are you know putting a toe in the water. Some are just getting started and and I think that's gonna be a major impact on cap rates in 2022, when they really start to put a lot of capital to work.

Ross said the relative returns are still are still pretty juicy relative to other to other food groups.

A reminder to currently limit yourself to one question and one follow up the next questioner is for us.

Speaker 4: A reminder to kindly limit yourself to one question and one follow up. The next questioner is for us.

Speaker 4: Van Dykem with Compass Point. Please go ahead.

Dicom with Compass point. Please go ahead.

Speaker 13: Morning, thanks for taking my question guys.

Good morning, Thanks for taking my question guys.

Speaker 13: Connor, you guys are the largest shopping center read in the country now. You've got tremendous information at your fingertips. I saw that you appointed a chief information officer. You have access to a huge amount of data, probably more data in the shopping center space than anybody else in the country.

Conor you guys are the largest oh.

Shopping center REIT in the country now.

You've got tremendous information at your fingertips.

Saw that you appointed a chief information officer.

You have access to a huge amount of data probably more data in the shopping center space than anybody else in the country.

Just help us think about how your mining that data trying to monetize that we heard one of your competitors yesterday talk about how they're using data to get into the an anchored.

Speaker 13: Just help us think about how you're mining that data, trying to monetize that. We heard one of your competitors yesterday talk about how they're using data to get into the unanchored center space because they think that that's an underappreciated segment. And what kind of impact do you think

Center space, because they think that that's an underappreciated.

Segments, and what kind of impact could all of this information has in your view or what do you what initiatives do you have in place too to really to raise also the occupancy level, particularly in your small shop space, which has historically lagged your anchor space by.

Speaker 13: all of this information have in your view or what initiatives do you have in place to really to raise also the occupancy level particularly in your small shop space which has historically lagged your anchor space by almost 10%.

Most 10%.

Speaker 1: Yeah, Floris, it's a great question and I think you're spot on in a lot of ways, you know, you might have picked up that I mentioned data analytics in my script as well. I think it's a big differentiator and I think, you know, having scale.

Yes, it's a great question and.

I think youre spot on and a lot of ways.

Might have picked up that I mentioned data analytics in my script as well I think it's a big differentiator and I think you know having scale has that advantage when you're able to invest in data analytics and information and tracking that others can't and it gives you the opportunity to understand your consumer and better than ever before and it helps with capital allocation.

Speaker 1: has that advantage when you're able to invest in data analytics and information and tracking that others can't. And it gives you the opportunity to understand your consumer better than ever before. And it helps with capital allocation and it helps with leasing. And so we're at the very forefront of that. We're doing a lot of things to test out different products.

Patients and it helps with leasing and so we're at the very forefront of that we're doing a lot of things to test out different products I would.

Speaker 1: I would say that we understand trade areas better than we ever have before. We understand consumer habits better than we ever have before. We're also partnering with our retailers to start to share information because we sort of have data around the shopping center where they have data inside the four walls. So all of these I would say are going to be

Say that we understand trade areas better than we ever have before we understand consumer habits better than we've ever had before we're also partnering with our retailers to start to share information because we sort of have data around the shopping center, where they have data inside the four walls. So all of these are I would say are going to be.

Speaker 1: major differentiators in the future. I think data analytics is at the very first inning of utilization in the shopping center sector. And you know, online has had that advantage for a very long time where they have all of your data, all of your habits.

Major differentiators in the future I think data analytics is is that the very first inning of of utilization in the shopping center sector and online has had that advantage for a very long time, where they have all of your data all of your habits and sort of anticipate what you're going to need and I think that that's just starting.

Speaker 1: and sort of anticipate what you're going to need. And I think that that's just starting to come to the brick and mortar space, as most of the best online retailers are now brick and mortar retailers. And I think you're going to see that customer acquisition continue to be sort of critical. And I think it's going to be a major game changer for us.

To come to the brick and mortar space as most of the best online retailers are now brick and mortar retailers and I think youre going to see that customer acquisition continue to be sort of critical and I think it's gonna be a major game changer for us for capital allocation as well as on leasing because we can anticipate what the.

Speaker 1: for a capital allocation as well as on leasing because we can anticipate what the demographic needs, what's missing, a void analysis tool that we utilize for our leasing is important, you know, trade area information. It goes on and on but I do think data analytics is really just...

Demographic needs, what's missing avoid analysis tool that we utilize for our leasing is important you know trade area information. It goes on and on but I do think data analytics is really just starting and I think we're putting a lot of investment both capital and human resources into it to make sure that we take advantage of it from our scale side of it.

Speaker 1: starting and I think we're putting a lot of investment both capital and human resources into it to make sure that we take advantage of it from our scale side.

Speaker 7: I'd just like to add two things. One, on the specific retailer initiatives, when we're working with the retailers that Connor had mentioned, we're able to share some of the information that we have related to performance at the center, their catchment area, their overlap in market share, and how our center could be an appealing option for them. And in several cases, it's actually drawn the retailer to our center versus a competing center.

I'd just like to add two things one on the.

Specific retailer initially.

Initiatives, while we're working with our retailers are Conor had mentioned, we're able to share some of the information that we have related to performance at the center.

Their catchment area there are overlap in market share and how our center could be an appealing option for them and in several cases, it's actually drawn the retailer to our centers.

In center so.

Speaker 7: So we'll continue to refine and utilize that going forward.

So we will continue to refine and utilize that going forward I think second to that tying back to Weingarten is you have to look at technology and data in a much broader context, because I think you also have to take into consideration our operating platform and the dollars that we've invested in the time that we are investing into building a very sophisticated operating platform.

Speaker 7: I think second to that, tying back to Winegarden, is you have to look at technology and data in a much broader context because I think you also have to take into consideration.

Speaker 7: our operating platform and the dollars that we've invested in the time that we've invested in building a very sophisticated operating platform.

Hmm.

Speaker 7: that's now allowing us to grow at scale and be very efficient in doing so. If we didn't make the investments that we had done for the last three years prior to Weingarten, we would have been in a very different position, but as a result of that, we were able to absorb a very large portfolio in a very short period of time.

Now, allowing us to grow at scale and be very efficient in doing so if we didn't make the investments that we had done over the last three years prior to Weingarten, we would've been in a very different position, but but as a result of that we were able to absorb a very large portfolio in a very short period of time.

Speaker 7: report our numbers in 60 days and the operating team really didn't skip

Our numbers in 60 days and the operating team really Didnt skip a beat.

Speaker 7: So that to me also is a go-forward opportunity that we can utilize in FLAC.

That to me also is as it go forward opportunity that we can utilize and flex you can tell we're pretty passionate about it I mean, I think when you look at the benefits of scale. Historically, it's probably been you know number one pricing power number two maybe G&A savings and number three technology and.

Speaker 1: You can tell we're pretty passionate about it. I mean, I think when you look at the benefits of scale, historically it's probably been, you know, number one, pricing power, number two, maybe GNA savings, and number three, technology. And I think in a matter of probably a few quarters, that's gonna be flipped. And I think technology is going to be the dominant reason for scale to take advantage of that opportunity.

I think in a matter of probably a few quarters, that's gonna be flipped and I think technology is going to be the dominant reason for scale to take advantage of that opportunity.

Great if I can ask a one one little follow up.

Speaker 13: Great. If I can ask one little follow up. The Donahue Schreiber portfolio supposedly is trading. You guys must've looked at that. It appears to be a very, very tight cap rate based on market sources. Maybe can you talk about the impact?

Onto your Schreiber portfolio supposedly it's trading you guys must have looked at that it appears to be a very very tight cap rates based on market sources, maybe can you talk about the impact on the markets and and you know again another.

Speaker 13: on the markets and, and, you know, again, another, you know, another print, lower cap rate print, and maybe the, you know, how much

Another prints lower cap rate print in and maybe the you know how much should people get worried that return expectations, our AR factoring in more growth, but slightly less.

Speaker 13: should people get worried that return expectations are

Speaker 13: factoring in more growth but slightly less current income? Or should we be pretty confident about that growth going forward?

No current income or should we feel pretty confident about that growth going forward.

Yeah, I mean look it's a great portfolio. So we're not surprised to see that it's traded aggressively and that there was a lot of competition for it.

Speaker 2: Yeah, I mean it's a look at the great portfolio, so we're not surprised to see that it's traded aggressively and that there was a lot of competition for it. It's just another of many data points that we continue to see in our sector of a lot of capital chasing, you know, a smaller amount of supply and with that you're going to continue to see pricing remain very aggressive.

Another of many data points that we continue to see in our sector, where a lot of capital chasing you know a smaller amount of supply and with that you're going to continue to see pricing remained very aggressive theres been a tremendous emphasis on certain parts of the country.

Speaker 2: There's been a tremendous emphasis on certain parts of the country, you know, the Sunbelt especially, and we love the Sunbelt and we continue to invest capital there. But let's not lose sight of the fact that, you know, the other markets and because we are geographically diverse.

Unbalance, especially and we love the Sunbelt and we continued to invest capital there, but let's not lose sight of the fact that you know the other market and because we are geographically diverse.

Speaker 2: There is a lot of demand and a lot of pricing power for the Northeast and New England and the Mid-Atlantic and Pacific Northwest and especially California as well. So there are tremendous barriers to entry in a lot of these markets and it's not surprising to see the rest of the investment community coming around to it and continuing to provide a lot of capital to those assets. So there's going to continue to be more and more single assets and portfolios that are going to surprise how competitive.

There is a lot of demand a lot of pricing power or the northeast and new England, and the mid Atlantic and Pacific Northwest and then, especially in California as well. So they were tremendous barriers to entry and a lot of these markets and it's not surprising to see the rest of the investment community coming around to it and continuing to.

To provide a lot of capital to those assets. So it's there's going to continue to be more and more single assets and portfolios that are gonna surprised to how competitive and less cap rates, though.

Speaker 1: it still shines a light on that disconnect between public and private pricing. And I think that as deals come through this year, especially sizable ones, it'll be very apparent that there's a sizable disconnect still.

It's still shines a light on that disconnect between public and private pricing and I think that.

Deals come through this year, especially sizeable ones it'll be very apparent that there's a sizable disconnect still.

Great. Thanks, guys.

The next question comes from Handel St Jousten with Mizuho. Please go ahead.

Speaker 4: The next question comes from Hendel St. Justin with Mizzoujo. Please go ahead.

Hey, good morning.

Speaker 13: Um, kind of intrigued by your comments on technology and wanted to follow up on that.

Kind I was intrigued by your comments on technology and wanted to follow up on that a bit I guess I'm curious first of all you know whats the built in assumption for expense growth. This year, where do you think were most impressed pressure and what's your sense of pricing power in the curbs platform the ability to offset these <unk>.

Speaker 13: I guess I'm curious, first of all, what's the built-in assumption for expense growth this year? Where are you seeing the most pressure? And what's your sense of pricing power in the Kim Code platform's ability to offset these rising costs, both from a rent or ABR growth side, but also from a platform of technology-driven cost savings? How much are we thinking, or maybe reflecting on a guide from some benefits of margin expansion from those two items? Thanks.

And we call it both from a retro ABR growth side, but also from a platform of technology driven cost savings.

Are we thinking or maybe are reflected in our guide from some benefit.

Margin expansion from those two items.

Speaker 1: Yeah, so technology does continue to be a focus of ours and we do invest.

Yes, So technology does continue to be a focus of ours. When we do invest and I think the keyword. There is invest I think annually I'm, making sure that our platforms are up to date and sort of the most efficient for the portfolio to operate and improve margin. So we utilize salesforce really is our backbone in them.

Speaker 1: And I think the keyword there is invest. I think annually I'm making sure that our platforms are up to date and sort of the most efficient for the portfolio to operate and improve margins. So—

Speaker 1: We utilize Salesforce really as our backbone and MRI. We did a pretty significant upgrade there. And continue to think that those platforms give us an advantage going forward to integrate whether it's one-off or portfolios.

We did a pretty significant upgrade there and continue to think that those platforms give us there.

Vantage going forward to integrate whether it's one off our portfolios onto the platform. It gives us tremendous data relatively real time.

Speaker 1: onto the platform and gives us tremendous data relatively real time. And so the annual investment there continues to be signed.

And so the annual investment there continues to be sizeable.

Speaker 9: We invest somewhere between $5 and $10 million in a given year.

We invest somewhere between five and $10 million in a given year.

Speaker 1: And we continue to pilot new ideas as well. I think that, again, as long as you continue to think of it as an investment and a differentiator for you going forward, I think that's the right way to look at it. I think as soon as you start looking at it as an expense item, that's when you can get in trouble. Because then you're going to start to cut corners, and you're not going to have the advantage going forward. Yeah, I mean, I'll just say a little bit to give you, I mean.

We continue to pilot new new ideas as well I think that again as long as you continue to think of it as an investment and a differentiator for you going forward I think that's the right way to look at it.

But I think as soon as you start looking at it as an expense item. That's when you can get in trouble because then you're going to start to cut corners, and you're not gonna have the advantage of going forward.

Yeah, I mean, I'll, just add a little bit to give you I mean, you know.

Speaker 9: We have invested a fair amount of money in developing bots that do things that are repetitive transactions. Instead of having people doing Excel spreadsheets, we're using the technology and it just creates an enormous amount of efficiency and allows our people to focus on higher level things that help drive... Right?

We have invested a fair amount of money in developing box that do things that are repetitive transactions instead of having people doing excel spreadsheets, where we're using the technology and it just creates an enormous amount of efficiency and allows our people to focus on higher level of things that.

Drive.

Speaker 9: value in the business. So anywhere where we can use technology to our advantage, we've really done that. And we've taken even things like MRI that we've you know that we've migrated to from CPI. I mean we are a major contributor to increasing the power of that product. We work very very closely with the vendor, same thing with Salesforce. So technology the key part of what we're doing to create all the efficiencies we can within the business.

Value in the business, so anywhere where we can use technology to our advantage, we've really done that and we've taken even if things like MRI that we've that we've migrated to from CPI. I mean, we are a major contributor to increasing the power of that product. So we work very very closely with the vendor.

Same thing with Salesforce. So technology is a key part of what we're doing to create all the efficiencies we can within the business.

Speaker 1: It's also part of our ESG initiative, right? I mean if you look at all the investments we're making, it really is for improving, you know, waste, improving the long-standing value creation to all of our stakeholders. That obviously includes the communities that we serve.

So part of our ESG initiatives right I mean, if you look at all the investments, we're making it really is for improving.

Waste improving the long standing value creation to all of our stakeholders.

Obviously includes the communities that we serve.

Oh, that's that's helpful and I guess I understand that you're still investing I'm curious when do you think you'll be able to put some numbers around some of those potential cost savings. It seems like youre still kind of early stages, maybe that's tough.

Speaker 13: That's helpful. I guess I understand that you're still investing. I'm curious when do you think you'll be able to put some numbers around some of those potential cost savings? It seems like you're still kind of early-ish stages. Maybe that's top of the list for next year, but just curious on when do you think you'll be able to put numbers? And then back to my original question, one of the pieces was what's in the guide for expense growth this year? Maybe you could talk about that a bit, maybe some of the key pressure points. Thanks.

Top of the list for next year, but just curious on when do you think you'll be able to put numbers and then back to my original question. What are the pieces was what's in the guide for expense growth. This year, maybe you could talk about that a bit and maybe some of the key pressure points. Thanks.

Yeah, I mean from an expense standpoint, again inflation is clearly something that is in the works and you have to deal with our.

Speaker 9: Yeah, I mean from an expense standpoint again, inflation is clearly something that is in the works and you have to deal with. Our recovery rates are pretty strong from a CAM and tax standpoint. So the amount of leakage is not tremendous, but you have that. And if you look at overall NOI margins, NOI margins are in the low 70s. So we would expect them to kind of stay in that range throughout the year.

Our recovery rates are pretty strong from a cam and tax standpoint, so the amount of leakage is not tremendous but you'd have that and if you look at overall you know overall NOI margins I know why margins are in the low seventies. So we would expect them to kind of.

Stay in that range throughout the year.

We gave you guidance as it relates on the G&A side, so that's already baked into the guidance range.

Speaker 9: We gave you guidance as it relates on the GNA side, so that's already baked into the guidance.

How does that answer your question. The next question comes from Keybanc Kim with Truest. Please go ahead.

Speaker 4: Got it. Thank you. The next question comes from Kee Ban Kim with Truist. Please go ahead.

Thanks, and good morning.

Speaker 3: Thanks, Don. Good morning. Just going back to the last question on expense reimbursements, the reimbursement rate looks like it dropped a little bit in 4Q. I was just curious if there was anything, anything that you can help us understand about that. And do you have a

Going back to the last question on expense reimbursements, the reimbursement rate it looks like it dropped a little bit in <unk>.

Just curious if there was anything.

Anything you can help us help us understand about that and do you have a cap on it.

Speaker 1: the amount of reimbursement, how much a tenant would pay versus how much you would pay on expense.

The amount of reimbursement.

I mean, how much a tenable papers with how much you would pay.

On the expense prices.

Speaker 8: So, Keaton, when it comes to recoveries, you know, there's a lot of facets to it. It really comes down to timing of spend and the nature of the spend. So, you know, as there are certain tenants that have caps in their leases, so if your spend reaches that cap in the fourth quarter, you may see a drop-off of the recovery related to that particular lease, just as an example. When it comes to, to, when it comes to spend, it's a fairly unique development, and somebody has to let in a real health NASA crew member and someone at the leisure worried about whether that's going give you a,... You know, bloody lock and totaltz, planning to leave a much smaller tank would seem kind of

So keep in mind when it comes to recovery. Okay. There's a lot of facets right. It really comes down to timing of spend and the nature of the spend.

As there are certain tenants that have caps and they only sell if you spend reach that cap in the fourth quarter, you may see a drop off after a recovery in China.

Take care of and you start with an example.

When it comes to kill them.

Speaker 8: the capping things. You also have a component of fixed CAM, which means that it's a set dollar amount that we're going to get from the tenants and that amount comes through pro rata throughout the entire year irrespective of where the actual spend happens. So again when it comes to recovery, there's a lot of timing impact which makes it a little bit lumpier.

At the capping things you also have a component of fixed cam.

That is a set dollar amount that we're going to get from the tenant and that amount comes through pro rata throughout the entire year irrespective of where the actual spend happens. So again when it comes to recovering if there's a lot of timing impact, which makes it a little bit lumpy.

Speaker 9: Yeah, I would just add that, again, when you look at the spend during the fourth quarter of 21 versus the fourth quarter of 20, it was clearly more spend. You have more spend related not just to the Weingarten acquisition, but, you know, fourth quarter of 20 was still pretty deep in the pandemic, and the amount of spend that was going on was a little bit more limited. So I think when you look at the fourth quarter, that's a pretty decent run rate about where spend is going. Thank you.

I would just add that again when you look at the spend during the fourth quarter of 'twenty, one versus the fourth quarter of 'twenty. It was clearly more spend you'll have more spend related not just to the weingarten acquisition, but fourth quarter of 'twenty was still pretty deep in the pandemic and the amount of spend that was going.

One was a little bit more limited so I think when you look at the fourth quarter, that's a pretty decent run rate about what where spend is going.

So somebody's arm camp.

Speaker 3: fixed CAM nature and maybe some caps on expenses that a tenant would pay. Is that at all a drag in your 2022 guidance for your theme phone?

Cant fixed cam nature, and maybe some caps on expenses that I that attempt would pay is that at all a drag and you can be 'twenty two guidance for your same store NOI.

Given what we can work in patients.

Speaker 8: So when it comes to fixed cams, just something to note, there's a bump each year in the lease with regards to the reimbursement that the tenant gives us. So it's not a set it and forget it. The amount keeps increasing over the years.

So when it comes to fixed Cam just that they didn't know it theres a bump each year.

With regards to that the reimbursement that's kind of against that so it's not a set and forget it the amount of keeps increasing over the years.

Speaker 7: There's also a component in terms of as you're building back occupancy and getting more tenants open, they're starting to contribute to the cam pool. You still have to operate a shopping center, you know, even if the occupancy is down a little bit. So you still have recurring expenses.

And then there's also a component in terms of.

You're building back occupancy and getting more tenants open theyre starting to contribute to the camp or you still have to operate a shopping center.

The occupancy was down a little bit so you still have recurrent expenses.

Some of which the landlord will bear until you have a new tenant that comes online. So as you start to see at least the economic compress more tenants open and start contributing to the reimbursement pool that recovery rate will increase and as we go through our budget process.

Speaker 7: some of which the landlord will bear until you have a new tenant that comes online. So as you start to see, at least the economic compress, more tenants open and start contributing to the reimbursement pool, that recovery rate will increase. And as we go through our budget process...

Speaker 7: the any cap component that may be associated with the lease is well understood and we manage

Annie have component that may be associated with the lease is well understood and we manage our expense and what the contribution could be but to kathleen's earlier point was really essentially is that the the fixed cam element continues to grow on an annualized basis.

Speaker 7: our expense within what the contribution could be. But to Kathleen's earlier point, what's really essential is that the fixed CAM element continues to grow on an annualized basis.

And it allows us to make the investments that we need to make to ensure that our centers day.

Speaker 7: and allows us to make the investments that we need to make to ensure that our centers stay.

Speaker 7: top of the market and relevant for both our retailers and customers.

The marketing and relevant for both our retailers and customers.

Right I guess, what I was getting to was.

Speaker 1: Right, I guess what I was getting to was, you know, your fixed accounts are growing, but perhaps not the pace of inflation. So I was wondering if that on a basis.

Fixed cam for growing but perhaps not at the pace of inflation. So I was wondering if that right no I understand that he faces yeah.

Speaker 7: Yeah, no, so let's talk inflation. Obviously, inflation is real, it's here. The numbers just came out this morning. We're very mindful of that and you're managing with, you're managing through that as well. And so you have the opportunity to adjust your spend as needed. In addition to that, what we've done is we've also pre-purchased you know, materials that we knew would be needed in 2022. We started buying

Yeah, no. So let's talk inflation, obviously inflation is real it's here. The numbers just came out. This morning, we're very mindful of that and you're managing with you're managing through that as well and so you have the opportunity to do it.

To adjust your spend as needed in addition to that what we've done is we've also pre purchased.

Materials that we knew would be needed in 2002, we started buying.

Speaker 7: roofing materials and other items that were essential, you know, back well into 2021.

Roofing materials and other items that were essential back well into 'twenty one.

Speaker 7: preparation to utilize for 22 stay in front of that and that's something that we'll just continue to manage as we're working through our budgets. We don't have it we don't see it having a negative impact on SAMHSA I know I see your question. Okay.

In preparation to utilize for 'twenty to stay in front of that and that's something that we'll just continue to manage.

As far as where we're working through our budgets. We don't have it we don't see it having a negative impact on same site NOI.

To your question Okay.

Thank you guys.

Speaker 4: The next question comes from Wes Golladay with Baird. Please go ahead.

The next question comes from Wes Golladay with Baird. Please go ahead.

Speaker 3: Hey, good morning, everyone. There's been a lot of noise in the quarterly non cash rent. And so can you tell us what's embedded in the full year guidance this year for the non cash rent on a per-rata basis?

Hey, good morning, everyone and this has been a lot of noise in the quarterly non cash rent and so can you tell us what's embedded in the full year guidance. This year for the noncash rent on a pro rata basis.

Speaker 8: So the collections for the quarter were $7.8 million of previous rents that were reserved that we think did collect. As Glenn mentioned, there's no estimate of past collections inside the projections for 2022. What's in there is actually the 100 basis of credit loss is what's actually embedded in the numbers. So as I mentioned, you know, there's no income related to prior periods included in any of the numbers that we put out. Apologies, I meant from the 90s.

The collections for the quarter were seven 8 million of previous rents that won't be there at that meeting.

As I mentioned Theres no estimate of past collections inside the projections for 2022, but then there is actually at 100 basis of credit loss is what's actually embedded in the numbers. So.

As I mentioned you know there's no there's no income related to prior periods included.

Yeah, the numbers play out.

I apologize I meant from the noncash rents with the straight line rents.

Speaker 9: Same concept there. So we're not showing any of the tenants flipping back onto a cruel where we reinstate the straight line. There's no impact in the numbers related to that. There was about a million and a half in the fourth quarter, so if you look at the straight line income number, there was about a million and a half that came back through that line. So if you're trying to figure out run rates, you'd have to kind of back that off a little bit.

And kind of get there. So we're not showing you know any of that the tenants putting back onto accrual that we reinstate the straight line that theres no impact in the numbers related to that there was about a million and a half in the fourth quarter. So if you look at the straight line.

Come number it was about a million and a half that came back through that line.

So if you're if you're trying to figure out run rates you'd have to kind of back that off a little bit.

Speaker 3: That's exactly what I was looking for. And then now going back to the, I guess the strong bid in the private market for shopping centers, can you maybe talk about the bid for non-core assets? Is that firming up as well? How much has that did tightened up? And then we look at your disposition program this year, will it be mainly non-core assets or do you have some opportunistic assets in there as well?

That's exactly what I was looking for and then now going back to the I guess the strong bid in the private market for shopping centers can you maybe talk about the bid for noncore assets is that firming up as well yeah. I don't know how much has that been tightened up and then when we look at your disposition program. This year will it be mainly non core assets.

Have some opportunistic assets in there as well.

Speaker 2: Yeah, I mean fortunately we don't have a whole lot of non-core assets at this point. So when we look at our disposition...

Yeah, I mean, unfortunately, we don't have a whole lot of non core assets at this point so when we look at our disposition.

Speaker 2: pipeline for the year, it's really assets where we feel we've maximized the value. Maybe there's less growth, but still good tenancy, good credit, and there's a lot of demand for credit in this market. So I think all facets of open-air retail have continued to be more aggressively priced, and we've seen pricing and cap rates continuing to compress.

The pipeline for the year, it's really assets, where we feel we have maximized the value, maybe there's less growth, but still good tenants and good credit and there's a lot of demand for credit in this market. So I think all facets of open air retail have continued to be more aggressively priced in we've seen.

Pricing and cap rates continuing to compress not just institutional grocery anchor product, but tower lifestyle, certainly single tenant as well. So everything is getting more aggressive as you know the amount of capital is flowing into the sector.

Speaker 2: Not just institutional grocery-anchor product, but power, lifestyle, certainly single-tenant as well. So everything is getting more aggressive as the amount of capital is falling into the atmosphere, creating grower Dooyah!

Great. Thanks, everyone.

The next question comes from Mike Mueller with Jpmorgan. Please go ahead.

Speaker 4: The next question comes from Mike Mueller with J.P. Morgan. Please go ahead.

Speaker 5: Yeah, hi, Connor, you talked about wanting to last mile retail, I think a few times. Just curious, what's the difference between what you see as last mile retail and and what is the difference between what you see as last mile retail and

Yeah, Hi, Conor you talked about wanting to own last mile retail take a few times just curious what's the difference between what you see as last mile retail and and what isn't.

Speaker 1: Yeah, it's a really good question. I think when we define last mile retail, it's retail that's embedded in the community that it serves so that when you look at the trade area using data analytics.

Yeah. It's a it's a really good question I think when we defined last mile retail its retail that's embedded in the community that it serves so that when you look at the trade area using data analytics.

Speaker 1: understand that it is the closest to where people live. And so that is sort of the neighborhood grocery store, the asset that fits within dense population.

Understand that it is the closest to where people live and so that that is sort of in the neighborhood grocery store the asset that sits within dense populations really high barrier to entry locations, where you don't necessarily have significant opportunity to see new supply come into the market anytime soon.

Speaker 1: really high barrier to entry locations where you don't necessarily have significant opportunity to see new supply come into the market anytime soon.

Speaker 1: And so that's why we continue to think we're in the right spot or we're in the sweet spot of last mile retail. Because when you look at where we've put our chip...

And so that that's why we continue to think we're in the right spot or we're in the sweet spot of last mile retail because when you look at where we've put our our our chips.

Speaker 1: You know, the map for us is really around the top 20 major metro markets.

<unk> for US is really around the top 20 major metro markets first string where we're seeing a lot of population growth a lot of demographic shifts and continuing to think that our locations have a lot of barriers to entry. So the supply and demand continues to be in our favor.

Speaker 1: first ring where we're seeing a lot of population growth, a lot of demographic shifts.

Speaker 1: continuing to think that our locations have a lot of barriers to entry. So the supply and demand continues to be in our favor. Got it.

Got it okay. Thank you.

Oh, sorry, I was flat if you think about a lot of the retailers that they're looking at the store today as there.

Speaker 9: I was glad you think about a lot of the retailers. They're looking at the store today as their

Speaker 9: you know, a main distribution point. So a lot of this online activity that they're getting, they're delivering that product from the store. I think also having curbside pickup is just another advantage where, you know, for the consumer and for the retailer. So

Our main distribution point, so a lot of this online activity that theyre getting did delivering that product from the store I think also having curbside pickup is just another advantage.

For the consumer and for the retailer so.

Speaker 9: put all that together when you have an asset that's sitting surrounded by general housing, it's just much easier for them to get their product quicker.

All of that together when you have an <unk>.

Asset that's sitting surrounded by you know just general housing, it's just much easier for them to get their product quicker.

Got it thanks.

Speaker 4: The next question comes from Anthony Powell with Barclays. Please go ahead.

Our next question comes from Anthony Powell with Barclays.

Please go ahead.

Hi, Good morning, maybe one for me on credit losses.

Speaker 12: Hi, good morning. So maybe one for me on credit losses. You said historically that you're at the 75 to 85 basis point, can you exit 2022 at that level and looking long term, given the increased quality of tenants, you know, more grocers, could you be below that in future years given kind of the improved quality of the tenant base?

You said historically that you're ramping 75 to 85 basis points could you exit 2022 at that level and looking at long term given the increased quality of tenants you know more grocers could you be below that with each years, given kind of improved quality of the tenant base.

Speaker 9: I mean, it's a great question. I mean, if I had a crystal ball, I guess I could tell you the answer, but it's possible. But again, you know, we're still to Conners point, we're still in the midst of pandemic. And I it's very difficult to predict what's going to happen, which tenants might fall out. You know, we've had very, very little in terms of bankruptcy.

I mean, it's a great question I mean, if I had a crystal ball I guess I can tell you the answer but.

It's possible, but again you know we're still to kind of support was still in the midst of endemic and it's very difficult to predict what's going to happen, which tenants might fall out we've had very very little in terms of bankruptcies would.

Speaker 9: It would be great if that would continue, but it's always possible that something could happen that it could go the other way. So again, as we set and think about guidance, we think this is really the appropriate level to start with and we'll make adjustments as we go and as things improve.

It would be great if that would continue.

But it's always possible that something could happen.

It could go the other way so again as we sit and think about guidance do you think this is really the appropriate level to start with and we'll make adjustments as we go and if things improve.

Speaker 1: we can certainly see it be better than what it is. I think it's a fair assumption to, if we least correctly and upgrade the tenant base, you know, with the credit tenants that are doing new deals. And you think that last mile retail is finally plugged into the supply chain and used in the e-commerce platforms that all of our retailers have, that you should be able to use, you know, after the pandemic, a lower credit loss reserve. I think that's a fair assumption.

We can certainly see it would be better than what it is.

It's a fair assumption just to if we lease correctly and upgrade the tenant base with the credit tenants that are doing new deals and you think that last mile retail is finally plugged into the supply chain and used in the E. Commerce platforms that all of our retailers have that you should be able to use you know after the pandemic.

A lower credit loss reserve I think that's a fair assumption to make.

Speaker 12: But maybe on I guess, lease spread, they're very strong in the quarter. There was a big difference between new and renewal. Is there an opportunity to push them in those renewal, I guess, went a bit higher given what you're seeing? Or are you more focused on retention at this point?

Got it.

Maybe on I guess, a lease spreads were very strong in the quarter. There was a big difference between new and renewal is there an opportunity to push them in those renewal I guess went a bit higher given what you're seeing or are you more focused on retention at this point.

Well I mean, our our renewal and option spreads continue to be in the high single digit range mid to high single digit range, which continues to be encouraging and we always look at that as an opportunity for tenants to walk away or renegotiate.

Speaker 7: Well, I mean, our renewal and option spreads continue to be, you know, in the high single digit range, mid to high single digit range, which continues to be encouraging. We always look at that as an opportunity for tenants to walk away or renegotiate. And the fact that it's still holding a healthy positive is good. We push as hard as we can. It's case by case.

Fact that its still holding a healthy positive is good.

We.

We push as hard as we can it's case by case.

Speaker 7: And, you know, we'll continue to do that going forward. Again, I always revert back to the fact that in the spreads that are posted are common.

And we will continue to do that going forward again, I always revert back to the fact that in the.

The spreads that are posted our comp spreads based on a point in time with a certain population so that can vary quarter to quarter.

Speaker 1: with a certain population so that can vary quarter to quarter. Yeah just one more point on that new lease spreads typically are higher because you have more below market leases coming to maturity where they don't have any more control and you get the opportunity then to replace them with the at market rent where some of the renewals and options have embedded bumps that are lower than what a mark-to-market would be.

One more point on that new lease spreads typically are higher because you have more below market leases coming to maturity, where they don't have any more control.

And you get the opportunity then to replace them with the App market rent, where some of the renewals and options have embedded bumps that are lower than what our mark to market would be yeah and right.

Speaker 7: One more point on top of that is that we did a lot of small shop leasing, which is typically closer to market. So that's where you're seeing the difference.

And on top of that is that we have we did a lot of small shop leasing which is typically closer to market.

So that's where you're seeing the different style.

Thank you.

Speaker 4: The next question comes from Linda Stye with Jefferies. Please go ahead.

The next question comes from Linda Tsai with Jefferies. Please go ahead.

Speaker 14: Hi, can you give us some color on shop retention in the quarter and any trends to note between the Kim and Legacy Wine Garden Portfolio?

Hi, can you give us some color on shop retention in the quarter and any trends to note between the Cayman legacy Weingarten portfolio.

So why it's been so nice about the Weingarten portfolio is how it's really complemented the kimco portfolio and I think we both had very similar strategies you know over several years of pruning of noncore assets, improving overall quality. So when we merged together in August there is.

Speaker 7: So what's been so nice about the Weingarten portfolio is how it's really complemented the Kimco portfolio and I think we both had very similar strategies over several years of pruning the non-core assets, improving the overall quality. So when we merged together in August , there was very complementary quality so we're seeing very similar trends between the two. When you look at retention levels in 2021, our deal retention was over 80...

Very complimentary qualities. So we're seeing very similar trends between the two when you look at retention levels in 'twenty one.

Our deal retention was over 80, 283%, which was really the highest it's been in over five years and the GLA was almost near 90%. So the retention time to vacate level as well it is at the lowest point we've seen.

Speaker 7: which was really the highest it's been in over five years. And the GLA was almost near 90%. So the retention time, the vacate level as well is at the lowest point we've seen really over the last six years as well. It's 56% below our historic average. So I really think, though, this is a reflection of what happened during the midst of the pandemic and really in 2020.

Really over the last six years as well at 56% below our historic average so I really think that this is a reflection of what happened during the midst of the pandemic and really 2020.

Speaker 7: and the purging of distressed tenancy, those that really just couldn't make it through or didn't see a path forward, that really fell out in 2020. So in 21, you really saw a renewed base that was relatively stable, had a desire to stay and grow within the shopping center, and then compounded now, obviously, with the New Deal activity, that's reducing the occupancy growth. So you're getting occupancy growth not only with elevated retention, reduced vacate, but also...

And the purging of distress tenancy those that really just couldn't make it through I didn't see a path forward that really fell out in 2020. So in 'twenty. One you really saw.

Renewed base that was relatively stable had a desire to stay and grow within the shopping center.

And then compounded now obviously with the new deal activity, that's where you're seeing the occupancy growth so you're getting occupancy growth not only with elevated retention.

Reduce vacates, but also new deal flow.

And then we've heard some of your smaller competitors discussed increased competition.

Speaker 14: And then we've heard some of your smaller competitors discuss increased competition in the transaction market and mention unanchored centers as one opportunity. Is this something you'd consider or you'd…

And the transaction market and mentioned on anchored centers. This one opportunity is this something you would consider or are you sticking with grocery anchored.

Speaker 2: It's an interesting concept. We do look at all sorts of you know formats of retail. You know we've talked about it in the past. We love grocery. We love mixed-use. We've also seen some of our power centers be some of our best performers with redevelopment potential. So at the end of the day, we're focused on the real estate, the location, but we do believe that having that grocery anchored.

So I'd say, it's an interesting concept, we do look at all sorts of.

Formats of retail we talked about it in the past they love grocery we loved mixed use we've also seen some of our power centers some of our best performers with redevelopment potential. So at the end of the day, we're focused on the real estate the location, but we do believe that having that grocery anchored is really a component that adds a lot of value and a lot of traffic.

Speaker 2: really a component that adds a lot of value and a lot of traffic to the center.

The center, so I don't want to discount the strategy, you're saying, it's something that we wouldn't consider but just given our focus right. Now we have been or are more focused on larger format grocery anchored shopping centers.

Speaker 2: So I don't want to discount the strategy or say it's something that we wouldn't consider, but just given our focus right now, we have been

Speaker 2: or more focused on larger format grocery anchor type shopping centers.

Thanks.

Yes.

Speaker 4: The next question comes from Michael Gorman with BTIG. Please go ahead.

The next question comes from Michael Gorman with BTG. Please go ahead.

Speaker 12: Yeah, thanks. Good morning. I'll try to be quick here and we're running long. Connor, just wondering, you talked a lot about last mile retail. And I think you mentioned MSCs in there as well, especially on the grocery side. Can you just give us any stats that you have about MSCs that are currently in the portfolio, maybe ones that are planned for the portfolio? And is there an opportunity for Kimco to partner with the tenants here to kind of do some improvements and invest in MSCs in your

Yeah. Thanks, Good morning, I'll try to be quick here I know, we're running long current just wondering you talked a lot about last mile retail and I think you mentioned M F fees in there as well, especially on the grocery side can you just give us any stats that you have about.

M. S sees that are currently in the portfolio maybe ones that are planned for the portfolio and is there an opportunity for kimco to partner with the tenants here to kind of do some improvements in and invest in MFC is in your centers.

Speaker 1: Sure, so it is very, very early on micro fulfillment. And I think what you're going to see is continuation of a lot of testing on that. What we found is that some of our grocers are looking for adjacent space.

Sure. So it is a very very early on on micro fulfillment and I think what you're going to see is continuation of a lot of testing on that what we've found is that some of our grocers are looking for adjacent space to either have that micro fulfillment bolted on.

Speaker 1: either have that micro-fulfillment bolted on where some are actually looking at...

Some are actually looking at.

Speaker 1: you know, freestanding locations that are within Last Mile Retail that are vertically integrated and automated so you can have that help with Last Mile delivery. I continue to think that the store will continue to evolve. You know, a lot of the grocers that we've talked to have also talked with, that's not far off to think at the center of store.

Bruce freestanding locations that are within the last mile retail that are vertically integrated and automated. So you can have that help with last mile delivery.

I continue to think that the store will continue to evolve.

Out of the grocers that we've talked to them also talked with that's not far off to think that the center of store comes with micro fulfillment, where you walk around the out the outer rim of the store and that's where you get the fresh you got the meats.

Speaker 1: comes a micro-fulfillment where you walk around the outer rim of the store and that's where you get the fresh, you get the meat.

Speaker 1: You get the bakery type goods and then your commodity type goods are fulfilled and they're ready for checkout when you walk through the rest of the store. So it's still very, very early there, but I think...

You got the bakery type goods and then your commodity type goods are fulfilled.

And they're ready for check out when you're when you walk through the rest of the store. So it's still very very early there, but I think with retailers reinvesting in their store base. The way that we see that that will be a part of their strategy now some we'll have that bolt on strategy. So we'll probably test integrating at some won't probably have freestanding, but the store.

Speaker 1: with retailers reinvesting in their store base the way that we see that that will be a part of their strategy. Now some will have that bolt-on strategy, some will probably test integrating it, some will probably have freestanding, but the store continues to be a focus for the lion's share of our retailers and I think that's how you're going to continue to see it evolve. I would also add that

Continues to be a focus for the lion's share of our retailers and I think that that's how you're going to continue to see at a ball I'd also add that you.

Speaker 7: You have to start, I think, thinking about microfulfillment a little bit differently. There is the physical change, right? So you have a grocery store that may parcel out 10,000 to 15,000.

You have to start I think thinking about micro fulfillment a little bit differently. There is the there is the <unk>.

Physical change right. So you have a grocery store that may parcel out 10 to 15000 square feet.

Speaker 7: throw in a racking system with some robotics to fulfill the orders, right? So that is something, a visual change that you notice.

Throw in our racking system with some robotics to fulfill the orders right. So that is something a visual change that you've noticed it something different that wasn't there a year ago, but then you got to think of like a target 95% of their goods are distributed through a store or is that not micro fulfillment in some capacity they are already utilizing their existing footprints to occur.

Speaker 7: that wasn't there a year ago. But then you have to think of like a target. 95% of their goods are distributed through a store. Is that not micro fulfillment in some capacity? They are already utilizing their existing footprints to accommodate.

Comedy addressed as same need similar to like <unk> as well. So I think we have to broaden that definition or appreciation of how we view that.

Speaker 7: addresses same needs similar to like QSRs as well. So I think we have to broaden that definition or appreciation of how we view that. But to Connor's point, it's still very much in the early days of its evolution, and it will be different for each retailer.

Conners pointed its still very much in the early days of its evolution and it will be different for each retailer.

And are you seeing like a just for flexibility or as it evolves as youre doing some of these grocer leasing or are you seeing them.

Speaker 12: Are you seeing like at just for flexibility or as it evolves as you're doing some of these gross releasing are you seeing them?

Speaker 12: ask for more space, look for more space, are they looking for things where there are potential adjacency already in place or is it still too far out?

Ask for more space, but look for more space or are you looking or are they looking for things where there are potential adjacencies already in place or is it still too far out for that.

Speaker 7: No, no, it is very much now. I mean, sometimes they may have had a box that was an older format that could have been 65 plus thousand square feet, and so now they're going to utilize 15 of that to do that, where maybe some of their newer formats in the last five years were slightly smaller, but now they appreciate that they need more space so then they'll do the adjacent vacancy, expand out the back or otherwise.

No no. It is very much now I mean, sometimes they may have had a box that was an older format that could have been 65, plus thousand square feet and so now they're going to utilize it.

15 of that to do that where maybe some of their newer formats in the last five years.

We're slightly smaller but now they appreciate that they need more space to then they'll do the adjacent vacancy.

Spanned out the back or otherwise.

Speaker 7: We host portfolio views on a weekly basis with a number of retailers and I'd say that continues to be a topic of conversation for some. I'd like to know what you have to the left and to the right of me that might be available either now or in the future.

Portfolio views on on a weekly basis with a number of retailers and I'd say you know that continues to be a topic of conversation for some.

Like to know what you have to the left into the right at me that might be available either now or in the near term.

The next question comes from Tammy <unk> with Wells Fargo Securities. Please go ahead.

Speaker 4: The next question comes from Tammy Seek with Wells Fargo Securities. Please go ahead.

Speaker 15: Thank you. Maybe just following up on the asset pricing question and understanding cap rates are compressing across segments. I'm just curious what you're seeing in the market today in terms of cap rates spread between grocery and power center and it was that narrower or wider today versus where it's been historically.

Thank you maybe just following up on the asset pricing question and understanding cap rates are compressing our cross segment I'm. Just curious what you were seeing in the market today in terms of cap rate spread between grocery and power center and it was that narrower or wider today versus where it's been historically.

It's pretty similar there both compressing at a pretty aggressive pace. So if we've seen no grocery anchor institutional quality now sub five.

Speaker 2: I think it's pretty similar. They're both compressing at a pretty aggressive pace. So if we've seen, you know, grocery anchor institutional quality now sub-five, we're seeing a lot of the traditional more commodity power centers.

Seeing a lot of the traditional more commodity power centers.

Speaker 2: compressing you know sub seven in some cases low sixes. I think you're still seeing maybe a hundred and fifty basis point spread on average, but a lot of factors go into the pricing of course, but I think that's consistent with historic everything is just compressing.

Compressing sub seven in some cases low sixes.

You're still seeing maybe a 150 basis point spread on average, but a lot of factors go into the pricing of course, but I think that's consistent with historic everything is just compressing cap rate wise.

Speaker 15: Okay, thank you. And then curious, what do you need to redevelop or acquire in order to get to the 15% of ABR and mixed-use target by 2025? Just trying to think about that in the context of the $100 to $125 million annual spend for redevelopment or if there's planned acquisition activity of this product type in the longer-term plan. Thank you.

Okay. Thank you and then curious what do you need to develop or acquire in order to get to the 15% of E. P. Our mixed use target by 2025, just trying to think about that in the context of that.

$225 million annual spend for redevelopment or if theres planned acquisition activity of this product type is a longer term plan.

Yeah.

Speaker 7: Yeah, yeah, it's a great question. So, you know, that that is the center if there's a mix.

Yeah, Yeah. It's a great question. So you know that a b R.

The AVR or a center if there is a mixed use component associated with it so for us it can be achieved.

Speaker 7: associated with it. So for us it could be achieved you know in several different ways. Obviously the activation of several more of our multi-family projects. If we are potentially buyout a partner or two or buyout the ground lease and get the full benefit of the income that will contribute as well. Obviously external growth you know through what Ross and his team are doing. Finding an opportunity to acquire mixed-use but when you look at our entitlement platform and the number of entitlements we have in a thousand.

Several different ways, obviously, the activation of several more of our our multifamily projects.

If we are essentially buyout, our partner or buy out the ground lease and get the full benefit in the income that will contribute as well obviously external growth through what Ross and his team are doing finding opportunities to acquire next year, but when you look at our entitlement.

Good for them and the number of entitlements, we have 1000 Activations, we have the opportunity to pull the trigger on several of those over the next three years, which will help contribute.

Speaker 7: activate, we have the opportunity to pull the trigger on several of those over the next three years which will help.

So that's the lion's share is coming from the internal entitlement platform and the activation of our and a number of different ways. We can ground lease we can joint venture.

Speaker 1: That's the lion's share coming from the internal.

Speaker 1: title and platform, the activation of it. In a number of different ways, we can ground lease, we can joint venture, but that continues. And then obviously the bigger projects that have multiple phases to them, clearly will continue to trend that percentage higher. I think we're at 11% today of mixed use. So we've done a lot of work, because five years ago that was zero. So we continue to think that that has the nice trajectory of adding.

That continues and then obviously the bigger projects that have multiple phases two of them.

Clearly, we will continue to trend that that percentage higher I think we're at 11% today of mixed use. So we've done a lot of work because five years ago that was zero. So we continue to think that that has the nice trajectory of adding density to our existing assets and that's where you'll see our capital allocation plans continue to shift.

Speaker 1: density to our existing assets and that's where you'll see our capital allocation plan continue to shift away from ground up development more towards that redevelopment side of the equation.

[noise] away from ground up development more towards that redevelopment side of the equation.

Great. Thank you.

The next question comes from Chris Lucas with capital One Securities. Please go ahead.

Speaker 4: The next question comes from Chris Lucas with Capital One Securities. Please go ahead.

Real quick guys.

Speaker 12: Real quick guys, Glen, just the tenure's touching 2% this morning. I guess I'm just curious as to what you think you could price your 10-year bonds at and with inflation.

Glenn just the 10 years.

<unk>, 2%. This morning, I guess I'm just curious as to what you think you can price your 10 year bonds at and with inflation.

Print to the way it was set as expectations to general macro outlook. How are you thinking about the fourth quarter maturities are you thinking you want to get in front of those or does it not matter in terms of how youre thinking about the funding plan for those.

Speaker 12: print the way it was, the Fed's expectations, the general macro outlook. How are you thinking about the fourth quarter maturities? Are you thinking you want to get in front of those or does it not matter in terms of what you're doing all parts of that are ECO or is there a higher level of tempo?

That's a great question again, we're always constantly monitoring the market looking for you know open windows that makes sense for us to issue.

Speaker 9: That's a great question. Again, we're always constantly monitoring the market, looking for open windows that make sense for us to issue.

Speaker 9: Again, we'd have two bonds that mature, one in October , one in November . You know, ideally we'll try and probably look to maybe do something sooner than later with one of them.

Again, we have two bonds that mature one in October one.

Remember you.

Ideally, we'll try and probably look to maybe do something sooner than later with one of them.

Speaker 9: But we're watching the markets pretty closely. In terms of pricing, again, it really depends on the day, it depends on the particular market. But I would say that we're probably somewhere in the 110 range or so around, above the 10-year treasury. So you're looking at somewhere in that.

We're watching the markets pretty closely in terms of pricing again, it really depends on the day. It depends on the particular market, but I would say that we're probably somewhere in the 110 range or so.

Around about above the 10 year Treasury, so you're looking at you know somewhere in that.

Speaker 9: You know, 310, 315-ish range would be the coupon today.

<unk> tends to be 15 ish range would be the coupon today.

Super Thank you I appreciate it.

And we have a follow up from Greg Mcginniss with Scotiabank. Please go ahead.

Speaker 4: And we have a follow up from Greg McGinnis with Scotiabank. Please go ahead.

Hi, just two quick ones, sorry about that I'm looking at the rent collections that fell slightly from last quarter is there anything to read into that perhaps pilings weaker tenants fall out before occupancy recovers or is that just in your own time an issue.

Speaker 12: I just two quick ones. Sorry about that. I'm looking at the rank collections that fell slightly from last quarter. Is there anything to read into that? Perhaps highlighting some weaker times suspected fallout before occupancy recovers? Or is that just a year in timing?

Speaker 8: So what you're seeing there, Greg, is actually there's some significant billings that go out in the fourth quarter related to our real estate taxes. And those aren't, you know, like your contractual rents where it's every month and no numbers. So when those go out, it takes a little bit longer to collect those. So that's what's just causing that relative, you know, small dip. But those questions will pick up in the first quarter related to those real estate tax.

So what you're seeing there Gregg is actually and there are some significant billings that go out in the fourth quarter related to wherever you don't pay taxes and those arent you know.

And your potential rents, whereas every month and no number so when those go out it takes a little bit longer to collect them. So that's what's causing that relative small but that those questions will pick up in the first quarter remains challenging.

Speaker 12: Okay, thanks. And then at Mayreet last year, you mentioned true rent growth versus 2019 was limited to certain Sunbelt markets. Is that still true? Were you starting to see improvement in other regions as well? So any details you can provide on market rent growth would be appreciated.

Okay. Thanks, and then at NAREIT last year, you mentioned true rent growth versus 2019 was limited to certain sunbelt markets.

Is that still true, where you're starting to see improvement in other regions as well. So any details you can provide on market rent growth would be appreciated.

Yeah, I mean, we're seeing I mean again when you look at the net effective rents.

Speaker 7: Yeah, I mean, we're seeing, I mean, again, when you look at the net effective rents, the

Spreads that were posted.

Speaker 7: volume of activity between our coastal and Sunbelt markets, which represents over 94-95% of our deal flow. We're seeing you know market rents move north in almost every case so at this point so it's really has spread the imbalance throughout the country. I think that's a result of several items we talked about before.

The volume of activity between our coastal and sunbelt markets, which represents over 90, 495% of our deal flow.

We're seeing.

Rents move north in almost every case so at this point. So it's really has spread in your balance throughout the country and I think that as a result of several items, we've talked about before obviously no any development supply urban inventory getting absorbed relatively quickly.

Speaker 7: of an inventory getting absorbed relatively quickly. Retailers fully appreciating the value of open air and wanting to grab market share and or enter and or expand their growth.

Taylor its fully appreciating the value of open air and wanting to grab market share and or enter.

And our expand their growth.

Speaker 7: in open air that otherwise may have been a little bit muted in the past. So I think when you combine those all that's putting some nice demand forces in our favor that we...

In open air that otherwise may have been a little bit you did in the past. So I think when you combine those all of that that's putting some nice demand forces in our favor that we can be.

Yeah, Greg that's another tool that we use right with data analytics to give us sort of a an advantage I would say on capital allocation understand maybe where.

Speaker 1: Yeah, Greg, that's another tool that we use with data analytics to give us...

Speaker 1: sort of an advantage I would say in capital allocation to understand maybe where the market has yet to reflect some of the pricing power that we see. Obviously Sunbelt gets a lot of air time and clearly there's a lot of rent growth going on down there, but there are other markets where we see rent growth that potentially is not yet reflected in pricing that we can take advantage of.

The market has yet to reflect some of the pricing power that we see.

Sun belt gets a lot of airtime and clearly there's a lot of rent growth going on down there, but there are other markets, where we see rent growth that potentially is not yet reflected in pricing that we can take advantage of them.

Okay. Thank you.

Speaker 4: And the final question today comes from Katie McConnell with city. Please go ahead.

And the final question today comes from Katy Mcconnell with Citi. Please go ahead.

Hey, it's Michael Bilerman.

Speaker 5: It's Michael Bellarmine. I see page 28 in the supplemental where you broke out all the entitlement projects. Thank you for doing that. It's pretty comprehensive. How does that tie to page 26 and then ultimately page 43 where you sort of value the entitlements today at least that are active into

The page 28 in the supplemental where you broke out all the entitlement projects. Thank you for doing that it's a pretty comprehensive.

How does the how.

How does that tie to page 26, and then ultimately page 43, where you sort of value. The entitlements today at least that are active.

To page 26 on page 43, you have it at about 4400 units in keys, whereas page 28, only breaks up the entitlement that you know.

Speaker 5: Page 26 and page 43 have it at about 4,400 units and keys, whereas page 28 only breaks up the entitlement at, you know, at that 3,400. So I don't know where those other 1,000 units are coming from.

But that 3400.

We know where those other thousand units are coming from.

Speaker 16: Maybe that's some that are undergoing entitlement that have more of a certainty. Can you just reconcile that?

Maybe that's some that are undergoing entitlement that have more of a certainty but can you just reconcile that.

Speaker 7: Yeah, you know from there there's there's there's two parts to it So so one of which I actually mentioned earlier where you have the the Camino Square and you have the Avery part two Which is over 600 entitled units that are actually our spend is fully completed so you won't see it reflected in the active Mixed-use page which is just in Milton right now but those are accounting for a portion of that Delta and then the other ones that are

Yeah no problem there there's there's there's two parts to it so one of which actually mentioned earlier, where you have the Camino square and you had the avian part two which is over 600 entitled units that are actually our spend is fully completed so you won't see it reflected in the active mixed use stage, which has just been built in right now.

But those are accounting for a portion of that Delta and then the other ones that are.

Speaker 7: undergoing entitlements that wouldn't necessarily be reflected on that page. But that's effectively where you're getting the tie-out.

Undergoing entitlement.

Necessarily be reflecting on that page, but that's effectively where youre getting the tie out.

Speaker 1: Those are ground leases, Michael. So that's why our spend is like pad prep and then it's over. So that's why you don't see that.

Well those are ground leases Michael So that's why I say this you know our spend is like pad prep and then it's over so that's why you don't see that.

Speaker 16: Yeah, I was going to get those on page 26, right? At 37.95, multifamily count. And then you flip to page 28 and it's at 2856.

It does.

Page 26, 37, 95 multifamily count and then you flip to page 28 28 56.

Speaker 7: Right, and then you have 2200, then you have another 1000 or so that are currently under construction.

Right and then you have 2200, then you have another 1000 or so that are currently under construction.

Okay. Okay.

I guess is there whats the potential that some of these projects get launched this year. So that when we look at page 26, you're sort of active mixed you starts to grow.

Speaker 16: I guess, is there, what's the potential that some of these projects get launched this year so that when we look at page 26 your sort of active mixed use starts to grow?

Speaker 7: Yeah, so I mean, we're evaluating, you know, when you look at the entitled projects, you go to page 28. So when you look at the 11 entitled projects that are on the pipeline there, there are two that are referenced that are currently have ground leases in place that are pending permit approval from the developers.

Yeah. So I mean, we're evaluating you know when you look at the entitled prior to actually go to the page 28. So when you look at the 11 entitled projects that are on the pipeline. There there are two that I referenced.

That are currently have ground leases in place that are pending permit approval from the developers.

Speaker 7: those could be opportunities to activate. In addition to that, we're evaluating probably three to five of those and you know again everything I've mentioned before market conditions, capital allocation, how we want to structure a deal, which ones we actually want to pull the trigger on.

This can be opportunities to activate in addition to that we're evaluating probably three to five of those and again everything I had mentioned before market conditions capital allocation, how we want to structure, a deal which ones that we actually want to pull the trigger on so.

Speaker 7: necessarily committing to a number today, but it's something that we're wanting to pursue.

Necessarily committing to a number today, but its something that were.

Wanting to wanting to pursue.

And all of the spend that you have been pursuing and put them into all of that the clean capitalize now and is there a certain balance of capitalized cost for these.

Speaker 16: And all the spend that you have in pursuing entitlements, all that's being capitalized now? And is there a certain balance of capitalized costs for these projects?

Projects.

Yeah, I mean, the capital that we're spending on those projects is definitely capitalize it goes into the you know the building basis for the asset.

Speaker 9: Yeah, I mean the capital that we're spending on those projects is definitely capitalized. It goes into the building basis for the asset.

Speaker 1: We're trying to have a balance, Michael, of how much we activate and how much we activate using ground leases as well as bringing in sort of a world-class multifamily developer. We've seen that it's a nice blend for us to not have too much capital going into these projects where we can continue to focus on FFO growth and activate more mixed-use opportunities without having to drag these lower return projects.

We're trying to have a balance might go up how much reactivate and how much we activate using ground leases as well as bringing in sort of a world class multifamily developer because we've seen that it's a nice blend for us to not have too much capital going into these projects, where we can continue to focus on.

F F O growth it activate more mixed use opportunities without having the drag of these these are lower return projects. So.

Speaker 1: So the Groundlies continues to be a nice way for us to probably set these projects up for future generations to collapse the ownership and have Kimco shareholders benefit from it long term.

The ground lease continues to be a nice way for us to probably set these projects up for future generations to collapse, the ownership and have kimco shareholders benefit from it long term.

Great.

Yeah.

This concludes our question and answer session I would like to turn the conference back over to David Bush Nikki for any closing remarks.

Speaker 4: This concludes our question and answer session. I would like to turn the conference back over to David Bushnicki for any closing remarks.

Speaker 6: Just want to thank everybody that participated on our call today. We hope you enjoy the rest of your day.

Just wanted to thank everybody that participated on our call today, we hope you enjoy the rest of your day. Thank you.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker 4: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Speaker 17: you

Okay.

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