Q2 2025 Kimco Realty Corp Earnings Call

Conor Flynn: Professionally. Blackstone has been a long-standing joint venture partner of ours, and our hearts go out to Wesley's family, friends, and everyone at Blackstone during this incredibly difficult time. On behalf of the entire KIMCO family, we extend our deepest condolences. Now, I'll start with a summary of our stellar Q2 highlights, and I'll provide an update on our strategy going forward and address the macroeconomic environment. We'll also follow with an update on the transaction market, and as usual, Glenn will provide details on our financial metrics and guidance. I'm pleased to report another quarter of consistent, high-quality execution, one that reflects the strength of our portfolio, the discipline of our strategy, and the exceptional efforts of the KIMCO team. Let's start with the key results. In the second quarter, we delivered funds from operations of 44 cents per diluted share, representing a 7.3% increase year over year.

Specially.

Blackstone has been a long-standing joint venture partner of ours and our hearts go out to Wesley's, family, friends and everyone at Blackstone during this incredibly difficult time.

on behalf of the entire Kymco family, we extend our deepest condolences

Now, I'll start with a summary of our Stellar Q2 highlights, and I'll provide an update on our strategy, going forward and address the macroeconomic environment. We're also follow with an update on the transaction market. And as usual, Glenn, will provide details on our financial metrics and guidance.

I'm pleased to report another quarter of consistent high-quality execution, 1 that reflects the strength of our portfolio, the discipline of our strategy, and the exceptional efforts of the Kymco team.

Let's start with the key results.

Conor Flynn: We continue to see strong property-level fundamentals, with robust tenant demand translating into a blended pro-rata leasing spread of 15%, our highest in nearly eight years. We also achieved a new all-time high in small shop occupancy of 92.2%, a clear indicator of the ongoing demand for well-located, necessity-driven retail. I also want to highlight the continued momentum in the RPT portfolio, where small shop occupancy has climbed to 90.3%, up 190 basis points since the acquisition just last year, and up 90 basis points sequentially. These small shop leasing results reflect the strength of our leasing platform, driven by new prospecting tools, strong retailer relationships, national scale, and the targeted outreach we're doing through the portfolio review program.

In the second quarter, we delivered funds from operations of 44, cents, per diluted, share representing a 7.3% increase year-over-year. We continue to see strong property level fundamentals with robust tenant demand translating into a blended Pro leasing spread of 15% our highest in nearly 8 years.

We also achieved a new all-time high in small shop occupancy of 92.2%. A clear indicator of the ongoing demand for well-located necessity driven retail.

I also want to highlight the continued momentum in the rpt portfolio where a small shop occupancy is climbed to 90.3% up. 190 basis points. Since the acquisition just last year and up, 90 basis points sequentially.

Conor Flynn: In total, we executed 174 new leases for 916,000 square feet at an average spread of 34% and completed 332 renewals and options covering 1.8 million square feet at a 9.6% spread. Combined, these contributed to a blended spread of 15.2%, further reinforcing the pricing power and productivity of our centers. While overall pro-rata occupancy dipped slightly to 95.4%, largely due to the anticipated lease rejections from JoAnn and Party City, we had positive absorption that helped offset the impact of these vacates. Importantly, our team is doing a great job of capturing pent-up demand by quickly backfilling space that comes back to us. Specifically, with the Party City and JoAnn spaces, our team responded with speed and precision, as the majority of those locations are now either re-leased or under LOI, many at significantly higher rents.

These small shop leasing results. Reflect the strength of our leasing platform driven by new prospecting tools, strong retailer relationships, national scale and the targeted Outreach. We're doing through the portfolio review program.

In total we executed 174 new leases for 916,000 square feet at an average spread of 34% and completed. 332 renewals and options covering 1.8 million square feet at a 9.6% spread combined these contributed to a blended spread of 15.2%. Further reinforcing the pricing power and productivity of our centers

while overall, Prada occupancy, dip slightly to 95.4%, largely due to the anticipated lease rejections from Joanne and Party City. We had positive absorption, that helped offset the impact of these vacates

Importantly, our team is doing a great job of capturing pent-up Demand by quickly backfilling space. That comes back to us.

Conor Flynn: This quarter, we also leveraged market dislocation to drive additional grocery-anchored conversion, advancing our long-term strategy. This is where KIMCO excels, upgrading tenancy and enhancing portfolio strength. As a result, 86% of our annual base rent now comes from grocery-anchored shopping centers, an all-time high that underscores the essential and resilient nature of our portfolio. In addition to driving leasing velocity, we're focused on enhancing execution through innovation. We're deploying AI in targeted high-impact areas, reducing costs, increasing speed, and supporting growth. We've significantly accelerated lease abstraction, freeing up internal resources and improving accuracy. Our teams are also piloting AI tools to enhance small shop tenant prospecting and streamlining early-stage redevelopment planning, both of which support leasing momentum and long-term value creation. These applications are already generating measurable returns and strengthening the foundation for future performance.

Specifically with the Party City in Joanne spaces. Our team responded with speed and precision as the majority of those locations are now either released or under Loi many at significantly higher rates,

This quarter. We also leveraged Market, dislocation to drive additional grocery anchored conversion advancing, our long-term strategy

This is where Kymco excels upgrading Tenney and enhancing portfolio strength.

As a result 86% of our annual base. Rent now comes from grocery anchor, shopping centers, an all-time high, that underscores the essential and resilient nature of our portfolio.

in addition to driving leasing velocity or focus on enhancing execution through innovation,

we're deploying Ai and targeted high impact areas, reducing costs increasing speed and supporting growth.

We have significantly accelerated lease abstraction freeing up internal resources and improving accuracy.

Our teams are also piloting, AI tools to enhance. Small shop tenant prospecting and streamlining early stage Redevelopment planning, both of which support leasing momentum and long-term value creation.

Conor Flynn: Further, we continue to build embedded growth that Glenn will speak to through our signed but not yet open pipeline. This visibility into future rent commencements reinforces the value of our real estate and gives us confidence in our annual base rent trajectory, particularly in today's more dynamic environment. Turning to capital allocation, we remain disciplined and strategic on how we deploy capital. This quarter, we continue to execute on our capital recycling strategy, monetizing low-growth assets and positioning the portfolio for stronger long-term performance. Private capital interest in our sector remains robust, but we're underwriting carefully and maintaining a high bar for new acquisitions. Our structured investment program continues to deliver attractive risk-adjusted returns and serves as a pipeline for future fee-simple opportunities. Ross will elaborate on those. On the balance sheet, we remain in a position of strength.

These applications are already generating measurable returns and strengthening the foundation for future performance further. We continue to build embedded growth that Glenn will speak to through our sign, but not yet, open pipeline. This visibility into future rent commencements reinforces the value of our real estate and gives us confidence in our annual base rent trajectory, particularly in today's more dynamic environment.

turning the capital, allocation

We remain disciplined and strategic on how we deploy Capital. This quarter, we continue to execute on our Capitol. Recycling strategy, monetizing low growth assets and positioning the portfolio for stronger long-term performance.

Private Capital interest in our sector remains robust, but we're underwriting carefully and maintaining a high bar for new acquisitions.

Conor Flynn: We took proactive steps this quarter to enhance flexibility and position ourselves for growth, including a well-timed debt issuance and an opportunistic use of our share repurchase program. Based on our strong first-half performance and the lease-up visibility we have ahead, we've increased our confidence in our full-year outlook. Glenn will walk through the updated guidance in a moment, but the message is clear: we are executing ahead of plan and converting leasing momentum into durable cash flow that could grow FFO over 5% for the second consecutive year. To wrap up, we're operating from a position of strength, with three clear priorities guiding our continued success. First, continue to drive leasing velocity and accelerate rent commencements from our signed pipeline. Next, backfill return space with stronger, higher credit operators. And finally, allocate capital with discipline while maintaining the strength and flexibility of our balance sheet.

Our structured investment program continues to deliver attractive risk, adjusted returns, and serves as a pipeline for future fee. Simple opportunities, Ross will elaborate on those, on the balance sheet. We remain in a position of strength. We took proactive steps, this quarter to enhance flexibility and position ourselves for growth including a well-timed debt issuance and an opportunistic use of our share repurchase program.

Based on our strong first half performance. And the lease of visibility we have ahead, we've increased our confidence in our full year outlook.

We are executing ahead of plan and converting leasing momentum into durable cash flow. That could grow ffo over 5% for the second consecutive year to wrap up or operating from a position of strength with 3. Clear priorities, guiding our continued. Success first continue to drive leasing velocity and accelerate rent commencements from our signed pipeline.

Next backfill, return space with stronger, higher credit operators.

Conor Flynn: With record demand, limited new supply, and a robust pipeline of rent commencements on the horizon, we believe KIMCO, with our open-air grocery-anchored shopping centers and well-located markets, is positively positioned to deliver growth and value creation at the upper end of the shopping center sector. Thank you to our incredible team for their continued dedication and execution, and to our shareholders for your continued support. With that, I'll turn the call over to Ross for an update on the transaction market, followed by Glenn with our financial results and updated outlook.

And finally allocate Capital with discipline, while maintaining the strength and flexibility of our balance sheet.

With record demand limited new Supply, and a robust pipeline of rent, commencements on the horizon We Believe Kymco with our open are gross Rancor. Shopping centers of well-located markets is positively positioned to deliver growth and value creation at the upper end of the shopping center sector.

Thank you to our incredible team, for their continued dedication and execution into our shareholders, for your continued support.

With that, I'll turn the call over to Ross for an update on the transaction Market, followed by Glenn with our financial results and updated Outlook.

Ross Cooper: Thank you, Conor. I hope everyone is enjoying their summer. The second quarter was one marked with uncertainty and volatility. However, it also presented tremendous opportunities for KIMCO, given our broad investment strategy, along with a strong, well-capitalized balance sheet, great liquidity, and extensive industry relationships. As a result, we are benefiting from meaningful deal flow, a key differentiator for us that we are very excited about. Early in the quarter, we saw several acquisitions that other groups had tied up get dropped amid the uncertainty. Lenders also acted cautiously due to the potential tariff impacts. This was a window of opportunity for us to lean into our conviction in open-air retail. We utilized our structured investment program to offer solutions to borrowers in need of capital. We issued two senior mortgages on high-quality grocery-anchored and lifestyle assets, with a writer-first offer on both properties.

Thank you, Connor. I hope everyone is enjoying their summer.

The second quarter was marked with uncertainty and volatility. However, it also presented tremendous opportunities for Kimco given our broad investment strategy, along with a strong, well-capitalized balance sheet, great liquidity, and extensive industry relationships.

As a result, we are benefiting from meaningful deal flow. A key differentiator for us that we are very excited about

Early in the quarter, we saw several acquisitions that other groups had tied up get dropped amid the uncertainty.

Lenders also acted cautiously due to the potential tariff impacts.

Ross Cooper: A portion of the funding for these investments came from the repayment of a pair of mezzanine financing positions on former RPT assets. For the quarter, the net investment on the structured investment side was just under $20 million. Additionally, during the quarter, we sold a long-term flat lease for $49.5 million on a Home Depot parcel in Santa Ana, California, at a 5.7% cap rate. As we have indicated previously, we anticipate recycling capital from these flat leases and non-income-producing parcels into higher-yielding, higher-growth investments. Our goal is to sell between $100 million to $150 million in the 5% to 6% cap rate range for these types of properties annually going forward, and this transaction puts us on a good path for 2025.

This was a window of opportunity for us to lean into our conviction and open are retail. We utilized our structured investment program to offer solutions to borrowers in need of capital. We issued 2, senior mortgages on high-quality grocery, anchored, and lifestyle assets with a right of first offer on both properties.

A portion of the funding for these Investments came from the repayment of a pair of Mezzanine Financing positions on former rptt assets.

For the quarter, the net investment on the structured investment side was just under $20 million.

Additionally during the quarter. We sold a long-term flat lease for 49.5 million on a Home Depot. Parcel in Santa Ana California at a 5.7% cap rate.

As we have indicated previously, we anticipate recycling capital from these flat leases and non-income producing Parcels into higher yielding higher growth Investments.

Our goal is to sell between 100 million to 150 million in the 5 to 6% cap rate range for these types of properties annually, going forward, and this transaction puts us on a good path for 2025.

Ross Cooper: Specific to the Home Depot parcel, we elected to designate this as a 1031 exchange to defer the gains on the sale and have already identified a grocery-anchored property as a replacement. The exchange property is expected to close in the third quarter with a compound annual growth rate of approximately 3%, which is significantly higher compared to the Home Depot that had a roughly 1% CAGR. Since the Vegas ICSC conference in late May up through today, investor apprehension related to acquiring core assets has mostly subsided as concerns related to the tariffs have been tempered. This has manifested with aggressively priced assets transacting, supported by an extremely competitive landscape on the debt and equity side, an abundancy of private capital that is ready to come off the sidelines, as well as the anticipation of possible rate cuts in the second half of the year.

Specific to the Home Depot. Parcel we elected to designate this as a 1031 exchange to defer the gains on the sale and have already identified, a grocery anchored property as a replacement.

The Exchange property is expected to close in the third quarter with a compound annual growth rate of approximately 3%, which is significantly higher compared to the Home Depot. That had a roughly 1% Kerr.

Since the Vegas icsc conference, in late May up through today, invest their apprehension related to acquiring. Core assets has mostly subsided as concerns related to the tariffs have been tempered.

Ross Cooper: These factors, along with our current cost of capital, have limited our ability to accretively acquire. Despite this, we remain active in evaluating new acquisitions of shopping centers outright, and if we see a positive change in our cost of capital, we're positioned to go on offense. Regardless, we'll remain disciplined with our capital allocation. Furthermore, we have a healthy pipeline of new structured investment opportunities, which continue to provide a foothold into high-quality real estate at attractive returns with a chance to acquire in the future. As I mentioned, the capital markets are open, with financing available for the right sponsors and better real estate. As a result, we anticipate a few of our existing structured investment borrowers are either evaluating sales or refinancings that may result in repayments to us in the second half of this year. We remain very confident in our ability to structure deals creatively.

This is manifested with aggressively priced assets, transacting supported by an extremely competitive landscape on the debt and Equity side and abundancy of private Capital. That is ready to come off the sidelines as well as the anticipation of possible rate Cuts in the second half of the year.

These factors along with our current cost of capital have limited our ability to accreted.

Despite this we remain active in evaluating new acquisitions of shopping centers outright. And if we see a positive change in our cost of capital, we're positioned to go on offense.

Regardless, we'll remain disciplined with our Capital, allocation.

Furthermore, we have a healthy pipeline of new structured investment opportunities which continue to provide a foothold into high-quality, real estate at attractive returns with a chance to acquire in the future.

As I mentioned, the capital markets are open with financing available for the right sponsors and better, Real Estate.

As a result, we anticipate a few of our existing structured investment borrowers are either evaluating sales or refinancing that may result in repayments to us in the second half of this year.

Ross Cooper: This outside-the-box approach continues to provide us with unique access to a number of other exciting structured investment opportunities, and as I mentioned, we have a solid pipeline of new investments that we anticipate closing in the back half of the year to offset any potential repayments. Overall, we remain disciplined in our approach to capital allocation, prioritizing the sale of low-growth, low-cap rate assets accretively into new investment opportunities with a higher growth profile. Between our existing pipeline and those that materialize during the rest of the year, we aim to remain a positive net acquirer as we were through the first half of 2025. Now to Glenn for the financial results and updates to 2025 outlook.

Back half of the year to offset. Any potential. Repayments overall. We remain disciplined in our approach to Capital allocation prioritizing. The sale of low growth low, cap rate assets ACC creatively into new investment opportunities with a higher growth profile.

between our existing Pipeline and those that materialize during the rest of the year, we aim to remain a positive, net acquire, as we were through the first half of 2025,

now, to Glenn for the financial results and updates to 2025 Outlook,

Glenn Cohen: Thanks, Ross, and good morning. The strength and durability of KIMCO's open-air platform resulted in another quarter of solid performance. We again delivered strong per-share FFO growth, broad-based leasing momentum, and ended the quarter with over $2 billion of available liquidity. Let me walk you through the quarter. FFO was $297.6 million, representing a per-share increase of 7.3% to 44 cents per diluted share, compared to 41 cents per diluted share in the second quarter of last year. This growth was driven primarily by a $20.8 million increase in pro-rata NOI, which reflected higher minimum rents, stronger net recoveries, and a 21 basis point improvement in credit loss, which came in at 89 basis points for the quarter. Year to date, credit loss stands at 72 basis points, highlighting the durability of our tenant base. We also saw a $4.8 million incremental contribution from our structured investment program this quarter.

thanks for us and good morning, the strength and durability of Kim seos. Open Air Platform, resulted in another quarter of solid performance. We again, delivered strong per share ffo growth broad-based, leasing momentum and ended the quarter with over 2 billion dollars of available liquidity.

Let me walk you through the quarter.

Ffo was 297.6 Million representing a per share, increase of 7.3% to 44 cents per diluted. Share compared to 41 cents per diluted share in the second quarter of last year.

This growth was driven primarily by a 20.8 million increase in Pro rata and oi which reflected higher minimum rents stronger. Net recoveries and a 21 basis point Improvement in credit loss, which came in at 89 basis points for the quarter.

Year to date. Credit loss stands at 72 basis, points, highlighting the durability of our tenant base.

Glenn Cohen: Offsetting these positives was a $7.9 million increase in consolidated interest expense tied to our 2024 and 2025 refinancing activity. Additionally, we recorded a one-time accounting benefit of one penny per share, primarily driven by $4.7 million in joint venture income from the conversion of a legacy JV structure to an LLC, as well as approximately $2 million from the recapture of below-market rent on a vacated JoAnn space. First half FFO totaled $599.5 million, or 88 cents per diluted share, a 10% increase over the first half of 2024. Turning to operations, as Conor mentioned, this was another strong quarter for leasing across the portfolio, with tenant demand translating into healthy spreads and record small shop occupancy. Same-site NOI increased 3.1%, driven by contractual rent growth, contributions from ancillary income, and further improvement in credit loss. The signed but not yet open pipeline remains a key growth driver.

We also saw a $4.8 million incremental contribution from our structured investment program this quarter.

Offsetting these positives was a 7.9 million increase in Consolidated interest expense tied to our 2024 and 2025 refinancing activity. Additionally, we recorded a 1-time accounting benefit of 1 penny per share.

Primarily driven by 4.7 million in joint venture income from the conversion of a legacy JV structure to an LLC as well as a proximately 2 million from the recapture of below Market rent. On a vacated jo-an space. First half ffo totaled, 599.5 million or 88 cents per diluted. Share a 10% increase over the first half of 2024

Glenn Cohen: We ended the quarter with a lease-to-economic occupancy gap of 310 basis points, representing approximately $66 million of ABR. We expect about 40% of that to commence in the second half of the year, which will contribute $7 million in incremental rent. Including commencements from the first half, we anticipate collecting $30 million of ABR in 2025 from the SNOW pipeline. The continued lease-up progress provides strong visibility into future earnings and reinforces the embedded growth across our portfolio. Shifting to the balance sheet, we took proactive steps this quarter to strengthen our financial flexibility. We opportunistically repurchased 3 million shares in April at an average price of $19.61, reflecting an FFO yield of 9% and a 24% discounted consensus NAV.

Turning to operations. As Conor mentioned, this was another strong quarter for leasing the portfolio with tenant, demand translating into healthy, spreads and record, small shop occupancy. Same sight, noi increased 3.1% driven by contractual rent growth contributions from ancillary income and further Improvement in credit loss the sign. But not yet opened pipeline remains a key. Growth driver, we ended the quarter with a lease to economic occupancy, gap of 310, basis points, representing a approximately 6.

56 million of ABR. We expect about 40% of that to commence in the second half of the year, which will contribute 7 million in incremental rent?

Including commencements from the first half, we anticipate collecting $30 million of ABR in 2025 from the snow pipeline.

The continued lease up progress provides strong visibility into future earnings and reinforces the embedded growth across our portfolio.

Glenn Cohen: We also completed a $500 million bond issuance in June, pricing a long 10-year note at 5.3%, reflective of a spread to treasuries of 92 basis points, our lowest issuance spread in many years. Proceeds were used to repay the $240.5 million Weingarten bond, pay down our revolver, and retain approximately $80 million for future accretive investment opportunities. We ended the quarter with consolidated net debt to EBITDA of 5.4 times and a look-through leverage ratio of 5.6 times. Liquidity remains robust at over $2.2 billion, including $228 million of cash on hand. Now, turning to guidance, based on our strong first half results and improved visibility into lease-up and cash flow timing, we are raising our FFO per share range to $1.73 to $1.75, representing annual growth of 4.8% to 6.1% over 2024.

Shifting to the balance sheet, we took proactive steps this quarter to strengthen our financial flexibility. We opportunistically repurchased, 3 million shares in April, and an average price of $19.61 reflecting an ffo yield of 9% and the 24% discount that consensus nav. We also completed the million dollar Bond issuance in June pricing. A long 10-year note at 5.3% reflective of a spread to treasuries of 92 basis points. Our lowest issue in spread in many years,

Proceeds were used to repay the $240.5 million Wine Garden bond pay down, reduce our revolver, and retain approximately $80 million for future accretive investment opportunities.

We ended the quarter with Consolidated net debt to ibida of 5.4 times and a look through leverage ratio of 5.6 times. Liquidity remains robust at over 2.2 billion, including 228 million of cash on hand.

Glenn Cohen: We're also raising our full-year same-site NOI growth outlook to 3% or better, 50 basis points above our prior guidance. This updated range incorporates the impacts of lease rejections we've already absorbed. All other guidance assumptions remain unchanged. In closing, I want to thank our associates for their outstanding execution. The embedded rent growth in our portfolio, combined with a conservative balance sheet and consistent performance, continue to position KIMCO as a top-tier REIT capable of delivering through a variety of market cycles. And with that, we're happy to answer your questions.

We've already absorbed.

What are the guidance? Assumptions? Remain unchanged in closing. I want to thank our Associates for their outstanding execution.

The embedded rent growth in our portfolio, combined with a conservative balance sheet and consistent performance, continues to position Kimco as a top-tier REIT capable of delivering through a variety of market cycles.

And with that what happened to answer your questions?

Operator: Thank you. If you would like to ask a question, please press star followed by one on the telephone keypad. If for any reason you'd like to remove your question, press star followed by two. Again, to ask a question, press star one. As a reminder, you are only allowed to ask question one, and if you have any follow-up questions, please press star one again. And if you're using a speaker phone, please remember to pick up your handset before asking a question. We'll pause here briefly as questions are registered. Our first question comes from Michael Goldsmith with UBS. You may proceed.

Thank you, if you would like to ask a question, please press star, followed by 1 on the telephone keypad. If for any reason you'd like to remove your question, press star, followed by 2 again to ask a question. Press star 1 as a reminder. You are only allowed to ask question once. And if you have any follow-up questions, please press star 1 again. And if you're using a speaker phone, please remember to pick up your handset before asking a question, we'll pause here briefly as questions are registered.

Our first question comes from Michael Goldsmith with UBS. You may proceed.

Analyst: Good morning. Thanks for offering to take my questions. Really solid same company NOI growth in the first half of 3.5%, second quarter at 3.1%, but the guidance implies trends decelerate in the second half to 2.5%. So can you help us understand the puts and takes for the outlook for the back half, and maybe within that, just talk about kind of the occupancy trajectory that's anticipated within that. Thanks.

Good morning. Thanks a lot for taking my questions, uh, really solid same property and a lot of growth in the first half of 3 and a half percent second quarter, uh, at 3.1%, but the guidance implies Trends decelerate in the second half to 2 and a half percent. So can you help us understand the puts and takes for the outlook for the back half. And maybe, uh, with that just talked about kind of the, the occupancy trajectory uh, that's anticipated within that. Thanks.

Glenn Cohen: Sure. Thanks. Good morning, Michael. Just so we increased our annual guide to 3% or better. Again, and that's coming off those 2% or better at the beginning of the year. And really, it's based on just the positive operating performance of the operating portfolio. You know, we've seen we have seen quicker rent commencements from the SNOW pipeline, which has added another $5 million since the original guidance. We have now accounted really for the impact of the Party City and JoAnn bankruptcies, which will have a much more much more impact during the second half of the year, as we'll be we're down about $5 million per quarter from those vacancies due to the bankruptcies. But you know, having said all that, we're very confident that we'll be able to achieve the 3% or better level for the full year.

Glenn Cohen: Again, you know, same-site NOI, it's a full-year guide number, and it takes into account any of the comps from last year.

Analyst: And then from an occupancy standpoint, we definitely feel like Q2 was the trough as we look at the back half of the year with Q3 and Q4 already generating incredible momentum. Obviously, when you look at the small shop occupancy up to 92.2, a new record high for the company is incredible and impressive. And what's most impressive about that, actually, is about over the first half of this year, we've leased about 100,000 square feet of vacancy that's been vacant for over three years. And I think that's just a further demonstration of the demand for quality product and retailers and operators really looking to enter and participate in KIMCO shopping centers. So really pleased with sort of where we are today and our expectations for the back half of the year.

Sure, thanks. Good morning, Michael. Um, just so so, we we increase our annual guide to 3% or better again, and that's coming off of 2% or better at the beginning of the year. Um, you know, it's really it's based on just the positive operating performance of the operating portfolio. You know, we've seen, we have seen quicker, rent commencements, uh, from the snow pipeline, which is added in another 5 million dollars. Since the original guidance, we have now, accounted really for the impact of the Party City in Joanne bankruptcies, which you'll have a much more much more impact during the second half of the year, as we'll be, uh, you know, we're down about 5 million dollars per quarter uh from uh from those from those vacancies due to the bankruptcies. But you know, having said all that but we're very confident that we'll be able to achieve the the 3% or better level for the full year again you know, same side. I don't know why. It's, it's a full year guide number, um, and it takes into account any of the comps from last year. And then from, um, from an

Standpoint, we definitely feel like Q2 was the trough. Um, as we look at the back half of the year with Q3 and Q4 already, um, generating an incredible momentum. Um, obviously when you look at the small shop documents, see up to 922% of this year, but we've used about 100,000 square feet of vacancy. That's been vacant for over 3 years and I think that's just a further demonstration of the demand for, uh, quality product and, um, and and retailers and operators really looking to, uh, enter and participate in in a Kymco shopping center. So really pleased with sort of where we are today and, and our expectations through the backup here.

Operator: Thank you. Our next question comes from the line of Alexander Goldfarb with Piper Sendler. You may proceed.

Thank you. Our next question comes from the line of Alexander Goldfarb with Piper Sandler.

You may proceed.

David Jamieson: Thank you. And good morning out there. Just a question on the structured finance book, the debt-first equity book. I think you said that you're expecting some repayments in the back half. So two parts on this. One, presumably your guidance includes the impact of those repayments. And then two, you know, some of the other REITs in REIT land are scaling back the debt and preferreds just, you know, because what they perceive as volatility. Sounds like you guys think there's ample runway on it. So just want to get a sense of if you think that this business is sustainable, you know, at a run rate or if your view of this business is it's more moment in time where there's an opportunity at one point, another point it gets scaled back because there's opportunities that don't exist.

Uh, thank you and uh, good morning out there. Uh just a question uh on the on the structured Finance book, The Debt for Equity book. Uh I think you said that you're expecting some repayments in the back half. So 2 parts on this 1 includes the impact of those repayments and then 2 you know some of the other REITs in Reidland or scaling back uh the debt and preferred just you know because what they perceive as volatility sounds like you guys think there's ample runway on it. So just want to get a sense of

David Jamieson: Just trying to understand how this factors into your FFO going forward.

If you think that this business is sustainable, you know, at a run rate, or if your view of this business is, it's more a moment in time where there's an opportunity at one point. At another point, it gets scaled back because those opportunities don't exist. Just trying to understand how this factors into your FFO going forward.

Analyst: Sure. Thanks, Alex. Yeah, to answer the first part, our guidance absolutely incorporates any expectation of repayments and new capital that we put out. Now, we do think that this is a business that has viability through all parts of the cycle. You know, we've seen tremendous opportunity. We continue to see the pipeline growing. And I think that whether, you know, interest rates are up or down, there's always going to be a need for this capital. There are very few operators on the institutional side that are providing this capital. So we think it's a real differentiator for us. Now, the way that we underwrite the deals, we look at it through the lens of an operator, through the lens of an acquirer, not too dissimilar from the way that we underwrite when we're looking to acquire an asset outright.

Sure, thanks Alex. Um yeah for to answer the first part that our guidance absolutely incorporates any expectation of of repayments and and New Capital that we put out.

Analyst: So we're extremely disciplined with the real estate that we're willing to invest in. And to the extent that we continue to see opportunities in real estate that we like, sponsors we like, and continue to get that foot in the door with the writer-first offer or the writer-first refusal, we do anticipate that we'll continue to scale the business. That being said, there's going to be ins and outs quarter to quarter. But when you look at it through an annualized basis, we anticipate that we will be net sort of positive investors in this program on a go-forward basis.

There's always going to be a need for this Capital. There are very few operators on the institutional side that are providing this Capital. So we we think it's a real differentiator for us, you know, the way that we underwrite the deals and we look at it through the lens of an operator through the lens of of an acquirer not too dissimilar from the way that we underwrite when we're looking to acquire an asset outright. So we're extremely disciplined with the real estate that we're willing to invest in.

David Bujnicki: The only thing I would add, Alex, is we're really being paid to wait because we're focused on that writer-first refusal of a future acquisition pipeline. And it's a really nice offering for us to be able to identify assets we want to own, potentially assets that may come to market, but it's a nice way to get our foot in the door on some generationally owned assets where they rarely trade, and we get a last look at it if they do come to market, which in this competitive set that you know how competitive it is out there on the acquisition front, it's nice to be in a position where we get last look on a pretty significant pipeline of opportunities, which is a big differentiator for us.

And to the extent that we continue to see opportunities in real estate that we like the sponsors we like and continue to get that foot in the door with the right of first offer the right of first refusal. We we do anticipate that we'll continue to scale the business that being said, there's going to be ins and outs quarter to quarter but when you look at it through an annualized basis, we anticipate that we will be net. Sort of positive investors in this program on a go forward basis.

The only thing I would add Alex is we're we're really being paid to wait because we're focused on that right of first refusal of a future acquisition Pipeline and it's a really nice um, offering for us to be able to identify assets. We want to own potentially assets that may come to Market, but it's a nice way to get our foot in the door, on some generationally owned assets, where they rarely trade and we get a last look at it, if they do come to Market, which in this competitive set. But you know how, how competitive is out there on the acquisition front, it's nice to be in a position where we get last, look on a pretty significant pipeline of of opportunities, which is a big differentiator for us.

Operator: Thank you. Your next question comes from Greg Martinis with Scotiabank. You may proceed.

Thank you. Your next question comes from. Greg matinis with disclosure Bank.

You may proceed.

Analyst: Hey, good morning. Given the more aggressive pricing and institutional investor interest in grocery-anchored shopping centers, is there any desire to expand the JV platform to help fund acquisitions that you're currently priced out of given the cost of capital? Or have your current partners talked about making additional investments in the relationships you already have?

Hey, good morning.

Uh, given the more aggressive pricing and Institutional Investor interest in grocery anchor, shopping centers. Is there any desire to expand? The JB platform to help fund Acquisitions that? You know, you're currently priced out of given the cost of capital or have your current Partners talked about making additional Investments. Uh, in the in the relationships you already have.

David Jamieson: Yeah, it's a great question. And I think we like to think of it as a tool in our tool belt. We always have the opportunity with some really wonderful partners, some of which are looking to expand within retail, other new potential partners that have expressed interest in co-investing with us. So, you know, we continue to have those conversations. You know, where we sit today, we think that we've taken an appropriate approach to capital allocation in terms of selling some lower growth, lower cap rate assets and then redeploying that into higher growth opportunities, primarily with grocery-anchored. So, as we indicated, you know, we have identified a 1031 exchange for the Home Depot sale that occurred in the second quarter. And that will be something that we can acquire on our own, a grocery-anchored asset with a 3% plus CAGR.

David Jamieson: So, to the extent that we can recycle sort of internally and into wholly owned assets, we'll continue to do that, but also have the optionality in the future of considering scaling the joint venture program.

Yeah, it's a great question, and I think we, we like to think of it as a tool in our tool belt. We always have the opportunity with some really, um, wonderful Partners. Some of which are looking to expand within retail other new potential partners that have expressed interest in co-investing with us. So you know we continue to have those conversations. You know, where we sit today we we think that we've taken inappropriate approach that's a capital allocation in terms of selling some lower growth lower cap rate assets and then redeploying that uh into higher growth opportunities, primarily with grocery anchored. So as we indicated you know, we we have identified a 1031 exchange for the Home Depot sale that um that occurred in the second quarter and that will be something that we can acquire on our own a grocery anchored asset with a 3% plus kagar. So, to the extent that we can recycle sort of internally

Into wholly owned assets, we'll continue to do that but also have the optionality in the future of considering scaling the the joint venture program.

Operator: Thank you. The next question comes from Samir Khanna with Bank of America. You may proceed.

Thank you. The next question comes from. Samir Cana. With Bank of America, you may proceed.

Analyst: Good morning, everybody. Hey, Conor, as part of guidance, I know the term fees went up. Maybe elaborate kind of the type of tenants category that's driving this number higher and maybe along the same lines, talk about sort of the, you know, the watch list sort of into next year, especially given some of the, you know, looks like some of the concerns around tariffs have subsided, but maybe talk around that as well. Thank you.

Good morning everybody. Um, hey Connor. Um, as part of guidance, I know the term fees went up, maybe elaborate kind of the type of tenants category.

that's driving this number higher and maybe along the same lines talk about sort of the

you know, the the watch list sort of in the next year especially given some of the, you know, um, looks like some of the concerns around tariffs have subsided, but

Maybe talk around that as well. Thank you.

David Jamieson: I'll take the LTA question, Samir. So it's actually primarily driven by one LTA we received that's associated with a large redevelopment that we're in the process of. We've already gone through the entitlement, so going through the permit process and documentation process right now. So it was a big chunk that enabled us to get access to land to move forward with the program. So that was really the primary driver. A lot of other stuff, you know, just regular course of business, you know, smaller LTAs, and we have that kind of backfills ready to go when a tenant wants to get out. So no real trend there of note.

I'll take the um, I'll take the LTA, uh, question to mirror. So it, it's actually primarily driven by, by 1 LT. We received that dissociated with a large Redevelopment that were in the process of, um,

David Jamieson: As it relates to the, you know, the outlook for '26, with our watch list tenancy, obviously it continues to narrow, I think, because of the second, you know, second round of bankruptcies that have sort of flushed through the system over the last couple of years as we've recently seen with Rite Aid being the most recent that just went to auction last week. On a go-forward basis, there's a handful of tenants we continue to watch. Our exposure in '26 is relatively limited on the rollover. We're already engaged with that, engaged with alternatives to backfill. So right now we're feeling pretty good about the outcome. The tariff, the tariff voice and concern from the first half of the year, I think, has more or less been muted at this point.

We've already gone through the entitlements so going through the, the permit process and documentation process right now. So it, it was a big chunk that enabled us to to get access to land to move forward with the with the program. So that was really the, the primary driver, a lot of other stuff, you know, just regular course of business, you know, smaller ltas, and we have that kind of back. Fills ready to go, um, when, when a tenant wants to get out. So so no real Trend there, um, of note, as it relates to the um, you know what, the the outlook for 26. Um,

David Jamieson: As you can see through our deal flow, over 175 new deals, which is incredible velocity in what we're seeing already in the July forecast and numbers for executed deals. Retailers are really looking at the opportunity to expand their market share and use the bankruptcy process as a means and a way to do that. You saw Ross last week really for the first time participate in the bankruptcy process. I think that's super interesting. Obviously, they want to grab some market share. We've seen other retailers starting to expand into new trade areas. You have Bob's Discount that's moving south. He's into the Florida region for the first time. So it's a fairly robust, healthy retail environment.

Phil. Um so right now we're feeling um, we're feeling pretty good about the outcome, the Tariff, the Tariff noise, um, and concern from the first half of the year I think is more or less been muted at this point. Um, as you can see through our deal flow over 175 New Deals.

Which is incredible velocity. And what we're seeing already in the July, um, forecast in numbers for executed deals, uh, retailers are really looking at the opportunity to expand their market share. Use bankruptcy process as a means in a way to do that. You saw Ross last week really for the first time participating in the bankruptcy process. I think that's super interesting obviously, they want to grab some market share, they seen other retailers. Starting to expand into to new trade areas, you have Bob's Discount that's moving South Houston into the Florida region for the first time. So it's a fairly robust, um, healthy retail environment.

David Bujnicki: I think just my last thing to add on the watch list tenancy, it's really the smallest it's ever been. And then when you dive into it a bit deeper, you know, as Dave mentioned, there's some really strong individual operators in some of these categories where the weaker performers are losing market share. And because of that lack of new supply, you're seeing some of the weaker, call it fitness operators be gobbled up by some of the stronger operators that are looking for growth. You see the same with, you know, obviously Michael's doing better since JoAnn's has filed. You've seen some of the soft goods players that are in the off-price category continue to do quite well as they're taking market share from department stores. So I think there's a real growing desire to grow their store fleet when they're healthy and operating at a high level.

I think just my last I need to add on the the watch list Tenney. Um it's really the smallest it's ever been and then when you dive into it a bit deeper, you know as Dave mentioned, there's some really strong individual operators in some of these categories where the weaker performers are losing market, share. And because of that, lack of new Supply. You're seeing some of the weaker call it Fitness operators. Be gobbled up by some of the stronger operators that are looking for growth. You see the same with um, you know, obviously Michael's doing doing better since Joann's is filed. You've seen some of the soft goods players that are in the the off price category. Continue to do quite well as they're taking market share.

David Bujnicki: And we continue to see with the JoAnn's and the Party City boxes the diversity of demand that we have. So whether it's the large anchor boxes, we've done a number of new deals and have a large pipeline with BJ's. You've got Dick's House of Sports. You've got Walmart. You've got Costco, Home Depot, Lowe's. You've got a number of big box players, including IKEA, doing deals with us. And then the junior box, you know, is very robust. That's where we see a tremendous amount of demand from not only the traditional off-price players, but grocers and others. And then our small shops continue to tick up as well. We're seeing deal volume elevate quarter over quarter, meaning that we have continued momentum to push that all-time high occupancy even higher.

David Bujnicki: So our focus is continuing to obviously execute, and that watch list tenancy is getting smaller and smaller, and those leases are typically significantly below market. So those are opportunities for us.

From department store. So there's I think there's a real growing desire to grow their Store Fleet when they're when they're healthy and and operating at a high level and we continue to see what the the Jo-Ann's and the Party City boxes. The the diversity of demand that we have. So whether it's the the large anchor boxes, we've done a number of New Deals and have a large Pipeline with, you know, BJ's you've got, uh, Dick's House of sports, you've got Walmart, you've got Costco Home Depot, Lowe's, you've got a number of big box players, including Ikea doing deals with us. And then the junior box, you know, is very robust. That's where we see a tremendous amount of demand from, not only the, the traditional off price Players, but Growers and others. And then our small shops continue to tick up as well. We're seeing feel volume Elevate, quarter over quarter, meaning that we have continued momentum to push, that all-time high occupancy even higher. So our focus is continuing to obviously execute and that watch. This tendency is getting smaller and smaller.

And and those leases are typically significantly below market. So those are opportunities for us.

Operator: Thank you. The next question comes from Ronald Comden with Morgan Stanley. You may proceed.

Thank you. The next question comes from Ronald condom with Morgan Stanley. You may proceed.

Analyst: Hey, just wanted to go back to the acquisition environment, just digging in a little bit more. Just can you talk about, is there more product out there in the market? It's just competition is so fierce, it's hard to sort of win deals. And you know, I guess when do you think that, you know, you would get to a point where KIMCO starts to maybe land more of these, sort of more of these transactions and so forth? So more product and what KIMCO needs to do to sort of land some of these deals. Thanks.

Hey, just wanted to go back to the acquisition environment. Just digging in a little bit more. Just can you talk about, is there more product out there in the market? Is just competition is so Fierce. It's hard to sort of win deals and, you know, I, I guess when do you think that, um, you know, you would get to a point where Kymco starts, uh, to maybe land, more of these, um, sort of more of these transactions and so forth. So more product and what Kymco needs to do uh to sort of blend some of these deals. Thanks.

David Jamieson: Sure. Yeah, we definitely saw some pent-up demand, so to speak, after a bit of a slowdown in April and the early parts of May. So going into the ICSC in Vegas in May and through the last couple of months, we've seen an increase of product in the market and definitely the demand continuing to increase. So I think you've seen it from a lot of our public tiers. You've seen it from the private institutions, a lot of very aggressively priced both single assets and portfolio in the market. You know, we've been very successful in terms of utilizing our ROFOs and our ROFRs, not just on the structured investment program, but also even within our joint venture program.

David Jamieson: So when you think about the amount of product that we have the first and/or the last look on, we have about $2 billion of gross asset value in the structured book and then upwards of $6 billion of assets within our joint venture program. So while we're going to continue to be very selective and it comes in waves as to when those opportunities present themselves, we do have the inside track on a tremendous amount of real estate. You know, we do look at assets that are being offered by third parties. Occasionally, we bid and we're successful in winning those deals. But the nice part about being able to exercise a ROFO or a ROFR is these are assets that we're invested in. In many cases, we already manage and we're involved in the operations.

Sure. Yeah, we definitely saw some pent up um demand so to speak after a bit of a Slowdown in April, in the early parts of May. So going into the, the icsc in Vegas and in May and through the, the last couple of months we've seen an increase of of product in the market and definitely the demand continuing to increase. So I think you've seen it from a lot of our, our public peers, you've seen it from from the private institutions. A lot of very aggressively priced both single assets and portfolio in the market. You know, we've been very successful um, in terms of utilizing our rofos and our roofers, not just on the structured investment program but also even within our joint venture program. So when you think about the amount of product that we have the first and or the last look on, we have about 2 billion dollars of gross asset value in the structured book and then upwards of 6 billion dollars of assets within our joint venture program. So while we're going to continue to be very selective and and it comes in waves as to when those oh

David Jamieson: So when you acquire one of those assets, there's virtually no new surprises. We know exactly what we're investing in. Whereas when you buy a third-party asset, there's going to be some good surprises. There's going to be some, you know, not so great surprises along the way. So we feel very comfortable acquiring from within assets that we're already involved and then selectively we'll take our spot where we want to buy from a third party.

David Bujnicki: I think Ross puts it correctly where we're poised to go on offense. But again, it all ties back to cost of capital. And so as you've seen us continue to be methodical and thoughtful about when to deploy capital accretively, it's really match funding recycling efforts we have to accretively grow from selling our flat ground leases. And if you give us a cost of capital advantage, I think Ross outlined the ability we have to really go on offense and grow externally. Right now, obviously, with where our stock is and where our cost of capital is, we continue to look internally and mine for recycling accretive opportunities.

Involved and then selectively we'll pick our spots where we want to buy from a third party.

I think Ross puts it correctly where we're poised to go on offense but again it all ties back to cost of capital. And so as you've seen us continue to be a methodical and thoughtful about when to deploy Capital creatively. It's really match funding recycling efforts. We have to creatively grow from selling our flat. Um ground leases. And and if you give us a cost of capital Advantage, I think Ross outlined the ability, we have to really go on offense and grow externally, but right now, obviously, with where our our stock is and where our cost of capital is we continue to look internally and mine for recycling a creative opportunities.

Operator: Thank you. The next question is from Michael Griffin with Evercore ISI. You may proceed.

Thank you. The next question is from Michael Griffin, with erakor isi, you may proceed.

Analyst: Great, thanks. Maybe just going back to the leasing pipeline and specifically on kind of small shop tenant demand, appreciate your comments there and the ability to kind of push on occupancy. But you know, can we break that down a little bit? I know about a quarter of that comes from those, you know, national retailers that probably have, you know, a longer timeframe that they need to realize to expand their real estate footprint. But for, you know, maybe some of those regional local players, you know, not necessarily mom-and-pops, but small businesses that might have more uncertainty kind of projecting out their financials amid the tariff situation, are you still seeing good demand from that cohort as well, or is it predominantly the national brands? Thank you.

Great, thanks. Um, maybe just going back to the leasing Pipeline and specifically on kind of small shop tenant demand. Appreciate your your comments there and and the ability to kind of push on occupancy, but you know, can we break that down a little bit? I know about a quarter of that comes from those, you know, National retailers that probably have, you know, a longer time frame that they need to realize to expand their real estate footprint. But for, you know, maybe some of those Regional local players, you know, not necessarily mom and pops but small businesses that might have more uncertainty, kind of projecting up.

Their financials amid. The the Tariff situation are you still seeing good demand from that cohort as well? Or is it predominantly the national Brands? Thank you.

David Jamieson: You know, great question. I think you're seeing a healthy demand across all categories as it relates to the financial strength from a corporate national to a regional to a local mom-and-pop. You know, again, they're looking to open their business. They're looking to, you know, this is their primary means in which to generate income. So they want to pick a great center, a great good tenancy, and partner with a landlord that has the funds and the means available to make sure and ensure that their business has the opportunity to thrive. So I think they continue to gravitate toward the KIMCO center and see that. You see a lot on the service side. I mean, you know, over 75% of our deals in the trailing four quarters have been service-related, and that's inclusive of, you know, restaurants, personal care, fitness, med.

David Jamieson: And so that is very much a combination of those that do franchises. Franchises is a very active broad category because it enables the operator to just focus on running the business while the franchisor helps develop and deliver the concept. And then on the restaurant, the QSR side, you know, we've seen significant uptick from last year to this year, almost 30, 40% higher. And you're seeing a lot of the trade-offs from the 1.0 to the 2.0 type QSR tenants with the Cavas, the Shake Shack, Racing Cane's, In-N-Out expanding, Chick-fil-A, obviously. So that's more on the national side. But yeah, we're seeing that healthy balance across those three brand categories.

You know, great. Great question. I, I think you're seeing a healthy demand, across all, all categories, as it relates to, um, the financial strength from uh, from a corporate National, to a regional, to a local Mom and Pop. Um, you know, again there they they're looking to open their business. They're looking to, you know, this is their primary means in which to generate income. So they want to pick a great Center, uh, a great, good Tenney and and partner with a landlord that has the, the funds. And the means available to make sure and ensure that their business has the opportunity to thrive. So I think they continue to gravitate toward the Kymco Center and see that, um, you see a lot of the service side. I mean, you know, over 75% of our deals and the trailing 4 quarters have been service related and that's inclusive of, you know, restaurants Personal Care Fitness meds. And so that is very much a combination of those that do franchises. Franchises is are is a very active broad category because it enables the operator to just focus on running the business while the franchise or helps to develop and deliver the concepts.

and then on the restaurant, the qsr side, you know, we've seen significant uptick, um,

David Bujnicki: The deal volume on the small shop side was 155 small shop deals. So when you think about the run rate, typically per up is usually, you know, right around 115, call it. So it is elevated going, you know, and continues to come from, you know, these are obviously spaces that, because we're at all-time high occupancies, these are spaces that may have been dark for a while, may have been vacant for a while. So you're seeing the breadth and depth of the demand, the ability for us to continue to push on the small shops because it's really all about services that are just exploding into the shopping center. You know, services that we love because it gets you, you know, off the couch, in your car, to the shopping center, and it has to be done in person. And it's very much an e-commerce-resistant type use.

From last year to this year, uh, almost 30, 40% higher, and you're seeing a lot of the trade out from the 1.0, to the 2.0, type, um, qsr tenants of the cavas, the Shake Shack Raising Canes in and out expanding Chick-fil-A, obviously. So, um, that's more on the national side. But yeah, we're seeing that healthy balance across across those 3, broad categories.

David Bujnicki: So we continue to like how the shopping center has evolved. And, you know, the small shop use case continues to gravitate and attract really best-in-class operators that are looking to connect with consumers more conveniently and provide a value proposition.

This deal volume on the small shops. Side was 100, 155 small shop deals. So when you think about the Run rate, typically for us is usually you know, right around 115, call it. So it is elevated going, you know, and continues to come from, you know. These are obviously spaces that because we're at all-time high occupancies. These are spaces that may have been dark for a while may have been vacant for a while. So you're seeing the breadth and depth of the demand, the ability for us to continue to push on the small shots because it's really all about services that are just exploding into the shopping center, you know, Services. I we love because it gets you, you know, off the couch in your car to the shopping center and it has to be done in person and it's very much an e-commerce resistant type use. So if we continue to like, how the the shopping center has evolved um and you know, the small shop use case continues to to gravitate and attract really best-in-class operators that are looking to connect with consumers more conveniently and provide a value proposition.

Operator: Thank you. Our next question comes from Craig Mailman with Citii. You may proceed.

Thank you. Our next question comes from Craig Millman with City. You may proceed

Analyst: Hi, this is Sydney McAntee on for Craig. So there's obviously been good progress on backfilling in the quarter. Just curious if there's any more color on the remaining Party Cities and JoAnn's being marketed. Are you getting interest from single tenants on those or considering splitting boxes or anything that would be helpful there? Thank you.

Hi, this is Sydney Mackenzie on for Craig so there's obviously been good progress on back. Filling in the quarter. Just curious if there's any more color on the remaining party cities in Joann's. Being marketed, are you getting interest from single tenants on those or considering splitting boxes or anything? That would be helpful there. Thank you.

David Jamieson: Yeah, we're still getting really strong interest on the single tenant backfill opportunities. Obviously, I mentioned a handful of tenants that are now expanding into some of the markets where these boxes reside. When you look at like when we say resolve between a signed executed at least or at, you know, a healthy stage of LOI, that's over 90% for both. Just this week, actually, we signed three JoAnn boxes, two coming in late last night, both with TJX. And we actually signed those deals in under 10 days from when they approved it at REC committee to when we actually had a fully executed deal, which is absolutely extraordinary.

David Jamieson: Again, it shows the demand, but more importantly, it shows the relationship and the partnership between, you know, between the two companies and the way we all work together with conforming leases, getting well ahead of the construction schedules and the work letters, and really, really approaching this as a true partnership. So, you know, we anticipate that to continue through the back half of the year, and it'll be pretty good that most of this will all be resolved and executed by the end of the year.

Executed at least or, or at, you know, a healthy state of Loy that's over 90% for both, um, just this week, actually. We signed 3, um, Joanne boxes, um, 2 coming in late last night. Um, both with uh, with TJX, and we actually signed those deals in under 10 days from when they proved it at Rec committee to when we actually had a fully executed deal, which is absolutely extraordinary. Uh, again shows the demand but more importantly, shows the relationship and the partnership, um, between, you know, between the 2 companies and the way we all work together with conforming, leases getting well, ahead of the construction schedules and the work letters. Um, and really, really the, uh, approaching this as, as a true partnership. So, you know, we anticipate that to, to continue through the the back half of the year and it will feel pretty good that most of this will all be resolved. Um, and executed by the end of the year.

Operator: Thank you. The next question is from Floris van Dijkum with Ladenburg. You may proceed.

Thank you. The next question is from Flores. Van ditcham with ladenburg. You may proceed

Analyst: Hey, guys. Thanks for taking my question. My question, I guess, is a little bit on the operations are pretty impressive and the demand is clearly there. Maybe if you could talk about some of the initiatives that you are working on to improve your expense recovery ratios and where do you think those will go. Presumably, they will go higher as you lease more of the vacant space. But are you also doing some other things operationally that should lift your expense recovery going on a going forward basis?

Hey guys, thanks for taking my question. Um, I had a, my question I guess is a little bit on the, the operations are pretty impressive and the demand is clearly there. Um, maybe if you could talk about some of the initiatives that you are working on to uh, to improve your uh, expense recovery, uh, Outreach.

Shows and and where do you think those will go? Presumably, they will go higher as you lease more of the vacant space. But are you also doing some other things operationally that should lift your expense recovery? Uh, going on a, on a, on a going forward basis.

David Jamieson: Yeah, it's a great question, Floris. Thanks. And you are right. As the occupancy increases and those tenants open, the recovery ratios should increase as well. Obviously, when you just think of like basic payment operating maintenance, you know, we sign several recurring service contracts and we negotiate those heavily prior to the start of the year. And with multi-year contracts, it helps eliminate some of the noise in terms of inflationary effects and/or increases year to year. So you're able to get a good handle on your cost upfront and then plan accordingly to that.

A great question for us. Thanks and and you are right as the occupancy.

David Jamieson: It's really, I think, with the amount of data that we have today and the way that we can really dive into the micro level on the account level on a site-by-site basis and pairing it closely with the asset strategy and the intention, you can just more closely monitor the expenses that you're deploying out on the site that are essential, that are necessary to maintain a safe and healthy environment while also pairing it with the activity on the leasing side. So I think it's just a more comprehensive approach that we've been taking. Obviously, we work very, very close with our vendors. We have scale, so we have, you know, in a sense, some leverage on the negotiating table.

To open the recovery ratio should increase as well. Um, obviously when you just think of like, basic Cam and operating maintenance, you know, we signed several recurring Services contracts and we negotiate those heavily, um, prior to the start of the year and with multi-year contracts, it helps eliminate some of the noise, uh, in terms of inflationary effects and or and or increases a year to year. So you're able to get a good handle on your cost upfront and then plan accordingly to that. Um, it's really I think with the amount of data that we have today and the way that we can really dive into the micro level on the account,

David Jamieson: But we want to always partner with the best providers that provide the best service and the most reliable service, which is really, really important for our retail partners. So it's really a culmination of a number of things. Obviously, we're using, you know, AI and analytics fairly heavily now as well internally to get a better understanding of where there's opportunities to improve margin and ratio while not sacrificing, obviously, the quality and care of the center.

Level on a side-by-side basis and parenting, it closely with the asset strategy and the intention you can just um more closely monitor the expenses that you're deploying out on the site that are essential that are necessary to maintain a, a, a safe and and healthy environment while also pairing it with the activity on the leasing side. So, I think it's just a more comprehensive approach that we've been taking. Um, obviously we work very, very close with our vendors. We have scale. So we have, you know, in incense some leverage on, on the negotiating table, um, but we want to always partner with the best,

David Bujnicki: Will, do you want to comment a little bit about our lease administration program as well and what we've done there?

The best providers that provide the best service and the most reliable service, which is really, really important for our Retail Partners. Um, so it's really a culmination of a number of things. Obviously we're we're using, you know, Ai and analytics fairly heavily now as well, internally to get a better understanding of where there's opportunities to to improve margin and ratio. While not sacrificing, obviously the quality of care at the center.

Well, do you want to comment a little bit about our lease Administration Pro uh, program as well and what we've done there?

Analyst: Sure. Thanks, Conor. This is Will Teichman. Good morning, everybody. You know, we've successfully executed on two public-to-public M&A integrations over the last few years and exceeded synergy targets on both deals. And really, that effort has allowed us to build a playbook for scalable efficiency and developing greater advantages of scale. And it's something that Conor talks about a lot with the management team and really drives home with the team on a day-to-day basis. We're really working to apply that playbook now to identify and prioritize other strategic platform innovation and transformation projects. One of the projects of focus for this year is transforming our lease administration function, which really plays a critical role behind the scenes in abstracting and managing lease data, doing the day-to-day billing and collections work with our retail partners. So a lot of work underway. We're rethinking the organizational design.

Sure, thank you. This is Will Taemin good morning everybody. Um,

Analyst: We're simplifying process, and we're deploying enabling technologies, including AI, to help enhance recovery rates and accelerate collection timelines. All of that really is focused on, obviously, being a best-in-class operator and maintaining a best-in-class DNA expense ratio in terms of how we operate.

You know, we successfully executed on 2 public to public m&a Integrations over the last few years and um, exceeded the energy Targets on both fields, and really that effort has allowed us to build a playbook for scalable efficiency and developing greater advantages of scale. And it's something that Conor talks about a lot with the management team and, and really Drive some, um, with the team on a day-to-day basis. We're really working to apply that Playbook now to identify, and prioritize other strategic platform Innovation and transformation projects. Um, 1 of the projects that focused for this year is transforming our lease Administration function, um, which really plays a critical role behind the scenes and abstracting and managing lease data doing the day-to-day billing and collections work, um, with our Retail Partners. So, uh, a lot of work underway, we're rethinking the organizational design. We're simplifying process.

Says and we're deploying enabling Technologies, including AI um to help enhance recovery rates and accelerate collection timelines. Um, all of that really is, is focused on, you know, obviously being the best-in-class, operator and maintaining, um, a best-in-class DNA, you know, expense ratio in terms of how we operate.

Operator: Thank you. The next question comes from Rajun Sanabria with BMO Capital Markets. You may proceed.

Thank you. The next question comes from. Regina Sanabria with BMO Capital markets, you may proceed.

Analyst: Hi, good morning. Just hoping you could talk a little bit about the the resi and entitlements that you guys have available to either harness for longer-term value and/or to monetize and kind of how you're thinking about that as part of the capital recycling. You talked about selling some of the flat leases, but just curious if resi and entitlements is part of that or if that's not the focus today.

Hi, good morning. I'm just hoping you could talk a little bit about the the resi and entitlements um that you guys have available.

to either harness for a longer term value and or to monetize and and kind of how you're thinking about that as part of the capital recycling, you talked about selling some of the flat leases, but just curious if, if resi and entitlements is part of that or or if that's not the focus today,

David Bujnicki: That is part of it. I think what we're trying to do is take each and every project and identify really the opportunity set that we have. And so some entitlements, you know, we may look to monetize and take some chips off the table, while some we may contribute as our land to a joint venture and ride that development with very little costs associated with the project other than just the land as our equity that we contributed into. So we're focused on trying to unlock the value and harness that value, and we're trying to see how the fastest way to do that. And right now, as you've seen through our activation program, we've really taken a capital-light approach where we've either ground leased the portion of the property that we own or we contribute the parking lot as land into the joint venture.

David Bujnicki: And I think as we look to the pipeline, we may look to see, obviously, where our supply is and demand is across the country where these projects might sit and if it makes sense to activate a few more in the near term. So we're working towards that as well as looking to see which ones could potentially be monetized.

That is that is part of it. I think what we're trying to do is take each and every project and identify really the the opportunity set that we have. And so some entitlements, you know, we may look to monetize and take some some chips off the table. Um, while some we we may contribute as our land to a joint venture and ride that development. Um, with very little um costs um associated with the the project other than just the land as our Equity that we contribute it into. So we're we're focused on trying to unlock the value and harness that value and we're we're trying to see how the fastest way to do that. And right now, as you've seen your activation program, we've really taken a capital light approach where we've either ground least the portion of the property that we own or we contribute the parking lot as land into the joint venture and I think as we look to the pipeline, we may look to see obviously

Where our supply is, and demand is across the country where these projects might sit, and if it makes sense to activate a few more, um, in the near term. So, we're working towards that, um, as well as looking to see which ones could potentially be monetized.

Operator: Thank you. Our next question comes from Rich Hightower with Barclays. You may proceed.

Thank you. Our next question comes from Rich. High tower with Barclays. You may proceed.

Analyst: Hi, good morning, everybody. Thanks for taking the question here. You know, just back onto capital allocation, you know, if you're able to repurchase stock at a 9% FFO yield with, you know, call it mid-single-digit growth on top of that, just where does maybe acceleration in that program fit in with the rest of the sort of manifold capital priorities for the company?

Hi, good morning, everybody. Thanks for taking the question here. Um, you know, just back on to Capital, allocation, you know, if you're if you're able to

to repurchase stock at a at a 9% ffo, yield with, you know, call it, mid single digit growth, on top of that, just where, where it is to be acceleration in that program fit in with the rest of the, uh, sort of many-fold capital priorities for the company.

Glenn Cohen: Thanks, Rich. It's a great question. You know, we have all the programs in place to deal with where the stock price is at any given point in time. As Conor mentioned, you know, we're obviously very focused on really what our cost of capital is and how we use it. When the stock got down, you know, as all the havoc was happening with the tariffs in the beginning of April, you know, at a nine yield, we thought it made sense to kind of make that a line of demarcation for us to say, you know, it makes sense to buy some stock back here. So we did that. Now, the stock has recovered somewhat, right? Stocks, you know, up over 10% from that point.

And it's a great question, you know, we, we have all the programs in place to deal with where the stock price is at any given point in time, as Conor mentioned, you know, obviously very focused on really what our cost of capital is, and how we use it, uh, when the stock got down, you know, as, as all the

Glenn Cohen: We also have an ATM program, which, you know, last November, we used that when the stock was above 25, where it made sense. So we're always watching. We try to have the tools in place to be reactive. We built the balance sheet where we really can take advantage of dips when they happen or be an issue where it really makes sense.

Harris in the beginning of April, you know, at a 9 yield. We thought it made sense to kind of make that a line of demarcation, for us to say, you know, it makes sense to buy some stock back here. Um, so, so we did that. Now the stock is recovered somewhat, right? Stocks. You know, up over 10% from that point. Uh, we also have an ATM program

Which, you know, last November, we use that. When the stock was above 25, where it made sense,

David Bujnicki: You know, I think one of the things we continue to monitor is the disconnect between public and private pricing. And we see a very wide spread between our implied cap rate and where we think our portfolio would trade in the private market. And so there is a pretty wide disconnect there that we continue to monitor. That being said, we have a lot of leasing going on, a lot of capital required for that leasing. We have a lot of growth, obviously, coming out of the portfolio. But if and when we do see these massive dislocations, we typically are prepared to jump at it and take advantage of the dislocation.

So we're always watching, we try to have the tools in place to to be reactive and we built the balance sheet where you really can take advantage of dips when they happen or the initial where it really makes sense.

No, I think 1 of the things we continue to monitor is the disconnect between public and private pricing, and we, we see a very wide spread between our implied cap rate and where we think our portfolio would trade in the private market. And so there is a pretty wide disconnect there that we continue to monitor. That being said, we have a lot of leasing going on, a lot of capital required for that leasing. Um, we have a lot of growth obviously coming out of the portfolio but if and when we do see these massive dislocations, we typically are prepared to to jump at it and take advantage of the dislocations.

Operator: Thank you. The next question comes from the line of Cooper Clark with Wells Fargo. You may proceed.

Thank you. The next question comes from the line of Cooper, Clarke with Wells Fargo. You may proceed.

Analyst: Thank you for taking the question. I just wanted to circle back on the transaction market. Curious what types of private buyers you're finding yourself competing with on new deals and any comments you could share on their yield hurdles or leverage profiles. And then also curious if you're seeing more attractive opportunities for larger portfolio deals versus one-off transactions on a cap rate basis, just given the scale and relationships you spoke to earlier on the call.

Thank you for taking the question. I just wanted to Circle back on the transaction Market. Curious what types of private buyers, you're finding yourself competing with on uh New Deals and any comments you could share on their yield hurdles or leverage profiles. And then also curious, if you're seeing more attractive opportunities for larger, portfolio deals, versus 1-off transactions on the cap rate basis, just giving the scale and relationships, you spoke to earlier on the call,

David Jamieson: Sure. Happy to. Yeah, a lot of capital on the private side and the public side. I mean, we're going up against pension funds, sovereigns, a whole bunch of groups that have been hanging around the retail sector for many years. In some cases, even conversations we've had with groups on the joint venture side that are looking at putting out capital on their own account. So there's just been a tremendous amount of competition in capital that we've gone up against. We have been able to pick our spots, as you've seen, and again, leaning into the structured investments where we can be very flexible and create, I think, unique solutions for borrowers. I think interestingly, this quarter, on the couple of deals that we closed on, we were the lender in a senior position.

David Jamieson: So, you know, you've seen us be very flexible and adapt to the market depending on where those opportunities present themselves. In terms of the larger portfolios, you know, the pricing has been pretty consistent on some of the portfolio transactions that we've seen trade versus some of the one-offs. There's been various points in the cycle where bigger was better or bigger was not necessarily better, depending on your perspective as a buyer or a seller. Right now, I think that the portfolios are pricing as aggressively as the one-offs. So, no no real sort of opportunity in terms of an arbitrage to buy a larger versus a single asset. You know, you saw with our transaction with RPT at the beginning of 2024, that was a point in time where we felt that larger portfolios were trading at a significant discount, and we took advantage of that.

Uh, we have been able to, to pick our spots as you've seen and again leaning into the structured Investments where we can be very flexible and create, um I think unique solutions for borrowers. I think interestingly this quarter on the the couple of deals that we closed on we were the the lender and a senior position. So you know you've seen us be very flexible and adapt to the market depending on where those opportunities present themselves. In terms of the larger portfolios, you know, the pricing has been pretty consistent on some of the portfolio transactions that we've seen trade versus some of the 1 off. There's been various points in the cycle where bigger was better or bigger was not necessarily better depending on your perspective as a buyer or a seller. Right now, I think that the portfolios are pricing as aggressively as the 1 off. So uh, no no real sort of opportunity in terms of an Arbitrage to buy a larger versus, um, single asset. You know, you saw with our

David Jamieson: But at this, you know, current moment, we haven't seen that exactly occur right now.

David Bujnicki: There's a few aggressive buyers that I think are sort of unique. Some of them are fund structures where they need to get capital out, where it's coming to the end of their fund life and they're leaning into the space. Some are building platforms and needing scale and putting capital out aggressively to race to get that scale. So those are obviously ones we take a step back and watch. but it's clear that there's a lot of capital and a lot of interest because if you look at the fundamental cash flow growth, it's very strong even relative to other sectors.

Transaction with rpt at the beginning of 2024, that was a point in time where we felt that larger portfolios were trading at a significant discount. And we took advantage of that. But at this, you know, current moment we haven't seen them at exactly occur right now. There's there's a few aggressive buyers that I think are sort of unique. Some of them are fund structures where they need to get Capital out, um, where it's coming to the end of their, their fund life, and their betting, their leaning into the space. Some are

David Jamieson: And these are all primarily unlevered acquirers. So the debt cost isn't necessarily factoring into their yield. And I think for the most part, investors or core products are backing into, you know, mid to high single-digit IRRs.

Are building platforms and needing scale and putting Capital out aggressively to race to get that scale. So those are obviously ones we take a step back and watch. Um, but it's clear that there's a lot of capital and a lot of interest, because if you look at the fundamental cash flow growth, um, it's very strong. Even relative to other sectors and these are all primarily unlevered acquires so that the debt cost isn't necessarily factoring into their their yield. And and I I think for the most part um investors for core products are backing into you know mid to to high single digit IRS.

Operator: Thank you. Our next question comes from the line of Heydal St. Just with Mizuo. You may proceed.

Thank you. Our next question, comes from the line of he St with mizuho. You may proceed

Analyst: Hey, guys. So a lot's been covered, but I was hoping you could go back and maybe give us an update on the backfills of the JoAnn's and the Party City boxes. How many are left to fill? How many LOIs you might have outstanding? what the new rents and spreads look like and how the CapEx spending is coming along. Thanks.

Hey guys. Um, so a lot's been covered, but I was hoping you could go back and maybe give us an update on the backfills of the Jo-Ann's in the Party City boxes. How many are left to fill? How many LOIs might you have outstanding? What do the new rents and spreads look like, and how is the CapEx spending coming along? Thanks.

David Jamieson: Yeah, sure. Absolutely. So on the JoAnn's side, as I mentioned, we signed another three leases this week. So we have six executed, one assigned, one's under contract as part of a center to sell. And then we have 14 LOIs remaining outstanding. On the Party City side, we have almost 36 executed, and then the remainder are at LOI or at lease right now. So I'd say those are effectively resolved with just a couple left outstanding. I mentioned a couple of the opportunities with TJX this week when we really accelerated the deal flow there and did it under 10 days. When you look at the overall mark-to-markets on the JoAnn's side, we're seeing around a 20% overall. Obviously, it ebbs and flows box to box, and on Party City, just about 15% mark-to-market there.

Yeah, sure, absolutely. So on uh, on the Joy inside as I mentioned we signed another 3 leases this week. So we have 6 execute and 1 to sign 1's under contract as part of a center itself. Um, and then we have 14 Lois remaining outstanding on the, on the, uh, on the Party City side. We have almost, um,

David Jamieson: So we're very good about the momentum and closing out both these opportunities by the end of the year.

36 executed and then the remainder or add Loi or at least right now. So I'd say those are effectively resolved with just a couple left. Um, outstanding. I mentioned a couple of the opportunities was, uh, with with TJX this week when we are really accelerated, the deal flow. There ended in under 10 days. When you look at the overall markets on the, on the Jo-Ann's side, we're seeing around a 20% overall, obviously it adds and flows. Uh, box and box on Party City, just about 15%. Um, Mark to Market there, so feel very good about the momentum and uh and closing out both these um,

Both these opportunities by the end of the year.

Operator: Thank you. Our next question comes from the line of Alex Hachin with Buyard. You may proceed.

Thank you. Our next question comes from the line of Alex a with beard, you may proceed.

Analyst: Hey, thank you for taking my question. When does Kim expect that redevelopment to flip into a tailwind for same-store NOI?

Hey, thank you.

Thank you for taking my question. Uh, when does Kim expect that Redevelopment to flip into a Tailwind for same store in a y?

David Bujnicki: Redevelopment into a tailwind? So it's the same-store NOI. The contribution is to drag the square numbers of net positive. So I think when you look at, obviously, some of the larger redevelopment that we have going, there's a lot of it, you know, is expanding square footage and GLA and taking that box down and looking for grocery conversions where we can add grocery. As you noticed, in the first quarter, we did a big portfolio deal with Sprouts. We've seen a lot of activity with Trader Joe's, a lot of activity with Aldi and Lidl. We just, you know, executed a big deal with BJ. So there's a lot of grocery coming into the shopping center space and the portfolio. And that's really where we've been focused on trying to to to add to the redevelopment pipeline.

Redevelopment to do a Tailwind. So the same thing I don't know why the contribution was a drag this quarter versus a net positive. So I think when you look at obviously the some of the larger redevelopments that we have going, there's a lot of it, you know, is is expanding square footage and gla and taking those that box down and looking for grocery conversions where we can add grocery. As you noticed in the first quarter, we did a big portfolio deal with Sprouts. We've seen a lot of activity with Trader. Joe's. A lot of activity.

David Bujnicki: And you'll see that, you know, continue to deliver in the back half of this year where it becomes a positive.

Activity with all the inle just, you know, executed a big deal with BJ. So there's a lot of grocery coming into this Shopping Center space in the portfolio. And that's really where we've been focused on trying to to, to add to the Redevelopment Pipeline and you'll see that, you know, continue to deliver in the back half of this year where it becomes a positive.

Operator: Thank you. Our next question comes from Mike Miller with JP Morgan. You may proceed.

From Mike Miller with JP Morgan, you may proceed.

Analyst: Yeah, hi. Glenn, how much of the guidance increase was driven by the the higher same-store outlook versus the one-time accounting item that you kind of referenced?

Yeah, hi um Glenn. How much did the guidance increase was driven by the the higher same store Outlook versus the 1-time accounting item that you kind of referenced.

Glenn Cohen: Oh, more than half of it is really related to just the way that how the portfolio is operating and our expectations for when commencements coming from the SNOW pipeline and the backfills that the team has been able to do on the JoAnn's and the Party City boxes with them coming online. So the bulk of it is really operational.

Oh, more more than half of, it is really related to just the way to how the portfolio is operating. And our expectations for rent commencements coming from the snow Pipeline and the back fills that the team has been able to do on the joints and the Party City boxes with them coming online. So the bulk of it is really operational.

Operator: Thank you. Our next question comes from Linda Tsai with Jeffries. You may proceed.

Thank you. Our next question. Comes from Linda thigh with Jeff. You may proceed

Analyst: Hi, thank you. A question for Ross. How has cap rates changed since ICSC across different property types and which regions or shopping center formats are you seeing better opportunities?

Hi. Thank you. A question for Ross. How has cap rates changed since icsc across different property types and which reasons are shopping? Center formats? Are you seeing better opportunities?

David Jamieson: Yeah, it's a good question because we've seen really aggressively priced and closed transactions with all sort of open-air formats. You've seen some really high-quality lifestyle that's been trading aggressively. Obviously, core grocery continues to be kind of the number one in terms of investor demand. Unanchored strips continue to grow in terms of investor demand and capital that is chasing those deals. And we've also seen big box power in the right location with the right tenancy trading aggressively. So I think everybody is sort of picking their spots and picking their lane. The nice thing I think about KIMCO and one other differentiator that we believe is our diversification in terms of format.

Yeah, it's a good question because we've seen really aggressively priced uh and and closed transactions with all sort of open are formats. You've seen some really high quality lifestyle that's been trading aggressively obviously core, grocery continues to be 1 of the the number 1. In terms of investor Demand on anchored strips. Continue to to grow in terms of investor demand and capital. That is chasing those deals. And we've also seen big box power uh in the right location.

David Jamieson: You know, we're very comfortable with all of those different formats, so we can sort of zig and zag and adjust depending on the opportunity that we see or if there is one format that at one point in time starts to trade off. That's something that we can be a little bit contrarian and lean into. But for the moment, we've seen all formats being really heavily pursued and priced aggressively.

With the right Tenney trading aggressively. So I think everybody is sort of picking their spots and picking their Lane. The nice thing I think about Kymco and, and 1 other differentiator that we believe is our diversification in terms of format, you know, we're very comfortable with all of those different formats so we can sort of Zig and zag and adjust depending on opportunity that we see. Or if there is 1 format and at 1 point in time, starts to to trade off, that's something that we can be a little bit contrarian and lean into, but for the moment we've seen all formats being really heavily pursued and priced aggressively.

Operator: Our next question comes from Michael Gorman with BTIG. You may proceed.

Our next question comes from Michael Gorman with BTIG. You may proceed.

Analyst: Yeah, thanks. Good morning. Just stepping back for a second here. Obviously, you've done a lot of work on the portfolio in recent years. You've grown the gross or exposure 15 percentage points over the past 10 years. When you talk about record small shop occupancy, I'm kind of wondering what you think the upper bound is for this newer portfolio that you've built over the past decade and how much of that is pushing into your expectations for rent escalators as you sign these new small shop tenants? Are they more pushing towards the high end of that three to five range you talk about in the presentation and what that looks like going forward? Thanks.

Yeah, thanks, good morning. Um, just stepping back for a second here. Obviously, you've done a lot of work on the portfolio. Um, in recent years, you've grown the grosser, exposure 15 percentage points over the past 10 years. When you talk about records, small shop occupancy, I'm kind of wondering what you think, the upper bound is for this newer portfolio that you've built over the past decade and, and how much of that is pushing into your expectations for rent escalators, as you sign these new small shop. Tenants, are they more pushing towards the high end of that 3 to 5 range, you talked about in the presentation, um, and, and what that looks like going forward. Thanks.

David Bujnicki: Yeah, it's a good question, Michael. Obviously, we're in uncharted territory when you get to our small shop occupancy where it is today and what we can take it to. So we're obviously, you know, optimistic that there's still a lot more room to run. There's no reason why we should cap out in the mid 92.5%, you know, occupancy range. To your point, the economics of small shop deals are a lot stronger because the annual escalators are typically, you know, in that 3 to 5 percent range. And you're seeing it in our stronger shopping centers being able to push the upper end of that range. So we're, you know, the momentum is there. As I mentioned, you know, the second quarter small shop volume was significantly higher. And these are on spaces that have been vacant or been sitting vacant for a while.

David Bujnicki: So I think you're seeing just the breadth and depth of demand expand alongside us transforming the portfolio to more of a grocery-anchored shopping center portfolio. So that combination, I think, is really working in our favor. And we're doing a lot in terms of new tools for leasing. I think I mentioned it earlier where there's really a lot going on behind the scenes that allows us to do portfolio type deals with these small shop operators, driving really good credit tenants into the shopping centers that we have, looking at all the different we have relationships and expanding people not even in certain geographies, but taking them to new geographies as well.

Yeah, it's a good question. Michael, obviously, we're in Uncharted Territory. Uh, when you get to our small shop occupancy, where it is today and and what we can take it to. So we're obviously, you know, optimistic that there's still a lot more room to run. There's no reason why we should cap out in the mid 92 and a half percent, you know, occupancy range. And to your point, the economics of small shop deals are a lot stronger because the annual escalators are typically, you know, in that 3 to 5% range and you're seeing it in our stronger shopping centers, being able to push the upper end of that range. So we're we're you know, the the momentum is there, as I mentioned, you know, the the second quarter small shop volume was significantly higher and these are on Spaces that have been vacant or been sitting vacant for a while. So I think you're seeing just the breadth and depth of demand. Expand alongside us transforming the portfolio to more of a grocery Anchorage, shopping center portfolio. So that combination I think is really working in our favor and we're doing a lot in terms of

In terms of new tools for leasing, I think I mentioned it earlier where there's really a lot going on behind the scenes that allows us to do portfolio type deals with these small shop operators. Driving really good credit tenants into the shopping center that we have working at all the different

David Bujnicki: And I think that's the real benefit of KIMCO and its scale and its advantages of scale is showcasing that we can use our portfolio to take the best-in-class retailer from one geography and bring them to a new geography and do the lion's share of that market share new deals that they're going to do.

David Jamieson: Yeah, and I think to be on top of that, it's obviously the retention site too is so essential and critical in order for you to continue gaining occupancy trends as we have with the small shop side. And so we're retaining over 90% of the rollover schedule on a recurring basis now, which is incredible. Again, I guess that's just a testament to appreciate them appreciating that they're doing well in their business, well in their location. We have a good partnership with them they had with us. And so there's a cost of relocating, and they've opted not to take that relocation instead and continue to stay with us to run their business.

We have relationships and expanding people not even in certain geographies, but taking them to new geographies as well. And I think that's the real benefit of kimko and its scale. And its advantages of scale is showcasing that we can use our portfolio to take the best-in-class retailer from 1 geography, and bring them to a new geography and do the Lion Share of that market. Share a new deal is that they're going to do.

I think.

Typically, on top of that.

it's obviously the retention side, too is so essential and critical and or for you to continue gaining um, occupancy Trends as we have in

Basis now, which is incorrect incredible. Again, that's just a testament to appreciate them, appreciating that they're doing well in their business. Well, in their location, we have a good partnership with them, they had with us and so there there's a cost to relocating and they've opted not to take that relocation instead of continued to stay with us around their business.

Operator: Thank you. Our next question comes from Omotayo Okusanya with Duchy Bank. Please proceed.

Thank you. Our next question is comes from Omnia with the she Bank. Please proceed.

Analyst: Hi, yes. Good morning, everyone. Congrats on the quarter. Really good execution here. The broader question I have is just, again, you just take a look at the group in general and stock performance relative to the broader retail sector. And it just kind of feels like investors are still pretty worried about, you know, the retail outlook and the implications for shopping centers going forward. I just wanted to ask you guys, you know, do you think that's valid? Do you think, again, '26 when tariffs are kind of all settled and they're clearly going to get higher rates, that that really becomes an issue? Or, you know, are people just, or investors just overly concerned, just kind of given the strong operating and demand trends that you and in fact several of your peers continue to see?

Uh, yes, good morning everyone. Um, congrats on the quarter, really good at the application here. The broader question I have is just again you just take a look at the, the group, in general and on stock performance relative to the broader receptor. I mean, it just kind of it was like, investors are still pretty worried about, you know, the retail Outlook and the implications for shopping centers, going forward. I just wanted to ask you guys, you know, do you think that is valid? Do you think again 26 when tariffs are kind of all settled and they're clearly going to be at higher rates that that really becomes an issue or, you know, or people just to invest to just overly concerned just kind of giving the strong, uh, operating and demand trends that you and in fact, several of your peers continue to see

David Bujnicki: Yeah, thanks for the question. I think a lot of what happened this year was there was a lot of noise to the beginning of the year that questioned the strength of the consumer, questioned the strength of the retailer demand, the operating margins on retailers. So there was obviously a lot out there to put a question mark on the strength of the underlying fundamentals. And for KIMCO, what we continue to focus on is to really be in that top quartile of FFO growth year in and year out. And that continues to be our North Star. And I think if we can continue to execute, you know, we were one of only two companies last year to do over 5% FFO growth. The midpoint this year is now raised to over 5%.

David Bujnicki: We feel like we have all the building blocks to put the numbers up, to let the numbers speak for themselves. I think there is a little bit of misperception going on when you think about the negative news cycle and when retailers sort of hit the skids. Typically, that's a news story that runs. But the underlying fundamentals and the strength of the demand that we see is not really covered in the news cycle. The private markets see it. The private markets have recognized the cash flow growth. Private markets have capital to deploy into whatever sector they so choose, and they're clearly taking advantage and notice of what's going on in the underlying fundamentals of the sector. So we're cautiously optimistic. We'll finish this year strong and have the building blocks to continue our momentum going forward.

No, thanks for the question. I think a lot of what happened this year was, there was a lot of noise to begin the year that questioned the strength of the consumer strength, strength. Uh, question, the strength of the retailer demand, um, the operating margins on retailers. So there was obviously a lot out there to put a, um, to put a question mark on on the, the strength of the underlying fundamentals. And I, and for Kymco what we continue to focus on is to really be in that top Corner tile growth year in and year out. And that continues to be our our Northstar and and I think if we can continue to execute, you know, we were 1 of only 2 companies last year to do over 5% ffo growth, the midpoint this year is now raised to to over 5%. We feel like we have all the building blocks to put the numbers up to let the numbers speak for themselves. I think there is a little bit of misperception going on when you think about the negative news cycle and when retailers sort of Hit the hit,

Hit the skids they're typically that's a new story that that runs but the the underlying fundamentals and the strength of the demand that we see is not really covered in the news cycle, the private markets, see it, the private markets, recognize the cash flow growth private markets have Capital to deploy into whatever sector they so choose and they're clearly taking advantage and and notice of of what's going on in the underlying fundamentals of the sector. So, we're, we're cautiously Optum

Istic. We'll finish this year, strong and have the building watched to continue our momentum going forward.

Operator: Thank you, ladies and gentlemen, who currently have no further questions. I would like to pass the conference back over to Speaker David Bujanicki for any closing remarks.

Thank you. Ladies and gentlemen, can I have no further questions? I would like to pass the conference back over to speaker, David Bush, Nikki for any closing remarks.

David Bujnicki: I'd like to thank everybody that participated in today's call. If you do have some follow-up questions or need further clarification, please don't hesitate to reach out. Otherwise, I hope everybody enjoys their summer. Thanks so much.

You'd like to thank everybody that participated in today's call. If you do have some follow-up questions or need further clarification, please don't hesitate to reach out. Otherwise I hope everybody enjoys their summer. Thanks so much.

Operator: That concludes the KIMCO Realty's second quarter 2025 earnings conference. Thank you for your participation. You may now disconnect your line.

That concludes the concur office, second quarter 2025 earnings conference. Thank you for your participation. You may now disconnect your line.