Kimco Realty upgraded to ’A-’ by S&P on strong performance

S&P Global Ratings has upgraded Kimco Realty Corp. to 'A-' from 'BBB+' with a stable outlook, driven by the company's solid operating performance and well-positioned balance sheet. The upgrade reflects Kimco's strategic focus on grocery-anchored centers, which contributed to 3.1% same-property NOI growth and 15.2% blended cash rent spreads in Q2 2025, alongside successful re-leasing of anchor vacancies. The company has also demonstrated improved financial health, with debt to EBITDA declining to 5.9x, and maintains a well-staggered debt maturity schedule, underpinning S&P's expectation for continued strong performance.

Analysis

S&P Global Ratings has upgraded Kimco Realty Corp. (KIM) to 'A-' from 'BBB+', assigning a stable outlook, which validates the company's robust operating performance and fortified balance sheet. The upgrade is underpinned by Kimco's strategic focus on a portfolio of grocery-anchored, open-air shopping centers, which constitute 86% of its average base rent and provide defensive cash flow attributes. This strategy has translated into strong Q2 2025 results, including 3.1% year-over-year same-property NOI growth and a seven-year high in blended pro-rata cash rent spreads of 15.2%. While anchor bankruptcies caused a minor 40 basis point sequential dip in pro-rata leased occupancy, management has effectively mitigated this risk, with approximately 90% of the vacant space either re-leased or under a letter of intent at favorable releasing spreads of 30% to 40%. Financially, the company has de-levered, with S&P-adjusted debt-to-EBITDA declining to 5.9x from 6.5x year-over-year. Proactive capital management, including a recent $500 million note issuance, has extended the average debt maturity to 8.5 years with no significant consolidated maturities until July 2026, positioning Kimco for continued stability and growth.

Key Decisions for Investors

• The 'A-' credit rating upgrade and strong operational metrics, particularly the 15.2% rent spreads, signal that Kimco's defensive, grocery-anchored strategy is performing well, warranting a bullish view on management's execution.
• Investors should monitor future leasing velocity and same-store NOI growth, which S&P projects at 3% or better, to ensure the company continues to successfully navigate the retail environment and capitalize on its strong rental rate momentum.
• The improved leverage profile, with debt-to-EBITDA at 5.9x and a well-staggered debt maturity schedule, reduces financial risk and should be considered a key factor for investors seeking stable income and a defensive position within the REIT sector.