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Noah and Ash discuss Kimco Realty’s 2025 performance, highlighting its record 96.6% occupancy, successful RPT merger integration, and $2.2 billion liquidity. The script explores how grocery-anchored centers and mixed-use redevelopments drive resilience against e-commerce and macroeconomic pressures.**Applying Formatting Rules** I'm now meticulously applying the TTS formatting rules. My focus is on transforming all numerical figures, percentages, and financial symbols within the [S1] and [S2] dialogues into their appropriate spoken-word equivalents. Additionally, I'm ensuring that all sentences are under 300 characters, breaking longer ones as needed while preserving speaker attributions. [S1] Welcome to the Stoky Podcast. I'm Noah, and today we are diving deep into the latest 10-K filing from Kimco Realty Corp, a massive player in the world of retail real estate. [S2] Thanks for having me, Noah. I’ve been seeing their signs at my local grocery store for years, but I never realized just how big they actually are until I saw this report. [S1] They are the largest publicly traded owner of open-air, grocery-anchored shopping centers in the U.S. [Item 1 - Business, ¶5]. This year was huge for them because they fully integrated their merger with RPT Realty. [S2] Before we get into the weeds, what does "open-air, grocery-anchored" actually mean for a regular investor? Is it just a fancy way of saying "strip mall"? [S1] In a way, yes, but with a very specific strategy. They focus on "necessity-based" retail. Think about the places you go even when the economy is shaky—the supermarket, the pharmacy, or the hardware store. [S1] By anchoring their centers with a grocery store, they ensure a steady stream of foot traffic. This filing shows they now have interests in 565 shopping centers across 29 states [Item 2 - Properties, ¶1]. [S2] That is a massive footprint. Are these spread out everywhere, or are they concentrated in specific parts of the country? [S1] They are very intentional about where they buy. They focus on what they call "first-ring suburbs" in 19 major markets, mostly in the Sun Belt and coastal areas [Item 1 - Business, ¶9]. [S1] These are affluent, high-density areas where it’s really hard for competitors to build new shopping centers because there’s no land left. That "high-barrier-to-entry" aspect is a key part of their moat. [CHAPTER] I. Property Portfolio and Leasing Metrics [S2] So, if it's hard to build new stuff, how are they actually doing with the space they already have? Are stores actually staying open in these centers? [S1] Better than ever, actually. Their consolidated occupancy rate hit 96.6 percent by the end of 2025 [Item 2 - Properties, ¶5]. That is incredibly high for the retail sector. [S2] 96.6 percent? That sounds like there’s almost no vacancy at all. How do they keep it that full when everyone says e-commerce is killing physical retail? [S1] It’s about the tenant mix, Ash. They aren't relying on department stores that people only visit once a year. Their biggest tenant is TJX Companies—the folks behind T.J. Maxx and Marshalls [Item 1 - Business, ¶14]. [S1] TJX only makes up 3.8 percent of their revenue, so they aren't over-reliant on any one name. Other top tenants include Ross Stores, Burlington, and Amazon—specifically through Whole Foods [Item 2 - Properties, ¶3]. [S2] So they’ve picked retailers that are "Amazon-proof" or actually owned by Amazon. But are they able to raise the rent, or are they just happy to keep the lights on? [S1] They are definitely raising the rent. The average base rent per square foot went up by about 3.4 percent this year to 21 dollars and 5 cents [Item 2 - Properties, ¶5]. [S1] They signed over 1,500 leases this year. When a lease ends and a new tenant comes in, they are getting significantly higher rates than the previous tenant was paying. That’s organic growth in action. [S2] You mentioned they are doing more than just traditional retail now. I saw something in the report about "multifamily units." Are they becoming landlords for apartments too? [S1] Exactly. It’s called "mixed-use" development. They’ve secured entitlements for over 14,000 apartment units [Item 1 - Business, ¶10]. [S1] The idea is to build apartments right on top of or next to the shopping centers. It creates a "live, work, play" environment where the residents become a built-in customer base for the retailers downstairs. [S2] That sounds like a smart way to squeeze more value out of the land they already own. But I imagine building apartments and renovating malls costs a fortune. Where is that money going? [S1] They spent about 347 million dollars on capital investments this year [Item 7 - MD&A, ¶30]. A big chunk of that—192 million dollars—went specifically into redevelopments and renovations to keep the properties modern. [CHAPTER] II. Strategic Initiatives and Business Developments [S2] You mentioned the RPT Realty merger earlier. Was that just a one-time event, or are they still feeling the effects of that in 2025? [S1] It was a cornerstone for them. It added 56 centers and over 13 million square feet to their portfolio [Item 1 - Business, ¶5]. They’ve spent 2025 finding "synergies," which is corporate-speak for cutting overlapping costs. [S2] And beyond the merger, are they still buying and selling individual properties? Or are they just sitting tight with what they have? [S1] They are very active. They bought three operating properties for about 218 million dollars but also sold off four properties and some smaller parcels for about 109 million dollars [Item 7 - MD&A, ¶29]. [S1] This "capital recycling" allows them to sell off older or less profitable assets and plow that money into higher-growth locations. They actually realized about 62 million dollars in gains from those sales [Item 7 - MD&A, ¶21]. [S2] I also noticed a lot of talk about "Green Bonds" and ESG in the filing. Is that just marketing, or does it actually affect their bottom line? [S1] It’s actually tied to their financing costs. They have a 2 billion dollar credit facility where the interest rate they pay can go down if they hit certain environmental targets [Item 1 - Business, ¶25]. [S1] They met their 2025 targets for reducing greenhouse gas emissions, which helps them keep their borrowing costs lower. It’s a literal financial incentive for being more sustainable. [CHAPTER] III. Financial Performance and Results of Operations [S2] Okay, let’s talk about the actual profits. Did all this leasing and merging translate into more money for the shareholders? [S1] It did. Their net income available to shareholders jumped to over 554 million dollars, up from 375 million dollars the year before [Item 7 - MD&A, ¶12]. [S1] But for REITs like Kimco, the number investors really watch is FFO—Funds From Operations. That climbed to 1.19 billion dollars, or 1.76 dollars per share [Item 7 - MD&A, ¶13]. [S2] Why is FFO more important than net income? That's a huge difference in the numbers. [S1] Net income includes "depreciation," which is a non-cash expense. Since real estate often appreciates rather than losing value, FFO adds that back to give a better sense of the actual cash the business generates. [S1] Their FFO grew by 7 percent per share this year, which is quite healthy for a company of this size [Item 7 - MD&A, ¶13]. [S2] And what about the properties they’ve owned for a while? If we ignore the new acquisitions, is the core business still growing? [S1] Yes, they track that through "Same-Property Net Operating Income," or NOI. That rose by 3.0 percent [Item 7 - MD&A, ¶13]. This tells us that even without buying new malls, they are making more money from their existing ones. [S2] Where is that extra money coming from? Is it just higher rent? [S1] Mostly higher rent and better occupancy, but also from things like "lease termination fees" and recovering more of their operating costs from tenants [Item 7 - MD&A, ¶18]. [S1] Interestingly, their general and administrative expenses actually went down by about 5 million dollars [Item 7 - MD&A, ¶19]. That shows they are becoming more efficient as they get bigger. [S2] That’s impressive. But I saw that real estate taxes and maintenance costs went up too. Does that eat into the profits much? [S1] Taxes rose by nearly 16 million dollars, mostly because property values are being assessed higher [Item 7 - MD&A, ¶19]. Maintenance was also up, partly due to higher snow removal costs and general repairs. [S1] But because their revenue growth was so much stronger—up over 102 million dollars—they were able to absorb those costs and still come out ahead [Item 7 - MD&A, ¶18]. [CHAPTER] IV. Liquidity, Capital Resources, and Debt Management [S2] With interest rates being so high lately, I’m always worried about companies with a lot of debt. How is Kimco handling their balance sheet? [S1] They describe it as a "fortress-like" liquidity position. They ended the year with 2.2 billion dollars in total liquidity [Item 7 - MD&A, ¶13]. [S1] Most of their debt is at fixed rates, averaging about 4.00 percent [Item 7 - MD&A, ¶14]. That’s actually quite low compared to where market rates have been recently. [S2] But what happens when that debt matures? If they have to refinance at 6 percent or 7 percent, won't that hurt? [S1] They have a very long runway. The average maturity of their debt is nearly 8 years [Item 7 - MD&A, ¶14]. They do have about 856 million dollars coming due in 2026, but they have plenty of ways to cover it. [S1] They have a 2 billion dollar revolving credit facility that is currently completely undrawn [Item 7 - MD&A, ¶33]. They also have over 525 properties that are "unencumbered," meaning there’s no mortgage on them. [S2] So they could basically take out a loan against those properties if they ever got into a pinch? [S1] Exactly. It gives them massive flexibility. They also used their cash flow to pay out 714 million dollars in dividends and even bought back 120 million dollars of their own stock [Item 7 - MD&A, ¶31]. [S2] Increasing dividends and buying back stock usually means management is pretty confident. But there have to be some red flags in a 10-K, right? [CHAPTER] V. Risk Factors and Challenges [S1] Of course. The biggest risk is always the tenants. If a major national retailer goes bankrupt, Kimco loses that rent and has to spend money to find a replacement [Item 1A - Risk Factors, ¶4]. [S2] We’ve seen a lot of retail bankruptcies lately. Does the filing mention any specific concerns about that? [S1] They don't name names for future risks, but they do acknowledge that e-commerce continues to pressure physical stores [Item 1A - Risk Factors, ¶2]. If consumers stop going to stores, the tenants can't pay rent. [S1] There’s also the "climate change" risk. Many of their properties are in coastal areas. They are seeing insurance premiums rise and are having to spend more on making buildings resilient to extreme weather [Item 1A - Risk Factors, ¶37]. [S2] I also saw a mention of a "cybersecurity incident" from a few years ago. Is that still a threat? [S1] They had a ransomware attack on some legacy servers back in 2023 [Item 1C - Cybersecurity, ¶1]. They’ve since created a dedicated Cyber Risk Committee to oversee their digital security. [S1] It’s a reminder that even a real estate company is a tech company these days. They handle a lot of sensitive data for leases and payments. [S2] What about interest rates? You said most of their debt is fixed, but does a 1 percent move in rates still matter to them? [S1] It’s actually very minimal for them right now. A 1 percent increase in short-term rates would only cost them about 200 thousand dollars extra a year because they use "interest rate swaps" to hedge that risk [Item 7A - Market Risk, ¶2]. [CHAPTER] VI. Forward-Looking Guidance and Market Outlook [S2] So, looking ahead to 2026, what is the game plan? Are they going to keep buying more centers? [S1] They are planning to spend between 300 million dollars and 500 million dollars on new acquisitions in 2026 [Item 7 - MD&A, ¶29]. [S1] They are also earmarking up to 300 million dollars for more redevelopments [Item 7 - MD&A, ¶30]. They clearly believe that the best way to grow is to improve the properties they already have. [S2] It sounds like they are doubling down on the "grocery-anchored" model even as the economy remains a bit uncertain. [S1] They are. They believe that necessity-based retail is the safest place to be. Even if people cut back on luxury items, they still need to buy eggs and milk. [S1] With 96.6 percent occupancy and 2.2 billion dollars in the bank, they are positioned to be the "consolidator" in the industry—buying up smaller players who might be struggling with high interest rates. [S2] It’s a fascinating look at how the shopping centers we visit every day are actually run behind the scenes. Thanks for breaking it down, Noah. [S1] My pleasure. It’s a great example of a company using a very simple, essential need to build a multi-billion dollar empire. [S1] Thanks for tuning in to the Stoky Podcast. We’ll see you next time. --- STORY TITLE --- Kimco Realty Achieves Record 96.6% Occupancy and 7% FFO Growth - 10-K --- PODCAST SUMMARY --- Noah and Ash discuss Kimco Realty’s 2025 performance, highlighting its record 96.6% occupancy, successful RPT merger integration, and $2.2 billion liquidity. The script explores how grocery-anchored centers and mixed-use redevelopments drive resilience against e-commerce and macroeconomic pressures.

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