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Kimco (KIM) Beats Q4 FFO Estimates on Occupancy, Rent Growth

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Kimco Realty Corp.’s (KIM - Free Report) fourth-quarter 2021 NAREIT funds from operations (FFO) came in at 39 cents per share, topping the Zacks Consensus Estimate of 37 cents. This figure also compares favorably with the year-ago quarter’s tally of 31 cents.

Results reflect better-than-anticipated revenues. Kimco also issued its 2022 outlook.

This retail REIT generated revenues of $424.7 million, exceeding the consensus mark of $406.8 million. Quarterly revenues increased 57.6% year over year.

According to Conor Flynn, Kimco’s CEO, “We are extremely proud to have completed another quarter with leasing volume exceeding two million square feet, bringing leasing for the year to 8.7 million square feet.”

For 2021, KIM reported NAREIT FFO per share of $1.38, up from $1.17 in the prior year and also beat the Zacks Consensus Estimate of $1.36. Rental revenues of $1.36 billion surged 29% year over year.

Moreover, this retail REIT recently raised the quarterly cash dividend on common shares by 11.8% sequentially to 19 cents per share, which is payable on Mar 24, 2022, to shareholders of record on Mar 10, 2022.

Quarter in Detail

Pro-rata portfolio occupancy at the end of the fourth quarter was 94.4%, reflecting an expansion of 50 basis points (bps) year over year and 30 bps sequentially. Pro-rata anchor occupancy was 97.1%, up 40 bps year over year and 20 bps sequentially. Pro-rata small shop occupancy ended the quarter at 87.7%, representing an uptick of 160 bps year over year and 40 bps sequentially.

The company signed 438 leases, aggregating 2.1 million square feet in the quarter. Blended pro-rata rental-rate spreads on comparable spaces increased 8.1%, with rental rates for new leases growing 14.1% and renewals and options rising 7.0%.

Same-property net operating income (NOI), including redevelopments, increased 12.9% year over year.

During the fourth quarter, Kimco acquired the remaining 70% stake in a portfolio of six Publix-anchored, Sunbelt region shopping centers for a gross purchase price of $425.8 million from its existing joint venture (JV) partner, Jamestown. Consequently, Kimco entered into a JV partnership with Blackstone Real Estate Income Trust, Inc., wherein KIM will own 50% of the portfolio, with the latter owning the remaining 50%. On behalf of the JV, Kimco will continue to manage the portfolio.

Kimco also acquired the remaining 85% interest in Anaheim Plaza and Brookvale Shopping Center — two grocery-anchored shopping centers in California — for a gross purchase price of $134.0 million from an existing JV partner, with KIM’s pro-rata share of the sales price being $113.9 million.

Kimco sold two land parcels and four shopping centers, aggregating 380,000 square feet, for a total of $65.8 million, with Kimco’s share of the sales price being $14.7 million.

Balance Sheet Position

Kimco exited 2021 with cash and cash equivalents of $334.7 million, up from $293.2 million recorded at the end of 2020. This retail REIT had more than $2.3 billion of immediate liquidity at the end of the reported quarter. This included full availability under its $2-billion unsecured revolving credit facility. In addition, at the end of the quarter, Kimco held more than $1.2 billion of Albertson’s common stock, subject to certain lock-up provisions.

Guidance

Kimco projects 2022 NAREIT FFO per share in the range of $1.46-$1.50. The Zacks Consensus Estimate for the same is currently pinned at $1.50.

Kimco’s full-year outlook is backed by assumptions of positive same-property NOI growth and a credit loss on rental revenues of 100 bps at the midpoint. Total property acquisitions, including structured investments, net of dispositions, are estimated at $100 million.

Kimco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kimco Realty Corporation Price, Consensus and EPS Surprise

Kimco Realty Corporation Price, Consensus and EPS Surprise

Kimco Realty Corporation price-consensus-eps-surprise-chart | Kimco Realty Corporation Quote

Performance of Other Notable REITs

Simon Property Group, Inc.’s (SPG - Free Report) fourth-quarter 2021 FFO per share of $3.09 exceeded the Zacks Consensus Estimate of $2.88. Simon Property’s performance was backed by occupancy and NOI growth. However, SPG generated revenues of $1.33 billion during the quarter, lagging the Zacks Consensus Estimate of $1.35 billion.

Prologis, Inc. (PLD - Free Report) reported fourth-quarter 2021 core FFO per share of $1.12, beating the Zacks Consensus Estimate of $1.10. Prologis also compared favorably with the year-ago quarter’s figure of 95 cents. PLD’s results reflected low vacancies and solid increases in rental revenues. Further, this industrial REIT issued its 2022 outlook.

Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2021 FFO per share of $1.55 beat the Zacks Consensus Estimate of $1.52. The figure also compared favorably with the year-ago quarter’s tally of $1.37. The quarterly figure also exceeded the midpoint of Boston Properties’ fourth-quarter guidance by 5 cents, reflecting an improved portfolio performance. BXP also experienced strong leasing activity in the fourth quarter.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.