KIM - Earnings call transcript Q1 2018 | Kimco Realty Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Kimco’s First Quarter 2018 Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to David Bujnicki. Please go ahead.

David Bujnicki

you Kimco's thank earnings quarter and call. morning for first joining XXXX Good

the Flynn, team during Glenn this are Officer; me members answer Operating call Joining on questions as well Conor present David our President other call. and Chief Officer, to as CFO; our Ross and of our are Investment the Kimco’s Officer; executive course Cohen, of Jamieson, Chief that Cooper, Executive Chief available

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

may Investor area management Kimco's better investors reference the financial measures found make believe I'll Conor. that, non-GAAP can of non-GAAP call to website. understand we that turn over financial these Relations presentation, to be this of the During our measures, And help with operating Reconciliations results. certain in

Conor Flynn

morning quarter Today views market Thanks, report good Ross trends our conditions. then level for quarter XXXX everyone. our his and I’ll performance. will high provide on activity transaction overview and Dave, share of the a first and on

on color position focused beyond. Finally, our are and team for execution key the Glenn Kimco. outlook. metrics specifically, company provide the details we year of on initiatives XXXX XXXX here will major and and is to for our XXXX More four at help

our on execute plan. First, disposition

for concerns pace of enthused redevelopments, estate, portfolio, estate, environment. improve and the are of about surround retail are and real credit fund air finance our retail to developments And equity debt valuations well centers remain is the that wide plan wrestle in to Our changing to designed shopping performing strong our to quality tenants markets pricing continue volume, the continues that disposition reduce open sales. open and debt. markets Despite we real while due in the our to the the

debt into go worth and will here we generally, funding current rates, dilutive the dispositions are Ross detail and lower than we is no reducing despite producing and while earnings that it balance are I at provide this solid even more cap still activity, sheet projects the disposition noting on to conditions average While market yields think think we growth is strength. rates results

notwithstanding our off year to Second, volume leasing upon this further are record-setting our expect and we start. strong a in leasing year XXXX, improve to

this a historically is XX.X%. almost and anchor another of our we improved last the at which centers. quarter elevated ten and is quite feat and quality year, at volume first the the in shops the seasonal This for we XX.X%. Occupancy time demand to experiences small sits core first air shopping now and where sequential high at open XX.X% markets and store indication our healthy for is closures maintain for bankruptcies exactly point were boxes years, quarter for leasing first over Our our occupancy slightly for increased in

XX.X% In leasing and our in terms came spreads at options the leasing for for combined at and of spreads X.X%. a new quarter, X.X% renewals

$XX.XX years. rents The just of which from as is portfolio XXnd efforts quarter four NOI X.X%, in positive up of to is Our XX% base average our resulted our in consecutive leasing same-site $XX.XX improve growth. dramatically continues to

operating open and average high-quality pipeline Tenants to our redevelopment II are sales to for Phases and best-in-class high-growth deliver now Grand development and Parkway continue I our above generating on and retailers. assets. at Third, create

out pre-leased. specialty this a anchored to of now Phase XX% summer. is grocer fill to Phase pleased Dania are by open I to Dania retailers announce currently that Lucky We line is great I a set

Philadelphia location of areas and Lincoln across about As we our Fort as of estate fastest use pre-leasing is that historic tracking site. Lauderdale have we Farmers the Center States. said now this train by station mixed retrofitting project Square, in on United Sprouts on City one will apartments growth real area the to is project Market and anchor is announce are that numerous the the occasions, excited

$X the for become times reliable for Our making our Kimco X.X we outstanding projects $X.XX balance a the only contributors unsecured quarter to real portfolio are and series enable as allowing to tremendous consolidated and unlock safety our them million EBITDA for ended embedded steady our further future estate line Fourth, first reposition improve provide the at dividend. We value on billion debt-to-recurring forward. us and going with to signature progress credit. the continue net of of growth sheet to major

to confident While are rated execute or we proud these to recognize prepare this to are initiatives Triple only of Plus one as them we meet on rating. in B to REITs, a some we that challenges be seek dozen move ahead and head are upon We to improve continue we’ll on. BAAX there opportunities

our of points our seeing rents XX are example, total XX occupancy which locations Us For and already Toys of search high-quality locations. significant from that demand a in growing base of list annual XXX represent of are our "R" basis retailers basis points

exceed facilities, see value. to improvement, best wellness, reinvest of quality to reposition from and the new categories addition or home arts focused to long-term centers and specialty team and and groups, for to shareholder goals. coming creates medical remains we use drive the reach both highest crafts motivated furniture, conclusion, our have started our them entertainment, opportunities grocer, In of future and our to demand facilities. hospitality The co-working thriving and In and health off-price,

through safe platform levers with will long-term related coastal a to high-quality numerous significant strength it portfolio stable will of generate Our value shareholder turn and the dividend. our I NOI now, of growth combined And Ross. over and

Ross Cooper

you, Conor. Thank

with related transaction as press activity quarter extremely release in are pleased month. We this our outlined earlier first the

XXXX. of are on goals available way our on owning share, coast million or level our activity our shopping the interest hitting range, $XXX combination being low a the the midpoint. the to we driven investor. at capital achieved. with resulting five of our million related $XXX new the Midwest. on have property an and the range was continued in continue at target line our returns the continued disposition on focus centers to per are year, high average, execute to take Kim by for the receiving the With well cap impressed of sale are compared three to properties rates compelling mid and of to being expected at Demand readily emerged we advantage formations four cap In to can rates bids the XX XXXX in demand. investor the our positively the quality profile our four properties. On sold sites to portfolio, seven majority those were the of centers in located for rate on sold the be coupled of opportunistic of in The of of we that bidding reflecting months both by is low-end and capital blended of Indeed, the a the Through of first average yields debt with of six

the in liquidity seeing and retail. we out private with own operators include who recent private and strong being desire significant equity regional market. track with records, institutional are capital have Other after sidelined Additionally, a of with years been buyers pass to partnering buyers priced reemerge

active sold REITs. of have in market specific have so demand our and plus been debt centers met year, While cash we sales envision private both accepted contracts to experience to our XXXX another year the Within the $XXX exchange our guidance spreads. has million net flows has stability far under range strength and All with coupled changing. match selling supply the an currently the given capital private historically and for we are portfolio, and rates. at of operators, We wide equity, and on ticked cap dynamic offer don’t has buyers volume this the maintain we supply up, this private full with

historically to major see low there with continue markets; shortage prices for demand achieve rates. cap institutional core quality is within continuing assets no We to of

our new this provide and that opportunities the coupled demand. performance quarter. in Glenn improving is short-term. color on our on real we retail is our disciplined however, insight and maintain for Bottom-line the with our additional redevelopment development acquisition will now Given debt metrics; estate in strategy on passing financial spend anticipated program, focus of on

Glenn Cohen

and good leasing start of is a Ross, strong activity, same-site to the execution Thanks, XXXX and the morning. by disposition off as plan. level growth of our NOI evidenced

which on made In development addition, in projects further growth has our beyond. been XXXX fuel redevelopment and our will progress and solid

be a the net in million better quarter current balance sheet. of some acquiring as and We operations $X.X the reclassified in $X.X related portfolio. change instead losses on on first to believe of profit of certain property debt, cost to the income operating $X share on million had for $X.X or our FFO old the to the Now have quarter marketable impact $X.XX results equity unrealized of well we new unrealized as peers comprised compared no of quarter personnel change and $X.X to income the which from to first periods comparability was charge securities statement to first property to income losses quarter as diluted XXXX NAREIT million Also as income, The participations directly G&A of FFO, the diluted for security the been the instruments from results. of our preferred marketable from included of adoption FFO this of provide million gains adjusted. for latter per related the year. account FASB and financial primarily and investments, guidance color last section forgiveness statement. first quarter, reflect the adjusted The per for equity during share transactional maintenance the includes disposition management reported from

rates $X.X primarily to financing year compared in the diluted first compared higher FFO, a as non-operating outstanding preferred NOI year level and recurring income consolidated of occupancy FFO adjusted of quarter came to terms or each first ago. XXXX XXXX impairments year at as from quarter. in and million, rent results per recovery this quarter a transactional was of million million last In and with greater stock expense, ago. excludes contribution cost Offsetting share higher larger to include from resulting $XXX.X to $X.XX $XXX.X which attributable increase minimum attributable increased

contributing This higher loss credit by basis of rent was improved basis minimum mentioned tax recoveries growth Conor operating spreads, occupancy first the of excluding earlier, X.X% NOI last and growth. compared was XXXX As for Same-site of comp leasing lower rent points points basis quarter redevelopments by adding XX year. and points, same-site substantially growth, and XX percentage XXX delivered a offset portfolio positive the increases to solid basis driven X.X% – NOI XX points.

quarter rejected the first results Toys attributable This "R" including Our X.XX% is level the bankruptcy Us of vacates during guided to to. we dispositions. from first certain the to outperformed initially no same-site lower positive well than several factors timing level the related a and quarter, leases budgeted,

guidance the NOI a to to As we full our result, range of to same-site raising from low X%. X.XX% are year end X.X% X%

sheet one excess had of $X.X off ending of during million the at debt paid through longest stands our weighted quarter On mortgage maturities with profile the front, in XX.X $XXX the billion. maturity industry. non-recourse We years debt debt the in balance period minimal XXXX we the and average of REIT liquidity

stock as common During share price overallotment XXXX preferred on in Series of totaling $XX.X million average an announced, repurchase debt-to-recurring December net from January through at X.X $XX.X the level originally repurchased times we pro our proceeds including the of times. six exercised EBITDA X.X XXXX a in million. was And company’s under shares million Consolidated of ago. and quarter, $XX.XX issued X.X additional the times our year net program. underwriters providing rata and X.XX% times a JVs M preferred debt-to-recurring look to their year option share at the EBITDA previously X.X us first On end basis improved outstanding,

driver times come our to to invested by this to signature $XXX varying development look and net from the basis X.X projects, will stages EBITDA times on million be A to are contribution at expected debt-to-recurring X.X to-date. key EBITDA a series XXXX. Our which of completion through are consolidated to reduce objectives with

Phase pleased and II, Parkway remain extremely construction contributors growth. track the on leasing cash Grand and flowing Dania to progress significant part Station XXXX Square begin are the to during latter Lincoln of the in quarter. and We with Phase Mill first I, made XXXX be

we is will we FFO continued happy key to We and confident execution. per as we’d are answer success guidance, share be NAREIT reaffirming remain deliver questions. Regarding per our range guidance of adjusted share our $X.XX. that to FFO and The $X.XX with your to

David Bujnicki

we ask question call, move with that to Q&A portion the follow-up. may one more efficient, the of you ask additional make it to to Ready a

welcome have If rejoin you questions, take to queue. you caller. could more than first the additional are Natalia, our you

Operator

Instructions] [Operator

David Bujnicki

he Jeremy Natalia? You I can the there? queue. is please, take the on you guess, Hey are first Jeremy,

Jeremy Metz

guys me? you can hear Hello,

David Bujnicki

we hear Yes, can you.

Jeremy Metz

Yes, thanks guys. and good morning

the of terms XX have here. in Toys, So, the boxes you

I call like are process were went year. out. you of sound you think kind shook this last seeing about necessarily assuming didn’t that where dark talking It all

So also just leaves the mark-to-market what and your given you I you could closing additional outcome today much reserves, how is talk room then talk you here, bad this and point wondering if on debt boxes? closures was this about of for in can from the terms if those about

Glenn Cohen

Jeremy. Hi, Glenn. it’s Sure,

have paid are. basis the our that debt through of full for And support our gotten in XXXX rejected those credit we on them. reserves to guidance we’d our all we Toys is have notices of mind April been where that comfortable as relates where that Us. in XXX balance we remain and of "R" Again, They in loss enough rents for far. keep points terms it have haven’t to are budgeted I sites closed. In believe are sites are, four stores rejection There so bad

will we’ve comfortable closure. year, second where but of guidance that the them remain Now our incorporates are the that that we in many close we budgeted of can very half

David Jamieson

And then is this Dave Jeremy, Jamieson.

go we positive relates for in already. the the on on the of QX of balance and And in we been terms level that this them closures a working all boxes, seeing just amongst it’s to several are vacant it comp as mid-double-digits LOIs have a spread mark-to-market, Just have of for XX. as and in of of significant activity terms leases clarify, these the the budgeted to we we’ve the most seeing locations. the to out

the his we opportunities very feel So, about optimistic script as Conor in mentioned here.

Jeremy Metz

Conor, Appreciate one of And then, that buyback. color. terms in you for just the

stock under in did a has clearly quarter. pressure. here amount modest The You the first been

current So, you have attractive we with well. But for so should ht option in I spending you rather minor, a lot remain an of your today in marked am buybacks assuming remains expect needs? still allocation developments at capital least the given year, as it that should mind, near-term

Conor Flynn

do We sit we in a you compelling for option where think Well, are it’s right. us today.

with to our nice, match see and We earmarked what to execution we redevelopments and are We’ve remarks, our there nice have have his that’s getting further really along as more continue fund developments. dispositions seen weekly. we and sales seen Ross covered in closing

shares compelling year. look then more we development think the our earmarked of and with for is a look and comfortable at where continue capital, shares cost redevelopment as So, of we that us. back X.XX our get at buying this trading, option And forward, our are we’ve that for look the to

Jeremy Metz

Thanks, guys.

Operator

next Our SunTrust comes Ki Kim with from Bin Robinson. question

Ki Bin Kim

everyone. Thanks, good morning

like painful looks progress you stopping early that the or year. And later already you but and made I year? the doing is in debt the maybe more have topic, know in disposition a the maturing, to are much factors kind what it are dilution of back you’ve from of year next don’t Going lot

Conor Flynn

the the execute that lot near-term. to to redevelopments Well, matures Conor I and terms of mentioned, we where – are and – we constantly we the to want plan. do for going the notwithstanding think on not the first We foremost as the is spend a continue fact to delever our X.XX that that can portfolio. continue evaluating in in priority are We developments. as whole But is there

the We lot have in close. everything Not will today. market a

lease market. are to be to that before some exercised they’ll awaiting options have We deals the up be or introduced other

dispositions focused new this market market where So, the are completing then latter the part for over expect part sit year to look on to may the the are latter very we year. as beginning will will XXXX. of currently our year we of the and we as this there be of be But we that year, into the do next some of assets that some determining trickle now to in which in brought

Ki Bin Kim

correctly Glenn, comp floor on, any Is Okay. And have I of hasn’t a if years remember vacant year. how And, that spread like? are that two longer, or you made if question correct? that additional your lease – your maybe spreads for if that for under definition look spaces you color definition inclusive more a maybe lease would

Glenn Cohen

XX spreads it’s the for lease changed not have been – We ever. our like and definition of months

Ki Bin Kim

Okay.

Glenn Cohen

So no change. change,- we don’t

Ki Bin Kim

Basically quarters? – yes, or four

Glenn Cohen

quarters. okay. right, It’s four full In

Ki Bin Kim

that any a not difference then, definition so, maybe make your And would two made for or if on of on little years spaces bit material spreads? longer lease but you kind that

Glenn Cohen

I communicated It’s it about not any the I think I mean, in is that we’ve under spreads seems the No, population renewal in is, necessarily. well, think what or quarter. as lumpy. past lease time given

keep have always customary pretty historic on peers see seen trend gets right forward, our at the look and track but to are we to utilize practice four the going as much we’ve when you we into So or you where what quarters that consideration, of months. XX from that

Ki Bin Kim

thank Okay, you.

Operator

question with from McElroy Christy Citi. next Our comes

Christy McElroy

good Hi, morning everyone.

in given Toys next how it’s just mid-year on XXXX is impact thinking to XXXX a Toys the that NOI back be kind the rest sounds rate Toys vacancies about through was like you of with but for are terms year? your that vacating much and XXXX walk with are of sort the guidance, that trajectory and and we boxes, expecting same-store expecting. of heading the should in this the greater of the then, Maybe into recognizing has closures higher kind can number going occupancy-driven. versus growth, versus Maybe Just the you what same-store QX of that everything you it commencement happening us growth

Conor Flynn

of high-end in again, of look be the least, still of Toys guidance comfortable impact on of from online. driver part Us. key basis raised of mean, the at increases. a minimum and the is that I the the current remain key rents encouraging increase, of is lower with coming quarter, at even range is the year even rent flow, if right. last with X.X% of we’ve us you end minimum the done same-site the us, for – latter going to X%. Cash XXX Again, of the cash we year now at to leasing the all to impacted way which range the and very over "R" of driver doing coming to X.XX% starting the our So, it’s really lease X.X% the first the We for it. terms was ups bulk A we NOI, from base lot projection, points full are the

are are all the starting that get many of boxes from you TSA that and coming are boxes getting So flows we to on. baking other these

economic Now points. still It’s we leap have points. occupancy XXX of narrowed an occupancy only basis gap versus basis XX

As to time. a boxes gap lot for gap of but again, the Toys widen there over narrow is vacate, start could opportunity to that that

where we yet. Toys need early all are to XXXX, remain XXXX. rejection these with a Again, rest more comfortable notices very boxes. we a again, you. going bit So, really We really them have don’t with with little The we to of the of see on little happen what’s it’s impact tell time to on

of leases. recently. those – our for filed were they sell a which lot the But also in of trying are Some bankruptcy to boxes

it’s some of leases mean by someone new gap. bought tenant continues So, and just possible no get else with these on I

in going tell early much to there. we’ll too really happen it’s is So, XXXX, to get how

Christy McElroy

bidders then, about, markets more financing had Okay. just, you wide terms Ross, talked open. demand, buyer out in there, And of

differential financing Coast fewer this do assets versus West and the asset buying peers country available. think that’s differential morning, of in other you selling the out selling the terms is primarily your think on talked and on about bidders the based that there? of in which seeing you is are you of less what or One type? you what are Do by What areas there geographic

Ross Cooper

though even at north yesterday in in on that attractive this on the geographic in point and put that quarter. actually don’t of the market we amount position at I selling time are that When majority where million just extremely are Yes, nationally to look be we we a mean, central region of $XX really center selling, we a investors. We we are bidders have on think we closed assets X the assets I to mentioned had the been Springfield think them power a it’s large substantial I they as beyond the Missouri to was X that average.

in that’s tenants right think right in the lot those with interest We’ve I products, the good financeable. market assets. So, seen for a credit of

of that attractive number the So, some on that clearly than those trend we more we don’t are marketing of assets have, large see are down. are but we and with slowing we executing others, a percentage

Christy McElroy

for All right. Thanks the color.

Ross Cooper

Sure.

Operator

question comes next with Hill from Our Stanley. Rich Morgan

Rich Hill

want I came G&A into dig versus are to and quarter-over-quarter what that? some guys. look morning it to G&A number down or maybe good But recognize we like maybe that XXXX, just about there. than $XX good Hey, a XQ that XXXX. over Bigger million assets think should I way Anything velocity any sold pretty you bit. like you little we have XQ expecting. look

Glenn Cohen

Glenn. It’s Rich. Sure,

management operations And personnel after about do specifically look in out million we the cost, O&M we property As $XX reclassified the the prepared change at we and it in it’s line. I guidance, from reclass. the first from this put G&A related to my if where remarks, guidance, mentioned you into G&A less

booked and G&A the of So, G&A million adjusted. bulk periods will O&M, a as $X that and from all Also, consistently. reclass see I to previously lower, bit is you mentioned, of have is little a really but the about it

have mix. So you an apples-to-apples can

Rich Hill

timing about helpful. Toys some about are better, that year about is some of the might impressive little for X.XX. reflective the rest sort the quarter. X.X% quarters coming guide should obviously, the than Am at X.X one back? be year? look rest correctly thing of same-store headwinds Then this that just the the the guide, just, NOI of That’s implies in back a you we less really then NOI those same-store get thinking you going the for while and maybe revised to I XQ to this it. you midpoint really And if Got of your of that of stores be as Or bit Us how that velocity "R" was – rest that the think for do and of a

Conor Flynn

Well, there. to Toys Again, hard range. as I forecast are comfortable our back. mentioned going We impact upper-end remain don’t it are really very XXXX we the We towards because for to the many earlier, play want of guidance total we bit. out on "R" a it’s know get little we Us, to how just

overall, the our X.XX. midpoint we’d mentioned, still we range. So, the guidance current remain of guidance higher-end get I comfortable But with as of

Rich Hill

Thank I clarity. it. for it. Got you appreciate

Operator

from Our with next Nikki comes question Yulico UBS.

Nicholas Yulico

the your guess, should fund thinking Albertsons. for terms that doesn’t I merger in affect we on more help go to if of development Thanks. how How and asset just in through, think Albertsons, Rite XXXX? Aid does sales about, need the redevelopment

Glenn Cohen

had Albertsons. doesn’t modeled in really mean, internally I impact not the using anything It that are we for models us.

to us hope So, is if amounts deploy and just capital figure point that going zero the optionality where out for capital the it be to it’s happens, our best of and way cost enormous when, in us that’s when, today. at terms of upside and of is to earning that we provide

Nicholas Yulico

to FFO change. was wasn’t same-store back there huge the low-end going bump at guidance guidance? question come How recognizing a other NOI no one just benefit the the And though to to Okay.

Glenn Cohen

out up out where still again, we in think, it’s then where guidance in early it and Toys – Us end we for the our early quarter the is We just second put "R" we’ll We plays quarter. see our Well, of how it’s guidance at really and to the February. better again another we are and leaving year. want see

Nicholas Yulico

you. Thank Okay. Appreciate.

Operator

comes question Bank next with Schmidt of from Our Craig America.

Craig Schmidt

wonder of the will assets the I of under the percent from sold Midwest? contract, Thank be you. and just those what dispositions

Conor Flynn

are coming coast part focused Midwest. a the prune of the of that of in country from the But majority the of reducing the become out continue ensuring a the the regions on dispositions We’ll part throughout Yes, to portfolio. much to exposure central we see continue we’ll the other country. prevalent more and assets very

have asset in close So, center Missouri. that’s deal yesterday closed tomorrow, in power we to the set I a actually Chicago. mentioned an that

progress course the year. So, on we make do over of continue exiting central region the to the

Craig Schmidt

how Great. for a let’s maybe On the it’s average, paying And be this and and will rejected long actually say, being time rent? Dave. then, is occupying Toys leased between when

David Jamieson

size the timing Craig. as Yes, box, vary. Yes, what Sure. dependent location with boxes these each to do you vary the can of in on love and itself

can eight months sooner, look So, you be at could slightly from slightly it anywhere could it be to ten some time, longer.

and do back. does of a repositioning unless redevelopment or opportunity a it. really and split hard timing. the matter do again, or rent, single get Toys it It’s you you box So, it’s wasn��t new back choose to a really for possible specific tenant, to the what you higher tag with Do you create got otherwise sell a with

Craig Schmidt

Great, thanks.

Operator

from comes Samir question next ISI. Our Evercore Khanal with

Samir Khanal

think I know higher most that growth jump guys. I certainly people was – benefit. in there bit ratio provide with in the I guess, morning good around same-store Hi, the and much a a quarter more that? recovery was color Can expected you and was a your NOI little

Conor Flynn

Sure.

recoveries. versus on the I over actually to hold year-and-a-half program this convert waiting camp has that’s starting take more just tenants some the on positive been we’ve impact and rata. to pro on So, to think last a And

Samir Khanal

forward, kind sort a more you went related of as model is going that of So, from of because item, XQ of kind XX%. we XX% to

what’s So of… sort

Conor Flynn

the Again, doing, so first landscaping the the quarter, that of half weighted what as the are the patching more It’s are about and right, during a you that amount when quarters happening the towards the of better. probably lots amount roofing, third, in more weather parking second, is amount doing, bit are year. that think happened of and those you items of little are first fourth the you

we benefit Don’t year analysis. of higher will feel still think part fixed that in little term have past. recoveries than And a bit overall, we from in the higher But, been occupancy. occupancy. they we have the do beginning also have stronger the our be we So, that I –

is the having up basis So occupancy XX higher revolving points. from rate

Samir Khanal

Right, growth, I you XXXX, categories second say, in your And certainly sort that mean, mean, of XXXX sort of what in highlighted months even today could but the other little are all positives, I in about concerned okay. you’ve I are you guess, noise up, watch follow-up, the of maybe mean as list the the about a or come that a growth ago. certainly, XXXX, and kind create is maybe I think be as categories the let’s can bit there of of six half are versus I about? Petco sort derailed what Petsmart, the talk

Conor Flynn

think that. I into you running at are watch tenants, look are look they all it’s the some at bit list our overleveraged categories changed you they sometimes and I really when a mean, into of haven’t when that run the at that trouble, because debt-related, retailers that And have Yes, much. really of

really, opportunities from to a of in boxes And anchor that mark-to-market benefits the back, Kimco’s one us and this occupied the say that when number portfolio we XX% benefits XX% on within over those diversity transformation gives market look boxes So, mark-to-market years. Sports we are are been the get over biggest to are love the and boxes. a of wide the portfolio doing those yes, to that shares sector, anchor alone we Authority our we continue and of are we an that back is our Toys ability of we’ve it see seeing boxes, we continue base. the as have at we we really to tenant think but opportunity of and getting are The our we of below when significant just benefit is owning

And is uptick the the in so, in this we’ve plus time quarter occupancy first actually first seen years. ten

we’ve do going portfolio future. and opportunities the continue we the the all within is hard see mark-to-market that in starting to doing to that to pay So, so, to have be is been off there work opportunity

Samir Khanal

Okay, thanks guys.

Operator

RBC Capital next comes from Our from question Markets. [Indiscernible]

Unidentified Analyst

much of that tenants? by spread is versus points versus that so, And of for will will question, anchored the shop first lease – occupancy, my occupied how then, basis XXX occupied Hi, be space how year-end? the of much

Conor Flynn

the to probably back to going base, the of – would on that of you. break to I have it out spread. I’ll is, The split, have to say majority get XXX but are you get point for anchor We details

Unidentified Analyst

up of addition see And about the Okay. then, like you $XX cost what market the and due the looks on by of went point, Dania on to Is it return type Lucky’s million. incremental investment? this will the

Conor Flynn

we the to that key is Lucky’s there. added have store line-up grocery It the to

have improvements round site are have returns actually offsite grocery last now pro the added are Lucky’s out and of to the also the that rata pro benefit a We’ve in We anchor excited for the really to we’ve to since gone share box and up forma. cost a anchor asset. into added

So, we the to anchor are having be enthused box. them last about

Unidentified Analyst

thank you. Great,

Operator

question comes Goldfarb next Our from Alexander O'Neill. Sandler with

Alexander Goldfarb

out morning. Good morning Good there.

two me. for Just

they as – is there think expired. that What anything? anything I far they the that timing? saw passed are the as to come through next Hot-Scott got on they Albertsons, period that up And the that’s that First, you delay the passed go need merger would hurdles on the

Conor Flynn

Hi, the in proxy, this is updated, expect for Albertsons mid-June and new the and about with for was and The completed the next merger filed comment Aid financials step period Rite Once because to is ready. file July. that earnings reported two the filed S-X early ago the are will probably and we XX weeks a they day that with it, they a is by vote which SEC.

We to point. this schedule on not at have think that no is reason

Alexander Goldfarb

And at leverage that we outlined, if basically in have remains going the a then dividend, XXXX even with coming at still if targets the the payout second – you look just it Okay. on. look is, developments we XXXX the then, full

you well are far guys plans, how to about So the future asset capital as sales, trying improve coverage? as as dividend as thinking

Glenn Cohen

EBITDA – I comes Well, to EBITDA online. more on more and and XXXX as improve action that coverage through the think to continues come does through dividend XXXX

and that depending yield assets although further that that the we EBITDA. go of Albertsons increase reduction debt well, debt, cost there lower baked some is level which to a is capital again, those on investment of are or will monetization, haven’t as in where Now, extent in transaction, proceeds either towards any would

will So, I once our online. projects coming start think you to to are improve ratio see continue going these AFFO payout

Alexander Goldfarb

thank Okay, you.

Operator

comes next Wells from Our with question Donnelly Fargo. Jeff

Jeff Donnelly

Glenn. use about redevelopments It Thanks, in exploring target there of making able dispositions? guess, like little dividend? ratio go do maybe seems to just to favor instead a through Alex’s your bolster is your puts get progress or a could ways the and walk you of the I are for to what fund more – question that in that’s your on common you building Actually, the of are just dividend, AFFO maybe sustainable lieu maybe in dividend, consideration the guys you but way more specifically takes payout to change something to bit a to to common as to and, that

Glenn Cohen

you dividend very remain AFFO is lot sustainable. revenue does And is And a CapEx now a that differently. CapEx are of that we look Well, we that little everyone it generating. the comfortable in, when bit investing of this good clearly at portion the

look takes time finish our is clearly it position. flowing. us it comfortable there. that an and And, standpoint, it up certainly we FFO it’s there, liquidity coverage at So, to get remain very for from But

It’s at these We mechanism pretty have start it development Dania, to of really funding that are clear and our dispositions, further we the whether continue they completion these that close about when debt – you on improve XXXX to start maturing. flowing. just all – they will through are we to XXXX no flowing because if will optimistic getting projects that’s coverage, you and Pentagon, that to latter are execute of us Lincoln, we be as the projects, and cost visit redevelopment projects go in going have. and is on into the our and part And

are on pressure not dividends. putting we the more So

Jeff Donnelly

it you in fly, out rolled but just guys maybe to when difficult know, XXXX the do then, had one follow-up. might the it And be back I vision.

I be You had shift? X% of prominence? to revisit landscape about four you creation, how would the do curious be redevelopment was I that walk to the taken through of with or to Did has growth, NOI some how guess, would ground had growth those changed, based I do and think that contributing as to get you am have X.X% leasing that before? lesser organic given think composition see to they plan on they as today, sort Or equal segments factors, development. might just you greater do growth, of your you was it think –

Glenn Cohen

block significantly obviously acquisitions. the changed is building that The one is net

developments today, that obviously have we’ll net been this of a sits year. right to a reinvested allocation are the net is growing to where to improve to the and going lower that year And of We growth our improve be seller quality cost strategy portfolio. and portfolio the and capital in and capital assets sell redevelopments this we think of because continue continue seller our the

the that’s piece retail changed that against wins so have the that’s And and one moved that. of obviously REITs against

Jeff Donnelly

Okay, thanks guys.

Operator

[Operator Instructions] sorry? from Our question – comes next

David Bujnicki

Go ahead.

Operator

Okay.

comes next Vincent Chao question from Deutsche Bank. Our with

Vincent Chao

everyone. Hey, morning good

being heard bids debt side. comments but, the private commentary the was what encouraging. little you market up is to from guys, back the of for Lot on of number similarly the going we’ve Just while a

sense any forming in bidders if curious driving is the increase capital in XXXX you really there of Just of what’s more why here? and the now number had

Glenn Cohen

the it’s compelling think I yields.

is have modestly can interest the be cap the still and the over extremely rate months, While the debt that last wide. up rates few achieved ticked spread between

coming X.X that cap that now are compelling high assets the marketplace. have return. into couldn’t point pricing So, buy where rates at gotten it’s a that groups selling X we The quality about to are are cap excited that back to at a

pretty couple So in until were now. years executed that with that groups on and last we’ve quiet of transactions we’ve to XXXX sold XXXX over the

Conor Flynn

recently. to also that tied the be commentary retailer out came of might It some

what store of If back you open-air sales Navy came to recently Kohl’s because banner shopping centers CEOs out important thriving generating the centers. brand think be there. new very TJX stores centers shopping and aggressive open said traffic. they are plan on are Old see and the opening how they in said they open-air and and many in brand have because traffic go shopping positioning the and look generating others they and to the plans, why how of out CEO to said, without that because come about want they and their the are traffic

I to and shopping that, open-air have So they the the do investment that there. with centers it see opportunity commentary really sits something the think may of value

Vincent Chao

the assets to of Toys terms boxes, Gotcha. the Thank terms looking Toys the you. just changing sell – or what curious of are assets? with announcement the – if assets of them in buyer year And in or how those are balance in over them of in thinking buyers to then, the on any and shifted that’s those – that’s just interest if of you has types sales

Conor Flynn

market that, backfill slated in put to early the of examples assets of Yes, be year. that asset thought with an there or may I to was working that on are a latter as that are the few certainly we disposition our leasing pipeline where push mentioned few originally Toys are part to in or earlier a the on the are Babies. the Those year

we making to that prudent able we being we backfilling those so we a for before are that at about intent make very assets. or obtain activity minimum those sure letters that and sell of leases are provide So spaces, we go value those sure

slightly, the So, delay it year. us of selling boxes, us we based it part assets the upon in deter shouldn’t but level latter those into activity that from may have the

Vincent Chao

no But Okay. them in at selling vacant this interest point?

Conor Flynn

No.

Vincent Chao

Okay. Thanks.

Operator

next JPMorgan. [Operator comes Hong Instructions] Zhang from Our question with

Hong Zhang

guys. Hey

guidance, throughout relates it acquisitions net assumptions Or consider – of is thorough year? that’s the As that? we any should to your should how disposition

Conor Flynn

are of this any to plans course throughout pipeline. we currently current the in no assets acquisitions. Nothing the acquire year have not We working on and

redevelopment of delever. needs for the plan and continue and and obligations developments, is the year fund and our all we So, to to sure that on sell make this

sense So, would look with quality are our it capital us that assets cost if for current this at where high rates time. we were doesn’t cap to for of acquire, different, types make the of

sit we’ll to dispose and on going and where be XXXX. So, the continue disciplined into execute see we

Unidentified Analyst

Thank Perfect. you.

Operator

Barclays. Tsai question from with Our next comes Linda

Linda Tsai

changed? a $XXX the noted today’s $XXX release million. released on being the transaction market, million month, but for activity it XQ terms sale, properties was this of What Hi, earlier in on marketed

Glenn Cohen

handful assets few now that then moved the Yes, closed the on we or market that previously the including have has mentioned it’s into of that under a were the into one accepted a those assets yesterday transaction. contract closed and shifted just

So, progress made bit. shifted a around have numbers as we the

Linda Tsai

then, some are And thanks. Okay, of larger these for for Boulevard, developments? merchandizing Pentagon, thinking the the trends on? how to type you What are scale focus about Dania

Conor Flynn

in are we that Well, Pentagon mixed site. We where going asset. think use retail rate significantly is cap project, to the residential on a drop adding of a it’s the above tower existing

the extremely with the in been of that projects area really We rents are that delivered. surrounding have recently market pleased

as really optimistic Pentagon comes a we drive are specialty online like. We’ve cautiously to really asset future It’s Then On traffic. think blend grocer, think we grocery the adding the fitness, of really have rounded estate out the perfect grocery. going a mix that what signature and of are real we Lucky’s for that positioned wellness. and looks you’ve we really more health with retail especially now of got So, well in forward. company Dania, via XXXX that to

loves user got drive the to off-price these traffic at treasure hunt. the really You’ve who with

So it’s well as a nice as restaurants as well. blend some really

customers that really points repeat love and So merchandizing that’s during mix we that traffic back. think to the day drives at come all the

Linda Tsai

Boulevard? on Anything

Conor Flynn

got The those got really a that’s strong piece as is again, making entertainment think component concept When We’ve be to an that that’s project. that’s that it. up. drive we’ve street use. user row hunter. to We’ve be going We’ve already for are to the restaurant off-price main got And grocer a We’ve beauty executed. think we that of like vibrant we very a complementary again there. at, that’s going and wellness treasure that We’ve going too. got signed got a mix Boulevard great progress you health fitness look a a is and merchandizing theater to got movie

signature and to So, be asset of in is there we that going York, of are project pre-leasing well for ahead of terms our another that the Kimco. City in think New terms

Linda Tsai

Thanks.

Operator

Bujnicki concludes closing for I over like the session. David our conference answer turn to any and remarks. would to question This back

David Bujnicki

enjoy rest Thank available the to questions you follow-up I for may any you participating answer in our hope call you the of am I today. day. have.

Operator

Thank concluded. attending now you has conference for presentation. today's The

You now disconnect. may

Kimco Realty (KIM) 26 Apr 182018 Q1 Earnings call transcript