Kimco Reports Increases to Occupancy, Rent, and the Common Dividend in Q2

Kimco Realty reported second-quarter results that were relatively in line with our expectations, leading us to reaffirm our $26.50 fair value estimate for the no-moat company. Occupancy continued to improve, sequentially up another 40 basis points to 95.1%, which is slightly better than our estimate of a 20-basis-point sequential improvement. Kimco reported blended re-leasing spreads of 7.6% in the second quarter, in line with our estimate. Same-store revenue only improved 2.2% year over year, though revenue in the second quarter of 2021 benefited from tenants repaying previously owed rent. Minimum rent in the same-store pool was up a healthy 4.7% over the second quarter of 2021, which we view as the most important indicator of the company’s long-term trajectory. Same-store expenses fell 0.6% in the second quarter, leading to same-store net operating income growth of 3.4%. Kimco reported funds from operations of $0.40 per share in the quarter, which was a penny better than our estimate and 6 cents higher than the $0.34 figure the company reported in the second quarter of 2021.