Strong Occupancy Growth and Re-Leasing Spreads but Low NOI Growth for Kimco in Q4

Kimco Realty reported fourth-quarter results that were relatively in line with our expectations, leading us to reaffirm our $27 fair value estimate. Same-store occupancy improved 40 basis points sequentially and 120 basis points year over year to 95.7%, better than our estimate of 95.2%. Blended re-leasing spreads were also strong at 8.7% in the fourth quarter, slightly better than our estimate of new rent being 7.0% higher than prior terms. Same-store revenue increased 3.5% in the fourth quarter, though same-store operating expenses were up 7.5%. As a result, same-store net operating income, or NOI, grew 1.9%, which was in line with our estimate of 2.1% growth. However, higher interest expense caused funds from operations, or FFO, to fall 2.2% year over year to $0.38 per share in the fourth quarter, which was a penny below our $0.39 estimate.