KIMCO REALTY CORP Annual Report - A Look Back at 2025

This summary offers a clear, straightforward review of KIMCO REALTY CORP's performance during the fiscal year ending December 31, 2025. We'll explore their operations, financial health, and strategic direction, helping you understand their position and potential as an investment.

We'll cover the following key areas:

1. Business Overview

Kimco Realty stands as a leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties across the United States. They essentially serve as the landlord for many essential retail destinations – places where people shop for groceries, grab coffee, or run daily errands. With over 65 years in the business, Kimco directly manages its extensive property portfolio.

A major strategic move in early 2024 saw Kimco fully integrate the RPT Realty acquisition into its operations this year, significantly expanding its footprint. This integration added:

• 56 open-air shopping centers (43 wholly-owned and 13 through a joint venture)
• 13.3 million square feet of leasable space
• A 6% stake in a joint venture with 49 net lease properties

By December 31, 2025, Kimco held interests in 565 shopping center properties, totaling 100.2 million square feet of leasable space across 29 states. Additionally, they owned 66 other property interests, including net leased properties and preferred equity investments, adding another 5.4 million square feet. The company achieved a strong 95.0% overall occupancy rate across its portfolio by year-end.

Kimco's growth strategy focuses on acquiring and redeveloping existing shopping centers, particularly those anchored by a grocery store, and developing residential and mixed-use properties.

2. Financial Performance

For the fiscal year ending December 31, 2025, Kimco reported total revenues of approximately $1.85 billion. Net income attributable to common shareholders reached $450 million, or $1.95 per diluted share.

As a Real Estate Investment Trust (REIT), Funds From Operations (FFO) provides a crucial measure of cash-generating ability by adding back non-cash expenses like depreciation. Kimco reported FFO of $820 million, or $3.55 per diluted share, and Adjusted FFO (AFFO) of $780 million, or $3.38 per diluted share.

Kimco paid out $1.00 per common share in dividends during 2025, representing a current yield of approximately 4.5% based on recent prices. This demonstrates their commitment to delivering shareholder returns. Same-property Net Operating Income (NOI) grew by 3.5% for the year, signaling healthy performance from existing assets. New leases and renewals also showed strong rental rate growth, with cash rent spreads averaging 12.5%.

As a REIT, Kimco benefits from a special tax status, generally avoiding U.S. federal income tax as long as they distribute at least 90% of their taxable income to shareholders annually. They also utilize "Taxable REIT Subsidiaries" (TRSs) for certain business activities, which do pay taxes.

3. Risk Factors

Kimco effectively diversifies its portfolio, limiting concentration risk. As of December 31, 2025:

• No single shopping center accounts for more than 1.2% of their rental income.
• Their largest single tenant represents only 3.8% of rental income.
• Their top five tenants combined make up just 10.9% of rental income, reducing reliance on any one property or tenant.

However, several broader risks persist:

• Economic Headwinds: Sustained high inflation and interest rates could impact tenant profitability, potentially leading to slower rent growth or increased vacancies.
• Geopolitical Instability & Supply Chains: These factors remain ongoing concerns.
• Interest Rate Sensitivity: As a REIT, Kimco is sensitive to interest rate fluctuations, which can increase borrowing costs and affect the attractiveness of real estate investments compared to other income-generating assets.
• Competition: They face continuous challenges from competition for high-quality acquisitions and the evolving retail landscape, particularly the growth of e-commerce.
• Property Valuation: If property values decline due to these issues, Kimco might incur "impairment charges," which could significantly impact financial results.

4. Management Discussion and Analysis (MD&A) Highlights

Kimco achieved several key successes and navigated challenges in 2025:

Key Achievements:

• RPT Realty Integration: The successful integration of the RPT Realty portfolio, acquired in early 2024, significantly boosted 2025's revenue and FFO growth.
• Residential Development: Kimco continued strong progress in residential development, completing and leasing 850 new multi-family units during 2025. This brought the total built to 3,505 units by year-end.
• Capital Structure Optimization: The successful repurchase of $150 million of preferred stock in early 2024 optimized their capital structure.

Challenges Faced:

• High-Interest-Rate Environment: Navigating a persistent high-interest-rate environment increased borrowing costs for certain debt maturities and impacted property valuations.
• Operating Expenses: Kimco faced increased operating expenses due to inflationary pressures, though strong rental growth largely offset these.

The acquisition of RPT Realty in early 2024 represented a major strategic move to expand Kimco's footprint. Kimco also reorganized into an UPREIT structure in January 2023. This structure allows them to acquire properties from owners who can defer capital gains taxes by contributing their properties to the UPREIT in exchange for operating partnership units, making acquisitions more attractive and tax-efficient for sellers. Kimco's strategy continues to emphasize value creation through redevelopment, adding residential components, and selective acquisitions in high-growth markets, moving beyond traditional retail-only models.

Kimco operates under a complex regulatory framework, including federal securities laws, tax laws specific to REITs, environmental regulations, and local zoning ordinances, incurring ongoing compliance costs. A recent change in U.S. tax law in July 2025, which extended the 20% deduction for "qualified REIT dividends" for individual investors and adjusted limits for Taxable REIT Subsidiaries, was assessed by Kimco and determined to have no material impact on their financial condition or results of operations. Beyond regulations, Kimco actively adapts to evolving consumer preferences, the continued growth of e-commerce (by focusing on essential, experiential retail), and the increasing demand for mixed-use developments that integrate living, shopping, and dining.

5. Financial Health

Kimco maintains a strong financial position, holding investment-grade unsecured debt ratings (A-/A-/A3) from three major ratings agencies. Their financial discipline is evident in a Net Debt to EBITDA ratio of 6.5x and a Fixed Charge Coverage Ratio of 3.8x, both considered healthy for the sector.

The company boasts one of the longest weighted average debt maturity profiles in the REIT industry, currently at 7.9 years, which spreads out their debt payments over an extended period. Kimco also commands over $2.2 billion in immediate liquidity, including a $2.0 billion unsecured revolving credit facility that provides a substantial line of credit for operational flexibility. Furthermore, over 525 of their properties (approximately 91% of their centers) are unencumbered, meaning they are free of mortgage debt and offer Kimco significant flexibility for future financing or strategic moves.

6. Future Outlook

For fiscal year 2026, Kimco projects FFO per diluted share to range from $3.65 to $3.80, driven by anticipated occupancy gains and rental rate increases. Kimco aims to be the premier owner and operator of open-air, grocery-anchored shopping centers and mixed-use properties in the U.S. They plan to achieve this by:

• Increasing the value of existing properties and growing their portfolio.
• Boosting cash flows for reinvestment or shareholder distributions, while maintaining conservative payouts.
• Sustaining strong debt ratings and financial health.
• Continuing to grow in desirable areas with successful retailers, especially grocery anchors.
• Increasing approvals for residential use on their properties.

Kimco plans to continue optimizing its portfolio through strategic dispositions of non-core assets and reinvesting in higher-growth opportunities, including further residential development. A strong focus on sustainability and technology integration remains central to their long-term operational efficiency and tenant experience. Maintaining a strong, sustainable dividend is a core objective, supported by anticipated FFO growth.

7. Competitive Position

Kimco strives to be the premier owner and operator in its market segment. They focus on a strong, diversified portfolio of grocery-anchored centers in desirable locations – specifically, drivable first-ring suburbs within 19 major metropolitan Sun Belt and coastal markets. A significant 82% of their rental revenue originates from these top markets, which feature strong demographics, projected population growth, and "high barriers to entry" that deter new competitors.

Their "Lifestyle Collection™" of upscale properties offers elevated retail experiences with premium brands and food options, attracting more foot traffic and sales for their tenants. Kimco's focus on essential retail and strategic locations, combined with proactive redevelopment and mixed-use initiatives, creates a strong competitive advantage against traditional retail landlords and e-commerce pressures. They compete with other REITs, private equity firms, and developers for both prime properties and desirable tenants.

Kimco also values its company culture, having earned "Great Place to Work" certification for eight consecutive years, which helps them attract and retain top talent.