Listen to this articleJericho-based Kimco Realty raised its 2024 outlook after stronger than expected second-quarter results.
The real estate investment trust, which is one of the largest owners and operators of open-air, grocery-anchored shopping centers and mixed-use properties in the United States, grew its funds from operations (FFO) in the second quarter by 5.1% over Q2 2023 to $0.41 per diluted share. Its Q2 2024 FFO was $276 million, as compared with $243.9 million in Q2 2023.
Kimco also saw 3% growth in same-property net operating income in the second quarter from the same period last year, according to its Q2 2024 financial report.
Kimco leased 2.3 million square feet in the second quarter, raising its pro-rata portfolio occupancy to 96.2%, up 40 basis points year-over-year. The REIT generated blended pro-rata cash rent spreads on comparable spaces, including renewals and options, of 11.7% and pro-rata cash rent spreads of 26.3% on 144 comparable new leases, according to the report.
“Our ability to report strong growth reflects the quality of our open air, grocery-anchored portfolio and further validates our investment thesis for the RPT acquisition,” Conor Flynn, CEO of Kimco, said in a company statement. “We see these positive trends continuing, and with $63 million of future cash flow from signed leases that have yet to commence paying rent, we are comfortable raising our full-year outlook. With a resilient portfolio and best in class team, we remain committed to increasing shareholder value.”
Kimco’s second quarter net income available to the company’s common shareholders was $111.8 million, or $0.17 per diluted share, compared to $100.4 million, or $0.16 per diluted share, for the second quarter of 2023, representing a 6.3% increase per diluted share.
The company reports that the acquisition of RPT Realty was the primary driver of the growth in consolidated revenues from rental properties with a net of $57.2 million. That was partially offset by higher real estate taxes of $8.6 million and operating and maintenance expenses of $12.7 million, as well as an increased depreciation and amortization expense of $18.9 million.
Kimco raised its 2024 outlook for net income per diluted share from $0.44 to $0.46 and raised its outlook for FFO from $1.60 to $1.62 per diluted share.
Kimco Realty’s board of directors declared a quarterly cash dividend on common shares of $0.24 per share, payable on Sept. 19. The company ended the second quarter with about $1.8 billion available on its $2 billion unsecured revolving credit facility and over $125 million of cash and cash equivalents, according to the report.
As of June 30, the Kimco owned interests in 567 U.S. shopping centers and mixed-use assets comprising 101 million square feet of gross leasable space.