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Kimco Realty raised its full-year earnings outlook Thursday after leased occupancy at its shopping-center portfolio reached a record 96.6% and rents on new leases increased sharply.
The Jericho, New York-based real estate investment trust reported third-quarter funds from operations of $316.2 million, or $0.47 a diluted share, compared with $300.3 million, or $0.44 a share, a year earlier. Per-share FFO increased 6.8%.
FFO is a supplemental measure commonly used by real estate investment trusts. Kimco excludes gains on property sales, net of impairments, from its calculation.
New-lease rents rise 31.5%
The company signed 444 leases covering 2.7 million square feet. Comparable new leases carried cash rents 31.5% above the previous rents, while blended cash rent spreads across comparable new leases, renewals and options were 12%.
Same-property net operating income increased 4.9% from a year earlier, driven by a 3.2% increase in minimum rents. Small-shop occupancy matched its record of 92.9%, and anchor occupancy reached 98.2%.
Kimco said signed leases that had not yet commenced represented $76 million of future annual base rent. Its 96.6% leased-occupancy rate was 390 basis points above economic occupancy, so the leased figure should not be read as space already generating rent.
Property sales lift net income
Net income available to common shareholders rose to $272.5 million, or $0.41 a diluted share, from $130.2 million, or $0.19 a share. The increase was primarily driven by $122.4 million more in property-sale gains, net of impairments.
The company sold The Witmer, a 440-unit multifamily building at Pentagon Centre, for $211.5 million. It also completed previously announced sales of four Costco-anchored assets for about $127 million and used 1031 exchange proceeds to acquire two Florida shopping centers.
In Connecticut, Kimco acquired the leasehold interest of BJ’s Wholesale Club at Home Depot Plaza in North Haven for $8.5 million.
Kimco now expects full-year FFO of $1.84 to $1.86 a diluted share, up from $1.83 to $1.84. It raised its net-income outlook to $1.07 to $1.09 a share from $1.00 to $1.03, and expects same-property NOI growth of 3.5% to 3.8%, compared with its previous range of 3.0% to 3.5%.
JBizNews Desk | Jericho, New York
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