Good morning and welcome to Kimco's First Quarter 2020 Earnings Conference call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to David Bujnicki, Senior Vice President, Investor Relations and Strategy. Please go ahead.

Good morning, and thank you for joining Kimco's first quarter 2020 earnings call. From wherever you find yourself following social distancing guidelines. Honestly hosting this call remotely from our homes presents a new dynamic, and we hope to make the best of it. Even with the occasional dog barking and kids yelling in the background. The Kimco management team participating on the call includes Conor Flynn, Kimco's CEO; Ross Cooper, President and Chief Investment Officer; Glenn Cohen, our CFO; and Dave Jamieson, Kimco’s Chief Operating Officer, as well as other members of our executive team who are available to answer questions during this call. As a reminder, statements made during the course of this call may be deemed forward-looking. It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements due to a variety of risks, uncertainties, and other factors. Please refer to the company's SEC filings that address such factors. During this presentation, management may make reference to certain non-GAAP financial measures that we believe help investors better understand Kimco's operating results. Reconciliations of these non-GAAP financial measures can be found in the Investor Relations area of our website. And with that, I will turn the call over to Conor.

Good morning and thanks for joining us. Today we will take a bit of a modified approach to our quarterly call. I will give you an overview of how we have confronted the challenges posed by COVID-19 and how we plan to move forward as the country begins to re-emerge. Following that, I will present a recap of the numbers for Q1 and our strong liquidity position. First, on behalf of the entire Kimco team, I want to thank all the first responders, medical professionals, volunteers, grocery store workers, and essential retailers that have risked their own personal safety to serve and help all of us. They are the true heroes, and their efforts should not be forgotten. On a personal note, I also want to thank all of you for your support in my personal battle with the virus. Your emails, texts, and thoughts were as powerful as any vaccination and were a part of my recovery. I would also like to recognize the entire Kimco team for their tireless efforts to ensure our centers continue to provide essential goods and services to our local community. All of our centers are open and operational, and we will continue to provide our shoppers, vendors, employees, and our extended Kimco family with a safe experience. Our best health and safety practices have been shared with companies both small and large so that we can help those with fewer resources in more critical needs. As an organization, we are battle-tested, having successfully weathered both industry-specific cycles and macroeconomic downturns. However, this current situation is unprecedented and poses new challenges. We have been working seamlessly and remotely since mid-March, focusing all our efforts, as Milton reminds us, to survive so we can thrive. Our strategy is focused on exactly that: managing through the current environment while positioning ourselves to thrive when the economy opens back up. Our strategy for dealing with COVID-19 was one we implemented quickly to try and help those most in need. Time is of the essence on all fronts, and a wait-and-see approach was never considered. First, we prioritized liquidity. Glenn will provide details on how we bolstered our balance sheet, which included securing a well-timed term loan at very advantageous rates. With a healthy balance sheet and cash position, Kimco will not only survive, but is in a strong position to prosper. Furthermore, we wanted to have available resources not only for our own use, but to help our retailers, many of whom lack access to capital. Next, we refocused our operations by shifting more resources to the frontline. Our team has worked tirelessly to develop new approaches and launch new programs that address numerous tenant requests. Our significant investment in cloud-hosted technologies, from companies like Salesforce, MRI, Microsoft, and Zoom, has streamlined our operations and created efficiencies across the organization. These investments have allowed us to roll out programs of size and scale rapidly across the country. In addition, we deployed custom-developed tools to help us manage and quickly address tenant communications related to COVID-19 concerns. All this has provided us with tremendous real-time data that allows us to react quickly and be proactive. We have led by example, as a number of our peers are following our lead in technology, website architecture, and Tenant Assistance Programs. Our tenant assistance program, or TAP, is a multi-pronged approach to give our tenants valuable resources in a time of need, free of charge. At the end of March, we encouraged our small shop tenants to embrace TAP, which provides them with a free legal advisor to navigate the numerous State and Federal programs available to small businesses to help them weather the storm. We also engaged quickly to reassure these small businesses that the rent for April was not hanging over their heads, allowing them to focus on government assistance programs and try to keep as many employees as possible. In addition to legal advisors, we have helped identify lenders to work with our small shop tenants applying for the PPP loan. By our last count, just under 600 tenants have participated in the program. For the month of April, we collected cash rent totaling 60% of our billed rent. We fielded rent requests for 35% of scheduled rent from tenants and have worked out deferral plans that equal approximately 14% of the April rent. For the month of May, we are still within the grace period for a number of leases that allow our retailers to pay over the first few weeks of the month. To date, many rent collections are tracking near the same level of April through the first week of the month. Each of our deferral programs is confidential and catered directly to the needs of the tenants. We are in a very fluid environment and we plan to proactively address the challenges ahead by quickly implementing any necessary changes while keeping an eye on the long-term. As such, we don't want to speculate and instead focus on the facts and provide accurate information as the situation continues to unfold. We are working to maintain occupancy and bridge our tenants to the other side of the pandemic. We are also on alert for dislocation opportunities. We have not seen any quality assets trade in this environment yet, but we are ready if and when they present themselves. At the same time, until we get a clear picture of the landscape, we have hit the pause button on assets we were considering adding to our portfolio before the COVID-19 crisis hit. Our development and redevelopment pipeline remains largely on track, and we are in the fortunate position of having limited projects in the active phase. Our two main projects, Dania in Florida and Highland in Staten Island, are very close to completion and will be tremendous assets for Kimco long-term. After a temporary delay, we received approvals to continue construction at the Boulevard at the former Highland shopping center as it was determined to be essential due to the ShopRite grocery anchor. We are hopeful that this signature asset will open later this year. At Dania Point, construction has been ongoing with Urban Outfitters and Anthropologie, building out their newly leased spaces. While we recognize that the pandemic may pose challenges surrounding the schedule of inspections and achieving final sign-off, we remain optimistic that we will be able to complete these two projects on schedule. As previously noted, we have postponed nearly $100 million of capital expenditures originally planned for this year to further our already strong liquidity position. Our strategy of focusing on grocery-anchored centers and mixed-use assets continues to validate our approach. These assets are outperforming, especially in this current environment. Our first two Class A multifamily projects, Lincoln Square in the heart of Philadelphia and Whitmer in Washington DC, are both operational, and despite the recent shelter-in-place orders, we have been able to continue leasing activity, both through virtual tours. Based on the success of both Lincoln Square and Whitmer, we are continuing to expand upon our existing 4,500 multifamily units that are currently entitled. Our new goal over the next five years is to have over 10,000 units entitled. Perhaps never before has the local grocery, pharmacy, and essential physical brick-and-mortar retail been more important. While I anticipate eCommerce will continue to accelerate during this stay-at-home period of the pandemic, it is important to note that the lion's share of eCommerce deliveries are originating at the store base. We anticipate curbside pickup combined with click and collect to be another trend that will accelerate both during the current pandemic and afterward. We have launched the Kimco curbside pickup program, and we are already working with our tenants to implement a proprietary system to provide curbside pickup in our parking lots. We want to help our retailers embrace the new normal of retail and help them ramp back up sales upon reopening with the full suite of services that are now expected by our shoppers. We know the road ahead is not going to be easy, but with persistence and a laser focus on what we can control, we will be in a position to thrive over time.

Thanks Conor, and good morning. Clearly, we are all experiencing an unprecedented health crisis that is causing a global financial recession, or what some may view as a global depression. It is times like these that bring out the best in all of us. I echo Conor’s sentiments in saluting all the workers on the front lines who are caring for the sick and ensuring we have the most vital essentials like groceries, medicine, and medical office supplies. And I cannot be prouder of how the entire Kimco organization is handling this crisis. We are fortunate to have significantly invested in our technology infrastructure, which has enabled us to quickly convert from a multi-office setting to a work-at-home environment for 500 associates within 24 hours. What was truly amazing is we have never skipped a beat—in fact, communication and productivity across the entire organization are at the highest levels. We have positioned the company to withstand the severity of the current situation and come out stronger, which I will elaborate on shortly. 2020 was off to a solid start, as the first quarter results will demonstrate. Let me provide some context on the first quarter and spend some time on our balance sheet strength and significant liquidity position. As a reminder, beginning in 2020, we are reporting only on net defined FFO. If we recognize a unique transactional gain or charge, we will be sure to point it out. Our FFO came in at $160.5 million, or $0.37 per diluted share for the first quarter of 2020. This compares to $158.4 million, or $0.38 per diluted share for the first quarter of 2019. Our first quarter results included a decrease in NOI of $7.5 million. This decrease was driven by net disposition activity during 2019, lowering NOI by $11.4 million, and a higher credit loss of $2.8 million due to bankruptcy filings from Modell's and Fairway. Nonetheless, NOI benefited from $3.1 million of incremental development NOI from our Lincoln Square, Dania Point, Mill Station, and Grant Parkway projects, along with an organic rental growth of $6.1 million. FFO for the first quarter of 2020 also benefits from a lower G&A expense of $4.8 million and reduced financing costs of $5.8 million, with the latter resulting from the redemption of $575 million of perpetual preferred stock last year. We issued $350 million in 3.7% 30-year bonds and 9.5 million shares of common stock at $21.03 per share to fund the preferred redemptions during 2019. The successful transformation of our operating portfolio has put us in a strong position to weather the COVID-19 impacts, but we recognize there remain challenges ahead. Pro-rata occupancy stands at 96%, down 40 basis points from a year ago, but flat to Q1 2019 results. Anchor occupancy is at an impressive 98.6%, down 30 basis points from year-end, but up 80 basis points from a year ago. Small shop occupancy is at 88.8%, down 50 basis points from year-end, primarily due to vacates from retailers such as Dress Barn and Modell's. Pro-rata leasing spreads remain strong during the quarter at 7.3%, comprised of new leasing spreads of positive 13.3% and renewal options of a positive 6.8%. Same-store NOI growth was positive 1.5% for the first quarter of 2020 versus a comparable 3.7% in the same quarter last year, primarily driven by minimum rent increases and increased percentage rent. Overall, this was a solid first quarter. Now, let's talk about our balance sheet and sizeable liquidity position. During the first four months of 2020, we have significantly fortified our liquidity position through the execution of four key transactions. In January, we completed a $225 million refinancing for our care joint venture, which comprised a $75 million five-year unsecured term loan and a new $150 million four-year revolving credit facility with zero drawn on it. The pricing for the term loan is at LIBOR plus 135 and revolver pricing of LIBOR plus 120 basis points. In February, we completed a new $2 billion revolving credit facility priced at LIBOR plus 77.5 basis points, maturing June 2025, which replaced our previous $2.2 billion revolver scheduled to mature in March 2021. We ended the first quarter with $675 million drawn, including $300 million drawn in mid-March as a precautionary measure as the COVID-19 crisis was unfolding. Earlier this month, we subsequently retained this amount. In April, we closed on a new $75 million mortgage on a joint venture property, replacing a $66 million secured loan that was the largest individual joint venture debt scheduled to mature in 2020. The new seven-year loan has a fixed rate coupon of 3.13%. Lastly, in April, we completed a new $590 million term loan priced at LIBOR plus 140 basis points, with 15 banks participating. This loan has a final maturity date in April 2022. As of today, we have nearly $600 million in cash on the balance sheet, $1.6 billion of availability on our revolving credit facility, and over 320 unencumbered assets, which represents approximately 80% of our total NOI. Combined, we have significantly more liquidity than any REIT in the open air sector, which puts us in excellent shape to expand the price, assist our tenants who need it most, and provide maximum flexibility to take advantage of suitable transactions as they arise. Our weighted average debt maturity profile is 10.1 years, one of the longest in the entire REIT industry, and we only have $114 million of pro-rata debt maturing for the remainder of 2020. Additionally, we have significant cushions regarding our bank and bond covenants and are confident we could access the unsecured bond market if we deemed it necessary. As previously announced, due to the uncertainty regarding the extent of the COVID-19 impact, we have withdrawn our guidance for 2020. Out of an abundance of caution, the Board has decided to temporarily suspend the common dividend. The Board will monitor our performance and economic outlook on a monthly basis and intends to reinstate the common dividend during 2020 at an amount at least equal to our REIT taxable income. Certainly, there are many unknowns, including the timing of the country reopening, the pace of getting back to some semblance of a new normal, and the financial health of specific companies, but we remain confident that with our abundant liquidity position, long debt maturity profile, superior portfolio and incredible team, we will not only survive, but thrive, as Milton says. With that, we would be happy to take your questions.

Before we start the Q&A, I just want to offer a reminder that you may ask a question with an additional follow-up. If you have further questions, you are more than welcome to rejoin the queue. Grant, you may take the first caller in the Q&A.

We will now begin the question and answer session. Our first question will come from Christine McElroy with Citigroup. Please go ahead.

Hi, good morning and thank you. So Conor, just this is for you. We have seen April collection rates from you and all of your peers. The variance among the group is not that wide, but it is there. How should the investment community be looking at April collections in the context of what is the most important thing, which is ultimately the collectability of these rents? Some national tenants are playing hardball, but should ultimately be in a position to pay, while local and regional tenants are getting a little more support from the government and landlords. What are the most important factors we should be considering ultimately?

Yes. Hi, Christine. It is a good question. I think it is so early on in the pandemic—the first month of collections that everybody is tracking should be taken with a grain of salt. The real question mark is how long this will last and how deep it will go. We are still sort of in the early innings of it. You are spot on in terms of the lion's share of what we did early on was to help our small shop tenants, because we felt—we have been pretty clear from the get-go that we think our large national retailers—who have the balance sheets and cash positions to pay their rent—should pay their rent. So we can use our balance sheet to help the small shops, the ones that don't have those resources to weather the storm. The first month that you are seeing being reported captures something similar, where the bigger players are paying a portion or all of their rents, and then the smaller mom-and-pops are trying to make sure they survive and get to the other side of it. So as it progresses, I think obviously May will be important, then June, and the reopening will be critical. You have started to see a few states start to reopen, and anecdotally, we have heard from a few of our retailers' store managers that so far so good. We continue to monitor the situation, but again take it with a grain of salt—it is extremely early.

Okay. And then about half of your projected CapEx reduction in leasing CapEx. How much of this is a function of just lower leasing volume versus a concerted effort to pull back on leasing incentives? In that context, how does the current environment, where many tenants are not meeting long-term lease contracts, change your view on the economics and risk associated with some of these upfront leasing costs and how much you are willing to invest?

Hey Christine, it is Dave. This is a layered question. Let me try to break it down a little bit to address everything you asked. As it relates to the leasing CapEx right now a lot of that is deferred CapEx. Not necessarily that we won't be doing it, but we will probably be pushing it to 2021. We are anticipating delays in terms of RCD commencements, or the leasing volume itself may accelerate in the back half of this year as we get better visibility into the situation with COVID and reopening of markets, targeting those retailers that are actively looking to expand, as there are a number of them that see this as a real opportunity to strengthen their brick-and-mortar portfolios. Regarding sourcing deals and evaluating new deals going forward, we have always taken a very hard look at the quality of the tenant and their balance sheets, and that will continue throughout this process. It has always been a historic focus, and it remains so, because it is really at these times that it matters most. Those with strong balance sheets and solid operating fundamentals will be the ones that thrive during this time and in the aftermath.

Thank you.

Our next question will come from Greg McGinniss with Scotia. Please go ahead.

Hey, good morning Glen. Kimco has done a really good job in ensuring it has the liquidity to survive and this is not necessarily a unique position for Kimco operating in this difficult environment. But how are you thinking about managing leverage throughout the shutdown once we get onto the other side of this pandemic? And then Ross, would you mind commenting on the transaction environment and your ability to help fund any expenses with dispositions? That would be appreciated as well. Thanks.

Hi Greg. Look, leverage always continues to be a focus for us. The liquidity that we have right now is not impacting leverage, because it is really net debt—you have cash that we have put on the balance sheet or debt that we repaid with some of that liquidity. So leverage really hasn't moved, as you can see in the numbers at the end of the first quarter and where I would expect it to be even at the end of the second quarter. Again, leverage is important, and we are keeping a close eye on it. We are a strong BBB+ rated company, which is important to us. We still have desires to improve our credit rating. They are tapping the bank market—involving 15 banks participating in this environment, is fairly unique. I do feel, as I mentioned in my prepared remarks, that we have clear access to the bond market if we wanted to make a move. So again, we feel like we are in pretty good shape on that front, and leverage will continue to be a focus for us to try and reduce it further.

Again, as it relates to the second part of the question, I would say that the current market is really taking a bit of a wait-and-see approach to determine the longer-term impacts on cash flow and tenancy. We have seen a few smaller deals trying to structure around the situation with master leases, escrows, or holdbacks; however, it is really a pretty diminutive component of the overall transaction market. In terms of our own portfolio and utilizing dispositions, we are extremely confident in the portfolio transformation that we have undertaken over the last five to seven years. As you know, our intent coming into this year pre-COVID was to have a very modest level of dispositions, and that hasn’t changed. You will see a very light second and third quarter in terms of disposition and transaction overall standpoint for Kimco as we get into the fourth quarter. We may evaluate a couple of deals if the market defrosts to a certain extent, but we do not anticipate utilizing dispositions as a primary funding mechanism in any meaningful way.

Great. Thanks. And Conor, you have demonstrated a clear focus on helping out small shop tenants. I am just curious how successful your tenants have been at obtaining the PPP funds with guidance from the Tenant Assistance Program. Do you have any stats on how many tenants have applied for and received funds?

It is something we focus on. I will tell you that the first round was uninspiring, because typically, as you have seen some of those stats come out, it reflected what we saw in our small shop tenants that around 5% of them were only successful in the first round. The good news is we have seen quite a few become very successful in the round that followed. We think that since they have made tweaks to the program, the focus on the small retail, and mom-and-pop, we believe they now have the tools to access those funds successfully. We are cautiously optimistic that they did it extremely fast and had to get it out there; and there were some loopholes that people took advantage of. However, we think the small shops now have the right tools in place and are ready to go to secure the PPP loan so that they can make it to the other side of this. We are cautiously optimistic they have made the necessary changes.

Alright. Thanks for the insight, guys.

Our next question will come from Alexander Goldberg with Piper Sandler. Please go ahead.

Hey, good morning and thank you. First, just on the dividend: you guys suspended the common dividend, but it sounds like you're still going to pay the preferred. Based on where you have paid the common so far, and presumably you're going to pay the preferred for the rest of the year. Do you guys need to pay a common dividend through the balance of the year to satisfy your tax compliance within REIT status?

Hi, Al. It is Glenn. Yes, based on where we are currently and our internal forecasts, the answer is yes—we would still need to pay a further dividend to cover taxable income.

Can you share how much are you close to the line, or are you still on the tee box?

We can't share that, Alex.

Honestly, Alex, it is too early. There are a lot of moving parts that go into it. But as I mentioned, we would still need a further dividend to make our distributions equal to 100% of our taxable income.

Okay, great. And then the second question is regarding your REITs. Other REITs out there: it sounds like tenants have credit as part of their bank lending— they have to be current on all of their leases, etc. But some of the tenants have been seeking waivers from their creditors, so that if they don't pay their leases, they are not in default of their credit. Do you know how many of your tenants have sought those waivers from their banks?

Alex, yes it is Dave. We haven't really had that discussion with retailers in that regard.

Okay. Thank you.

Our next question will come from Rich Hill with Morgan Stanley. Please go ahead.

Hey, good morning and Conor. I'm glad to hear you are feeling better. I want to come back to a question Christy asked about the ability to defer expenses. Reflecting back on how much CapEx you were able to reduce during the GST, but maybe Conor, if you are thinking about fully loaded CapEx, both recurring and development and redevelopment CapEx, how much do you think you could reduce that from your run rate in 2019?

Thanks for that. It is nice to be back in the saddle, that is for sure. Look, we look at our CapEx and our OpEx really on a site-by-site basis, and we have multi-year CapEx and OpEx plans. What we do is go through that in detail to figure out what is required to ensure the operating plan keeps the shopping center as safe as possible, making sure that the required upgrades are done while distinguishing needs from wants. We obviously prioritize the needs, then we push out the wants. That applies to the capital plan for each and every asset. As for the offensive CapEx, we are evaluating our development and redevelopment plans. We feel our asset base is right for redevelopment. We think we are probably only in the early innings of the entitlement plans we have pursued these last few years. Having been successful in gaining traction on multi-family entitlement, we anticipate doubling the number of entitlements in the next few years. The question is how much of that we can activate. In this environment, we will probably hit the pause button on large self-development projects but might look at doing ground leasing or similar types of proposals that limit the amount of capital we would invest directly.

Got it. I think that is pretty helpful color. I wanted to talk about negotiations with tenants, not just what you are hearing currently, but a lot of us are trying to understand the potential structural dynamics over the medium to long-term. So, I'm curious if you are hearing about any tenants wanting to stay in your properties but maybe switch to a more percentage rent structure or nothing at all, asking for lower rent. I would think that much of that tenants are viable and want to be involved, but maybe needing a bit more cushion than they did previously. Are you engaging in any of those discussions yet, or is it still too early?

Yes, this is Dave. It is a great question. It is still very much the early days. Despite feeling like nearly a decade has gone by, it has only been about six weeks. So, keeping that in context, the way we are approaching this is very methodically and measured. Each month allows us to have those discussions as needed. As we continue to gain visibility, over the course of the summer and into the fall, we will better understand the outcomes and long-term implications. Many of our retailers see this long-term as an opportunity to strengthen their portfolios and will want to expand, especially as markets start to reopen. For us, it will be measured as we progress.

One point to add to that. It is important to know that retailers are prioritizing their opportunities and assessing their boxes. The differentiator for Kimco is that many of our anchor boxes are 55% below market rents, which means when retailers look at their fleet, they recognize which stores they need to protect because they cannot replace those economic deals. Anticipating a limited amount of landlords struggling through this, it makes sense that those anchor tenants will prioritize spaces that either involve ground leases or are considerably below market rents. We believe that this will be a differentiator for Kimco.

Thank you, guys. Very helpful.

Our next question will come from Craig Schmidt with Bank of America. Please go ahead.

Thank you. Under deferral rental agreements, when are you generally targeting for the payback of the deferred rent? And are you getting any other control rights as you enter into these deferral agreements?

Yes, this is Dave. It really is a case-by-case analysis. We treat each retailer individually in those discussions. It will vary based on need from both sides. Again, we are taking a very measured approach and addressing one month at a time.

We have seen opportunities, Craig, to recapture control areas and things that would open up some redevelopment entitlement opportunities. But as Dave says, every single tenant and lease is a different situation, so we approach them one-by-one.

Okay, great. And then just turning to Kimco’s curbside pickup program. I wonder how you are monitoring it and does the national rollout seem imminent?

Yes. We first launched it in Texas, which is going to be one of the first markets to open and require curbside. Grand Parkway is fully deployed at this point with stalls in place, and as those retailers have started to open, we have seen both local and national participants utilize it. We anticipate curbside to be a trend that continues into the future. It has been an ongoing dialogue for years now at various events and in our conversations with retail partners. The COVID situation simply accelerated this trend. Because our systems are centralized, we could react quickly and capable of offering those retailers specific zones for curbside pickup. Those shoppers, then contact the retailer to identify their stall. Thus far, it is early, right—we are about a week or two into our initial deployment in Texas, but the response has been positive. As for the national program, we are already in process and will take a measured approach on that rollout. Curbside will serve as just another tool retailers and landlords will use together to ensure we provide customers the best service possible.

Craig, I think that this is a way to get customers more comfortable returning to shopping centers as well. One key challenge we have focused on is helping our small shop tenants while also encouraging customers to resume their daily needs and services when the states allow for reopening. Since many of our grocery stores are big box tenants and home improvement centers have remained open throughout, customers are increasingly comfortable with this program. Our retailers have reported over 200% growth in curbside pickup, so it made sense to share best practices from largest national tenants with our small shop tenants to help them rebound quickly, inviting customers to return to the shopping center with confidence.

Yes, that does seem like a good way to facilitate the reopening. Thank you for your comments.

Our next question will come from Samir Khanal with Evercore ISI. Please go ahead.

Good morning, guys. So Conor, I guess the question I had was on co-tenancy risk. How should we think about that in the portfolio, especially as it relates to some of the bigger box centers or newer developments? I assume there are leases tied to some of these non-essentials, right? The gyms, the theaters. If they were potentially to restructure or close, how does that trickle through to the renters or other tenants?

Co-tenancy risk for us is pretty minimal. The way that co-tenancy has been drafted in a lot of these leases varies case-by-case. Typically, a shopping center has maybe three to five anchors—the co-tenancy clause in our portfolio needs at least two or three of those anchors to be dark in order for it to be triggered. We come into this from a strong position, considering the multi-year repositioning we have undertaken. If you think about our balance sheet and our position, along with our occupancy rate above 90%, we have been preparing for this. We recognized that many deferral programs discussed with tenants are allowing us to further soften those co-tenancy clauses, providing us with enhanced strengths moving forward.

Thanks for that. I guess my second question is about groceries—can you provide an update on Albertsons? The grocery sector has been solid during the pandemic, and Albertsons have improved their debt position. How are you thinking about that?

Good morning, it is Ray Edwards. I hope you and your family are safe and healthy. Regarding Albertsons, they filed and updated their S-1 based on their fiscal year-end in February. They have performed extremely well, with comp store sales up 47% in March, and over 30% in the first two months. They have done an excellent job improving their balance sheet, positioning them for a potential IPO. However, the exact timing is contingent on market conditions, so we are working with underwriters to determine the right approach for that.

Thanks, guys. I appreciate the color.

Our next question will come from Mike Muller with JPMorgan. Please go ahead.

Yes. Hi, you began discussing plans for deferrals, but how are you thinking about the risks given that there are many people unemployed—this could lead to closures if sales recover slowly?

Yes, hi, it is Dave again. Again, it is so early in this cycle to forecast the longer-term outcomes. So for us, we have been taking a one-month-at-a-time approach to gain visibility on the program and how COVID will affect retailers and employment moving forward. Our primary focus has been on tenant retention by ensuring they have the support needed to survive in the long-term.

Are you operating with the view that this will be worse than the previous crisis or just different?

It is unprecedented in many respects and has different outcomes. This has been a health crisis that converts to a financial crisis. Many of the companies, including strong retailers that are closed today, are not closed because of poor business performance, but due to the pandemic we are in. Thus, it is quite challenging to directly compare this to the past financial crisis. Unemployment is at 14.7% and 30 million people are temporarily out of work or furloughed. However, the government actions have been highly supportive—pumping liquidity and providing consumer assistance with $600 checks on top of unemployment benefits. Still, it is too early to say how we will emerge from this. Therefore, we continue to take it one day, week, and month at a time.

To expand on this point, while this is indeed a health crisis affecting financial aspects, many strong retailers that are currently closed are not doing so due to poor inventory or business management; they are simply responding to the pandemic. Therefore, it is difficult to properly compare this crisis to the past events. Yes, we are at 14.7% unemployment, but the government's strong liquidity efforts do provide a significant difference.

Got it. Thank you.

Our next question will come from Derek Johnson with Deutsche Bank. Please go ahead.

Hi, good morning everybody. I wanted to go back to the Tenant Assistance Program. How can it become more substantive versus PR? How have you invested in tweaking the approach to filing for the program so that more tenants actually see relief in round two? Or is it a buy-in issue with local tenants? What can you do to create a higher success rate going forward?

Yes, this is David. The program has seen over 600 tenants participate so far. To enhance its effectiveness, we aligned ourselves with local banks that have shown the greatest success in delivering loans to end customers—our retailers. The program is substantive in that we have over $20 million approved or under submission for loans. We believe we have effective procedures in place and if the government assistance expands, we have the infrastructure to continue to support this effort, providing further assistance to retailers as they navigate the PPP process.

Okay, great. And just secondly, in reference to Albertson: if an IPO goes successfully, could you remind us of how your stake would be treated and/or taxed?

Hi, it is Glenn. If something were to go public, you have to understand that our basis is about $140 million. A portion of the investment was previously held in the REIT and the other portion was in our TRS. We know that based on our studies, the maximum tax would be roughly $50 million to total on everything. If it goes public, the investment we have today on the cost method would turn into a marketable security and unsold shares would be marked-to-market, with cash coming through like a free equity offering. You would receive cash with no impact to NOI since we aren't generating any NOI from that investment.

Thank you, guys.

Our next question will come from Jeremy Metz with BMO Capital Markets. Please go ahead.

Good morning. I guess two quick ones for me. As it relates to the deferrals, did you guys have a weighted average duration by ADR that you could provide just in terms of how long the deferrals are for the 14%?

No, right now, it is really a case-by-case situation. I mentioned earlier some of these deferral agreements that were issued paid back just because they secured loans. So it remains fluid and we will provide better visibility as we progress over the next couple of months.

Okay. And then, Glen, earlier in your comments you mentioned something about a mortgage. It seems like you pushed it out 90 days, so can you provide some commentary about what is happening in the direct lending market, how people are underwriting or not.

Yes, we have a property in the Bronx, Concourse Plaza, near Yankee Stadium that was a development project with our partner, where we are 50/50 partners. We had a loan maturing in 2020, and we sourced a higher-proceeds loan, closing it early April. It is a seven-year loan at 3.13%. The mortgage market is quite specific—it varies for the properties you are looking to finance. For a while, the CMBS market froze. Yet, I would say banks are still engaged, especially the big money center banks compared to regional banks. Those regional banks continue to be active. The Fannie and Freddie market operates too; for right assets, mortgages and financing can still be obtained at very low rates.

Okay, great. Thank you.

Our next question will come from Collin Mings with Raymond James. Please go ahead.

Thanks and good morning. I wanted to go back to the transaction market. You touched on Albertsons, but what about Kimco's history in this plus business? Can you expand on your potential appetite for opportunistic investments as this cycle plays out? How would you balance these types of investments versus your near-term focus on liquidity or potentially ramping back up your development opportunities?

Sure. When looking at Kimco's strategy, we have always had the opportunity bucket. We look at retailers that are real estate rich—that is how we acquired close to 10% of Albertsons years ago, recognizing that their real estate is so valuable long-term. The operations have been a shining star in the grocery sector. We believe there will continue to be opportunities in what we call the plus business moving forward. Right now, we are prioritizing harvests from existing plus business investments before making new ones to build on this track record. This differentiation strategy requires us to be prepared for any robust opportunities during this inevitable dislocation. Should we be among the few capable of underwriting and investing, it is likely to reward our shareholders in the long-term.

Okay, that makes sense, so that remains more of an intermediate to longer-term priority.

We always have that aspect as part of our differentiated strategy. We are focused on executing our 2020 vision strategy. If you think about the transformation of our asset base and how we positioned ourselves financially, we have prepared ourselves well for times like these. The ability to leverage our plus business will be advantageous when the window opens up, to create value for our shareholders.

I spent some time discussing the curbside program, but as social distancing becomes a sustained focus, are there other longer-term changes that you started discussing with tenants regarding outdoor seating for restaurants or anything else along those lines?

Yes, great question. We have already begun discussions with our restaurant operators. We are assessing the outdoor seating capacities of tenants and how we can manage it in a centralized manner to allow for more capacity. It is a key consideration as we engage all our resources in development, property management, construction, and leasing—all in understanding how we can best serve our tenants going forward. This will need to be addressed on a case-by-case basis, following the specific rules of municipalities and counties, but we are taking each of our 400 assets through a deep dive to determine how to adapt for both short-term and long-term.

Alright, thank you.

Our next question will come from Ki Bin Kim with SunTrust. Please go ahead.

Good morning. Hope you are all doing well. You have about 3.5% of rent expiring this year, and another 1% on a month-to-month basis. What is your current game plan to address these leases and how will these negotiations play out in this environment?

Sure. In terms of current renewals and discussions, those have been ongoing even before COVID, and they continue amidst these circumstances. The quality of our real estate has improved greatly over the years, and our 400 locations serve the local markets effectively. Our shopping centers maintain essential components, making them attractive to our retailers.

So this translates into perhaps shorter-term leases for now for the long-term leases that are expiring?

Not necessarily; we take each situation case-by-case. The majority of our retail shopping centers have essential components like groceries, which comprise over 77% of our ABR associated with shopping centers. Those retailers want to remain in those spaces long-term.

I appreciate that. And Glenn, was there a change in the lease spread definition? If I look at the supplemental, is there some language that suggests that?

No. Our lease spread definition hasn't changed.

Okay. I just noticed that the 4.2 number changed versus what you reported for Q4 last quarter.

No, the definition didn’t change, it is merely a presentation change.

Alright, thank you.

Our next question comes from Tammi Fique with Wells Fargo. Please go ahead.

Good morning, glad to hear you are feeling well Conor. Just following up on the commentary you made about loving the one you are with. Certainly, there are a number of tenants you may not love quite as much. Is this also an opportunity to address lower credit tenants where you may want to reverse base longer-term or is occupancy preservation so critical that it is not a consideration at this point?

That is a good question, and I think we look at each and every situation individually, crafting the best business plan for the long-term. We are always seeking to improve the quality of our tenancy. We recognize there might be opportunities to better position grocery tenants in our properties.

Okay. Got it. Thanks. And are some of your peers looking to extend loans to their small shop tenants? I'm curious if you've thought about doing that.

Yes. It is something we discussed while rolling out the TAP program. We concluded it was best to focus on government programs benefiting tenants due to existing structures around those programs. We want our tenants to access these government resources first. If necessary, we have the infrastructure and balance sheet to assist those in need. For now, the priority is the PPP.

Okay, great. Thanks. And are you seeing any differences in collectability based on geography?

We haven't seen much difference right now; it is consistent across the board.

Our next question will come from Linda Tsai with Jefferies. Please go ahead.

Hi, thanks for taking my question. Any sense of the breakdown in April rent collection for anchors versus the small shops?

It is in the supplemental; you will find that in the supplemental and our COVID business update, Linda.

Okay. It appears that the anchors are paid, then it varies across the small shops. Right?

Yes, 73% of our anchors paid, while 44% of our non-anchors paid for April.

Thanks for that. With your retailers announcing restructurings, are there any strategies to mitigate the impact of increasing costs? Could you maintain occupancy on a shorter or medium-term basis? Do you believe your scale is advantageous in this situation?

Our scale and diversity certainly help. Our tenant base is incredibly diverse, especially when coupled with geographic diversity. We closely monitor credit markets, and our tenants are some of the top 50 highest investment grade credits among our peers. We will keep a close eye on navigating the reorganizations and swaps occurring in other sectors, evaluating our opportunities accordingly.

Our last question today comes from Christine McElroy with Citigroup. Please go ahead.

Hey, it is Michael Bilerman with Citigroup. Conor, it is great to hear you are feeling better. I wanted to ask about the Tenant Assistance Program. While you are engaged in working with your tenants, are you working with them to provide equity in the form of stepping into retailers as it has been a hallmark of Kimco for years? Do you view that as an opportunity today to invest into repositioning, aside from the deferrals and loans?

Yes, Michael, we regard that similarly. We are considering additional investments in tenants that are real estate rich, exploiting this opportunity where those distressed retailers need a partner to unlock real estate value. However, we proceed with caution. Our track record serves as a verification of our effectiveness. We only invest in tenants that have a strong recovery plan.

On the dividend: it was a suspension and you are reviewing it monthly. When you do reinstate, do you plan to catch up on unpaid dividends when possible, or is it simply going to be the current rate?

It will depend on the circumstances. The Board has been discussing numerous scenarios reflecting potential outcomes. We will take it month by month, reviewing how May unfolds and the extent of our rent collections before deciding. The focus is on ensuring sustainability for the long term, so there are many options available to us.

From past payments, you have the option to pay in stock. Do you think the suspension decision was more favorable than offering script to shareholders?

Yes. We determined that the suspension was the most prudent approach, given the uncertainty. The situation is fluid, and we will continue to assess it regularly. We may have clearer insights in the coming weeks, which will help us make informed decisions.

Lastly, with some states reopening, do you have any anecdotal sales from stores or restaurants in your portfolio? Are there any indications of pent-up demand in the economy as things reopen?

We do not have specific sales data yet. However, the engagement from store managers indicates positive sentiments, and we anticipate favorable responses through curbside pickup which supports customer comfort levels in resuming transactions.

This concludes our question-and-answer session. I would like to turn the conference back over to David Bujnicki for any closing remarks.

Thank you for participating in our call today. I'm available to answer any follow-up questions you may have. I hope you and your families are staying safe and healthy during this crisis, and hopefully, by next call we can do this in a more normalized setting. Thank you, everybody.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.