Earnings Call Transcript - KIM Q4 2025

Operator, Operator

Hello, everyone, and thank you for joining the Kimco Realty Corporation fourth quarter earnings call. My name is Claire, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2 on your telephone keypad. I will now hand over to David F. Bujnicki, Senior Vice President of Investor Relations and Strategy for Kimco Realty Corporation. Please go ahead. Good morning.

David F. Bujnicki, Senior Vice President of Investor Relations and Strategy

Thank you for joining Kimco Realty Corporation’s quarterly earnings call. The Kimco Realty Corporation management team participating on the call today includes Conor C. Flynn, Kimco Realty Corporation’s CEO; Ross Cooper, President and Chief Investment Officer; Glenn Gary Cohen, our CFO; David Jamieson, Kimco Realty Corporation’s Chief Operating Officer; as well as other members of our executive team that are also available to answer questions during the call. As a reminder, statements made during the course of this call may be deemed forward-looking, and 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 Realty Corporation’s operating results. Reconciliations of these non-GAAP financial measures can be found in our quarterly supplemental financial information on the Kimco Investor Relations website. Also, in the event our call were to incur technical difficulties, we will try to resolve them as quickly as possible, and if the need arises, we will post additional information to our IR website. Good morning. Thanks for joining us today. We appreciate your interest in Kimco Realty Corporation. Today, I will highlight what we delivered in 2025 and how we are positioned to drive value in 2026. David Jamieson will provide additional color on our leasing activity. We will also discuss the transaction market, and Glenn will wrap up with a review of our key financial metrics and guidance. 2025 was another banner year for Kimco Realty Corporation. We delivered NAREIT FFO per share growth of 6.7%, making us one of the only shopping center REITs to achieve over 5% FFO growth in 2024 and over 6% in 2025. We also earned a credit rating upgrade, A-, from Moody’s during the fourth quarter, reflecting our disciplined approach to the balance sheet. Kimco Realty Corporation is now one of only 13 REITs in the entire REIT industry with multiple A-/A3 ratings from the three rating agencies. A notable milestone in our transformation into one of the lower-levered REITs while still accelerating earnings growth. This is a rare accomplishment in the REIT world, and it speaks to the strength of our team, our portfolio, and our execution. Operationally, our performance was equally strong, achieving a number of record milestones, including overall portfolio occupancy of 96.4%, matching our all-time high, our highest quarterly new leasing volume in more than a decade, with 1,200,000 square feet leased, a 90 basis point sequential increase in anchor occupancy, our strongest quarterly gain on record, a new all-time high in small shop occupancy of 92.7%, a signed but not open pipeline reaching a record 390 basis points, which represents $73,000,000 of future annual base rent, enhancing our portfolio quality by expanding our annual base rent from grocery-anchored centers by converting nine nongrocery sites to new grocery-anchored locations in 2025. In terms of same-site NOI growth, we delivered 3% for the full year. These achievements highlight one of Kimco Realty Corporation’s key advantages: our ability to create value through our platform, not only through capital allocation but through consistent hands-on execution at the asset level. A great case study is the portfolio we acquired from RPT. At acquisition, the occupancy gap between RPT and Kimco Realty Corporation legacy portfolio was 120 basis points. Since then, we have increased RPT occupancy to 96.2% at the 2025 year-end, narrowing the gap to a mere 20 basis points, or approximately 30,000 additional square feet to match Kimco Realty Corporation’s occupancy level. The key driver has been small shop leasing. Our RPT small shop occupancy improved 370 basis points since the merger to 92.1%. Further, our operating momentum translated into real cash generation. We produced over $165,000,000 of free cash flow after the payment of all dividends and leasing costs in 2025, strengthening our ability to self-fund growth while supporting a well-covered and growing dividend. We also paired that performance with a disciplined capital allocation, repurchasing shares when our valuation reached a meaningful discount to net asset value. Our portfolio and balance sheet are cycle-tested and we are positioned to keep executing through any environment. As we enter 2026, we are encouraged by the continued fundamental strength of the shopping center sector. Importantly, there is almost no supply coming online, which combined with the resilient consumer and a robust pipeline of deals driven by healthy tenant demand gives us confidence we could push occupancy and same-site NOI higher. This is why we believe Kimco Realty Corporation offers investors a compelling opportunity: solid, robust operating fundamentals, a well-covered dividend, durable earnings growth, and one of the strongest balance sheets in the REIT sector with a very attractive valuation based on our current multiple. As Ross will touch on, our high-quality open-air retail continues to attract capital. While public REIT sentiment has been uneven, private market pricing remains constructive, and that disconnect is creating opportunity. In 2026, we are focused on closing the value gap between Kimco Realty Corporation’s public market valuation and private market price. Our strategy for 2026 is built around the following priorities. First, we intend to be proactive and aggressive in recycling capital that is both accretive and enhances the overall long-term growth profile. We plan to take individual assets and portfolios to market and sell at attractive private market cap rates, redeploying the proceeds into our highest return opportunities, including further potential share repurchases that currently offer roughly a 9% FFO yield. Recent transactions show shopping center REITs go private at cap rates in the mid-5s to low-6s range, and demand for high-quality assets like ours remains strong. Based on what we are seeing, we believe we can sell assets across our portfolio at a blended cap rate in the 5% to 6% range, which compares favorably to our implied cap rate in the low- to mid-7% range, representing a clear value creation opportunity. Where appropriate, we will continue to utilize 1031 exchanges to mitigate the tax impact from these sales. To the extent gains cannot be fully deferred, it is quite possible that we may have to distribute a special dividend at year-end. Second, we are flattening our organization and modernizing our operating platform to move faster and operate more efficiently, driving higher cash flow, improving margins, and unlocking the full advantage of our scale through better coordination, clear ownership, and faster execution. At the midpoint, our plan removes $3,000,000 of G&A expense this year while still investing in our people and platform to keep raising the level of execution. Our priorities position us well for 2026. We are entering the year with strong operating momentum, the largest signed but not open pipeline in Kimco Realty Corporation’s history, providing clear visibility into future rent commitments and embedded NOI growth, and a balance sheet designed for flexibility. Our focus is on disciplined execution, and we are energized by the opportunity ahead. With the strength of our team, the quality of our portfolio, and the financial capacity to act decisively, we are confident in our ability to outperform and unlock even greater long-term value.

David Jamieson, Chief Operating Officer

Thank you, Conor. I will start by touching on our fourth quarter leasing highlights, followed by sharing some additional perspective on 2026. In the fourth quarter, as Conor shared, we achieved a number of record leasing milestones punctuated by 1,200,000 square feet of new leasing volume. Other notable accomplishments included the signing of 30 anchor leases, which are the most we have ever completed. We also saw the lowest volume of vacates in over six years, including only three anchor leases vacating. This performance reflects the robust and deep demand that exists with activity spanning grocery, off-price retailers, fitness, furniture, and general merchandise sectors, and also showcasing that retailers, when given the chance to relocate, are choosing to remain at well-located high-traffic open-air centers at market rents to further support their business strategies. The impressive deal volume has helped grow the SNO pipeline to a record 390 basis points, representing $73,000,000 of annual base rent. This is an increase of $17,000,000, or 30% higher than the prior year’s level. Our construction and tenant coordination teams prioritize cash flow growth and are committed to accelerating rent commencements by working closely with retail partners and municipalities to streamline workflows and address challenges early, ensuring timely openings. This effort enabled us to recognize $31,000,000 in rent commencements during 2025, a figure that exceeded our initial budget by 15%. Our success in 2025 was also driven by new approaches to our targeted leasing strategy, which is best exemplified by the package deals. During the year, we completed 10 package deals totaling nearly 60 leases and over 20% of the total GLA for all new leases signed in 2025. The most recent example of this is in the fourth quarter package deal with Ross Dress for Less, in which we signed six leases that were completed within 30 days from approval to execution. Both sides were motivated by a shared goal to efficiently expand the partnership, work collaboratively, with residual benefit that would expedite the store opening strategy for Ross while allowing us to increase our economic occupancy over time. A key initiative in 2026 is to further expand these efforts and fully optimize our advantages of scale. This includes shifting away from the regional organizational framework to a functionally aligned operating model, enabling us to drive further operating efficiencies. Most importantly, this change will not result in any incremental cost and is expected to drive additional savings over time. Nearly six weeks into 2026, we continue to see last year’s momentum carry forward, supported by steady demand and limited new supply. Our tenant credit profile is as strong as it has been in several years, and while we budget for the usual first quarter seasonal softness, we do not anticipate it will materially impact performance in 2026. In terms of our expiring annual base rent, we have resolved or have a deal in the works for 87% of the expiring ABR in 2026, which gives us confidence that a retention rate should remain around that 90% level. In addition, of the 47 naked anchor leases, which are those that are expiring without any renewal options in 2026, 98% of our budgeted assumptions are resolved with mark-to-market spreads around 30%. Importantly, most of our budgeted minimum rent for 2026 is in place with 90% already cash flowing, and another 8% driven by rent commencements from the SNO pipeline and budgeted renewals and options. All told, this leaves only 2% of the budget as speculative, which is inclusive of new leases, additional renewals, and options. Provided there is no major bankruptcy activity in early 2026, and no significant macro disruptions, we are confident in our budget and see the potential to outperform based on our historical success with the SNO deliveries and retention levels. And while we do not provide guidance for occupancy, we are optimistic that we can drive it higher than the 2025 year-end level. The same holds true for our SNO pipeline. Given the elevated pace of leasing, we project it to grow further before beginning to compress through the end of the year and into 2027. This bodes well for the cash flow growth over the coming years.

Ross Cooper, President and Chief Investment Officer

Thank you, David. I will begin with a brief recap of fourth quarter capital allocation, then turn to our 2026 expectations. The fourth quarter was active as we continued to execute on our strategy and capital plan. This was highlighted by the conversion of another structured investment with the acquisition of a common member’s interest in Shops at 82nd Street in Jackson Heights, Queens, New York. Shops at 82nd is located in an exceptionally dense infill market and is a grocery-anchored center with a strong tenant roster, including Target, Chick-fil-A, Chipotle, Starbucks, and Northwell Medical. Having initially invested preferred equity in this asset in 2021, we exercised our right of first offer/right of first refusal, which culminated in buying our partner’s interest and retaining the property in Kimco Realty Corporation’s long-term portfolio. We utilized this property to complete a 1031 exchange, deferring tax gains from the continued sale of long-term flat ground leases from the portfolio. This dovetailed well with our capital recycling strategy that we laid out last year, selling lower-growth assets at compelling private market cap rates and reinvesting into higher-growth, better-yielding investments. We made meaningful progress on that initiative during 2025. As we enter 2026, competition for open-air retail has become increasingly intense, making our ability to source acquisition opportunities from our existing JV platform and structured investment program a meaningful differentiator for Kimco Realty Corporation. This is critically important as we continue to see new entrants into this asset with investors and operators trying to find ways to position themselves to win marketed deals. This is leading to tighter return hurdles and forcing us to be more selective to achieve acceptable yields. Our strategy and having our foot in the door on deal flow allows us to avoid a crowded bidding tent and find unique opportunities where we can invest at a more favorable spread. We are excited by our ability to continue recycling capital accretively and build on the momentum that started to ramp in 2025. To that point, we have identified a disposition pipeline of $300,000,000 to $500,000,000, primarily consisting of flat ground leases, lower growth multitenant centers, and non-income producing land and entitlements. We are also further evaluating components of our multifamily program as potential opportunities to further monetize assets at low cap rates and crystallize value. We expect the blended cap rates from sales to be between 5% to 6%. Utilizing this low-cost source of capital, we anticipate acquiring a similar amount of shopping centers at cap rates roughly 100 basis points higher at the midpoint. Importantly, these acquisitions not only provide higher going-in yields, we also expect on average approximately 200 basis points of incremental compounded annual growth, creating a higher-growing portfolio that should enhance same-site NOI and FFO growth as we recycle capital over time. As we did last year, we plan to utilize 1031 exchanges and other tax strategies to help defer gains from asset sales. The other component of our investment strategy is a modest expansion of the structured investment book, with net growth of approximately $100,000,000 at the midpoint with a blended average yield around 9%. This is a capital allocation strategy that we are confident we can achieve in 2026 and, importantly, build out as a recurring strategy to enhance the composition of the portfolio while reinvesting in higher growth and quality. We are off to a great start to the year, with several dispositions already closed as well as a few structured investment deals funded in January. The pipeline is active and building, and the team is excited and motivated.

Glenn Gary Cohen, Chief Financial Officer

Thanks, Ross, and good morning. As the team has shared, Kimco Realty Corporation delivered a strong finish to 2025, driven by continued cash flow growth, disciplined capital allocation, and the strength of our open-air grocery-anchored portfolio in a supply-constrained environment. Starting with the fourth quarter, funds from operations, or FFO, was $294,300,000, or $0.44 per diluted share, representing a 4.8% increase versus the prior year period. This performance was driven by higher pro rata NOI, primarily reflecting greater minimum rents. For the full year, FFO was approximately $1,200,000,000, or $1.76 per diluted share, representing a 6.7% per share increase compared to 2024, driven by the embedded growth characteristics of our portfolio, highlighted by an increase of 4.9% from pro rata NOI. We also delivered same-property NOI growth of 3% for both the quarter and the full year, supported by sustained demand for our space and consistent rent growth. Credit loss was 74 basis points for the full year, at the low end of our range, underscoring the solid tenant credit profile across the portfolio. Turning to the balance sheet, we ended the year with strong liquidity and significant financial flexibility. This is demonstrated by over $2,200,000,000 of immediate liquidity, including $213,000,000 of cash and full availability on our $2,000,000,000 unsecured revolving credit facility. We also maintained our solid balance sheet with consolidated net debt to EBITDA of 5.4 times and on a look-through basis, including pro rata JV debt and preferred stock outstanding, at 5.7 times. During the quarter, as Conor mentioned, we received an A3 unsecured debt rating from Moody’s, which places Kimco Realty Corporation in a select group of REITs with A- level ratings across the three major rating agencies. This milestone reflects the strength of our portfolio, a conservative leverage profile, consistent execution, and significant financial capacity and flexibility. We also added another option to our funding toolkit by a commercial paper program, which we expect to use opportunistically as part of our overall financing strategy. In terms of capital allocation, we repurchased 3,100,000 common shares during the fourth quarter at a weighted average price of $19.96 per share. For the full year 2025, we repurchased 6,100,000 common shares at an average price of $19.79. We view buybacks as an important lever when our valuation reflects a meaningful discount to the value of our real estate and our internal growth profile. Looking ahead, Kimco Realty Corporation enters 2026 with considerable momentum and a foundation for continued strong performance. Our 2026 outlook reflects another year of healthy earnings progression. Our initial 2026 FFO per share range is $1.80 to $1.84, representing a 2.3% to 4.5% growth over 2025. This outlook reflects our expectation for continued demand across the portfolio supported by same-property NOI growth of 2.5% to 3.5%. With respect to same-property NOI growth, we expect the first quarter to mark the low point for 2026 as we lap prior year rental income from tenants such as Joann’s, Party City, Rite Aid, and Big Lots. Importantly, we see a clear and accelerating growth profile emerging thereafter, with each successive quarter benefiting from a rising pace of rent commencement from our SNO pipeline, providing strong visibility through the balance of the year. As David Jamieson noted, our tenant credit profile is as strong as it has been in many years, and we do not expect that to change materially in 2026. That said, we believe it is prudent to begin the year with a credit loss assumption of 75 to 100 basis points, which is consistent with historic norms and aligned with our approach over the last several years. Other financial assumptions in the outlook include lease termination income between $7,000,000 to $15,000,000, noncash GAAP revenue inclusive of straight-line rent and above- and below-market rent amortization of $45,000,000 to $50,000,000, and net mortgage and financing income, which continues to be an important contributor to our earnings profile, of $45,000,000 to $55,000,000. On the expense side, we are projecting consolidated G&A between $128,000,000 to $132,000,000, reflecting ongoing cost discipline, and consolidated interest expense plus preferred dividends of $370,000,000 to $377,000,000. With respect to capital deployment, we will continue to prioritize high-return opportunities that enhance long-term growth. For 2026, we anticipate total development and redevelopment investment between $100,000,000 to $150,000,000, capitalized lease-related and maintenance spending of $275,000,000 to $300,000,000 to support strong occupancy growth and tenancy momentum, net new structured investment activity between $75,000,000 to $125,000,000 with going-in yields in the 8% to 10% range, and net neutral acquisition and disposition activity with a positive spread on reinvestment of proceeds. In terms of the balance sheet, we have over $800,000,000 of consolidated maturities at an average effective rate of approximately 2.65% in 2026. While these low coupon maturities represent a known headwind, we view them as manageable, and we are confident in our ability to address them proactively and opportunistically, supported by our A- level ratings and balance sheet strength. In summary, Kimco Realty Corporation enters 2026 with confidence and a positive outlook. Our portfolio continues to generate growing cash flow supported by embedded rent commencements, ongoing occupancy upside, and robust leasing activity. Coupled with a fortified balance sheet, prudent capital allocation, and multiple levers for value creation, we believe we are well-positioned to deliver another year of sustainable growth and profitability while continuing to provide an attractive dividend yield. Before we move on to Q&A, I want to recognize Paul Westbrook, Kimco Realty Corporation’s Chief Accounting Officer, who plans to retire in March. For the past 23 years, Paul has been a tremendous partner and leader; we are deeply grateful for his many years of service and contributions to the organization. At the same time, Kathleen Thayer will step into the role of Executive Vice President, Treasurer, and Chief Accounting Officer on April 1. With nearly two decades at Kimco Realty Corporation, and deep institutional and technical expertise, Kathleen’s appointment reflects the depth of our team and makes for a seamless transition.

Operator, Operator

Thank you. To ask a question, if you change your mind, please press star followed by 2. For questions, you can rejoin the questions queue. When preparing to ask your question, we request that you ask one question, and if you have any follow-up, please ensure your device is unmuted locally. Our first question comes from Greg Michael McGinniss from Scotia, from Alexander David Goldfarb from Piper Sandler. Please go ahead.

Alexander David Goldfarb, Analyst

Hey. Good morning. I guess I would say I am here with Greg Michael McGinniss. But so question for you. You spoke about the potential for a special dividend depending on the level of dispositions and recycling potential. But also, Conor, you have been pretty clear that you want the company to be a top quartile earnings grower. And certainly, I would think a special dividend would imply that you are losing earnings relative to investing. So can you just walk more through that and how you are balancing the desire to have Kimco Realty Corporation be a top earners grower versus the clear disconnect between where the stock is and the underlying asset value?

Conor C. Flynn, CEO

We are happy to. It is a good question, Alex. I think when you look at where our taxable income is and where our dividend level is, you know, we need to be mindful of the fact that as we really work to close the gap between where our public valuation is currently versus where the private valuation is. We think there are multisteps we can do to do that. And one of the biggest ones is to really take assets to market, as I mentioned earlier, and really showcase the disconnect between our implied cap rate and where those assets are trading in the market today. As you probably are aware, we do not have assets that have embedded losses, and when we look across the portfolio, most of our basis is quite low on our assets. So that will trigger a quite sizable taxable gain on any assets we sell. So we are very focused on 1031 exchanges to shield that taxable gain. We have been successful in doing that thus far. That being said, with the sizable disposition program that Ross outlined, we do want to, we thought it was important to showcase that if we are not able to shield those gains, it will trigger a special dividend. But our mission and our focus is obviously to do 1031 exchanges to shield those tax gains.

Operator, Operator

Thank you. Our next question comes from Michael Goldsmith from UBS. Your line is now open. Please go ahead.

Michael Goldsmith, Analyst

Good morning. Thanks for taking my question. My question is on capital allocation. You clearly have no shortage of options on how you choose to allocate capital with you repurchase shares, you are acquiring assets, you have the preferred lending book, you redevelopment, redevelopment. The same time you have identified a pipeline of funding sources such as ground leases and multifamily. So I guess how should we think about what are the most accretive opportunities, you know, where is the greatest upside or accretion? And then, I guess, why not accelerate some of these actions and take advantage of taking advantage of these things.

Conor C. Flynn, CEO

Sure. It is a good question, Michael. So the final point of why not accelerate it. We are accelerating it year over year. I think Ross made that point that we are taking more to market this year than we did last year. A number of items restrict in terms of how big of a program we can take to market at any given time. The ground leases need to be separately parceled and make sure that they are on a separate tax parcel so we can sell them into the triple-net or 1031 exchange market to get the best pricing. The other piece of it is, I think when you look at where our capital allocation priorities are, we still start with leasing as number one. That is really obviously where you see the best returns. We are continuing to showcase that there is accelerating demand for our product. We are taking market share as we are reaching out and using our platform as well as our relationships to really take, I would say, the majority of deals that are being done in the open market and making sure that the retailer thinks of Kimco first as really the partner of choice when they look to roll out new store opening plans. Second to that, you know, we look at the redevelopment opportunity set that we have. You know, we did grow it year over year. So we are scaling it. We continue to see that those return on cost blend to double digits. And we continue to think that is a great use of capital because, typically, not only are you getting a double-digit return on that redevelopment, but you are getting also a halo effect on the rest of the shopping center because, in essence, you are bringing something new and vibrant to an asset that has a halo effect on the residual shops that may be vacant or may have opportunity for mark to markets. Ross has outlined, obviously, the other potential growth of the structured investment book. Again, we really like that opportunity set. We think it is a nice tool in the toolbox to get our foot in the door with ROFO and ROFRs on assets we want to acquire. As we showcased in 2025, that is really the mission of that book is getting paid to wait, and those are averaging double digits. And then you look at, obviously, on the core acquisition piece, you know, that is where we are match funding accretively. Our flat ground leases that we can sell in the mid- to low-5s. Looking at the multifamily opportunity set that we have as well, which would trade in the mid- to low-5s. And grocery-anchored shopping centers with good growth, we think we can find, you know, our fair share of those with, as Ross outlined, you know, potentially with the 6 cap handle with some really strong comp annual growth.

Ross Cooper, President and Chief Investment Officer

Yeah. I think that was a great overview. I would just quickly add, I mean, there is a bit of a push and pull to every component of the capital allocation strategy. So we really do look at, you know, our investment strategy somewhat holistically as a blend. And we feel really good about the guide and the baseline that we put out to start the year in terms of blending together the amount of acquisitions, dispositions, redevelopment, structured. And so at its core, at the end of the day, when we blend it together, we feel good about the accretion that we can obtain. Again, we are thinking about multiple different objectives through every one of these strategies: enhancing growth, both same-site and FFO, enhancing our grocery component of exposure, looking at the impact on watch list tenancy. So we are taking into consideration all of these factors, in addition to, of course, the tax considerations, which Conor identified earlier.

Conor C. Flynn, CEO

And the final piece is obviously the share buyback opportunity. I think we have showcased in 2025 that we can make it a meaningful piece of our capital allocation strategy. and use it opportunistically. And when Kimco Realty Corporation is selling at values that we think are extraordinarily compelling, we have the balance sheet, the free cash flow, that could take advantage of that. We continue to focus and think 2026 is going to be a year where we will continue to focus on that opportunity.

Ross Cooper, President and Chief Investment Officer

Great. Thanks for taking the question. On the acquisitions guidance, I know you mentioned earlier about opportunities coming from your JV and structured investments. But historically, you have also had success buying larger portfolios and integrating them into your platform. Just curious how the opportunity set looks like today in terms of larger portfolio deals rather than one-off transactions. And any considerations we should be thinking about with respect to pricing between portfolio sales and one-off deals?

Conor C. Flynn, CEO

Sure. That is always going to be part of our acquisition strategy. As we indicated earlier, it is a bit challenging given where our cost of capital is compared to the private markets. And with financing readily available at pretty attractive rates, it has brought in a whole host of private investors and competition. That being said, we do believe that we have thrived on some larger M&A and portfolio acquisitions in the past, and that will always be part of the playbook and the consideration. For the moment, we feel really good about, as I mentioned, some of the foot in the door that we have within the structured program and within the joint venture program. Actually, when you look at 2025, all of our acquisitions for the year were made within investments where we already had a piece and/or a right of first offer or right of first refusal. So we will continue to lean into that while we keep the door open for other larger transactions should the opportunity arise.

Operator, Operator

Our next question comes from Ronald Kamdem from Morgan Stanley. Your line is now open. Please go ahead.

Caroline, Analyst

Hi, this is Caroline on for Ron. Thanks for taking the question. I was wondering if you could speak a little bit on what you are seeing in terms of tenant health so far and just how it is trending. And are there any names that we need to look out for or categories that are doing better or worse than last year?

Ross Cooper, President and Chief Investment Officer

Yeah. Thanks for the question. So as I mentioned in my prepared remarks, sorry, the credit quality, I think, of our portfolio today is better than it has been in a number of years, especially coming out of COVID. A few notable retailers that were on the watch list previously, one of which is now off, say, is Michaels, where they have really been opportunistic in trying to restructure their capital stack. They had a great year last year, in terms of repositioning their value proposition, their customer base, leveraging their brick-and-mortar fleet to really drive sales. So we continue to see that as an encouraging move forward. 24 Hour Fitness obviously has their CEO from the past now come in, wanting to retake the reins and reposition that portfolio. Although our exposure is low to them, it is another indication that retailers are really taking bold and important steps to reposition their value proposition to ensure that they are offering the customer what is in demand today. When you look at our the tenant strength of our existing fleet, I sort of look at 2026 and how much we have already resolved that I mentioned in my prepared remarks, and to get another indication when you have, you know, 47 anchor leases that are coming due with no options, and we have resolved 98% of them. Again, it is an indication either through renewals or new lease opportunities that the demand is high, and people are continuing to see opportunities within our sector and, more specifically, within our portfolio, which, again, is also reflective of the retention levels that we are already seeing in 2026. So we have not seen anything concerning. We continue to see consumer growth being strong on the discretionary side within our sector. Within our shopping centers, retailers are really looking at 2027 now, even into 2028, to ensure that they are continuing their momentum to hit their open-to-buy mandates and make sure that they continue to grab the market share when it becomes available.

Michael Goldsmith, Analyst

Hey, good morning. Glenn, could you just help us better understand the underlying components of the same-store NOI guidance of around 3%? Especially considering the significant sign on occupied pipeline and comping versus, you know, last year’s bankruptcies.

Ross Cooper, President and Chief Investment Officer

Sure. You know, again, we put out 2.5% to 3.5% as the range. We know, as I mentioned in my prepared remarks, that the beginning, the first quarter is going to be the most challenging in terms of where we are based on the comp and us lapping the bankrupt tenants. But overall, we see the SNO pipeline coming online the way David Jamieson talked about, and we feel comfortable that, you know, the range is the right level, and it tied into the, you know, the entire guidance to get us to the $1.80, $1.84. But as a major component of it.

Operator, Operator

Our next question comes from Juan Carlos Sanabria from BMO Capital. Your line is now open. Please go ahead.

Michael Goldsmith, Analyst

Hi. Good morning. Hoping you could talk a little bit about the realignment to a national leadership in terms of the asset management and kind of what drove that? What changes day to day in terms of leasing decisions and streamlining of those procedures? Kind of the savings as well. Seems like the G&A is coming down a bit.

Ross Cooper, President and Chief Investment Officer

Sure, Juan. Yeah. Thanks for the question. It was a, as you may know, Kimco Realty Corporation for decades had operated as a regional structure where we had multiple regions overseen by regional presidents. And it served the company very well for decades. And when we look forward in terms of what we are looking to in terms of our efficiency of scale, wanting to move quickly, wanting to adapt and evolve as the market and the environment continues to change very quickly as well, we came to appreciate that if we streamlined our operating model, so replaced the regional structure with two functional teams, one for national leasing and one for asset management, that will ensure alignment and consistency across our platform end to end, coast to coast, and that will enable us to accelerate all the workflows that we have in process, to ensure that we are fully taking advantage of our scale and be able to grow with that as the market environment comes as well as be able to better utilize all the technology and the investing that we are doing on that side, both from a new investment as well as just streamlining our business workflows.

Conor C. Flynn, CEO

And so we felt it was prudent that we took that step now. We started to test it when you really take a look back in the last year, as I was mentioning these package deals. That was a good example of how we started to consolidate our efforts, streamline it, and have one accountable party go and execute. We could do this much, much quicker. The fact that we got Ross’s deals done in 30 days from approved REC to lease execution was phenomenal, and that was really a direct reflection of streamlining that process. On the asset management side, it is ensuring consistency and continuity across the portfolio. Tom Simmons, previously running the Southern Region as President, has a depth of experience in mixed-use activity, repositionings, redevelopments, is a great strategist. And so we will be able to expand that expertise across the entire country, with consistency. So we felt it was prudent at this time to take that step forward. And then as it relates to savings, we are early days on the restructuring strategy. We have obviously made the, and we intend similar to what we have done with the Weingarten integration and the RPT integration. We view this very much as a similar effort and that we will be very thoughtful in terms of using the first several months to go through the restructuring, rebuild the team, identify and introduce new operating roles. With a full rollout towards the ’3. Within that exercise, we will start to identify more of the savings that will come through the organization.

Will Teichman, Office of Innovation and Transformation

Just to add to that, this is Will Teichman. Just to add a bit more about how we are approaching this project as a whole. Conor mentioned on our last earnings call that we have formed an Office of Innovation and Transformation to guide a lot of these operational improvement efforts for the company, and in conjunction with this operational restructuring, our Office of Innovation and Transformation is helping David and his team to quarterback and coordinate this overall planning process. In addition to that, in the past quarter since launching the new office, we have really been focusing in on a number of digital transformation efforts that we believe will help us to unlock additional efficiencies within the business. I want to just quickly touch on three of those. The first is around automation, where we are bringing together many of our early pilots around robotic process automation and agentic AI under a single governance structure that will allow us to more rapidly build the deploy, and drive adoption of these tools. The second is a proprietary data visualization tool that we have constructed and launched last quarter. It is allowing us to gain better visibility into market- and property-specific insights through some interactive maps and site plans and other tools that we have created. And then finally, we completed work on an internal natural language chatbot which pairs our property and lease data with the power of OpenAI’s latest GPT models and puts that into the hands of our associates. I think we are really excited overall about how things are coming together and about the opportunity to leverage a lot of these digital transformation efforts together with organizational changes to drive further efficiencies in the business.

Operator, Operator

Thank you. We currently have no further questions, and I would like to hand back to David F. Bujnicki for any closing remarks.

David F. Bujnicki, Senior Vice President of Investor Relations and Strategy

Thanks so much. We are really excited about our opportunities set for 2026. Continue building the momentum from 2025. Thanks, everybody, who joined the call today. If you have any follow-up questions, please contact us. Thank you so much.

Operator, Operator

Thank you. This now concludes today’s call. Thank you all for joining. You may now disconnect your lines.