News & Trends

Investor Day 2015 shows 2020 Vision

Posted by: Dave Bujnicki Dave Bujnicki
on January 19, 2016

A few weeks ago, Kimco held its well-attended 2015 Investor Day presentation at New York’s Palace Hotel. The event gathered analysts and investors to learn about Kimco’s strategy over the next several years. Our strategy was widely supported, with analyst reports from the event being very positive. Kimco’s stock has also responded well, continuing to outperform since the Investor Day presentation.

Some highlights from this year’s event include:

Kimco’s new executive management team. We introduced the new management and leadership of Kimco, which includes Company President Conor Flynn as incoming CEO, David Jamieson as Executive Vice President of Asset Management and Operations, Ross Cooper as Executive Vice President of Acquisitions and Dispositions and Chief Investment Officer, and Geoff Glazer as Senior Vice President of National Development. While we will miss outgoing CEO David Henry at the helm, he has groomed this team for a seamless transition.

2020 Vision. Kimco’s 2020 Vision is our five-year plan for the company to enhance its portfolio, focusing on high-quality assets in core markets. As part of this strategy, we have put into place a simple and disciplined operating structure and acquisition strategy, which is supported by a very strong balance sheet. All of these components, as well as our talented management team, is expected to create strong growth in our NAV and earnings over the next five years.

Kimco is working to further increase our high-quality property concentration in these major metro areas. This allows for a simple, transparent, and efficient operating structure by having our properties clustered close together. Our top 300 assets, together with an additional 200 properties within 10 miles of those top assets, generate 92 percent of our NOI. On the acquisition front, we will selectively invest in properties that offer redevelopment and value creation opportunities.

On the leasing side, there is strong opportunity to generate growth in the portfolio from the continued lease-up of the small shop space as we target a 90 percent occupancy rate for these spaces by the end of 2016. In terms of anchor spaces, there is an approximately 48 percent positive spread on the 100 anchor box spaces that are expiring between 2016 and 2018.

Firm financial footing. On the financial front, the goal is to continue to reduce leverage, so our balance sheet is positioned to capitalize quickly on opportunities that arise in the market place. CFO Glenn Cohen shared how since Investor Day 2013, we have refinanced approximately $2 billion of maturing debt at significantly lower rates and extended average debt maturity using a 30-year bond.

As part of this 2020 Vision plan, Kimco will maintain a conservative capital structure and divest low-growth and high-risk assets. We have a strong liquidity position, with $1.75 billion available from an unsecured line of credit. We are going to repay more than $1.2 billion of consolidated mortgage debt through 2020.

Finally, 2016 guidance was reiterated in the Investor Day presentation. Our recurring FFO will continue to grow on a year-over-year basis while further reducing leverage, even with the dilutive impact of asset sales, including the exit of our CAD Canadian platform during 2016. Our initial 2016 recurring FFO/share guidance is $1.48-$1.52 and is driven by SSNOI growth of 2.50 percent to 3.50 percent, and a U.S. occupancy rate of 95.7-96.2 percent.

For additional insight, you can access Part I and Part II of the Investor Day presentation on our website or watch this year’s presentation in full.

The statements in this blog post, including targets and assumptions, state the Company’s and management’s hopes, intentions, beliefs, expectations or projections of the future and are forward-looking statements. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from current expectations include the key assumptions contained within this presentation, general economic conditions, local real estate conditions, increases in interest rates, foreign currency exchange rates, increases in operating costs and real estate taxes. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s Annual Report on Form 10-K. Copies of each filing may be obtained from the Company or the SEC.

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