Kimco Q3 2026 FFO Rises 6.8% as Occupancy Hits Record

Kimco Realty (NYSE: KIM) reported 6.8% year-over-year growth in funds from operations per diluted share for the third quarter of 2026, supported by record portfolio occupancy, positive leasing spreads and a substantial pipeline of signed leases that have not yet begun paying rent. The shopping-center REIT ended the quarter with 96.6% occupancy and $76 million of annual base rent tied to signed-not-open leases, providing visibility into future cash flow as tenants take possession.

Leasing activity supports embedded growth

Kimco signed 444 leases covering 2.7 million square feet during the quarter, including 134 new deals. Comparable new leases generated a 31.5% pro-rata rent spread, with spreads of 39.9% for anchors and 21.0% for small shops. The company has now recorded new-lease spreads above 10% for 20 consecutive quarters.

Small-shop occupancy reached 92.9%, matching its previous high, while overall occupancy set a company record. Kimco said tenant retention was 91% by gross leasable area, and the number of tenant departures declined by 88 from a year earlier. The company has also resolved 75% of annual base rent scheduled to expire in the first half of 2027.

The signed-not-open pipeline represented a 390-basis-point gap between leased and economic occupancy at Sept. 30. Kimco expects 28% of the associated annual base rent to commence in the fourth quarter of 2026, 57% during 2027 and the remaining 15% in 2028. About 60% of the pipeline relates to anchor spaces, while 40% comes from shop space. Redevelopment projects account for 25%, and backfills of spaces previously occupied by retailers including Party City, Conn’s, Rite Aid, JOANN, Big Lots and Painted Tree represent 22%.

An additional $22 million of annual base rent from signed leases is not included in the $76 million pipeline because existing tenants remain in the space or the rent relates to construction that has not yet been delivered. Kimco also identified mark-to-market opportunities in 68 anchor leases expiring through 2027 without additional options. Those leases carry weighted-average annual base rent of $14.35 per square foot, with the company estimating roughly 50% mark-to-market potential.

Grocery-anchored portfolio remains central

Kimco owned 561 properties totaling 99 million square feet at quarter-end. Grocery-anchored centers generated a record 87% of annual base rent, and management said the portfolio is on a path toward approximately 90%. Grocers that report sales averaged about $817 per square foot.

Discount and necessity-based retailers and service businesses together represented 78% of annual base rent. National and regional tenants accounted for 81%, while 71% of new leases signed over the trailing 12 months were service-based. Small shops generated 48% of pro-rata annual base rent, with restaurants representing the largest portion of that category.

The portfolio remains concentrated in first-ring suburbs of large metropolitan areas. Sun Belt and coastal markets accounted for 91% of annual base rent, while 82% came from Kimco’s leading major metropolitan markets. Traffic across the company’s shopping centers increased year over year in every month covered by the presentation, including an approximately 3% year-to-date gain.

Kimco said its unified “One Kimco” operating model is intended to improve leasing execution, accelerate rent commencement and control overhead. From 2019 through the third quarter of 2026, revenue increased at a 10.4% compound annual rate, compared with 5.4% for general and administrative expenses. G&A declined to 5.2% of revenue from 7.2% over that period.

Capital recycling and redevelopment

Through Sept. 30, Kimco generated $391 million from asset sales and $179 million of free cash flow after dividends and leasing and maintenance capital expenditures. It deployed $118 million into acquisitions and joint-venture buyouts, $129 million into redevelopment and $224 million into common and preferred share repurchases.

The current 2026 capital plan calls for $400 million to $500 million of acquisitions and joint-venture buyouts at an implied yield of approximately 6%, alongside $400 million to $500 million of asset sales at about 5%. Kimco also plans $140 million to $150 million of redevelopment spending, with expected yields of 9% to 11%, and $75 million to $125 million of net structured investments at an implied yield near 10%. Share repurchases remain opportunistic rather than tied to a specified full-year amount.

Grocery-focused redevelopment remains a priority. Kimco had 23 active redevelopment projects with $264 million of gross costs and expected yields of 9% to 11%, as well as six anchor-repositioning projects totaling $22 million with expected yields of 19% to 23%.

Balance sheet and risks

Kimco ended the quarter with more than $2.5 billion of liquidity, including full availability under its $2 billion revolving credit facility. Look-through net debt to EBITDA, including preferred stock and the company’s share of joint-venture debt, was 5.3 times. Fixed-charge coverage was 4.3 times, more than 92% of properties were unencumbered, and the recurring AFFO dividend payout ratio was approximately 74%.

The company repaid $500 million of 2.8% senior notes at maturity on Oct. 1, leaving no notable 2026 debt maturities. Its consolidated debt had a weighted-average maturity of 7.4 years and was almost entirely fixed-rate. Kimco also reported a 7.7% year-over-year increase in its common-share cash dividend.

The outlook remains subject to economic and real-estate conditions, interest-rate volatility, tenant bankruptcies or lease terminations, changing consumer behavior, e-commerce competition, inflation and supply-chain disruption. Kimco also cited acquisition and redevelopment execution, financing availability, asset valuations, cybersecurity incidents, regulatory changes and its ability to maintain REIT status among the factors that could cause actual results to differ from current expectations.