JERICHO, N.Y.--(BUSINESS WIRE)--Kimco Realty Corp. (NYSE: KIM), one of North America’s largest publicly traded owners and operators of open-air, grocery-anchored shopping centers and mixed-use assets, today reported results for the third quarter ended September 30, 2020.

Third Quarter Highlights

• Collected approximately 89% of base rents for the third quarter highlighted by a 91% collection rate for the month of September. Subsequently collected 90% of October’s rents.
• Reported pro-rata portfolio occupancy of 94.6%.
• Recognized 8.2% increase in pro-rata rental-rate spreads on comparable spaces.
• Commenced the grand opening of the ShopRite grocer at The Boulevard® Signature Series redevelopment project in Staten Island, NY.
• Ended the quarter with a liquidity position of over $2.3 billion in immediate availability including $325 million in cash.
• Issued a 2.7% $500 million 10-year Green Bond and a 1.9% $400 million 7.5-year unsecured bond.

“The strength of our third quarter rent collections exemplifies the stability of our well-located, predominately grocery-anchored portfolio that provides essential goods and services to the communities it serves,” stated Conor Flynn, Kimco’s Chief Executive Officer. “Our leasing volume and spreads for renewals and options remain at or above pre-pandemic levels, and we’re encouraged by the growth in our leasing pipeline for new leases, led by grocers and other essential retailers. With our robust liquidity level, minimal upcoming debt maturities and over $500 million in Albertsons common stock owned, our balance sheet serves as a source of strength to successfully navigate these extraordinary times with an overarching focus on creating long-term shareholder value.”

Financial Results

Net (loss)/income available to the company’s common shareholders for the third quarter of 2020 was ($44.7) million, or ($0.10) per diluted share, compared to $59.0 million, or $0.14 per diluted share, for the third quarter of 2019. The year-over-year change was primarily due to:

• ($76.5) million in a mark-to-market adjustment on 39.8 million common shares of Albertsons Companies, Inc. (NYSE: ACI) held by the company.
• ($28.3) million from potentially uncollectible receivables, including $4.0 million in abatements.
• ($8.6) million of one-time non-cash severance charge related to voluntary early retirement and organizational streamlining with the merging of Kimco’s Southern and Mid-Atlantic regions.
• ($7.5) million in early extinguishment of debt charges related to the redemption of $485 million of Kimco’s 3.20% unsecured bonds due in 2021.
• $18.6 million associated with an $11.4 million charge for the redemption of preferred stock during the third quarter of 2019 which resulted in $7.2 million less in preferred dividends paid during the third quarter of 2020.

NAREIT Funds From Operations (FFO)* was $106.7 million, or $0.25 per diluted share, for the third quarter 2020 compared to $146.9 million, or $0.35 per diluted share, for the third quarter 2019.

Operating Results

• Pro-rata portfolio occupancy ended the quarter at 94.6%, compared to 95.6% on a sequential basis and 96.4% year-over-year. The change in occupancy was primarily due to tenant bankruptcies including Modell’s (8 leases), Pier 1 Imports (11 leases), Ascena (14 leases) and GNC (12 leases).
• Pro-rata anchor occupancy ended the quarter at 97.4%, compared to 98.2% sequentially and 98.7% in the comparable period in 2019.
• Small shop occupancy ended the quarter at 86.7%, compared to 88.0% sequentially and 89.9% in the comparable period in 2019.
• Pro-rata rental-rate spreads on comparable spaces during the third quarter of 2020 increased 8.2%, with rental rates for new leases up 5.1% and renewals/options up 8.8%.
• The company executed a total of 233 leases totaling 1.5 million square feet during the third quarter. Renewals/options, which represented approximately 75% of all leases executed during the third quarter, totaled 174 leases for 1.2 million square feet and compares favorably to the 1.1 million square feet completed during the third quarter of 2019. In addition, of the 174 renewals/options executed in the third quarter of 2020, only eight leases were at a lower spread than the prior lease.
• Same-property Net Operating Income (NOI)* decreased 9.1% over the third quarter of 2019 due primarily to a charge for potentially uncollectible accounts receivable.

Capital Markets

• Issued $400 million of 1.90% notes maturing March 2028 and a $500 million, 10-year green bond at a 2.70% coupon.
• Repaid the remaining $325 million outstanding on the company’s unsecured term loan.
• Redeemed $485 million of Kimco’s 3.20% bonds due May 2021 resulting in a $7.5 million early extinguishment of debt charge.
• Ended the quarter with over $2.3 billion of immediate liquidity, including full availability under the company’s $2.0 billion unsecured revolving credit facility, and $325 million in cash. In addition, Kimco maintains over $550 million of Albertson’s common stock, subject to certain lock-up provisions.

COVID-19 Update

• At the end of October, all of Kimco’s shopping centers remain open and operational with approximately 98% of tenants, based on annualized base rent (ABR), currently open, including those that are operating on a limited basis
• Kimco has collected approximately 89% of the total pro-rata base rents billed for the third quarter of 2020 including 91% for the month of September. Subsequently, rent collections for October were approximately 90%.
• The company granted rent deferrals approximating 5% of pro-rata minimum base rent for the third quarter of 2020. The company continues to negotiate with tenants the payment of rents not yet collected or deferred.
• Kimco’s Board of Directors continues to assess the company’s taxable income required to be distributed in order to maintain REIT compliance and expects to declare and pay a dividend on common shares prior to year-end 2020.

About Kimco

Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust (REIT) headquartered in Jericho, N.Y. that is one of North America’s largest publicly traded owners and operators of open-air, grocery-anchored shopping centers and mixed-use assets. As of September 30, 2020, the company owned interests in 400 U.S. shopping centers and mixed-use assets comprising 70 million square feet of gross leasable space primarily concentrated in the top major metropolitan markets. Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center acquisitions, development and management for more than 60 years. For further information, please visit www.kimcorealty.com, the company’s blog at blog.kimcorealty.com, or follow Kimco on Twitter at www.twitter.com/kimcorealty.

The company announces material information to its investors using the company’s investor relations website (investors.kimcorealty.com), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the company’s blog (blog.kimcorealty.com) and social media channels, including Facebook (www.facebook.com/KimcoRealty), Twitter (www.twitter.com/kimcorealty), YouTube (www.youtube.com/kimcorealty) and LinkedIn (www.linkedin.com/company/kimco-realty-corporation). The list of social media channels that the company uses may be updated on its investor relations website from time to time.