Kimco Realty Corporation — 2023 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2023. The filing also reports fourth-quarter results. Kimco Realty Corporation and its operating company, Kimco Realty OP, LLC, file jointly; substantially all operations are conducted through Kimco OP. The January 2023 UPREIT reorganization changed the legal structure, not the underlying operating business.
Business context and financial performance
Kimco owns and operates open-air, predominantly grocery-anchored shopping centers, with a growing mixed-use portfolio. At year-end it had interests in 523 shopping centers totaling 89.7 million square feet across 28 states, plus 21 other property interests. Its portfolio is concentrated in major metropolitan markets.
- Occupancy and rents: The consolidated operating portfolio was 96.1% leased, up from 95.5% a year earlier; the combined shopping center portfolio was 96.2% leased. Average base rent per leased square foot in the consolidated portfolio increased from $19.60 to $20.24.
- Revenue and operating performance: Total revenue was $1.783 billion, up from $1.728 billion. Net rental property revenue rose to $1.767 billion from $1.711 billion. Operating income increased to $638.8 million from $565.5 million. Same-property NOI, a non-GAAP measure, rose 2.4% to $1.307 billion.
- Net income: Net income available to common shareholders was $629.3 million, or $1.02 per diluted share, versus $100.8 million, or $0.16, in 2022. The increase was substantially affected by unusual and market-sensitive items, including a $194.1 million Albertsons special dividend, higher property-sale gains, and the reversal of a large marketable-securities loss recorded in 2022. It should not be read as comparable growth in recurring operations.
- FFO: FFO available to common shareholders, a non-GAAP measure, was $970.0 million, or $1.57 per diluted share, compared with $976.4 million, or $1.58, in 2022. Fourth-quarter FFO was $239.4 million, or $0.39 per diluted share, versus $234.9 million, or $0.38. Fourth-quarter net income available to common shareholders was $133.4 million; the comparable 2022 quarter recorded a loss of $56.1 million.
- Cash flow and investment: Operating cash flow was $1.072 billion, up from $861.1 million; the 2023 total included Albertsons’ $194.1 million special dividend. Investing cash outflow was $137.0 million and financing cash outflow was $300.7 million. Property improvements totaled $264.4 million, including $151.1 million for redevelopment and renovations.
- Debt and liquidity: Year-end consolidated debt carrying amounts were approximately $7.617 billion, comprising $7.263 billion of notes and $353.9 million of mortgages. Weighted-average debt interest rate was 3.68%, with an 8.7-year weighted-average maturity. Cash and cash equivalents were $783.8 million; reported immediate liquidity was $2.8 billion. The $2.0 billion revolving credit facility was undrawn. The company reported compliance with its debt covenants and investment-grade unsecured debt ratings of BBB+/Baa1.
- Dividends: Common dividends paid were $1.02 per share for 2023, versus $0.84 in 2022; the 2023 amount included a $0.09 special dividend. The board declared a $0.24 quarterly common dividend in January 2024.
Material changes versus the prior comparable period
- Net rental property revenue rose $56.2 million, primarily from leasing and portfolio growth and acquisitions, partly offset by dispositions and increased tenant credit losses.
- Same-property NOI increased 2.4% for the year; fourth-quarter same-property NOI increased 3.2%.
- Interest expense rose $23.4 million to $250.2 million, reflecting debt activity including the issuance of $500 million of 6.40% notes due 2034.
- Property-sale gains increased to $75.0 million from $15.2 million. Impairment charges declined to $14.0 million from $22.0 million.
- The net marketable-securities result moved from a $315.5 million loss in 2022 to a $21.3 million gain in 2023. The company sold 14.1 million Albertsons shares in 2023 and held 14.2 million at year-end.
Outlook, management commentary, risks and unusual items
- RPT merger: The merger closed January 2, 2024, after the reporting period, and therefore is not included in 2023 operating results. It added 56 centers and 13.3 million square feet of GLA. Kimco issued approximately 53.0 million common shares, 1.8 million Class N preferred shares and 953,400 OP units. Management identifies integration, realization of expected benefits, transaction costs, potential liabilities and leverage as risks. Purchase-price allocation remained incomplete at filing, and any goodwill was not yet determined.
- 2024 capital plans: Kimco estimated $225 million–$275 million for redevelopment and re-tenanting commitments, and $50 million–$100 million for acquisitions or additional property interests, excluding the RPT merger. These are spending estimates, not earnings guidance. The filing does not provide a clear earnings or FFO forecast.
- Debt and subsequent events: In January 2024, Kimco repaid $246.2 million of notes due that month and repaid $511.5 million of RPT notes triggered by the merger’s change-of-control provisions. It also entered a new $200 million term loan and amended $310 million of RPT term loans. The company sold its remaining Albertsons shares in February 2024 for $299.1 million net proceeds and expects approximately $72.9 million of related corporate taxes.
- Economic and operating risks: Management cites elevated interest rates, inflation, slower growth or recession, tenant financial stress and bankruptcies, labor and supply constraints, e-commerce, and higher operating and insurance costs. Other risks include leasing and renewal outcomes, development costs and delays, mixed-use execution, joint-venture exposures, refinancing access, impairment, climate and severe-weather events, cybersecurity, and maintaining REIT qualification.
- Unusual items and contingencies: 2023 included $4.8 million of RPT merger costs and a $10.8 million pension settlement gain, among other items. A February 2023 ransomware attack affected archived legacy Weingarten servers; the company reported no material financial or operational impact. It reported no litigation expected to have a material effect and $39.2 million of letters of credit, $18.4 million of performance and surety bonds, and $64.7 million of investment funding commitments, of which $51.8 million was funded at year-end.
Important facts for investors to verify
- How much of the 2023 net-income increase reflects recurring property operations versus the Albertsons dividend, securities valuation changes and property-sale gains; compare with FFO and same-property NOI.
- Post-merger debt, liquidity, share count and interest expense after the RPT-related repayments and new or amended borrowing arrangements.
- Integration progress and whether the RPT portfolio delivers expected operating benefits without material added costs or tenant disruption.
- Occupancy, rent growth, tenant credit losses and leasing spreads as leases roll over; 2024 expirations represented 6.6% of gross annual rent.
- Execution and funding of the stated 2024 redevelopment and acquisition plans, and the final RPT purchase-price allocation.
- Albertsons-share sale proceeds, related taxes, and the effect of investment income no longer supported by those shares.