Kimco Focused on Unlocking Value in Shopping Center Real Estate

Conor Flynn, CEO of Kimco Realty Corp. (NYSE: KIM), joined Nareit for a video interview at REITworld 2017.

Kimco owns interests in 507 shopping centers in the United States, primarily in major metropolitan markets.

Flynn said Kimco sees an “enormous” opportunity in unlocking the embedded value of its real estate.

“We’re really just scratching the surface on what the highest and best use of the real estate could be…mixed-use in some cases is the best way to do that,” Flynn said.

At the same time, Kimco is cognizant that mixed-use is not its core expertise, he added, so the company must work with partners or operators to “really identify the opportunity set” and execute on such projects.

Flynn also noted that Kimco’s occupancy rate is climbing to all-time highs. He pointed out that the company’s top tenant list today is totally different from when Kimco went public in 1991. “That’s just the way of retail as it ebbs and flows,” Flynn said.

Flynn also explained that two key drivers of traffic to its shopping centers are “treasure hunters,” or shoppers who are attracted by the rapidly changing product mix at off-price retailers, as well as shoppers looking for fresh produce at specialty grocers.

Meanwhile, Kimco’s top objective for 2018 is to focus on its balance sheet, Flynn explained. Kimco has been able to extend its debt maturity profile, but the shopping center REIT needs to work on improving net debt to earnings before interest, taxes, depreciation and amortization (EBITDA), Flynn said. Consequently, Kimco will be a net seller in 2018. “As we invest in redevelopment and development, our growth is really going to accelerate thereafter,” he added.