Analyst Note| Kevin Brown |
Third-quarter results for no-moat Kimco Realty were relatively in line with our expectations, leading us to reaffirm our $21 fair value estimate. Same-store occupancy sequentially improved 20 basis points to 94.3%, slightly better than our estimate of flat occupancy. Re-leasing spreads remained positive but were up just 4.9%, below our 7.8% estimate and the lowest figure the company has reported in at least five years. Still, same-store revenue increased 8.1% year over year as the company went from taking a $20 million charge on uncollected rent in the third quarter of 2020 to receiving $8 million in previously owed rent in the third quarter of 2021. Same-store operating expenses fell 1.2%, leading to same-store net operating income growth of 12.1% in the quarter, in line with our estimate of 11.6% growth. Kimco reported funds from operations of $0.32 per share for the third quarter, in line with our estimate and $0.07 ahead of the $0.25 it reported in the third quarter of 2020.