Financial Data and Key Metrics Changes - Core FFO per diluted share for Q3 2025 was $0.35, a decrease from $0.36 in Q3 2024, attributed to the sale of three projects and higher net interest expense, offset by growth in operations due to higher economic occupancy and rental rate growth [27][28] - FFO generated during Q3 2025 was approximately $26.5 million [27] - The company narrowed its 2025 annual core FFO guidance from a range of $1.38 to $1.44 to $1.40 to $1.42 per diluted share [29] Business Line Data and Key Metrics Changes - The company executed approximately 724,000 square feet of total leasing during the quarter, including over half a million square feet of new tenant leases, marking the largest amount of new tenant leasing in a single quarter in over a decade [9][10] - The weighted average starting cash rent was nearly $42 per square foot, unchanged from the previous quarter, with net effective rents at $21.26 per square foot, reflecting a 2.5% increase [17] Market Data and Key Metrics Changes - U.S. office demand turned around in Q3 2025, with about 12 million more square feet occupied than returned to landlords, marking the first positive figure since late 2021 [4][5] - Five operating markets experienced positive absorption, with Washington, D.C. and Boston being exceptions [5] - The overall lease percentage increased by 50 basis points quarter-over-quarter to 89.2% [10] Company Strategy and Development Direction - The company aims to strengthen its brand as the landlord of choice, driving leasing demand and increasing rental rates across its portfolio [8][32] - The strategy includes focusing on high-quality office spaces and leveraging hospitality-driven service models to enhance tenant experiences [7][14] - The company anticipates achieving a lease percentage above 90% and increasing rental rates while refinancing above-market rate debt to drive FFO and cash flow growth [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit FFO growth in 2026 and 2027, driven by strong leasing momentum and a backlog of uncommenced leases [14][30] - The company noted that the broader macro factors and successful portfolio repositioning are expected to continue driving organic FFO growth [14] - Management highlighted that the office sector is turning a corner, with a surge in large tenant leasing and limited availability of premium space [6][10] Other Important Information - The company achieved a five-star rating and Green Star recognition from GRESB, placing it in the top decile of all participating listed U.S. companies [14] - The out-of-service portfolio was over 50% leased and is expected to reach stabilization by the end of 2026 [11] Q&A Session Summary Question: Clarification on expansion versus contraction within the portfolio - Management noted that there have been 16 expansions versus two contractions in the last quarter, indicating a net positive of 40,000 square feet [36][37] Question: Insights on larger tenant behavior and office utilization - Management indicated that larger users are generally looking to upgrade to higher quality space, with some consolidations occurring to enhance collaboration [40][41] Question: Conviction level for earnings growth next year - Management clarified that the projected earnings growth is based on organic growth within a static portfolio, assuming no acquisitions or dispositions [47] Question: Status of non-core asset dispositions - Management stated that the market remains challenging for selling non-core assets, but they continue to focus on pruning these assets [60][62] Question: Details on the $75 million of cash rent pending - Management estimated that about 70% of the $75 million would be realized in 2026, with a significant portion expected to commence in the middle of the year [70][73]

Financial Data and Key Metrics Changes - Core FFO per diluted share for Q3 2025 was $0.35, a decrease from $0.36 in Q3 2024, attributed to the sale of three projects and higher net interest expense, offset by growth in operations due to higher economic occupancy and rental rate growth [27] - FFO generated during Q3 2025 was approximately $26.5 million [27] - The company narrowed its 2025 annual core FFO guidance from a range of $1.38 to $1.44 to $1.40 to $1.42 per diluted share [29] Business Line Data and Key Metrics Changes - The company executed approximately 724,000 square feet of total leasing during the quarter, including over half a million square feet of new tenant leases, marking the largest amount of new tenant leasing in a single quarter in over a decade [10] - The weighted average starting cash rent was nearly $42 per square foot, unchanged from the previous quarter, with net effective rents at $21.26 per square foot, reflecting a 2.5% increase [18] - Rental rates for space vacant less than a year reflected almost 9% and just over 20% roll-ups on a cash and accrual basis, respectively [13] Market Data and Key Metrics Changes - U.S. office demand turned around in Q3 2025, with about 12 million more square feet occupied than returned to landlords, the first positive figure since late 2021 [5] - Five operating markets experienced positive absorption, with Washington, D.C. and Boston being exceptions [6] - The overall leasing volume in the U.S. reached approximately 105 million square feet in Q3 2025, within 10% of the 2015 to 2019 national quarterly average [6] Company Strategy and Development Direction - The company aims to strengthen its brand as the landlord of choice, driving leasing demand and increasing rental rates across its portfolio [9] - The strategy includes focusing on high-quality office spaces and leveraging a hospitality-driven service model to attract tenants [8] - The company anticipates achieving a lease percentage of 89% to 90% for its operating portfolio by year-end [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit FFO growth or better in 2026 and 2027, driven by strong leasing momentum and a robust pipeline [15] - The company noted that the broader macro factors, along with successful portfolio repositioning, are expected to drive organic FFO growth [15] - Management highlighted that the demand for office space remains strong despite slow hiring and an uncertain economic outlook [7] Other Important Information - The company achieved a five-star rating and Green Star recognition from GRESB, placing it in the top decile of all participating listed U.S. companies [15] - The out-of-service portfolio is approaching 70% leased, with expectations for stabilization by the end of 2026 [13] Q&A Session Summary Question: Clarification on expansion versus contraction within the portfolio - Management noted that there have been more expansions than contractions, with 16 expansions versus two contractions in the last quarter, indicating a net positive of 40,000 square feet [36] Question: Insights on larger tenant behavior and office utilization - Management indicated that larger users are looking to upgrade their space, with some consolidating to create hubs for collaboration [39] Question: Conviction level for earnings growth next year - Management clarified that the projected earnings growth is based on organic growth within a static portfolio, assuming no acquisitions or dispositions [46] Question: Status of non-core asset dispositions - Management stated that the market remains challenging for selling non-core assets, but they continue to focus on pruning these assets [60] Question: Details on the $75 million of cash rent pending - Management estimated that about 70% of the $75 million would start paying in 2026, with a significant portion expected to commence in the middle of the year [71]

Core Viewpoint - Kimco Realty Corporation is positioned as a strong investment opportunity within the shopping center REIT sector, benefiting from a favorable market environment characterized by high demand and limited supply, leading to improved operational metrics and valuation [1][29]. Group 1: Market Dynamics - Industrial leasing has slowed down, with gestation periods extending, while retail leasing remains robust, with Kimco experiencing no slowdown in tenant demand [2][3]. - The retail sector is witnessing a scarcity of high-quality real estate, which is advantageous for landlords like Kimco [4][5]. - Since 2010, there has been minimal new supply in shopping centers, exacerbated by high construction costs relative to current rental rates [5][6]. Group 2: Financial Metrics - The average rent per square foot among retail REITs is $20.33, with new leases being signed closer to $27-$30 per foot, indicating a significant potential for revenue growth [6][8]. - Kimco's signed but not open pipeline has expanded to $66 million, with 88% of that expected to commence by the end of next year, contributing to future cash flow growth [15][17]. Group 3: Operational Advantages - Kimco has developed proprietary leasing tools that have expedited deal-making, resulting in shorter gestation periods and faster filling of vacancies [19][20]. - The company is experiencing a shift in tenant dynamics, with a focus on strong tenants following the bankruptcy of weaker ones, leading to a smaller watch list of at-risk tenants [16][14]. Group 4: Valuation and Growth Potential - Kimco's stock is trading at a 16.6% discount to NAV, with the shopping center REIT sector broadly undervalued at 15.4X AFFO, suggesting potential for multiple expansion as market conditions improve [22][27]. - The fundamental landscape for shopping centers has improved significantly, with high tenant demand and limited new supply making recent bankruptcies accretive rather than dilutive [28][29].

Financial Data and Key Metrics Changes - Core FFO per diluted share for Q2 2025 was $0.36, down from $0.37 in Q2 2024, primarily due to higher net interest expenses from refinancing activities [24] - AFFO generated during Q2 2025 was approximately $16 million [25] - The company anticipates annual core FFO guidance in the range of $1.38 to $1.44 per diluted share, with no material changes to previously published assumptions [26] Business Line Data and Key Metrics Changes - Total leasing success in Q2 2025 reached 712,000 square feet, with year-to-date leasing exceeding 1,000,000 square feet [6] - Approximately two-thirds of Q2 leasing activity was related to new tenant leases, marking the highest new tenant leasing in a single quarter since 2018 [6][7] - Rental rates for spaces vacant less than a year reflected over 7% increases, with almost 14% roll-ups on a cash and accrual basis, respectively [9] Market Data and Key Metrics Changes - Demand for office space is increasing, with JLL Research noting a 5.8% growth in active space requirements, the highest level of demand since 2021 [10] - National occupancy remained stable, with Piedmont observing positive absorption in four of its operating markets [10] - The out-of-service portfolio was over 30% leased by the end of Q2 and is expected to reach stabilization by the end of next year [8] Company Strategy and Development Direction - The company is focusing on creating modern work environments and is well-positioned to benefit from the flight to quality in office buildings [6] - The leasing guidance for 2025 has been increased to a range of 2,200,000 to 2,400,000 square feet, reflecting an increase of over 800,000 square feet compared to the original guidance [11] - The company plans to continue selective capital deployment to drive lease percentage and increase rental rates, aiming for FFO and cash flow growth [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about leasing prospects, citing strong demand from large tenants and a lack of new office construction [10] - The company anticipates that the majority of new leasing will benefit earnings in 2026 and beyond [11] - Management noted that the current high interest rates and inflation are expected to diminish new office supply and push construction costs higher, which will support rental rate growth [9] Other Important Information - The company repurchased approximately $68 million of its bonds during the quarter, resulting in a $7.5 million loss on early extinguishment of debt, but expected to save $7.5 million in total interest over the next three years [25] - The company has approximately $450 million of availability under its revolving line of credit and no final debt maturities until 2028 [26] Q&A Session Summary Question: What are the longer-term goals for exposures within markets? - Management indicated a focus on increasing exposure to the Sunbelt markets, aiming to raise the current 70% exposure to around 80% [34] Question: Can you touch on some of the larger pending vacancies and activity? - Management highlighted a strong pipeline with about 2,200,000 square feet of outstanding proposals, with significant activity in Atlanta and Dallas [37] Question: What offsets should be considered in terms of guidance? - Management noted that while leasing strength is strong, most of it will translate into growth in 2026 and beyond, which is why the bottom line guidance was not revised up [48] Question: How do you think about the buyer group and potential outcomes? - Management mentioned that the sales market is improving, particularly for core quality assets, and they are focused on disposing of non-core assets [54] Question: What is driving the reinvigoration of leasing activity? - Management identified several factors, including the need for larger tenants to upgrade their office experience and the return-to-office mandates [64]

Core Insights - The article posits that the value of shopping centers is expected to rise significantly due to low vacancy rates and high incremental demand for retail space [1][25][38] - Current construction costs are prohibitively high, making new developments unfeasible until rental rates increase substantially [12][24][27] Vacancy and Demand - National shopping center vacancy is at 4.1%, close to historical lows, indicating near full occupancy [3][6] - Incremental demand for retail space remains high, with strong lease signings reported at industry conferences [7][11] - Existing shopping centers are experiencing minimal vacancy, necessitating new space for additional demand [8][11] Construction Costs - The cost to build new shopping centers ranges from $300 to $500 per square foot, with an average reported cost of $394 per square foot [12][17][18] - Current net operating income (NOI) per square foot is insufficient to support these construction costs, with average rent at $20.33 per square foot [20][22] Rental Rate Dynamics - Shopping center REITs are experiencing rental rate increases of over 20% on new leases, indicating a strong upward trend in rental rates [26][27] - The estimated rental rate needed to justify new construction is around $45 per square foot, which is approximately double the current rates [26][27] Valuation and Investment Opportunities - The average shopping center REIT trades at 15.9 times the current year estimated adjusted funds from operations (AFFO), suggesting the sector is undervalued [28][30] - Shopping center REITs are trading at a significant discount to replacement costs, which are estimated between $400 and $450 per square foot [37][36] - There is strong private investor demand for shopping centers, as new construction is not viable, leading to potential acquisitions of existing properties [39]

Financial Data and Key Metrics Changes - Camden Property Trust reported core funds from operations (FFO) for Q1 2025 of $189.8 million, or $1.72 per share, which was $0.04 ahead of the midpoint of prior guidance [17] - The company increased the midpoint of its full-year core FFO guidance by $0.03 per share from $6.75 to $6.78, primarily due to lower projected interest expenses [19] - The annualized net turnover rate for Q1 2025 was 31%, one of the lowest in the company's history, indicating strong resident retention [12] Business Line Data and Key Metrics Changes - Same property revenue growth in the top five markets ranged from 1.3% to 4.5%, compared to an overall portfolio growth of 0.8% [10] - Effective new leases were down 3.1%, while renewals were up 3.3%, resulting in a blended rate of negative 0.1% for the quarter [10] - Camden's customer sentiment score reached 91.1, the highest since measurement began in 2014, reflecting strong resident satisfaction [12] Market Data and Key Metrics Changes - New supply in Camden's markets has peaked, with apartment absorption remaining strong; new starts are at a 13-year low, down 80% in Austin and 65-80% in several other markets [6] - The Sunbelt markets are 50% to 60% less expensive for residents compared to high-cost coastal markets, contributing to job and population growth [7] - Occupancy for Q1 averaged 95.4%, showing slight improvement from 95.3% in Q4 2024, with expectations for stability throughout the year [11] Company Strategy and Development Direction - Camden is focused on expanding its presence in high-demand markets like Nashville and Austin, with plans for acquisitions and developments in these areas [14][83] - The company aims to maintain a geographically diverse portfolio to weather economic uncertainties, emphasizing the importance of the Sunbelt region for growth [7] - Camden is actively marketing older, capital-intensive assets for sale while pursuing new acquisitions to enhance its portfolio [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current economic uncertainty but expressed confidence in the company's strong position and operational performance [22] - The company is cautious about guidance changes due to market volatility but remains optimistic about future performance as supply-demand dynamics improve [30] - Management noted that while Nashville and Austin face challenges, they are expected to recover quickly once market conditions improve [31] Other Important Information - Camden completed two acquisitions totaling $199 million and commenced construction on a new development community with an estimated cost of $184 million [14] - The company entered into a $600 million commercial paper program to supplement its existing line of credit, allowing for lower interest rates [16] - Camden's development pipeline is being rebuilt, with a focus on disciplined underwriting amid rising construction costs [88] Q&A Session Summary Question: Maintaining same store guidance amid macro uncertainty - Management indicated that the current uncertainty has influenced their cautious approach to guidance changes, but they feel confident about the business's performance [22] Question: Stabilization of deliveries in Sunbelt markets - Nashville and Austin are expected to remain challenged, but improvements are anticipated in the latter half of 2025 as supply decreases [29] Question: Impact of oil prices on Houston market - Management believes that lower oil prices will not significantly affect Houston's market due to the consolidation and efficiency of the energy sector [110] Question: Projections for A and B assets in Sunbelt markets - Class A urban assets are currently performing slightly better than Class B suburban assets, reflecting changing supply-demand dynamics [68] Question: Insights on bad debt levels - Bad debt improved to 60 basis points, nearing the normalized level of 50 basis points, with significant improvements in previously problematic markets [95]

Financial Data and Key Metrics Changes - Core FFO per share for Q1 2025 was $0.27, flat compared to the prior year, reflecting the impact of the final stages of the portfolio optimization and deleveraging strategy completed last year [15][19] - Same store NOI grew by 2.7%, driven by a 2.3% increase in same store revenue and a 1.6% increase in operating expenses compared to the prior year [15][19] - Average occupancy increased by 100 basis points year over year, contributing to the same store NOI growth [8][15] Business Line Data and Key Metrics Changes - Value add renovations completed during the quarter included 275 units with a weighted average return on investment of 16.2% [8] - The company has 28 communities with over 4,600 units in the ongoing value add program, expecting to complete between 505,000 units this year [8] - The company sold its final asset in Birmingham, Alabama for $111 million and acquired a 280-unit community in Indianapolis for $59.5 million at a 5.6% economic cap rate [9][15] Market Data and Key Metrics Changes - In 2025, new apartment deliveries are expected to decrease to 32,000 units, representing only 2% of existing supply, down from 6.1% in 2020 [11][64] - The company anticipates positive net absorption of 8.5% in its submarkets, significantly higher than the national average of 1.5% [12][65] - Homeownership costs in the top 10 markets are 94% higher than the company's average monthly rent, indicating strong demand for rental properties [12] Company Strategy and Development Direction - The company is focused on executing its long-term investment strategy, with a strong acquisition pipeline and ample liquidity for accretive investments [10][18] - The company expects to continue benefiting from strong demand and significant declines in new supply, leading to ongoing rental rate gains without sacrificing occupancy [13][19] - The company is cautious about macroeconomic uncertainties but remains confident in its market fundamentals [13][19] Management's Comments on Operating Environment and Future Outlook - Management believes that the fundamentals of supply and demand in their markets will continue to dominate operations, with expectations for improving rental rates and occupancy [13][19] - The company is optimistic about the trajectory of leasing spreads improving in the second half of the year due to waning supply pressures [24][30] - Management noted that they have not yet seen significant stress from macroeconomic factors such as tariffs or deportations [25][26] Other Important Information - The company ended the quarter with a net debt to adjusted EBITDA ratio of 6.3 times, with plans to achieve a mid-five ratio by year-end 2025 [18] - The company has nearly $750 million in liquidity available for investments [18] - The company is not expecting to exit any additional markets beyond Birmingham at this time [81] Q&A Session Summary Question: Can you walk through the leasing spreads for the first quarter? - New leases were down 4.6%, while renewals were up 4.8%. The company did not experience the same level of decline in rental rates as some peers due to its predominantly Class B portfolio [22][23] Question: Have you seen any evidence of stress from tariffs or macro uncertainty? - The company has not felt significant effects from tariffs or deportations and has seen a reduction in bad debt [25][26] Question: Can you speak to trends in leasing traffic and conversion? - Demand is up 25% compared to the same period last year, with conversion rates remaining stable [30] Question: What are your expectations for new lease rates and renewals? - The company anticipates positive trends in blended rental rates and expects to see upward momentum in leasing rates as the year progresses [34][35] Question: How are you thinking about the full-year revenue guidance? - The company expects job growth and population growth to remain steady, with a significant drop in new supply contributing to revenue growth [63][64] Question: Can you discuss the impact of insurance renewals on expenses? - The company expects a net decrease in insurance premiums despite initially assuming a 10% increase [73][75]