Kimco Realty (KIM) Q3 2025: Signed-Not-Open Pipeline Hits $71M, Securing 2026 Rent Growth Visibility
Kimco Realty’s record $71 million signed-not-open (SNO) lease pipeline cements forward rent growth, even as anchor recapture and redevelopment reshape its portfolio dynamics. Management’s guidance raise and capital recycling discipline signal confidence, but competitive deal flow and refinancing headwinds will test execution heading into 2026. With limited new supply, high occupancy, and innovation initiatives ramping, Kimco’s model is positioned to weather sector volatility and capitalize on retailer demand tailwinds.
Summary
- Leasing Pipeline Surge: Signed-not-open leases at all-time highs create multi-quarter rent growth visibility.
- Capital Recycling Focus: Kimco accelerates shift from ground leases to higher-yielding assets and structured investments.
- Innovation and Redevelopment: New Office of Innovation aims to drive NOI and margin gains through technology and operational transformation.
Performance Analysis
Kimco’s third quarter results were defined by resilient core operations and a record pipeline of future rent commencements. Funds from operations (FFO) per share rose, driven by higher net operating income (NOI) from base rent growth and healthy recoveries, even as anchor box recapture and bankruptcies created 130 basis points of drag on same-site NOI. Notably, leasing momentum accelerated across both anchor and small shop categories, resulting in pro-rata occupancy rising to 95.7% and small shop occupancy reaching a new high of 92.5%.
Leasing activity was robust, with 427 leases completed totaling 2.3 million square feet and blended leasing spreads of 11%. The signed-not-open (SNO) pipeline—leases signed but not yet commenced—swelled to $71 million, up 360 basis points, setting up a strong tailwind for 2026. Credit loss remained well-contained at 75 basis points, and the balance sheet further strengthened with S&P’s upgrade to A-. Liquidity stood at $2.1 billion, providing ample flexibility for redevelopment and acquisitions. The dividend was raised 4%, reflecting management’s confidence in forward earnings power.
- Anchor Recapture Drag: Early recapture of large anchor boxes and bankruptcies temporarily pressured same-site NOI, but re-leasing at higher rents is expected to drive future growth.
- Structured Investment Returns: New investments in grocery-anchored and value-add centers are generating low double-digit unlevered returns, offsetting large repayments in the structured finance program.
- Redevelopment Pipeline Expansion: Active and near-term development projects now total $600 million, with targeted unlevered returns of 10-12% and recent completions yielding 13.7%.
The quarter’s operational strength was underpinned by disciplined capital allocation and a focus on categories with proven rent durability, notably grocery-anchored centers and small shop leasing, both of which continue to outperform sector peers.
Executive Commentary
"The leasing success we're achieving today is already building tomorrow's FFO growth. Redevelopment also continues to be a key pillar of long-term value creation strategy and one we intend to increasingly capitalize on moving forward."
Connor Flynn, Chief Executive Officer
"Our signed not open pipeline has reached a record level of 360 basis points, totaling $71 million. We anticipate that approximately 20% of these leases will commence in the fourth quarter, contributing $2 to $3 million in incremental rent. This expansion will create a favorable tailwind as 60% of the current snow pipeline is projected to commence next year."
Glenn Cohen, Chief Financial Officer
Strategic Positioning
1. Grocery-Anchored Portfolio as Growth Engine
Kimco’s core business remains centered on open-air, grocery-anchored shopping centers, which provide stable foot traffic and resilient rent rolls. This segment’s consistent demand and limited new supply underpin high occupancy and strong leasing spreads, with anchors like Safeway and Trader Joe’s serving as traffic drivers and enhancing small shop leasing.
2. Capital Recycling and Structured Investments
Kimco’s capital allocation discipline is increasingly visible through its recycling of lower-growth ground leases into higher-yielding acquisitions and structured investments, such as senior loans on grocery-anchored centers and participations in retailer-backed loans. These moves not only improve portfolio yield but also provide right-of-first-offer (ROFO) opportunities for future acquisitions, deepening the funnel for accretive growth.
3. Redevelopment and Mixed-Use Activation
The $600 million redevelopment and mixed-use pipeline targets high-return projects, with 25 active grocery projects and multifamily developments in core markets. Kimco’s capital-light approach—partnering with developers and contributing land—limits risk and accelerates value creation, while completed projects are already delivering above-target yields.
4. Innovation and Digital Transformation
The newly formed Office of Innovation and Transformation unifies digital, data, and operational improvement under a single leadership structure, aiming to unlock NOI margin gains and productivity through technology investments, including AI and digital leasing tools. Management is committed to ROI-driven tech spending, leveraging scale to drive both expense efficiencies and new revenue streams.
5. Small Shop Leasing and Occupancy Upside
Small shop occupancy hit a record 92.5%, and management sees further upside driven by redevelopment “halo effects” and service-based tenant demand, with limited new supply in the sector supporting continued rent growth. The RPT portfolio, acquired in 2024, has already seen a 280 basis point occupancy lift, demonstrating Kimco’s ability to unlock value from acquisitions and asset repositioning.
Key Considerations
Kimco’s Q3 was marked by a blend of defensive operational strength and proactive capital deployment, with management emphasizing visibility into future rent growth and a flexible, innovation-driven platform.
Key Considerations:
- Rent Growth Visibility: The $71 million SNO pipeline, with 60% commencing in 2026, provides rare multi-quarter clarity on forward NOI gains.
- Interest Expense Headwinds: $825 million of debt maturing in 2026 at a low average yield will pressure interest expense, requiring careful refinancing strategy to mitigate FFO drag.
- Capital Recycling Program: Ongoing disposition of ground leases and non-core assets, with proceeds reinvested in higher-yielding centers and structured loans, is expected to accelerate into 2026.
- Sector Supply Constraints: With only 0.3% of sector stock under construction, Kimco’s assets face minimal new competition, supporting pricing power and occupancy.
- Innovation ROI Focus: Investments in technology and operational transformation are being held to strict ROI thresholds, aiming to deliver margin expansion without inflating G&A.
Risks
Rising interest rates and debt refinancing represent the most immediate earnings headwind, as $825 million of low-cost debt matures in 2026. While credit loss remains low and bankruptcy impacts are largely absorbed, any deterioration in tenant health or macroeconomic shocks could pressure occupancy and leasing spreads. Competitive capital chasing retail assets may compress acquisition yields, making disciplined underwriting and capital recycling execution critical for sustaining growth.
Forward Outlook
For Q4 2025, Kimco guided to:
- ~20% of SNO leases commencing, contributing $2–3 million incremental rent
- Continued strong leasing and small shop occupancy momentum
For full-year 2025, management raised guidance:
- FFO per share to $1.75–$1.76 (previously $1.73–$1.75)
- Maintained same-site NOI growth outlook of 3% or better
Management highlighted:
- Majority of SNO pipeline rent commencements weighted toward the second half of 2026
- Interest expense will be a headwind, but refinancing strategies are under review
Takeaways
Kimco’s forward rent growth is now largely de-risked by its record SNO pipeline and high occupancy, while capital recycling and redevelopment provide additional levers for earnings expansion.
- Pipeline-Driven Growth: The $71 million SNO pipeline anchors 2026 and beyond, with 60% of commencements weighted to the back half of next year, supporting multi-year NOI visibility.
- Balance Sheet and Capital Allocation: Upgraded credit ratings and strong liquidity enable continued investment in redevelopment and structured finance, but refinancing execution will be a key watchpoint.
- Innovation and Margin Expansion: The new Office of Innovation and Transformation aims to convert technology investment into tangible NOI and productivity gains, a differentiator as the sector digitizes.
Conclusion
Kimco’s Q3 execution demonstrates the durability of its grocery-anchored, open-air model and the benefits of proactive capital allocation, with a record SNO pipeline setting the stage for sustained rent growth. Interest expense and fierce competition for quality assets remain key risks, but management’s innovation focus and disciplined recycling provide a credible path for continued outperformance.
Industry Read-Through
Kimco’s results highlight the competitive intensity and capital flows targeting open-air retail, as institutional and private buyers drive cap rates lower. The sector’s supply constraints—only 0.3% of stock under construction—underscore the scarcity value of stabilized, grocery-anchored centers. Operators with redevelopment pipelines and digital transformation initiatives are best positioned to capture margin and NOI gains, while those with legacy ground leases or limited innovation investment may lag. Expect continued asset recycling and structured investment activity across the sector, as peers emulate Kimco’s approach to balance yield, risk, and future acquisition optionality.