KIMCO S 2020 VISION. INVESTOR Presentation Third Quarter 2016

Transcription

1 KIMCO S 2020 VISION INVESTOR Presentation Third Quarter 2016

2 SAFE HARBOR The statements in this presentation, including targets and assumptions, state the Company s and management s hopes, intentions, beliefs, expectations or projections of the future and are forward-looking statements. It is important to note that the Company s actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from current expectations include the key assumptions contained within this presentation, general economic conditions, local real estate conditions, increases in interest rates, foreign currency exchange rates, increases in operating costs and real estate taxes. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the Company s SEC filings, including but not limited to the Company s Annual Report on Form 10-K. Copies of each filing may be obtained from the Company or the SEC. Suburban Square, Philadelphia, PA Cover: Corsica Square, Miami, FL

3 KIMCO S 2020 VISION PORTFOLIO QUALITY High-quality assets, tightly clustered in major metro markets that provide multiple growth levers NAV CREATION Increase net asset value (NAV) through redevelopment, select ground-up development and active investment management FINANCIAL STRENGTH Maintain a strong balance sheet and financial flexibility, on a path to A-/ A3 credit rating 3 3

4 TSR Since IPO 1 KIMCO S HISTORY Dividend Growth 11/29/91 9/30/ % 10.3% $0.64 $0.72 $0.76 $0.84 $0.90 $0.96 $1.02 $1.08* 2 KIM 9.5% DJIA S&P Founded by Milton Cooper & Marty Kimmel 1991 IPO that launched the Modern REIT Era 2006 Named to the S&P 500 Index 534 U.S. properties totaling 86M square feet in 35 states and Puerto Rico Information as of 9/30/ Source: Bloomberg 2 Quarterly dividend annualized 4

5 CASE FOR OPEN-AIR REAL ESTATE Today s Market 12% New Supply Near 38-Year Low Shopping Center Supply Growth (GLA) 1 90 High Demand Planned Retailer Store Openings 3 (in thousands) 10% 80 8% 70 6% 60 4% 50 2% 40 0% U.S. retail market occupancy increased with net absorption totaling 43.1M sf during 3Q16 2 More than 79,272 store openings scheduled over the next two years (3) Pure-play online retail opening physical stores Discounters and off-price concepts are increasing store count Next 24 months Next 12 months 1 Green Street Advisors January CoStar Group, The CoStar Retail Report: National Retail Market Third Quarter RBC Capital Markets, Retail REITs: July 2016 National Retailer Demand Monthly (NRDM) July

6 SWEET SPOT OF RETAILING Market Cap ($B): Off-Price Retailers vs. Department Stores Q, 2016 Nordstrom $15 Ross Stores $5 Macy's TJX $21 Ross Stores $13 Nordstrom $26 $9 Sears $27 Off-Price Total: $18B Department Stores Total: $85B Sears $1 Macy s $11 Off-Price Total: $75B Department Stores Total: $26B JC Penney $19 TJX $49 Source: Bloomberg 6

7 PORTFOLIO QUALITY Riverplace, Jacksonville, FL

8 PORTFOLIO QUALITY Highly Concentrated in Major Metropolitan Markets Seattle Denver Minneapolis/St. Paul Portland St. Louis Chicago Pittsburgh Boston San Francisco Sacramento San Jose Los Angeles Orange County San Diego Charlotte New York Philadelphia Baltimore Washington D.C. Raleigh-Durham Phoenix Orlando Atlanta Dallas Austin Houston Tampa Miami Fort Lauderdale West Palm Beach 8

9 PORTFOLIO QUALITY Tenant Diversity 3.4% Top Tenants % of ABR Only 15 tenants with an ABR exposure greater than 1.0% SCALE: Approximately 8,900 leases with 4,100 tenants STABILITY: Well staggered lease maturity; averages ~8% of GLA each year for next 10 years QUALITY: ~55% of ABR from the top 50 tenants is attributed to tenants with investment grade credit ratings SECURITY: Single tenant exposure no more than 3.4% of total ABR; low ABR with strong mark to market upside 2.4% 2.2% 2.0% 1.9% 1.7% 1.6% 1.4% 1.3% 1.2% 1.1% As of 9/30/2016 9

10 PORTFOLIO QUALITY Necessity Based Goods and Services Omni-Channel Players 41% Internet Vulnerable 5% % of ABR 2% Electronics 2% Office Supply Stores 1% Books Internet Resistant 54% % of ABR 10% Home Improvement/ Home Goods 7% Apparel/ Accessories 6% Sporting Goods/ Hobbies 5% Department Stores 5% Pharmacy/ Personal Care 5% Other Omni Channel 3% Banking/ Finance % of ABR 15% Grocery/ Warehouse Clubs 12% Restaurants 9% Service 8% Off-Price 5% Other Internet Resistant 3% Health Clubs/ Fitness 2% Medical 72% of ABR from Grocery Anchored Centers 10

11 PORTFOLIO QUALITY Multi-Year Highs and Continued Growth in Operating Metrics Occupancy 3Q16 4Q15 4Q14 4Q % 95.1% 95.8% 95.7% 3Q Annual New Leasing Spreads 15.6% 19.5% 25.0% 26.6% 4Q % % 4Q % 3.6% 2011 Annual Same Property NOI Growth 3Q % 3.3% 2.5% 1.1% 3.8% 3.3% Rent Per Square Foot 3Q16 3Q16 4Q15 4Q15 4Q14 4Q14 4Q13 4Q13 4Q12 4Q12 4Q11 4Q11 $12.99 $12.58 $11.91 $13.74 $14.46 $14.46 $13.74 $12.99 $12.58 $11.91 $14.94 Note: All figures are at Kimco s share 11

12 PORTFOLIO QUALITY Quality Leads to Multiple Growth Levers bps NOI Growth Walk Through bps bps bps bps Organic Growth (Rent Bumps) Leasing & Value Creation Redevelopment Ground-Up Development Targeted Annual Growth Rate 12

13 PORTFOLIO QUALITY Building Blocks of NOI Growth $55M $10M Net Acquisitions 3 U.S. Portfolio $935M $65M Organic Growth $50M Rent Spreads/ Lease-up/ Value Creation $80M Redevelopment Pipeline Ground-Up Development $1.2B 2015 BASE E is based on U.S. portfolio at 12/31/15 2 Assumes proceeds from sales used to pay down debt 3 Acquisition NOI in excess of dispositions 13

14 PORTFOLIO QUALITY Growth through Leasing & Value Creation % 84.7% 87.0% 88.0% 89.2% 90.0% Small Shop Occupancy Progress to Date Improved small shop ABR = $26.02 psf Small shop spreads for last four quarters New Leases = +11% Renewals & Options = +8% % The Path to 90% occupancy Deal and occupancy bounties Operator portfolio reviews Targeting of service-oriented tenants 76 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 Goal 14

15 PORTFOLIO QUALITY Unmatched Mark to Market Opportunities Chicago Anchor Mark to Market +27% Top 10 Core Markets New York Anchor Mark to Market +64% 14 sites 2% ABR 119K Population 65 sites 12% ABR 189K Population San Francisco, Sacramento, San Jose 24 sites 5% ABR 54 sites 10% ABR 13 sites 4% ABR 170K Population Los Angeles, Orange County, San Diego 161K Population 135K Population +30% +58% +48% 10 sites 2% ABR 87K Population +30% Phoenix Dallas Houston 12 sites 4% ABR 94K Population +40% Philadelphia, Baltimore, Washington D.C. 72 sites 16% ABR Raleigh-Durham 9 sites 2% ABR 29 sites 5% ABR 102K Population 66K Population Miami, Ft. Lauderdale, West Palm Beach 148K Population +89% +14% +84% *ABR is defined as Annual Base Rent 15

16 $ABR/SF PORTFOLIO QUALITY Growth through Leasing & Value Creation $20 $18.51 $18 Anchor Lease Spreads/Mark To Market $16 $14 $12 $10 $8 $15.50 $15.56 $14.42 $ % +48% +44% +35% $11.27 $10.51 $10.05 $ % $ Actual 2014 Actual 2015 Actual E 2019E & After Mark to Market Spread on Anchor Leases: +59% 82 Naked Leases 1 expiring through 2018 totaling 1.5M sf 5 Kmart Leases expiring through 2018: 362% market upside Actual anchor spreads for 1H16 were +46% Total Average RPSF up 30% since 2010 New Rent Expiring Rent Projected Rent 1 Naked Leases are defined as leases with no remaining options 16

17 NAV CREATION Crossroads Plaza, Raleigh, NC

18 NAV CREATION: REDEVELOPMENT Highest and Best Use Total Pipeline $3.0B+ Current: ~$1.0B+ (through 2020) Shadow: ~$2.0B+ (beyond 2020) $80M Projected NOI $550M Value Creation Mixed-use densification options: Partner with best in class developer Ground Lease Sell $XXX M Incremental Return: 8%-13% 18

19 NAV CREATION: REDEVELOPMENT Growth through Redevelopment $250 Spending ($M) $225 $225 $225 $200 $190 $150 $118 $135 $100 $47 $50 $42 $ E 2017E 2018E 2019E 2020E Note: Numbers are represented in gross terms. 19

20 NAV CREATION Growth through Selective Ground-up Development Pipeline $740M Projected ROIC 7%-9% Dania Pointe, Dania Beach, FL Development Approach Retailer demand-driven Building additional concentration Build to own Risk Management ~75% Pre-leased to build Phased construction Experienced team 20

21 NAV CREATION Evolution of Top 10 Kimco Assets Through NOI Growth Westlake S.C. (San Francisco) 2 Oakwood Plaza (Ft. Lauderdale) 3 The Tustin Legacy (Orange County) 4 Mesa Riverview (Phoenix) 5 Suburban Square (Philadelphia) 6 Towson Place (Baltimore) 7 The Marketplace at Factoria (Seattle) 8 Crossroads Plaza (Raleigh-Durham) 9 Dulles Town Crossing (Washington D.C.) 1 Dania Pointe (Ft. Lauderdale) 2 Westlake S.C. (San Francisco) 3 The Boulevard (Staten Island) 4 Suburban Square (Philadelphia) 5 The Tustin Legacy (Orange County) 6 Oakwood Plaza (Florida) 7 Mesa Riverview (Phoenix) 8 Pentagon Centre (Washington D.C.) 9 Grand Parkway (Houston) 1 0 Christown Spectrum (Phoenix) $99M NOI (11% of Total) 1 0 Crossroads Plaza (Raleigh-Durham) $152M NOI (15% of Total) Redevelopment Site Development Site NOI metrics are pro-rata 1 Before planned acquisitions 21

22 NAV CREATION Growth through Active Asset Management Acquisition Criteria Core markets where Kimco has scale/ density Asset/ tenant quality NAV impact NOI growth potential Redevelopment and value creation potential Disposition Criteria Assets with above average risk Assets with limited growth potential Secondary markets Airport Plaza, Farmingdale, NY Plaza Paseo, Albuquerque, NM Maintain Conservative Capital Structure 22

23 NAV CREATION Growth through Active Asset Management ACQUIRED 208 Assets that reflect our 2020 Vision Non-Strategic Assets DISPOSED OF bps Pro-rata Occupancy +59% Pro-rata ABR/sq. ft. +29% Average Household Income +19% Population Improved Occupancy Stronger Strategic Markets Improved Demographics Reflects transactions since Investor Day 2010 through 9/30/2016. Note: Demographics are weighted by pro-rata ABR within a 3-mile radius 23

24 NAV CREATION Growth through Simplification JV Site Count Reduced by 74% Consolidated NOI % Increased by 39% % 84.7% % % Q Q16 24

25 FINANCIAL STRENGTH Davidson Commons, Charlotte, NC

26 2020 VISION BALANCE SHEET STRENGTH Strong liquidity position; $1.75B available from unsecured line of credit Increase unencumbered asset pool; 362 assets as of 3Q16 Lower Net Debt/Recurring EBITDA leverage levels Consolidated 5.0x 5.5x Pro rata (including preferreds) 6.4x 6.9x Fixed Charge Coverage 3.0x+ Extended WAVG debt maturity profile (3Q yrs; 3Q yrs) Committed to strong investment grade ratings S&P: BBB+ Moody s: Baa1 Fitch: BBB

27 Investor Day 2010 STRONG CAPITAL STRUCTURE Today 12% 6% 2% Total Enterprise Value: $10.6B 52% Since Investor Day 2013, refinanced $3.2B of maturing debt at significantly lower rates & extended average debt maturity using a 30-year bond 21% 7% 4% 1% Total Enterprise Value: $18.2B 28% ATM program Issued 9.8M shares; generated net proceeds of $285.1M 67% Common Equity Unsecured Debt Mortgage Debt Preferred Stock Non-controlling Interest As of 9/30/

28 Debt in Millions Debt in Millions WELL-STAGGERED DEBT MATURITIES 1 Consolidated Debt Joint Venture Debt Fixed Rate 4.10%* Fixed Rate 5.14%* 1,200 Floating Rate 1.69%* Maturity 8.9 Yrs* 26% 1,200 Floating Rate 2.40%* Maturity 3.9 Yrs* % 13% % 8% 8% 7% 7% 8% % 14% 9% 5% 10% 20% 12% 11% 7% 1% 0% 0 0 Secured Unsecured Line of Credit Term Loan Kimco s Share Partner s Share 1 Proforma includes the subsequent issuance of 7-year $400M 2.7% and 30-year $350M 4.125% Notes and the payoff of $400M of the term loan, $225M of line of credit and $55M of mortgage debt maturing in Q1, 2017 *Weighted average Note: Percentages are annual maturities of total debt stack 28

29 2020 VISION LEVERAGE VIEW 6.0x 5.8x 3.4x 3.5x 3.6x 3.6x 3.2x 5.6x 3.0x 5.4x 5.3x 5.2x Fixed Charge Coverage Net Debt/ Recurring EBITDA Grow Recurring EBITDA & Funds Available for Distribution (after common dividends) Exit Canada Monetize Albertsons investment Opportunistic use of ATM program Development/Redevelopment spending $250M - $400M per year Modest net acquirer 29

30 $1.14 $1.20 $1.26 $1.33 $1.40 $1.46 $ $1.51 A LOOK BACK Multiple Years of Growth Funds From Operations Maintained a ~5% Recurring FFO CAGR Through Our Transformation Dividends Consistently Raised Dividend Commensurate With Recurring FFO/ Share Growth $1.02 $1.08* $0.96 $0.90 $0.84 $0.72 $0.76 $ Headline FFO Conservative FFO Payout Ratio *Quarterly dividend annualized 30

31 2016 GUIDANCE 2016 Guidance (per diluted share) EPS FFO FFO as Adjusted* $ $0.79 $ $1.32 $ $ Operational Assumptions Transactional Income/ (Expense), net U.S. Portfolio Occupancy U.S. Same Site NOI Operating Property Acquisitions Operating Property Dispositions $(79) million - $(78) million 95.2% % +2.70% % $450 million - $500 million $1.1 billion - $1.2 billion *Excludes transactional income/(expense), net Note: All figures are at Kimco s share 31

32 2016 FFO GUIDANCE FFO ($M) FFO/Share (2) 2015A 2016F 2015A 2016F RECURRING: U.S. Retail Portfolio $964 $965 - $979 $2.33 $ $2.33 International & Other Corporate Financing (275) (233) - (236) (0.66) (0.55) - (0.56) G&A (121) (116) - (118) (0.29) (0.28) - (0.28) Income Taxes & Other (28) (6) - (9) (0.08) (0.01) - (0.02) RECURRING FFO $604 $625 - $632 $1.46 $ $1.51 Transactional Income, Net (1) 40 (79) (78) 0.10 (0.19) (0.19) HEADLINE FFO $644 $546 - $554 $1.56 $ $1.32 (1) Net of non-controlling interests ranges include bond/ mortgage prepayment charges and charge for merger of TRS (2) Reflects diluted per share basis and the potential impact if certain units were converted to common stock at the beginning of the period 32

33 APPENDIX The Marketplace at Factoria, Bellevue, WA

34 RECONCILIATION OF FFO TO NET INCOME FFO ($M) FFO/Share (2) 2015A 2016F 2015A 2016F FFO $644 $546 - $554 $1.56 $ $1.32 Depreciation and amortization (334) (346) - (358) (0.81) (0.82) - (0.85) Depreciation and amortization real estate JV s (1) (67) (45) - (49) (0.17) (0.11) - (0.12) Gain on disposition of operating properties Gain on disposition of JV operating properties, and change in control of interests Impairments of operating properties (52) (78) - (78) (0.13) (0.19) - (0.19) Benefit/(Provision) for income taxes (3) (54) (41) - (41) (0.13) (0.10) - (0.10) Noncontrolling interests (3) Net income available to common shareholders $831 $322 - $334 $2.00 $ $0.79 (1) Net of non-controlling interests (2) Reflects diluted per share basis and the operational impact if certain units were converted to common stock at the beginning of the period (3) Related to gains, impairments and depreciation on operating properties, where applicable 34

35 SIGNATURE SERIES The Boulevard, Staten Island, NY

36 SHOPPES AT WYNNEWOOD Completed Ground-up Development Project Summary Phase I: 45K sf Whole Foods Phase II: 10K sf small shops Location: Main Line area in the Philadelphia-Camden-Wilmington MSA Located 1 mile from Kimco s Suburban Square flagship property (~$900 sales psf) Average Household Income over $105K Timing & Economics Phase I: Total costs = $27.5M Date completed = 3Q 2016 Phase II: Total costs = $10.9M Date Completed = 1Q

37 GRAND PARKWAY MARKETPLACE Ground-up Development Project Summary Phase II Phase I Phase I: 488K sf open-air center anchored by Target Phase II: 255K sf open-air center Location: Houston-The Woodlands-Sugar Land MSA Near Exxon Corporate Campus (>10k employees) 168k people (5 mile radius) Avg. household income >$100k (5 mile radius) Phase I is 70% pre-leased Timing & Economics Phase I: Estimated costs = $87.0M Estimated completion = 2017 Phase II: Estimated costs = $52.0M Estimated completion =

38 DANIA POINTE Ground-up Development Project Summary Phase I: Traditional open-air center with 320K sf of retail anchored by Costco Phase II: 490K sf of full price and fast fashion retail anchored by H&M, restaurants, and entertainment in a Main Street setting with two hotel towers, residential, and office space Phase II Location: 108 acres on I-95 in Dania Beach, FL (5 miles south of Fort Lauderdale) Project adjacent to Kimco s 900K sf Oakwood Plaza S.C. Phase I Timing & Economics Phase I: Estimated costs = $109.0M Estimated completion =

39 PROMENADE AT CHRISTIANA Ground-up Development Project Summary Develop 435k sf open-air center Location: New Castle County, Delaware Fronting one half mile of I-95 1/2 mile from GGP s Christiana Mall which produces sales of $1,200 psf Destination shopping market due to no sales tax Timing & Economics Estimated costs = $64.0M Estimated completion =

40 OWINGS MILLS Ground-up Development Project Summary Develop 615K sf open-air center (de-malling) Location: Baltimore-Columbia-Towson MSA Direct access ramp to 795 which connects Carrol County with Baltimore County Mass transit access within walking distance of the property Timing & Economics Estimated Costs = $108.0M Estimated Completion =

41 WILDE LAKE COLUMBIA, MD Mixed Use Redevelopment The Project Total Project Costs: $18.9M Anticipated Stabilization: 2016 Value Creation: $14.1M Incremental ROI: 8% Original Village Center located ½ mile from Downtown Strategically located market with minimal class A residential Specialty grocer located at project Favorable entitlement process implemented, easing future entitlements in same markets Future Projects 4 additional Columbia village centers for redevelopment Total Project Costs: $300M-320M Value Creation: $150M-200M Redevelop existing retail and newly construct: 32,000 sf retail 15,000 sf office 230 residential units Ground lease residential structure 41

42 PENTAGON CENTRE PENTAGON CITY, VA In Progress Redevelopment Gross Costs (Phase I): $164.5M Incremental NOI: $10.1M Incremental ROI: 6%-7% Incremental Value Creation: $66.9M Before Multi-phase project with first phase expected to be completed in 2019 Above grade retail parking structure (426 spaces) Develop two residential towers: 440 units (Tower I) 250 units (Tower II), and modernize existing retail Located in Washington D.C. MSA, #7 in U.S. Site sits above Pentagon City Metro After A B C D 42

43 THE BOULEVARD STATEN ISLAND, NY Future Redevelopment Gross Costs: $173.5M Incremental NOI: $11.0M Incremental ROI: 6%-7% Incremental Value Creation: $71.1M Before Trophy NY metro asset Leasing overflow to other cluster assets Transformative, innovative site plan design - Maximize density - Improve parking efficiency - Enhance visibility & signage - Accommodate anchor prototypes After 43

44 CORPORATE SUSTAINABILITY Established Priorities Tangible Results Transparency & Leadership Operational Leadership Tenant Partnerships Common Area Energy Consumption 129, , ,099 Stakeholder Engagement 113, ,330 15% #1 Retail Owner, 2016 Newsweek Top Green Companies in the U.S. Sole Retail Owner, 2016 Dow Jones Sustainability North America Index Quality Team Community MWH consumed GRESB Green Star 2014 CDP Climate Disclosure Leadership 44

45 KIMCO NOTES

46 KIMCO NOTES

47 KIMCO NOTES