KIMCO S 2020 VISION INVESTOR PRESENTATION FIRST QUARTER Westlake Shopping Center, Daly City, CA

Transcription

1 KIMCO S 2020 VISION INVESTOR PRESENTATION FIRST QUARTER 2016 Westlake Shopping Center, Daly City, CA

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. The District at Tustin Legacy, Tustin, CA

3 3 COMPANY SNAPSHOT LARGEST PUBLICLY TRADED OWNER & OPERATOR OF PREMIER OPEN- AIR SHOPPING CENTERS IN THE UNITED STATES History Founded in 1958 IPO that initiated Modern REIT Era NYSE listed (1991) S&P 500 Index (2006) Dividend $1.02/share annually, 3.5% yield at 3/31/16 Retail Portfolio Footprint 550 U.S. properties totaling 88M sf 36 States and Puerto Rico Occupancy (1) 3/31/16: 95.8% All-time high: 96.2% (12/31/07) Credit Rating Investment Grade: BBB+ Baal BBB+ S&P Moody s Fitch Information as of 3/31/2016 (1) Pro rata

4 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15E '17E CASE FOR OPEN-AIR REAL ESTATE: TODAY S MARKET Low Supply High Demand 12% 10% 8% 6% 4% 2% Shopping Center Supply Growth (GLA) (1) Planned Retailer Store Openings (3) 0% Retail supply remains historically low Consumer confidence trending higher U.S. retail market occupancy remained consistent with net absorption totaling 18.6M sf during 1Q16 (2) (1) Green Street Advisors January 2016 (2) CoStar Group, The CoStar Retail Report: National Retail Market First Quarter 2016 (3) RBC Capital Markets, Retail REITs: March 2016 National Retailer Demand Monthly (NRDM) March 2016 More than 79,000 store openings scheduled over the next two years (3) Pure-play online retail opening physical stores Discounters and off-price concepts are increasing their footprint in both square footage and store count 4

5 SWEET SPOT OF RETAILING Market Cap ($B): Open-Air Retailers vs. Mall Retailers Ross Stores $23.8 Sears $27.3 JC Penney $18.9 Dillard's $2.8 Ross Stores $4.5 TJX Companies $13.4 TJX Companies $51.6 Nordstrom $14.6 Macy's $20.8 Sears $1.7 JC Penney $3.0 Dillard's $2.5 Nordstrom $8.9 Macy's $12.4 Source: Bloomberg 2007 Q Q Off-Price Retailers Department Stores 5

6 6 E-COMMERCE: WELL-POSITIONED FOR THE FUTURE Total Retail Sales Kimco ABR Composition 92.5% Brick & Mortar (B&M) Sales 7.5% E-Commerce Sales 93% Internet Compatible/ Resistant 7% Internet Vulnerable (poor Omni-channel platform) The Case for Brick & Mortar Omni-Channel: Everybody s Different A Case Study B&M + Ecommerce = Sales Ecommerce sales 80% w/in zip code of B&M 50% increase w/ new store opening Growth Strategy Over 40+ store openings in 2016 Invest in omni-channel New Entrants Buy Online Ship to Store +7.1% +4.0%

7 7 CORPORATE SUSTAINABILITY Established Priorities: Tangible Results: Transparency & Leadership: Operational Leadership Tenant Partnerships Quality Team Stakeholder Engagement Community 15.1% #1 Retail Owner, 2016 Newsweek Top Green Companies in the U.S. Sole Retail Owner, 2015 Dow Jones Sustainability North America Index 2014 & 2015 GRESB Green Star 2014 CDP Climate Disclosure Leadership

8 U.S. SHOPPING CENTER PORTFOLIO Westlake Shopping Center, Daly City, CA

9 TOP 30 MARKET SUMMARY: UNMATCHED DIVERSITY Top 10 Markets by ABR Source: Green Street Advisors 9

10 10 OPERATING PORTFOLIO A HIGH-QUALITY BASE The Market The Real Estate Top U.S. markets Major metros Strong demographics Above national average Grocery-anchored >70% ABR Anchor tenants ~60% ABR Top 50 tenants with investment grade >50% ABR Fee owned ground leases ~11% ABR

11 TOP10 KIMCO ASSETS Westlake S.C. (San Francisco) 1 Dania Pointe (Ft. Lauderdale) 2 Oakwood Plaza (Florida) 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.) 10 Christown Spectrum (Phoenix) 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) 10 Crossroads Plaza (Raleigh-Durham) $99M NOI (11% of Total) $152M NOI (15% of Total) *NOI metrics are pro-rata as of 5/2/2016 (1) Before planned acquisitions Redevelopment Site Development Site 11

12 KIMCO IS QUALITY PORTFOLIO PROFILE 2016 Share of Portfolio NOI Additional properties within 10 miles Combined share of portfolio NOI* TOP100 SITES 49% % TOP 300 SITES 86% % 2020E Share of Portfolio NOI* 77% 97% Dominant properties concentrated in major metropolitan markets *Projection for largest properties plus properties within a 10-mile radius 12

13 BUILDING BLOCKS OF GROWTH Ground-Up Development Net Acquisitions (3) $10M Rent Spreads/ Lease-up/ Value Creation Redevelopment Pipeline $70M $55M U.S. Portfolio $935M Organic Growth $65M $50M $1.2B Canada $40M 2015 BASE (1) Debt Reduction ($40M) (2) (1)2015 is based on population at 12/31/15 (2)Assumes proceeds from sales used to pay down debt. (3)Acquisition NOI in excess of dispositions 2020E 13

14 14 BUILDING BLOCKS OF GROWTH THE ROADMAP TO MULTIPLE GROWTH LEVERS NOI Growth Walk Through 2020 Organic Growth: Leasing & Value Creation: Redevelopment: Ground-Up Development: Targeted Annual Growth Rate: bps bps bps bps bps

15 15 U.S. SHOPPING CENTER PROFILE: By GLA By Annual Base Rent Local Small Shops(< 5K sq. ft.) 7% of GLA National Small Shops (< 5K sq. ft.) 8% of GLA Mid Tier Stores (5K 10K sq. ft.) 9% of GLA Anchors (> 10K sq. ft.) 76% of GLA 13% 16% 12% 59% Small Shops provide: Higher rent PSF Shorter term which keeps pace with current market Avg. RPSF = $25.49 Anchors provide: Solid credit quality Stability Mark to market opportunities Avg. RPSF = $11.32 Stable Base with Significant Growth Potential

16 TENANT PROFILE: UNMATCHED DIVERSITY Top Five Tenants Tenant % of ABR % of GLA 3.3% 4.1% 2.5% 3.6% 9,500 leases with 4,600 tenants Well staggered lease maturity with limited rollover in any given year; averages ~8% of GLA over next 10 years 2.0% 2.0% 1.9% 2.3% 2.0% 2.4% 4 of the top 5 and 7 of the top 10 tenants are Moody s investment grade Tenant diversity; exposure to any one tenant no more than 3.3% of total ABR As of 3/31/

17 17 BUILDING BLOCKS OF GROWTH LEASING - SMALL SHOPS 92% 90% 88% 86% 84% 82% 80% Small Shop Occupancy 90.0% 88.6% 88.2% 85.6% 84.0% 82.3% 81.1% 1Q11 1Q'12 1Q'13 1Q'14 1Q'15 1Q'16 4Q'16E Progress to Date Improved small shop ABR= $25.49 psf New leases last four quarters +10% Spreads on renewals & options Last four quarters + 8% The Path to 90% Occupancy Deal and occupancy bounties Operator portfolio reviews Targeting of service-oriented tenants

18 $ABR/SF 18 BUILDING BLOCKS OF GROWTH VALUE CREATION FROM ANCHOR EXPIRATIONS $20 Anchor Lease Spreads/Mark To Market $18.51 $18 $16 $14 $12 $12.53 $ % $ % $ % +60% Mark to Market Spread on Anchor Leases: +58% 105 Naked Leases expiring through 2018 totaling 1.7M sf 4 Kmart Leases expiring through 2018: 650% below market $10 $8 +35% $11.27 $10.05 $9.28 $11.65 $ Actual 2014 Actual 2015 Actual E 2019E & After Total Average RPSF up 29% since 2010 New Rent Expiring Rent Projected Rent

19 REDEVELOPMENT & DEVELOPMENT The Boulevard, Staten Island, NY

20 BUILDING BLOCKS OF GROWTH REDEVELOPMENT PIPELINE Total Pipeline $3.0B+ Current ~$1.0B Gross Costs $1.0B Projected NOI $80M Value Creation $550M Shadow $2.0B+ Major shopping center redevelopments Anchor tenant redevelopment Pads & outparcels Additional phases on prior redevelopments Mixed-use Incremental Return 8%-13% Retail Redevelopment: 9% Mixed-Use/ Residential: 6% 20

21 BUILDING BLOCKS OF GROWTH REDEVELOPMENT Results Since 2013 * ($M) Spending ($M) Incremental ROI Budgeted Actual Variance NOI $31 $33 +6% Costs $274 $269 (2%) Value Creation $214 $249 $34 11% 12% 1% $250 $200 $150 $100 $50 $0 $225 $225 $225 $190 $118 $135 $77 $ E 2017E 2018E 2019E 2020E Note: Numbers are represented in gross terms. *Through 12/31/

22 CURRENT REDEVELOPMENT PIPELINE Gross Costs by Project Type ($MM) Gross Costs by Stage ($MM) $60 Pads/Outlots $405 Active $80 $860 Value Creation (Anchor Repositioning) Redevelopments (Change in GLA) $466 $129 Design/Entitlements Evaluation Project Cost by Estimated Year of Completion ($MM) $835 $689 $181 $165 $19 $16 $68 $49 $129 $ & Beyond Gross Costs Pro Rata Costs 22

23 BUILDING BLOCKS OF GROWTH 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 23 23

24 24 GRAND PARKWAY MARKETPLACE: GROUND-UP DEVELOPMENT Project Summary: Phase I: 468K sf power center anchored by Target Phase II: 267K sf open-air center Location: Houston-The Woodlands-Sugar Land MSA On Grand Parkway toll road near Exxon Corporate Campus (>10k employees) 168k people (5 mile radius) Avg. household income >$100k (5 mile radius) Timing & Economics: Phase I: Estimated costs= $86.2M Estimated completion= 3Q 2017 Phase II: Estimated costs= $51.9M Estimated completion= 4Q 2018 Phase II Phase I

25 25 PROMENADE AT CHRISTIANA: GROUND-UP DEVELOPMENT Project Summary: Develop 435k sf power 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 $990 psf Destination shopping market due to no sales tax Timing & Economics: Estimated costs= $63.7M Estimated completion= 2Q 2018

26 26 DANIA POINTE: GROUND-UP DEVELOPMENT Project Summary: Phase I: 300K sf open-air retail center anchored by Costco Phase II: Lifestyle Center with 550K sf of retail and restaurants, residential, hotel and office Location: Miami-Ft. Lauderdale-West Palm Beach MSA Fronting one quarter mile on I-95 Adjacent to Kimco s Oakwood Plaza; approximately 2 miles of combined I-95 exposure Timing & Economics PMUD (Planned Mixed Used Development) zoning ordinance created by Kimco Estimated Project Costs= $263M Phase II Phase I

27 27 OWINGS MILLS: GROUND-UP DEVELOPMENT Project Summary: Develop 560K 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= $107.2M Estimated Completion= 3Q 2019

28 INVESTMENT STRATEGY Crossroads Plaza, Cary, NC

29 VISION - INVESTMENT STRATEGY SIMPLE, DISCIPLINED & SELECTIVE 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

30 INVESTMENT STRATEGY AT WORK QUALITY TRANSFORMATION Since 2010* Disposed Acquired Number of U.S. Properties Gross GLA 33M 27M Gross Price ($B) $3.1 $ % Pro-rata Occupancy % 90.6% 95.8% +520 bps Pro-rata ABR/sq. ft. $9.11 $ % Average Household Income $68,800 $89, % Population 77,485 89, % Improved Occupancy Stronger Strategic Markets Improved Demographics *Reflects transactions since Investor Day 2010 through 3/31/2016. Note: Demographics are weighted by pro-rata ABR within a 3-mile radius 30

31 31 SIMPLIFIED OWNERSHIP STRUCTURE SIGNIFICANT REDUCTION IN JOINT VENTURES SINCE 2010 JV Site Count Reduced by 68% JV Asset Value ($B) Reduced by >51% $12.3 $ $6.3 $ Q16 $4.0 $3.8 $2.2 $ Q16 Kimco s Pro Rata Share

32 32 HIGH-QUALITY ACQUISITIONS BUY WHAT YOU KNOW Joint Venture Acquisitions Since 2010 acquired: 101 Properties - $3.5B Adjacent Parcel/Neighboring Property Purchases Since 2013 acquired: 36 Parcels - $197.2M In-depth property knowledge Negotiated transactions No broker fees No transfer taxes Greater control Improves cap rate on overall property Easier to execute redevelopment Highest and Best use optionality

33 PLUS BUSINESS Long Gate S.C., Ellicott City, MD

34 34 KIMCO S ALBERTSONS INVESTMENT HISTORY Cerberus Consortium buys 661 Albertsons Albertsons Divests 49 stores in Florida to Publix Albertsons Jewel-Osco ACME Shaw s Star Market Purchases 877 stores including remaining Albertsons, Acme, Jewel-Osco, Shaw s, & Star Market banners from SuperValu Divests 132 stores in NorCal and Nevada to SaveMart Sale/Lease-back of 33 properties SAFEWAY Safeway privatization, 1,100 stores added to portfolio 2006: Albertsons Privatization Invested $50M = 15% interest Received $245M 2013: Albertsons/SuperValu Two step transaction: Invested $37M for grocer banners Ownership Stake: 13.6% Acquired 8.2M SVU common shares for $33.2M ($4.11 sh) Sold shares in 2015: $40M gain 2015: Safeway Invested $85M Reduced interest in overall Albertsons investment to 9.8% Albertsons 2016: S-1 remains on file and up to date as the company continues to evaluate market conditions

35 FINANCIAL OVERVIEW Conroe Marketplace, Conroe, TX

36 VISION - BALANCE SHEET STRENGTH Strong liquidity position; $1.75B available from unsecured line of credit Increase unencumbered asset pool 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+ Committed to strong investment grade ratings S&P: BBB+ Moody s: Baa1 Fitch: BBB+ Meet with rating agencies in an effort to be placed on positive outlook for a potential increase in credit rating to A-

37 STRONG CAPITAL STRUCTURE Since Investor Day 2013, refinanced ~$2B of maturing debt at significantly lower rates & extended average debt maturity using a 30-year bond Redeemed 6.9% preferred stock & implemented ATM program Total Market Cap: $10.6B Investor Day 2010 Total Market Cap: $18.1B* Today 12% 6% 2% 8% 5% 1% 52% 20% 28% 66% Common Equity Unsecured Debt Mortgage Debt Preferred Stock Non-controlling Interest * As of 3/31/

38 Debt in Millions Debt in Millions WELL-STAGGERED DEBT MATURITIES 1, Consolidated Debt 17% 18% Fixed Rate 4.72%* Floating Rate 1.42%* Maturity 5.4 Yrs* % 11% 9% 13% 12% 7% 6% 0 1, Thereafter Joint Venture Debt 35% 15% Secured Unsecured Line of Credit Term Loan 5% 7% 8% 11% 12% Thereafter 4% 0% Fixed Rate 5.26%* Floating Rate 2.10%* Maturity 2.9 Yrs* 1% 2% *Weighted average Note: Percentages are annual maturities of total debt stack Kimco's Share Partner's Share 38

39 VISION LEVERAGE VIEW 3.5x 6.0x 3.4x 5.8x 5.7x 3.0x 3.2x 5.5x 3.6x 3.6x Fixed Charge Coverage Net Debt/ Recurring EBITDA 5.4x 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 5.2x

40 $1.14 $1.21 $1.20 $1.27 $1.26 $1.25 $1.33 $1.35 $1.40 $1.45 $1.46 $1.56 A LOOK BACK SUCCESSFUL 5 YEARS OF GROWTH Funds From Operations Dividends $1.02* $0.96 $0.90 $0.84 $0.72 $0.76 $ Recurring FFO Headline FFO Maintained a ~5% Recurring & Headline FFO CAGR Through Our Transformation *Current quarterly dividend annualized Conservative FFO Payout Ratio Consistently Raised Dividend Commensurate With Recurring FFO/ Share Growth 40

41 2016 GUIDANCE Assumptions U.S. Acquisitions: $450M to $550M Blended cap rate: ~ % U.S./ Canada Dispositions: $825M to $975M Blended cap rate: ~6.75% Full Year U.S. Same-Site NOI: Growth of 2.50% to 3.50% Year End U.S. Occupancy: 95.7% to 96.2% Albertsons Monetization: 5% to 10% of investment Dilution Impact 2015/ 2016 U.S./ Canada Dispositions $2.2B: ~6.75% blended cap 2015/ 2016 U.S. Acquisitions $1.8B: ~ % blended cap rate Generate Net Disposition Proceeds Used to reduce debt Transformation Impact on 2016: FFO impact of ($0.06) per share on growth 2016 Final year of dilution from portfolio transformation Note: All figures are at Kimco s share 41

42 2016 FFO GUIDANCE FFO ($M) FFO/Share (2) 2015A 2016F 2015A 2016F RECURRING: U.S. Retail Portfolio $964 $977 - $1,004 $2.33 $ $2.40 International & Other Corporate Financing (275) (235) - (242) (0.66) (0.56) - (0.58) G&A (121) (118) - (121) (0.29) (0.28) - (0.29) Income Taxes & Other (28) (16) - (20) (0.08) (0.04) - (0.05) RECURRING FFO $604 $620 - $636 $1.46 $ $1.52 Transactional Income, Net (1) HEADLINE FFO $644 $645 - $678 $1.56 $ $1.62 (1) Net of non-controlling interests (2) Reflects diluted per share basis and the potential impact if certain units were converted to common stock at the beginning of the period 42

43 The Marketplace at Factoria, Bellevue, WA APPENDIX

44 RECONCILIATION OF FFO TO NET INCOME FFO ($M) FFO/Share (2) 2015A 2016F 2015A 2016F FFO $644 $645 - $678 $1.56 $ $1.62 Depreciation and amortization (334) (330) - (344) (0.81) (0.79) - (0.82) Depreciation and amortization real estate JV s (1) (67) (46) - (52) (0.17) (0.11) - (0.12) Gain on disposition of operating properties, net of tax (1) Gain on disposition of JV operating properties, and change in control of interests Impairments of operating properties, net of tax (1) (40) _ - _ (0.10) _ - _ Net income available to common shareholders $831 $342 - $380 $2.00 $ $0.92 (1) Net of non-controlling interests (2) Reflects diluted per share basis and the potential impact if certain units were converted to common stock at the beginning of the period 44

45 45 COMPLETED: CASTOR PLACE PHILADELPHIA, PA Gross Costs: $16.2M Incremental NOI: $1.5M Incremental ROI: 9% Incremental Value Creation: $5.2M BEFORE Convert four-story former JC Penney s into a multitenant retail building Added vertical entrance, parking, common area for 2 nd and 3 rd floor tenants and renovated existing inline tenants Burlington Coat Factory occupies 1 st and lower level; TJ Maxx and Bob s Furniture occupy 2 nd and 3 rd levels AFTER

46 46 IN PROGRESS: TRI-CITY PLAZA LARGO, FL Gross Costs: $28.8M Incremental NOI: $2.8M Incremental ROI: 9%-10% Incremental Value Creation: $12.7M Redeveloping 90% of shopping center to improve traffic and pedestrian circulation Adding seven junior anchor and anchor tenants, as well as 38K sf of small shop space Executed leases with LA Fitness, Ross Dress for Less and Petco BEFORE AFTER

47 47 FUTURE: HICKORY RIDGE COLUMBIA, MD Gross Costs: $80.0M Incremental NOI: $5.7M Incremental ROI: 7% Incremental Value Creation: $37M Reconfiguring existing retail for better parking field for the Giant Foods Adding approximately 250 market rate multi-family units Creating a new public green space for the community s activities with the new retail facing onto the square BEFORE AFTER

48 48 REDEVELOPMENT: MIXED USE OPPORTUNITIES Reasons Why? Unlock the highest and best use for EXISTING Real Estate, benefits the surrounding community and makes the RETAIL more valuable Kimco mitigating risk by either ground leasing the mixed use component or partnering with best in class consultants Unlocks the most value for our shareholders while retaining the ownership of the fee position Active Projects Wilde Lake (Apartments being constructed under a ground lease which is a portion of the site to best in class apartment developer) Initial first residential move ins late 2016 Pentagon (Increasing NAV by developing two apartment towers, garage, retail; and exterior/ interior upgrades) Design & Entitlements Cupertino (Future opportunity for hotel or office on a ground lease)

49 49 MIXED USE: WILDE LAKE COLUMBIA, MD The Project Total Project Costs: $18.9M Anticipated Stabilization: 4Q 2016 Value Creation: $14M Incremental ROI: 8% Future Projects 4 additional Columbia village centers for redevelopment Total Project Costs: $300M-320M Value Creation: $150M-200M 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 Redevelop existing retail and newly construct: 32,000 sf retail 15,000 sf office 230 residential units Ground lease residential structure

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