Kimco's FFO rose 4.5% to $0.46 a share and occupancy held at a record-matching 96.4% with 40% rent increases on new leases, while GAAP EPS slipped to $0.22 on smaller property-sale gains.
Revenue
$551M
+4.9% YoY
Net income
$146M
-6.2% YoY
Diluted EPS
$0.22
-4.3% YoY
Overview
Kimco Realty owns open-air shopping centers across the US, most of them anchored by a grocery store. It is a real estate investment trust (REIT), a company that owns property, passes most of its taxable income to shareholders as dividends, and is usually judged on funds from operations (FFO). FFO is net income with property depreciation and gains or losses from selling property added back or taken out, so it tracks the cash the buildings actually produce.
In the second quarter of 2026 (April to June), the rental business did well while GAAP profit fell. Revenue rose 4.9% to $550.8 million. FFO per diluted share rose 4.5% to $0.46. Leased occupancy was 96.4%, level with the company's all-time high. Net income available to common shareholders fell 6.2% to $145.8 million ($0.22 per share, down from $0.23). The drop in net income comes almost entirely from a one-off in the prior year. Gains on property sales were $1.4 million this quarter, against $38.9 million in Q2 2025.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenues
$550.8M
$525.2M
+4.9%
Net income available to common shareholders
$145.8M
$155.4M
-6.2%
Diluted EPS (GAAP)
$0.22
$0.23
-4.3%
FFO available to common shareholders
$309.2M
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FFO and same-property NOI are non-GAAP measures that Kimco reconciles to net income in its filing. Q2 2025 occupancy figures are derived from the year-over-year basis-point changes the company reports. A basis point (bp) is one-hundredth of a percentage point.
Why GAAP profit fell while FFO rose
Two things explain most of the difference between the two measures.
Smaller property-sale gains. Gains on sale of properties fell $37.6 million year over year, from $38.9 million to $1.4 million. FFO leaves these gains out by definition, so the drop reduces net income but not FFO. For the first half, Kimco sold one operating property and three parcels for $54.9 million, with a $17.1 million gain. In the same half of 2025, it sold one property and two land parcels for $51.9 million, with a $39.8 million gain.
A gain inside a joint venture. Equity in income of joint ventures rose $8.5 million to $32.4 million. The main reason was a $9.9 million gain on a property sold within a joint venture. This gain also counts toward net income but is removed from FFO.
Leaving out property-sale gains on both sides, the underlying business grew. Revenues from rental properties rose $25.5 million (4.9%). The 10-Q breaks this down as follows:
$20.6 million more from tenants, "primarily due to an increase in leasing activity and net growth in the current portfolio"
$3.1 million more net straight-line rent (an accounting adjustment that spreads scheduled rent increases evenly over a lease's life)
$2.8 million from properties bought in 2025
$1.7 million from lower credit losses
partly offset by $1.6 million lost from properties sold and $1.1 million less lease-termination income
Costs rose more slowly. Real estate taxes were up $4.7 million because of higher assessed values and the timing of refunds. Operating and maintenance costs were up $4.1 million, including $3.2 million more for snow removal and $2.0 million more for utilities, partly offset by $1.1 million lower insurance. Depreciation fell $7.3 million, mostly because assets became fully depreciated or were written off. Interest expense rose 3.3% to $83.9 million.
Leasing: what is driving the rent growth
Same-property NOI measures profit from the same set of stabilized centers in both periods, so acquisitions and sales don't distort the comparison. NOI (net operating income) is rent minus property-level costs. It rose 3.5%, or $13.6 million. The 10-Q attributes $10.1 million of that to higher minimum rent from "strong leasing activity". Another $2.0 million came from higher net recovery income (costs passed on to tenants) and $2.0 million from lower credit losses. Non-recoverable expenses rose $1.1 million.
Kimco signed 461 leases covering 2.5 million square feet in the quarter. On comparable spaces, its share of cash rent rose as follows compared with the rent on the space before:
Lease type
Cash rent spread
New leases
+40.4%
Renewals
+6.1%
Options (tenant exercises a pre-agreed extension)
+8.0%
Blended
+13.1%
A 40% jump on new leases means space that came back from departing tenants is being re-let well above the old rent.
Small-shop occupancy reached a record 92.9%. Small shops are the smaller units beside the anchor store. They are usually the first to empty in a downturn and they pay higher rent per square foot, so gains here matter more than the headline figure suggests. Anchor occupancy (large units such as grocers and discounters) rose 110 bps to 97.8%.
There is also a pipeline of signed leases that haven't started paying yet. The gap between leased and economic (rent-paying) occupancy was 400 bps. The company puts it at $75 million of future annual rent from leases that are signed but have not commenced. That rent is already contracted and will come in as tenants open.
Tenant credit and bankruptcies
Credit loss (rent Kimco doesn't expect to collect) was 57 bps of pro-rata rental revenue in Q2 and 54 bps for the first half. Lower credit losses added $2.0 million to same-property NOI compared with the prior year. Kimco cut its full-year credit-loss assumption to 55–75 bps, from 65–90 bps.
One bankruptcy did cost the company money. It took a $5.6 million impairment on a preferred-stock investment after the investee filed for a bankruptcy restructuring. That charge is part of the quarter's $6.6 million of impairments. The largest tenants remain TJX (3.7% of annualized base rent), Ross (2.0%), Burlington (1.8%), Amazon/Whole Foods (1.8%) and Albertsons (1.7%), so no single tenant is a large share of rent.
Capital moves: exchangeable notes, buyback, dividend
$600 million of 3.50% exchangeable senior notes due 2031. These bonds can be swapped into stock at an initial exchange price of about $32.36 per share. They are why notes payable rose from $7.72 billion at year-end to $8.31 billion. Kimco used $104.7 million of the proceeds to buy back 4.1 million shares at $25.38. It ended the quarter with $700 million of cash and restricted cash and nothing drawn on its $2.0 billion credit line.
Asset recycling. Kimco sold The Milton, a 253-unit apartment building at Pentagon Centre, for $142.3 million (its share was $78.2 million) at about a 4.9% cap rate. The cap rate is a property's annual NOI divided by its price, so a lower rate means a higher price. After quarter-end, Kimco sold four Costco-anchored assets for about $127 million and bought two Florida grocery-anchored centers for $53 million and $56 million. The company says it is moving money out of assets with lower contractual rent growth.
Dividend raised to $0.28 per quarter. That is up from $0.26 last quarter and 12.0% above the year-ago dividend, and it came a quarter earlier than the company's usual schedule. $0.28 is about 61% of this quarter's $0.46 FFO per share.
Takeaway: GAAP EPS fell because there were fewer property sales to book gains on, not because the centers earned less. Occupancy near a record, 40% rent increases on new leases and $75 million of signed rent still to start all point to continued growth in rental income. The next test is the second-half acceleration built into guidance.
Outlook
Management raised its 2026 guidance in the Q2 earnings release:
2026 guidance
Current
Previous
Net income per diluted share
$1.00 – $1.03
$0.83 – $0.87
FFO per diluted share
$1.83 – $1.84
$1.81 – $1.84
Same-property NOI growth
+3.0% to +3.5%
+2.8% to +3.5%
Credit loss
55 – 75 bps
65 – 90 bps
Most of the net-income increase comes from expected gains on property sales. The guidance reconciliation deducts $0.15–$0.17 per share of such gains and $0.01–$0.04 of joint-venture sale gains, and these don't affect FFO. The FFO range narrowed and only its bottom rose.
Two points on the numbers:
Same-property NOI has to speed up. Growth was 2.6% for the first half. Reaching 3.0–3.5% for the year means second-half growth of roughly 3.4–4.4%. The $75 million of signed-but-not-started rent is the main visible source of that.
FFO per share is flat in the second half. First-half FFO was $0.92 per share, so the full-year range implies $0.91–$0.92 for the second half, about the same pace as the first. One known drag is a roughly $3.8 million charge in Q3 from repurchasing Class N preferred shares after quarter-end. The interest on the new $600 million notes is another.
Our read is that the rental business has room to grow. Occupancy is already at its high, so further growth depends mostly on higher rents and signed leases starting to pay rather than on filling more space. With FFO per share flat in the second half, the gains are going to fund the higher dividend rather than to faster per-share growth this year.