Kimco Realty Q3 2026: FFO up 6.8% to $0.47 as occupancy hits record 96.6%; EPS doubled on sale gains

Kimco Realty, which owns 561 open-air, mostly grocery-anchored shopping centers, posted its fastest same-property growth of the year: occupancy reached a record 96.6%, new tenants signed at rents 31.5% above what the previous tenant paid, and rent from centers owned for the whole of both years grew 4.9%. Funds from operations (FFO), the earnings measure REITs use because it adds back the depreciation of buildings and strips out gains from selling them, rose 6.8% to $0.47 per diluted share. GAAP earnings per share more than doubled to $0.41 from $0.19, but that jump comes from $140.0 million of property-sale gains, not from the shopping centers earning twice as much.

Key metrics

A "rent spread" is how much more the new lease pays than the old lease on the same space. Occupancy and spreads come from the earnings release filed the same day; everything else is from the 10-Q. Year-ago occupancy is derived from the release's stated basis-point changes.

What drove the quarter

Rent. Revenues from rental properties rose $8.6 million (1.6%). The 10-Q breaks this down: $7.4 million more from tenants because of leasing and growth in the existing portfolio, $3.7 million from centers bought in 2025–2026, $2.8 million more lease-termination fees (one-off payments from tenants leaving early) and $1.4 million lower credit losses, offset by $4.8 million less non-cash amortization of acquired leases (from tenants who moved out) and $1.9 million lost to sales. Reported revenue growth of 1.9% understates the rent trend, because non-cash items and sold properties pull in the other direction.

Same-property NOI. The cleaner view of the centers is same-property NOI, which only counts centers owned and stable throughout both years and excludes non-cash rent. It rose $18.9 million, or 4.9%: $12.4 million from higher minimum rent, $5.0 million from better recovery of operating costs from tenants, and $1.3 million from fewer bad debts. The release puts the minimum-rent increase at 3.2%.

Leasing. Kimco signed 444 leases covering 2.7 million square feet in the quarter. New leases were 31.5% above prior rents, renewals 7.3% and options 7.7%. Small-shop occupancy, which is harder to fill than big anchor boxes, held at its record 92.9%. The gap between leased and rent-paying occupancy was 390 basis points, worth $76 million a year once those tenants open, which is about 5% of the $1.6 billion of same-property NOI it earns over a year.

Capital recycling. Kimco sold The Witmer, a 440-unit apartment building at Pentagon Centre in Virginia, for $211.5 million (its share $116.3 million) at a cap rate of about 5.1% (the property's annual income divided by its price), and sold four Costco-anchored assets for about $127 million. It used the money to buy two Florida grocery-anchored centers ($53 million and $56 million) and to buy back stock: 6.3 million common shares for $150 million at $23.81, which management says implies a mid-7% cap rate, plus about $74 million of preferred stock. Selling at ~5% and buying back its own portfolio at ~7.5% is accretive to FFO per share, at the cost of a smaller company.

What the headline numbers hide

• GAAP EPS is inflated by sale gains. Q3 included $89.4 million of gains on properties Kimco owned directly and $50.6 million on joint-venture properties, versus $3.7 million and $5.8 million a year ago. That $130.5 million swing, partly offset by $8.0 million of impairment charges (versus $0.4 million), is why net income more than doubled. FFO excludes both, and FFO rose 5.3%.
• The GAAP operating margin of 51.3% is not comparable to last year's 34.9% for the same reason: gains are booked inside operating income. Without them the margin was 34.9% versus 34.2%, a modest improvement helped by $3.0 million lower operating and maintenance costs.
• About a cent of the three-cent FFO gain came from items that won't repeat at this size. Interest income rose $4.1 million on higher cash balances (the 10-Q attributes it to cash held during 2026; Kimco ended September with $545 million and repaid $500 million of 2.80% notes in October), and lease-termination fees rose $2.8 million. Together that is about $0.01 per share. After the October repayment the cash, and the interest it earns, is gone.
• Buybacks helped a little. The FFO share count fell 1.4% year over year (diluted GAAP shares -0.9%), and repurchasing preferred stock cut preferred dividends by $0.9 million. Q3's $150 million common buyback will shrink the count further in Q4.
• Cash conversion is good. Operating cash flow for nine months was $977.8 million, above both FFO ($936.6 million) and net income ($602.4 million), and up 13.5% from $861.6 million.
• Guidance went up, mainly for net income. Net income guidance rose to $1.07–1.09 a share from $1.00–1.03, largely the sale gains already booked. FFO guidance rose a smaller $0.01–0.02 to $1.84–1.86.

On balance the quarter is flattered at the GAAP level: EPS rose 116%, but property-sale gains drove that, and the underlying measure, FFO per share, grew 6.8%, with roughly a cent of that from interest income and termination fees.

Did last time's read hold up?

Yes. Our Q2 2026 report said the full-year same-property NOI target of 3.0–3.5% required the second half to grow about 3.4–4.4%, after 2.6% in the first half, and called that acceleration "the next test." Q3 came in at 4.9%, above that range, and management raised the full-year target to 3.5–3.8%. Occupancy also rose from 96.4% to 96.6%.

Takeaway: Ignore the doubled EPS; it is sale gains. The real news is that rent growth from the existing centers accelerated to 4.9% with occupancy at a record, and Kimco is selling assets at ~5% yields to buy back its own stock at ~7.5%. Implied Q4 FFO of $0.45–0.47 shows the October debt repayment and asset sales will take away part of what drove Q3.

Outlook

Management raised its 2026 guidance again:

With $1.39 of FFO per share through September, the new range implies $0.45–0.47 in Q4, flat to two cents below Q3. That fits the facts in the filing: the $500 million note repayment in October removes cash that was earning interest, and the Witmer and Costco sales remove their rent. With same-property NOI at 3.3% through nine months, reaching 3.5–3.8% for the year requires Q4 to grow faster than that pace again, which the $76 million of signed-not-open rent supports.

What to watch in Q4: whether same-property NOI holds above 4% as anchor openings convert signed leases into paying rent; whether new-lease spreads stay near 30%; and how much more stock Kimco buys back from the $538.1 million left on its $750 million authorization. The quarterly dividend declared on October 27 is $0.28, 7.7% above a year earlier and about 60% of Q3 FFO per share.

Sources: Kimco Realty Form 10-Q for the quarter ended September 30, 2026, and the Q3 2026 earnings release (Form 8-K Exhibit 99.1, filed October 29, 2026). Q3 share repurchases and dividends paid are derived from the nine-month cash flow statement less the six-month figures in the Q2 10-Q.