Connor Flynn, CEO Kimco Realty (NYSE: KIM), participated in a video interview during Nareit’s REITworld: 2023 annual conference, held November 14-16 in Los Angeles.
Flynn said the overall vacancy rate in shopping centers today is the lowest on record. “It’s an interesting time where there is virtually no new supply,” he said, while net new store openings outnumber closures two to one. This has resulted in the strongest leasing spread at Kymco in six years, as well as the highest ever occupancy levels at smaller stores.
As for how Kymco is positioned to navigate ongoing market financing challenges, Flynn pointed to the company’s advantages of being large, well-equipped and low-leveraged. “When you look at the overall strength of the organization’s cash flow growth, it’s outweighed the growth in interest expense, and that’s the growth profile that we think will be well received by the market going forward,” he said.
Meanwhile, the consumer is resilient, with foot traffic increasing year over year, Flynn said. He said the stabilization of interest rates will be welcomed by the shopping center space and Kymco, as well as the commercial real estate industry and REITs.
Looking to 2024, Flynn said it will be an important year in terms of integration with RPT Realty (NYSE: RPT). He said Kymco will also focus on FFO development next year.
Kimco was the recipient of Nareit’s 2023 Leader in the Light Award for retail. Flynn said sustainability is “the core of our DNA,” and said proptech and climate tech offer “myriad opportunities to continue to grow.”
