Kimco sees drop in funds from operations
Kimco Realty Corp. reported lower quarterly results Tuesday due to a transaction involving its own preferred shares. But the real estate investment trust said operating income from its shopping centers improved.
The New Hyde Park-based company's funds from operations, a measure commonly used as a substitute for earnings per share for REITs, fell by 6 percent to 31 cents per share in the fourth quarter of 2012 compared to the same period a year earlier, meeting Wall Street analysts' expectations.
For the full year, the company's funds from operations were $510.4 million, compared to $517.8 million in 2011. The company attributed the decrease to the accounting impact from a redemption of its preferred shares.
Alexander Goldfarb, an analyst at Sandler O'Neill & Partners LP who follows Kimco, said the improved performance from its shopping centers was in part due to a rebound in rents collected from mom-and-pop tenants.
"Property cash flows are improving, and . . . the small shop space, meaning the mom-and-pop-type space of the shopping center, continues to improve," Goldfarb said.
During the fourth quarter, it acquired interests in 27 properties for $653.6 million while selling 68 shopping centers for $631.8 million. New leases increased by 25 percent, and renewals and options increased by 6 percent in the final quarter of 2012.
Last month, Kimco announced it invested $76.5 million as part of a consortium buying five grocery chains from SuperValu Inc.
Kimco owns interests in 896 shopping centers with 131 million square feet of leasable space in North and South America.