Kimco Realty Attains 'A-' Credit Rating from S&P Global Ratings

Kimco Realty Corp. (KIM), a prominent retail real estate investment trust, recently attained an ‘A-’ credit rating with a stable outlook from S&P Global Ratings. This upgrade, announced on September 15, 2025, aligns with a similar affirmation by Fitch Ratings earlier in the month, underscoring the company's robust financial and operational standing.

Rating Drivers and Operational Strength

S&P Global Ratings cited several factors contributing to the improved rating, including Kimco's solid operating performance, a well-positioned balance sheet, and strategic asset quality enhancements achieved through all-stock acquisitions. Emphasis was placed on the REIT’s embedded revenue growth potential, ample liquidity, and its predominantly grocery-anchored portfolio. As of the second quarter of 2025, Kimco derived 86% of its annual base rent from its grocery-anchored portfolio, a testament to its focus on necessity-based retail. The company also reported a 15% blended pro-rata leasing spread in Q2 2025, reflecting strong tenant demand. Financially, Kimco exited Q2 2025 with $2.2 billion in immediate liquidity and a consolidated weighted average debt maturity profile of 8.5 years, with 99.8% of its total debt at a fixed rate, carrying a weighted average effective interest rate of 4.01%.

Implications for Capital Access and Investor Confidence

The upgrade to an ‘A-’ rating is poised to deliver tangible financial benefits for Kimco. By enhancing its creditworthiness, the company is expected to secure funds at more favorable rates, thereby lowering its borrowing costs and expanding access to debt markets. This improved financial flexibility supports future growth initiatives and refinancing activities, creating a virtuous cycle for capital allocation. The market views this as a strong validation of Kimco’s management strategy and its resilience in a dynamic retail landscape, likely fostering increased investor confidence in its long-term stability and growth prospects.

Broader Market Context and Strategic Resilience

Kimco's strategic focus on grocery-anchored centers is a cornerstone of its strong performance and credit rating. These properties are valued for their defensive cash flow characteristics and consistent foot traffic. The company's portfolio scale has nearly doubled through all-stock acquisitions, accompanied by an improvement in asset quality. Despite some recent bankruptcy activity within the retail sector from tenants like JOANN and Party City, Kimco's strong tenant demand and ability to re-lease spaces at higher rents have limited the impact. Second-quarter 2025 results highlighted 3.1% same-property Net Operating Income (NOI) growth year-over-year, alongside a record 92.2% small shop occupancy. The broader retail REIT sector itself demonstrates resilience, with average year-over-year Funds From Operations (FFO) and NOI increasing by 5.1% and 4.0% for same-store NOI as of Q2 2025, driven by limited new supply and robust tenant demand. Kimco's adjusted debt to EBITDA is anticipated to remain in the mid-to-high 5x range over the next two years, supported by leverage-neutral activities and strong embedded EBITDA growth.

Expert Perspective

S&P Global Ratings noted in its report, "We expect Kimco's sizable portfolio of grocery-anchored centers to perform well amid healthy retail fundamentals. The sector is benefitting from robust tenant demand and a resilient consumer." The agency further emphasized the positive impact of limited new development in the retail sector, allowing well-located centers to outperform. This sentiment reinforces the efficacy of Kimco's portfolio strategy, particularly its emphasis on properties that provide essential goods and services, which tend to generate more consistent cash flow.

Outlook and Key Factors to Monitor

Moving forward, Kimco's ability to maintain its leverage-neutral growth strategy, coupled with continued strong tenant demand and favorable retail fundamentals, will be key factors to monitor. The company's focus on disciplined capital recycling, as evidenced by its recent property sales to reinvest in higher-yielding assets, suggests a commitment to further portfolio enhancement. Investors will watch for sustained strong operating metrics, including FFO and NOI growth, and how effectively Kimco continues to navigate potential market uncertainties and tenant bankruptcies by proactively re-leasing vacated spaces at advantageous terms.