Kimco Realty Corporation (KIM): PESTLE Analysis [Nov-2025 Updated]

You're tracking Kimco Realty Corporation (KIM) and need a clear view of the external forces shaping its value right now. The short answer is that the defensive strength of their necessity-based, open-air retail centers is currently battling the high cost of capital driven by elevated Federal Reserve interest rates. This economic headwind is defintely the biggest near-term risk, threatening to pressure the projected 2025 Funds From Operations (FFO) per share of around $1.65, even as strong consumer spending keeps occupancy near 95.0%. We'll map out exactly how political shifts, e-commerce integration, and new ESG rules are shaping Kimco's strategy and your investment decision.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Political factors

Federal tax policy stability, especially regarding 1031 exchanges, remains critical for transaction volume.

The stability of federal tax law is defintely a core political risk for any Real Estate Investment Trust (REIT) like Kimco Realty Corporation. The most critical factor here is the continuation of the like-kind exchange provision, commonly known as the 1031 exchange. This provision allows a property owner to defer capital gains tax when selling an investment property, provided the proceeds are reinvested in a similar property.

Kimco Realty actively uses this mechanism for its capital recycling strategy-selling older, non-core assets to fund acquisitions of higher-growth, grocery-anchored centers. For example, in the second quarter of 2025, the company completed the sale of a freestanding, Home Depot-anchored property in Santa Ana, California, for $49.5 million, generating a gain of $38.4 million, and explicitly stated the proceeds would be utilized in a 1031 exchange. If this provision were repealed, Kimco Realty would be forced to pay income tax or distribute the gain to shareholders, which would reduce the cash flow available for reinvestment and growth.

Potential changes to corporate tax rates could impact REIT taxable income distribution requirements.

Recent legislative action in mid-2025 has significantly stabilized the tax environment for REIT shareholders. The 'One Big Beautiful Bill Act' (OBBBA), signed in July 2025, made the 20% deduction for Qualified Business Income (QBI) for ordinary REIT dividends permanent. This is a huge win for investors.

Here's the quick math: This permanent extension keeps the maximum effective top federal tax rate on ordinary REIT dividends for individuals at a favorable 29.6%, a substantial reduction from the top ordinary income rate of 37%. Also, the new law offers Kimco Realty greater operational flexibility by restoring the EBITDA-based business interest expense limitation and, for 2026 and future tax years, increasing the limit on Taxable REIT Subsidiary (TRS) securities from 20% to 25% of total assets.

Local zoning and permitting processes slow down or stop redevelopment projects, increasing CapEx risk.

While federal policy sets the tax framework, local politics-specifically zoning and permitting-govern the pace and cost of physical property improvements. Kimco Realty's strategy relies heavily on value-enhancing redevelopment, with a stated goal of expanding its multifamily footprint to approximately 10,000 units by 2025. The company's full-year 2025 outlook projects redevelopment spending (pro-rata share) to be between $90 million and $110 million. Slow permitting can delay the start of these projects, which pushes back the date new rent commences and ties up capital expenditure (CapEx) longer than planned.

Still, some state political environments are becoming more favorable. For example, the 2025 amendments to Florida's Live Local Act streamlined zoning approvals for multifamily projects, which can accelerate project timelines and reduce holding costs for mixed-use developments in that state. This shows that proactive local legislation can directly mitigate the CapEx risk inherent in redevelopment.

Here is a summary of Kimco Realty's planned capital deployment for the 2025 fiscal year, highlighting the direct financial exposure to political and regulatory risks:

2025 Capital Expenditure Category (Pro-Rata Share)	2025 Full-Year Outlook (in Millions)	Primary Political/Regulatory Risk
Redevelopment Spending	$90 to $110	Local Zoning & Permitting Delays
Capital Expenditures (Tenant/Landlord Work, Leasing Commissions)	$275 to $300	Local Permitting, Geopolitical Supply Chain (Cost Inflation)
Total Acquisitions, net of Dispositions	$100 to $125	Federal Tax Policy (1031 Exchange Stability)

Geopolitical tensions affect supply chain costs for tenants, pressuring lease negotiations.

Geopolitical instability, such as the ongoing Russia-Ukraine conflict and the U.S.-China rivalry, continues to disrupt global supply chains in 2025. These tensions translate into higher operational costs for Kimco Realty's tenants-the retailers-through increased energy prices, trade tariffs, and supply chain delays.

The resulting cost pressure on retailers could, in theory, lead to more aggressive lease negotiations or higher credit loss. However, Kimco Realty's focus on necessity-based, grocery-anchored centers provides a strong buffer. Despite the global headwinds, the company's leasing activity remains robust, indicating the essential nature of their tenant base is insulating them from the worst effects.

• New leases signed in Q3 2025 saw cash rent spreads up 21.1%.
• Blended pro-rata cash rent spreads on comparable spaces were 11.1% in Q3 2025.
• The full-year 2025 outlook for credit loss, as a percentage of total pro-rata rental revenues, is maintained at a tight range of (75) to (85) basis points.

The political reality is that while the global environment is volatile, Kimco Realty's domestic, necessity-based portfolio is currently strong enough to push through significant rent increases, mitigating the risk of geopolitical cost inflation translating into material tenant distress.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Economic factors

The elevated Federal Reserve interest rate environment keeps the cost of capital high for acquisitions and refinancing.

You're seeing the direct effect of the Federal Reserve's rate hikes on Kimco Realty Corporation's balance sheet, and it's not subtle. High benchmark rates translate immediately to a higher cost of capital (CoC), making both new acquisitions and debt refinancing more expensive.

For example, in the second quarter of 2025, Kimco issued $500.0 million of senior unsecured notes with a coupon rate of 5.30%, which mature in 2036. To be fair, this is a clear cost jump compared to the $240.5 million unsecured note they repaid in the same quarter, which had a much lower effective interest rate of 3.85%. This spread directly compresses the potential returns on new investments.

This higher interest cost is already hitting the income statement. Here's the quick math on the near-term impact:

Metric	Q3 2025 Value	Change vs. Q3 2024
Increased Interest Expense	$8.0 million	Higher interest expense
New Senior Unsecured Note Rate	5.30%	Cost of new 2036 debt issued in Q2 2025
Repaid Unsecured Note Rate	3.85%	Rate on $240.5 million note repaid in Q2 2025

The immediate action for management is to minimize external financing and focus on internal capital generation, which they are defintely doing by recycling capital through dispositions.

Inflation pressures drive up property operating expenses, including insurance and utilities, squeezing margins.

Inflation is a double-edged sword for a real estate investment trust (REIT) like Kimco Realty Corporation. While rising rents can offset some of the pressure, the cost to operate and maintain properties is climbing fast, squeezing net operating income (NOI) margins.

In the first quarter of 2025, the company's consolidated revenue growth was partially offset by significant increases in operating expenses. Specifically, the company saw a rise of $6.6 million in higher real estate taxes and an additional $3.8 million in operating and maintenance expenses compared to the first quarter of the prior year. This is a clear headwind.

The good news is that most leases include common area maintenance (CAM) and tax reimbursement clauses, meaning a portion of these costs is passed through to the tenants. Still, the delay in reimbursement and the non-recoverable portions of utilities and insurance can erode cash flow. The key focus must be on aggressive expense management and negotiating favorable master service agreements.

Strong consumer spending, particularly in necessity-based retail, supports occupancy rates near 95.0%.

The core strength of Kimco's portfolio-grocery-anchored and necessity-based retail-is insulating it from the broader retail turbulence. Consumers are still spending, but they are increasingly concentrating their budgets on essentials, which directly benefits Kimco's tenant base.

The company's pro-rata leased occupancy is exceptionally strong, reaching 95.7% as of the third quarter of 2025. That's a rock-solid metric. This high occupancy is driven by a few key factors:

• Grocery Anchor Focus: A record 86% of Annual Base Rent (ABR) now comes from grocery-anchored centers, which are highly resistant to e-commerce and economic downturns.
• Small Shop Demand: Small shop occupancy hit an all-time company high of 92.5% in Q3 2025, showing strong demand for smaller, local-serving spaces.
• Leasing Spreads: The company continues to sign new leases at significantly higher rents, with blended pro-rata cash rent spreads on comparable leases at 11.1% in Q3 2025.

This operational strength gives the company pricing power, even as lower- and middle-income consumers are tightening their belts and seeking value.

Near-term FFO (Funds From Operations) per share is projected around $1.65 for the 2025 fiscal year, reflecting modest growth.

The operational resilience and strong leasing momentum have led Kimco Realty Corporation to consistently raise its full-year guidance for Funds From Operations (FFO) per diluted share-the key performance metric for REITs (a measure of a REIT's operating performance). The latest official guidance is actually more optimistic than the initial projection.

Following the strong third-quarter 2025 results, the company raised its full-year 2025 FFO per diluted share outlook to a range of $1.75 to $1.76. This is a significant increase from the initial 2025 guidance of $1.70 to $1.72 set earlier in the year.

The growth is modest but reliable, driven by a combination of higher minimum rents, strong leasing spreads, and a healthy pipeline of signed-but-not-yet-open (SNO) leases. The SNO pipeline represents approximately $71 million in future Annual Base Rent (ABR) that will commence over the near term.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Social factors

The hybrid work model continues to drive population and spending to suburban centers where Kimco's properties are concentrated.

The structural shift to hybrid work has profoundly benefited Kimco Realty Corporation's (KIM) strategy of concentrating its portfolio in the first-ring suburbs of major metropolitan markets and Sun Belt cities. This demographic migration is not a temporary blip; it's a long-term re-allocation of consumer spending closer to home. As of 2025, nearly 25% of remote workers are expected to permanently relocate to suburban areas, fueling demand for local retail. This is why Kimco's portfolio, with 82% of its Annual Base Rent (ABR) coming from major metro markets, is positioned to capture this daily suburban spending. The flow of high-income remote workers from expensive coastal cities to markets like Austin and Dallas further enhances the spending power near Kimco's centers. That's a strong, tangible tailwind for necessity-based retail.

Demand for experience-based retail and services (e.g., fitness, dining) is rising, requiring tenant mix adjustments.

Consumers are defintely prioritizing experiences over material goods, a trend that requires landlords to adjust their tenant mix. In 2025, approximately 58% of Americans stated they would rather spend money on experiences than material goods. This is a crucial data point for Kimco's small shop component, which reached a record high occupancy of 92.5% in Q3 2025. This small shop segment is where the company houses many of its service and experience-based tenants, such as fitness centers, fast-casual dining, and personal care services, which are essential for driving multiple weekly visits. The company is actively focusing on these experiential categories to ensure its centers remain community hubs.

Here's the quick math on the experience-based spending shift:

Spending Category (12 Months Ended Aug 2024 vs. Jan 2019)	Growth Rate	Implication for Retail Mix
Experiences (Travel, Entertainment, etc.)	+32%	Strong demand for dining, fitness, and services in centers.
Consumer Goods (Including Groceries)	+21%	Stable, necessity-based anchor tenants remain foundational.

Shifting demographic trends, including an aging population, increase reliance on grocery-anchored centers.

The aging US population, combined with persistent economic uncertainty, reinforces the stability of necessity-based retail. Older demographics typically have a higher reliance on local, easily accessible grocery and essential service providers. Kimco's strategic focus directly addresses this by achieving its target of having 85% of its ABR derived from grocery-anchored centers in Q1 2025, which further expanded to 86% by Q2 2025. This high concentration of recession-resilient tenants, including seven of the top ten being grocery or off-price retailers, provides consistent foot traffic and stable revenue, which is reflected in the company's Same Property Net Operating Income (NOI) growth of 3.0% for the nine months ended September 30, 2025.

Consumers prioritize convenience, making the last-mile logistics capability of shopping centers more valuable.

The consumer's demand for ultimate convenience-the ability to shop online but receive goods instantly-is turning Kimco's open-air centers into critical last-mile logistics hubs. This is a massive, often-overlooked opportunity. Major retailers like Target and Walmart are fulfilling over 96% and over 50% of their online sales, respectively, through their physical stores. Kimco's properties, located in dense suburban areas with easy access, are perfectly suited for this 'Buy Online, Pick Up In Store' (BOPIS) model. This logistics function adds a layer of value to the real estate beyond traditional sales, creating a significant future rent pipeline. The company's pipeline of signed-but-not-yet-commenced leases had expanded to $71 million in future ABR by Q3 2025, represented by a 360 basis point leased-to-economic occupancy spread. This backlog is a clear indicator of tenant demand for these highly convenient, suburban locations.

• Actionable Insight: Kimco should continue to market its properties explicitly for their last-mile fulfillment capabilities to e-commerce-heavy tenants.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Technological factors

You are operating in a retail real estate environment where technology is no longer a cost center, but a core driver of net operating income (NOI) growth and tenant retention. For Kimco Realty Corporation, the technological focus in 2025 is less about flashy new gadgets and more about embedding PropTech (property technology) into the core business model to optimize everything from energy spend to leasing velocity. This strategic shift is funded within the company's substantial capital expenditure and redevelopment budget.

Increased use of PropTech for predictive maintenance and energy management drives operational efficiency gains.

Kimco Realty is actively investing in smart building systems to meet ambitious environmental, social, and governance (ESG) targets, which defintely translates directly to lower operating expenses over time. They are focused on common area lighting retrofits and advanced building controls to manage consumption across their portfolio of 564 U.S. shopping centers and mixed-use assets as of September 30, 2025.

The company is working toward a goal to reduce Scope 1 and 2 greenhouse gas (GHG) emissions by 30% from 2018 levels by 2030, and they aim to improve common area water efficiency at properties by 20% by 2025. This isn't just a compliance issue; it's a long-term cost-saving play. They also made an investment in Fifth Wall's Climate Tech Fund, which signals a commitment to integrating new, high-efficiency technologies across their sites.

E-commerce integration mandates that physical centers serve as crucial fulfillment and pickup points for omnichannel retail.

The rise of e-commerce has actually strengthened Kimco Realty's position as a 'first in last-mile retail' provider. Their grocery-anchored centers are essential hubs for omnichannel (using multiple channels like online and physical stores) fulfillment. We see this in the data from their major tenants: retailers like Target fulfill over 96% of sales through stores, and Walmart fulfills more than 50% of online orders in stores. Your physical location is now a warehouse, a showroom, and a pickup spot all in one.

Kimco Realty has facilitated this by completing Curbside Pickup® installations at over 300+ properties, which is a clear, tangible investment in supporting their tenants' omnichannel strategies. Plus, their 'Clicks to Bricks' program, which offers qualified online retailers one year of free base rent to open a physical store, shows a proactive use of real estate as a technology-enabled sales channel.

AI-driven data analytics help optimize tenant mix and rental pricing strategy based on foot traffic patterns.

Kimco Realty uses data, not just gut feeling, to optimize its tenant mix and drive pricing power. The proof is in the leasing results: the blended pro-rata cash rent spreads on comparable new leases were up a remarkable 48.7% in the first quarter of 2025, a seven-year high. That kind of pricing strength doesn't happen by accident.

They are leveraging data to create dynamic, automated leasing pages for vacant spaces, which pre-qualifies prospects and dramatically cuts down on wasted time for leasing representatives. Here's the quick math on their recent leasing technology project:

• Generated 2,343 leads.
• Resulted in 10 confirmed deals tied directly to the leads.
• Achieved a 6,566% return on investment (ROI) based on the first year's rent from those deals.

Honestly, a 6,566% ROI on a marketing-technology project is a game-changer for a REIT; it shows how effective simple, data-driven automation can be when applied to a core revenue function.

Investment in smart building systems is necessary to meet tenant and regulatory demands for energy transparency.

The push for smart building systems is now a non-negotiable part of the capital plan, driven by both tenant demand for lower operating costs and impending regulatory requirements for energy transparency. Kimco Realty's full-year 2025 outlook anticipates significant capital allocation to these areas. The company is exploring new lease structures to incentivize and curtail tenant energy usage, which is a smart way to address the largest emissions category-tenant energy consumption-given the triple net lease (NNN) structure.

The overall funding pool for these technological and physical upgrades is substantial for 2025, providing the necessary runway to execute these strategies.

2025 Capital Allocation for Property Upgrades and Technology (Full-Year Outlook)	Amount (in Millions)	Purpose / Impact
Capital Expenditures (Tenant Improvements, Landlord Work, Leasing Commissions)	$275 to $300	Primary funding for PropTech, smart systems, and tenant-specific technology build-outs.
Redevelopment Spending	$90 to $110	Includes funding for mixed-use projects like The Chester at Westlake Shopping Center, which often incorporate new smart building designs.
Signed-but-Not-Open (SNO) Lease Pipeline	$71 (ABR)	Represents future Annual Base Rent from signed leases, a significant portion of which is driven by tech-enabled leasing and tenant mix optimization.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Legal factors

Legal and regulatory shifts are creating a dual environment for Kimco Realty Corporation (KIM): increased compliance costs on the environmental and data fronts, but also a potential tailwind from tax relief in key markets. You need to focus on managing the growing complexity of disclosure while capitalizing on legislative changes that directly benefit your tenants' bottom line.

New SEC climate disclosure rules increase compliance costs and reporting complexity

As a large-accelerated filer, Kimco must begin complying with the new U.S. Securities and Exchange Commission (SEC) climate disclosure rules, starting with the annual reports for the fiscal year ending December 31, 2025. This immediately elevates your general and administrative expenses due to the need for new internal controls, data collection systems, and third-party attestation.

The final SEC rule requires disclosure of material Scope 1 (direct) and Scope 2 (indirect from purchased energy) greenhouse gas (GHG) emissions, subject to assurance requirements. Critically, the controversial mandate for Scope 3 (value chain) emissions was eliminated, which significantly reduces the initial reporting burden for a real estate owner like KIM. However, you must still report the financial statement effects of severe weather events and other material climate-related risks.

• Mandatory Disclosure: Material Scope 1 and Scope 2 GHG emissions.
• Financial Reporting: Disclose financial impacts of climate-related risks in Form 10-K footnotes.
• Initial Compliance: Reporting begins with annual reports for the fiscal year ending December 31, 2025.

Local rent control or tenant protection ordinances in some markets could limit rental growth flexibility

While Kimco's overall portfolio performance remains strong-evidenced by a Same Property Net Operating Income (NOI) growth of 3.0% for the nine months ended September 30, 2025-legislative action in high-cost states is introducing new friction, particularly for small-shop tenants. This is a direct attempt to apply residential-style protections to commercial leases.

In California, the Commercial Tenant Protection Act (SB 1103), effective January 1, 2025, mandates extended notice periods for 'Qualified Commercial Tenants' (QCTs), which are defined by a 5/10/20 employee rule (e.g., microenterprises with 5 or fewer employees). For these tenants on short-term leases, any rent increase exceeding 10% now requires at least 90 days' notice, up from the standard 30 days. This extends the negotiation window and slightly limits the speed of market-rate rent capture on smaller spaces.

To be fair, there is a positive counter-trend in Florida, a major market for Kimco. The elimination of the State Business Rent Tax and County Surtax, effective October 1, 2025, removes a tax burden of 2% to 3.5% (state tax plus county surtax) on commercial rent payments. This tax relief improves the financial health of your tenants, which should help keep the credit loss assumption low (Kimco's Q3 2025 credit loss was a favorable 75 basis points).

Data privacy regulations (like CCPA) impact how customer foot traffic data and analytics can be collected and used

The increasing scrutiny of consumer data, driven by laws like the California Consumer Privacy Act (CCPA), complicates how you and your tenants can use foot traffic data, mobile device tracking, and loyalty program analytics to optimize center performance. This is a crucial tool for a modern retail REIT, so any restriction here is a strategic risk.

The CCPA's updated enforcement in 2025 includes significant financial penalties. For instance, administrative fines can reach up to $2,663 per violation, escalating to $7,988 for intentional violations or those involving minors. These costs are not just for your tenants (the retailers) but also for the property owner if you collect or process anonymized data for common area marketing or operational efficiency. You defintely need to ensure your contracts with third-party data providers are CCPA-compliant.

ADA compliance and evolving building codes require ongoing capital investment in property upgrades

The Americans with Disabilities Act (ADA) and evolving local building codes impose a constant, non-discretionary capital expenditure requirement across Kimco's portfolio of older, open-air centers. Proactive compliance is significantly cheaper than reactive litigation.

Failing to maintain compliance with Title III of the ADA exposes the company to civil penalties of up to $75,000 for a first violation and $150,000 for subsequent violations, plus legal fees. The cost of retrofitting an older property to meet accessibility standards is almost always higher than incorporating those standards during a planned redevelopment or upgrade. This is why capital allocated to 'non-revenue generating' maintenance and upgrades is a necessary part of your budget, protecting against high-stakes lawsuits.

Here's the quick math on the legal risk exposure:

Legal Risk Area	2025 Impact/Metric	Actionable Consequence
SEC Climate Disclosure	Compliance starts for FY 2025 annual reports.	Increased G&A expenses for data governance and 3rd party attestation of Scope 1 & 2 emissions.
Local Tenant Protection (CA SB 1103)	90 days' notice required for >10% rent increase for QCTs (small shops) on short-term leases.	Reduced flexibility in capturing market-rate rents quickly for small-shop renewals in California.
Florida Commercial Tax	State Business Rent Tax (2%) and Surtax (0.5-1.5%) eliminated Oct. 1, 2025.	Reduces tenant occupancy costs, strengthening tenant financial health and supporting Kimco's low credit loss assumption (75 bps in Q3 2025).
Data Privacy (CCPA)	Fines up to $7,988 per intentional violation involving a minor.	Requires investment in data anonymization and vendor contract oversight to protect foot traffic analytics programs.
ADA Compliance	Penalties up to $75,000 for a first Title III violation.	Mandates ongoing capital investment in property upgrades to mitigate litigation risk and preserve asset value.

Next Step: Legal and Finance Teams: Conduct a joint audit of all California small-shop leases to ensure SB 1103 compliance procedures (notice periods, operating cost documentation) are in place by the end of Q4 2025.

Kimco Realty Corporation (KIM) - PESTLE Analysis: Environmental factors

Mandatory ESG (Environmental, Social, and Governance) reporting drives capital expenditure toward energy-efficient building upgrades.

You can't look at commercial real estate in 2025 without seeing the financial impact of environmental, social, and governance (ESG) standards. For a company like Kimco Realty Corporation, this isn't just about good PR; it's a mandatory capital allocation strategy driven by investor and regulatory pressure. The firm has committed to investing a total of $500 million in eligible Green Bond projects by 2030, which are specifically earmarked for energy-efficient upgrades, renewable energy, and water efficiency projects.

This commitment is already well underway. As of a recent update, Kimco had deployed $356.5 million toward these Green Bond projects. This spending directly impacts your net operating income (NOI) in the near term, but it's a necessary investment to future-proof the portfolio against obsolescence and higher operating costs. The goal is to drive down utility expenses and maintain a competitive edge for tenants who are increasingly focused on their own supply chain emissions. To be fair, this is a long-term play, not a quick win.

Physical climate risks, such as increased flooding or extreme weather, necessitate higher insurance premiums and property resilience spending.

The physical risks from climate change-think hurricanes, wildfires, and floods-are no longer theoretical; they are a direct and growing line item on your balance sheet. The U.S. property and casualty (P&C) insurance market is in a state of flux, with insured P&C losses exceeding $100 billion globally for the past five consecutive years. This translates directly to higher premiums for property owners.

A new report projects that U.S. home insurance rates will rise by an average of 8% in 2025, with high-risk states like California and Louisiana facing hikes of more than 20%. While this is for residential, the commercial market follows the same trend. Kimco's portfolio is geographically diverse, but their own risk assessment shows that 12.7% of their Gross Leasable Area (GLA) is at 'High Risk' for heat, and a more substantial 23.1% of GLA is at 'High Risk' for water. This exposure means you defintely need to budget for rising premiums and resilience measures like elevated mechanical systems and reinforced roofing. Here's the quick math: If your total insurance expense is $50 million, an 8% increase is an extra $4 million in annual operating costs, which directly pressures that $1.70-$1.72 FFO per share guidance for 2025. What this estimate hides is the benefit of their diverse, necessity-based retail portfolio, which is less exposed to market volatility than other CRE sectors. Anyway, your next step should be to model the impact of a 50 basis point interest rate fluctuation on their weighted average cost of capital.

Achieving net-zero carbon goals requires significant investment in solar and renewable energy sources across the portfolio.

The push toward net-zero carbon emissions is a multi-decade journey, but the near-term milestones are what matter for 2025. Kimco has a long-term goal of achieving net-zero Scope 1 and 2 Greenhouse Gas (GHG) emissions by 2050, with an intermediate target of a 30% reduction from 2018 levels by 2030. This requires continuous, significant investment in on-site solar, high-efficiency HVAC systems, and LED lighting retrofits.

The progress to date is measurable: Kimco has achieved an 11.9% reduction in Scope 1 and 2 emissions since 2018. Furthermore, they have a 2025 goal to improve common area water efficiency at properties by 20%. This focus on operational efficiency is a smart way to manage the transition risk of a carbon-constrained economy. One clean one-liner: Efficiency is the new anchor tenant.

Key Environmental Goals and Progress (as of 2025):

Environmental Metric	Target	Progress/Status (2025 Context)
Green Bond Investment	$500 million by 2030	$356.5 million deployed (as of Aug 2022)
GHG Emissions Reduction (Scope 1 & 2)	30% reduction by 2030 (vs. 2018 baseline)	11.9% reduction achieved (since 2018)
Common Area Water Efficiency	20% improvement by 2025 (vs. 2020 baseline)	8.2% decrease in usage (since 2020)
Scope 3 GHG Emissions	Establish a reduction goal by 2025	Partnering with tenants to quantify and set a goal

Tenant demand for green leases, which mandate shared sustainability goals, is becoming the new baseline.

The market is signaling a clear preference for sustainable space, and this is showing up in the lease language. A green lease (or 'sustainability lease') is a legally binding agreement that integrates environmental provisions, such as energy-efficient build-outs and data sharing on utility consumption, between the landlord and the tenant. This is no longer a niche request; it's becoming the baseline for high-quality retail space.

Kimco is a recognized Green Lease Leader, which is a strong competitive advantage. The proof is in the numbers: an impressive 90% of new leases executed in 2023 already incorporated these 'green' provisions. This means that for a significant portion of the portfolio, environmental performance is a shared responsibility, helping to distribute the cost and effort of achieving their net-zero goals. This trend is materially impacting revenue, with approximately 40% of the company's revenue now derived from green buildings and leases.

The increasing adoption of green leases is driven by several factors:

• Reduces operating costs for both landlord and tenant.
• Meets corporate sustainability mandates for major national retailers.
• Improves tenant retention and property valuation.

Finance: draft 13-week cash view by Friday.