May 1, 2008 / 4:48 PM / 9 years ago

UPDATE 1-Kimco 1st-qtr FFO falls, but meets Wall St target

(Recasts, adds dateline, NOI, stock price)

NEW YORK, May 1 (Reuters) - Kimco Realty Corp (KIM.N), the strip-mall shopping center owner, said on Thursday quarterly funds from operations (FFO) fell 19 percent from a year earlier, when it reported a large gain its investment in Albertsons.

Kimco reported first-quarter FFO of $164.4 million, or 64 cents a share, meeting the average analyst' expectation, according to Reuters Estimates.

A year earlier, Kimco reported FFO of $202.8 million, or 78 cents a share, including 21 cents a share for its stake in Albertsons LLC, the supermarket chain.

FFO, a measure of performance for real estate investment trusts, removes the profit-reducing effect of depreciation, a noncash accounting item, on earnings.

Kimco's shopping center portfolio includes 883 operating properties -- 806 in the United States and Puerto Rico, 39 in Canada, 34 in Mexico and four in Chile, as well as 61 development properties in the United States and Mexico.

For U.S. shopping centers open more than a year, net operating income rose 3.3 percent for the quarter, versus being up an average of 4.4 percent over the past eight quarters.

During the quarter, Kimco signed 165 new leases for 594,000 square feet and 270 lease renewals for 1.2 million square feet. On average, leases signed for the same U.S. space called for base rents 11.2 percent higher than the ones that expired.

With its portfolio of properties 96 percent occupied, Kimco has been redeveloping aging U.S. centers. It also is expanding in Mexico, and will have about $1 billion invested by the end of 2008, with 34 shopping centers completed and 24 under development, totaling 13 million square feet.

Kimco is also entering Brazil and Peru with its shopping center format.

During the quarter. Kimco Developer Inc, which builds projects for others, recognized $2.14 million in gains. Its investment management business generated $11.7 million in fees.

Kimco Capital Services has three investment arms. Its Preferred Equity Investments, which invests in other U.S. and Canadian real estate developers and operators' projects contributed $16.5 million in income in the quarter.

Kimco Retailer Services, which provides capital to retailers, reported income of $14 million during the quarter.

Kimco Select, which co-invests in securities issued by retailers and real estate owners, realized $30.8 million in income during the quarter.

Kimco left its prior 2008 FFO forecast unchanged at a range of $2.70 to $2.78 a share. Analysts look for 2008 FFO of $2.78 per share.

At the end of the quarter, Kimco had ownership stakes in 1,948 properties in the United States, Puerto Rico, Canada, Mexico and Chile, totaling 180 million square feet.

Kimco shares were up 3 percent, or $1.22, at $41.11 on the New York Stock Exchange. (Reporting by Ilaina Jonas; editing by Jeffrey Benkoe)

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