Kimco Realty • 2014 Annual Report Transforming & Cre at i ng Va lue REALTY 2014 Annual Report REALTY Kimco Realty Realty Corporation Corporation (NYSE: (NYSE: KIM) KIM) is a realis a estate real estate investment investment trust (REIT) trust head- quartered(REIT) headquartered in New Hyde Park,in New N.Y., Hyde that ownsPark, andN.Y., operates that is North America’sAmerica’s largest largest publicly traded owner and operator of neighborhood and publicly traded portfolio of neighborhood and community shopping centers. As of community shopping centers. As of December 31, 2014, the company ownedDecember interests 31, 2013, in the754 companyshopping owned centers interests comprising in 852 110shopping million centers square com- feetprising of 125leasable million space square across feet of 39 leasable U.S. states, space acrossPuerto 42 Rico, U.S. Canada,states, Puerto Rico, Canada,Mexico andMexico Chile. and South America. LETTER FROM THE CHAIRMAN 2 2014 OPERATING REVIEW 4 FORM 10-K 21 SHAREHOLDER INFORMATION 148 CORPORATE DIRECTORY IBC on the cover: Tri-City Plaza, Largo, FL, before and after redevelopment Joint Venture Acquisition Dulles Town Crossing, Sterling, VA KIMCO’S PATHS TO GROWTH Our growth strategy, summed up in three letters and one symbol: TSR+, continues to transform our business and create additional shareholder value. TRANSFORM Trading up to higher-quality properties in top markets pg. 4 SIMPLIFY Focusing on retail real estate in the U.S. pg. 9 REDEVELOP Getting the most value out of our strongly situated shopping centers pg. 12 PLUS Taking advantage of opportunistic retail investments pg. 17 These four parallel paths to growth all lead to the other TSR: TOTAL SHAREHOLDER RETURN 1 CHAIRMAN’S LETTER Kimco had an excellent year in terms of financial results, occupancy gains, and executing on our “Transform, Simplify, Redevelop, Plus” strategy, designed to generate Total Shareholder Return. Dear Fellow Shareholders and Associates: Kimco has always been about people. So much of And now Conor. I am thrilled with the Board’s selection Kimco’ s rich history and success is due to the vision, of Conor to succeed Dave. Kimco is part of Conor’s leadership and work ethic of key individuals who DNA as he follows in his father’s footsteps. Conor’s have joined with me to make Kimco what it is today; father, Mike, has been a Kimco officer, advisor and namely, the premier owner of retail shopping centers friend of mine for many, many years. And Conor in the United States. From time to time over the years, brings the same energy and passion for our business I have extolled the virtues of some of these individ- that his father brought. He is bright, analytical and uals who have played such a large role at Kimco. articulate. Conor is a wonderful motivator and has an Marty Kimmel, Mike Flynn and David Samber immedi- innate leadership ability that is both rare and refresh- ately come to mind, but there are many others. With ing. I believe the company will thrive under his leader- Dave Henry’s announced retirement and Conor Fly- ship, and I look forward to joining him as he takes nn’s appointment by the Board of Directors to suc- Kimco to higher and higher levels. ceed Dave as our next CEO, I thought it appropriate to focus my remarks on these two unique individuals. In addition to Conor, Kimco is blessed with a group of talented professionals that are smart, dedicated and Dave’s retirement is bittersweet for me. On the one committed to Kimco’s future success. Conor has hand, I am saddened that Dave’s smile, upbeat per- assembled a young team that is limited only by their sonality and calm demeanor will no longer be part of own imagination. At the same time, Conor is also our day at Kimco. In his 14 years at Kimco, Dave has surrounded by some very seasoned and respected been a trusted partner, mentor and friend, and was managers and advisors, including Glenn Cohen, our instrumental in guiding our transformation over the CFO, Bruce Rubenstein, our General Counsel, and a last few years. He will be sorely missed. On the slate of regional presidents who are second to none, other hand, I smile with thoughts that Dave will now and who each manage portfolios that could easily finally have the time that he has rightfully earned to stand alone as separate companies. do all the things in life that he enjoys, but has put off for so long. He leaves us with wonderful memories of Finally, no letter of mine would be complete without a his time here, and we wish him nothing but the best. word about our portfolio. A particularly unique source And we look forward to his continued assistance and of value creation in our business has excited me from advice as we call upon him to serve from time to time the very beginning of my career, and still does today. in the future. By their nature, shopping centers require a very high 2 ratio of land to total value. The typical shopping cen- more value and a better asset for the long term. Let ter is comprised of a one-story building and five times me be specific: in Pentagon Plaza just outside as much land as the square footage of the building’s Washington, DC, a 750-apartment project is under footprint. The land component often exceeds the consideration. And in Boca Raton, we are looking at parking requirements, and thus, becomes an addi- 300 residential units to complement our shopping tional asset. In a growing economy, land is one of the center. We are also considering a smaller residential best and least risky long-term investments. It is irre- project in Columbia, Maryland, which we believe will placeable, indestructible, and a natural hedge against further enhance our existing retail center. In another inflation. And as the land increases in value, it allows instance, in the Bronx, in a shopping center that lies the center’s extra land to be set aside, or land banked, in the shadows of Yankee Stadium, adjacent to the as I like to say, for additional investment opportuni- Bronx County Courthouse and Bronx Municipal ties. In the meantime, the revenue generated from the Building and in one of the densest parts of New York improvements covers the real estate taxes and other City, we built, with a partner, on excess land that we carrying costs. own behind the retail center, a five-story, 67,000- square-foot office building. Our ability to unlock addi- Today, the opportunities that land banking affords us tional value in our current portfolio will play an can take many forms, including the expansion of important part in our future growth. And given the existing centers, development of outparcels, sales to size of our portfolio and the length of ownership of third parties, and possibly mixed-use development. many of our properties, some of which have been As markets change and evolve, it is incumbent upon owned for more than 50 years, I am confident that we us to make sure that we are maximizing each asset’s will continue to find value-creation opportunities value, in order to maximize total shareholder return. within our portfolio. In addition to our redevelopment projects spear- headed by Conor, we have, on occasion, drawn Joe Namath, the iconic New York Jets quarterback of down from our land bank to unlock additional value the late sixties once wrote a book titled, “I Can’t Wait with a mixed-use concept. Where the opportunities Until Tomorrow…’Cause I Get Better-Looking Every for mixed-use projects exist, we are careful to make Day.” While I can’t say the same about myself, I can sure that any non-retail component enhances the say the same about Kimco and its future. We have primary retail component; it is this synergy that great people, great assets and great opportunities increases the overall asset’s value. ahead of us. We get better every day. So, for example, in two quality centers in Washington, DC and Boca Raton, Florida, we are working with best-in-class developers to build residential develop- MILTON COOPER ments on excess land that we believe will create more Executive Chairman demand for our centers’ tenants, and overall, create 3 2014 OPERATING REVIEW Our results reflect our best efforts to reposition the portfolio to a vibrant collection of high-quality, high-growth assets located in dense, core major metropolitan markets with the highest growth in population, wages and employment. Dear Fellow Shareholders and Associates: These are momentous times at Kimco on so occupancy(1) is 88.0 percent, a 280 basis point many fronts. The company’s Transform, Simplify, increase since 4Q 2013. We are targeting small Redevelop, Plus (TSR+) strategy has been a shop occupancy to reach 90 percent by 2016. resounding success. Our 2014 financial perfor- mance exceeded our high expectations. And Transforming our portfolio while Dave Henry will be greatly missed following Simply put, the reason for our excellent perfor- his retirement at the end of the year, the appoint- mance in 2014 is that our transformation efforts ment of Conor Flynn as CEO to succeed Dave, have produced a portfolio of high-quality proper- and our other executive promotions, have been ties in strong markets that benefit from positive enthusiastically received both within and outside macro-economic factors and are more resilient to the company. economic downturns. Overall, Kimco had an excellent year in 2014 in In 2014, we purchased interests in 60 retail proper- terms of financial results, operating performance, ties, including 33 acquired from existing joint ven- and executing on our TSR+ strategy.