Kimco Realty Corporation (KIM) Earnings Call Transcript & Summary

Great. Welcome to everyone to Citi's Global Property CEO Conference on day 2. I'm Michael Bilerman. I'm here with Katy McConnell from Citi Research. We're extraordinarily pleased to have with us Kimco Realty, and CEO, Conor Flynn. This session is for investing clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available up on the webcast. For those joining us on the webcast here, [Operator Instructions]. Conor, I'm going to turn it over to you to introduce your management team and the company, and then we'll start with some questions.

Thanks, Michael. Good to see you. Hopefully, we'll be doing this in person in no time. With me today, we have Ross Cooper, our President and Chief Investment Officer; Glenn Cohen, our CFO; and Dave Bujnicki, our SVP of Investor Relations and Strategy. So I thought I would open it with just a few remarks and lessons learned and some of the experiences we've had over the past year, and then we can go into Q&A and answer anything that pops up from you or from the investor base. So it's been a remarkable year. If you look back a year ago today, actually, I think it was almost right around this time when I actually got COVID. And so one of the things that I'm extremely proud of is our team. If you look at how people were able to step up through this pandemic, it really shines a light on the depth of our talent and the culture that we have at Kimco. We prioritized really 3 main items during the pandemic. First was teamwork as we all wanted to step up and sort of do more than just what we were -- what our job title called for. Second was communication. We did a tremendous amount of outreach with our retailer base. We talked to each tenant individually. We have points of contact now that we never had before. And we really did, I think, a lot to make sure that they felt that they had a partner in Kimco to help navigate through these tumultuous waters. Third, and probably, one of the most important during times of stress is liquidity, and we wanted to prioritize liquidity. And I'll make sure Glenn has a chance to really sort of update all the items on the balance sheet and how we've positioned ourselves for the future there. So lessons learned to this pandemic, never in our wildest dreams did we think that government will come and shutdown parts of our business. But I think the major takeaway from this pandemic is that the physical last-mile store has never been more valuable. And what I mean is that the retailer has evolved to make the last-mile location of their stores be, using their words, fulfillment epicenters. And the store has evolved to become a profitable endeavor for them to get the customer the good or the service in a way that they demand. So what's happened is with the lockdown, a lot of folks were looking at ways to shop differently. So there's a lot of people that pushed to online shopping. And what they found is that buy online, pick up in store, we launched curbside pickup nationwide, all of a sudden, all these items allowed the store to be a point of distribution and fulfillment. And that's where I think the Kimco portfolio, in a lot of ways, the last 5 years, all of our strategic initiatives, helped us manage through one of the most challenging times in retail history. And we upgraded the portfolio to be predominantly grocery-anchored. If you think back 5-plus years ago, we were about 50-50. We're now up to 78% grocery-anchored. We've got demand coming from all different parts of the grocery universe to feel comfortable that we can get to 85% grocery-anchored over the next 5 years. We also see a tremendous snapback in demand across all the different demand drivers. And I think that's one of the most interesting things that we've seen in this disruption is how quickly the demand has snapped back. And so yes, there's been a lot of folks that did not make it through the pandemic. There's a lot of retailers that filed bankruptcy or closed stores. But when you look at the Kimco portfolio today, we came into this pandemic at all-time high occupancy. So Kimco has a very long history, and we're very proud of that history. But we also are proud that we actually took the occupancy up to a historic high pre-pandemic level. And then if you think about what's happened in the pandemic, all of the lowest credit or the worst operators have been removed from the ring hole. And now we have the opportunity to use our platform to go and lease to the best-in-class retailers that are omni-channel experts, that are optimizing their store for last-mile delivery and fulfillment, to give ourselves, I think, a growth profile that will really separate ourselves from the pack. And we've done a lot of work to improve the portfolio. We've done a lot of work to improve the balance sheet. We've invested in our team significantly. So we feel like we're cautiously optimistic that we have all the ingredients to really outperform here going forward because when you look at the drivers of growth for us, it's really the organic leasing that's driving the boat. And that's what we feel we do best, and that's when we look at our portfolio today, we have aspirations to not only get back to that all-time high occupancy, but to create a new all-time high occupancy with the best-in-class retailers. We also have goals to get our entitlements up to 10,000 apartment units. We're up to 5,000 today. We feel long term, that's the best way to create significant shareholder value as we feel like the shopping center is predominantly 80% parking lots, 20% single-story buildings. And if you're located in these dense areas where we are, we feel like we're one of the most underutilized form of commercial real estate. So we feel like we have a long road of both organic, lease-up growth coming but also long-term value-creation initiatives that we can activate when we feel appropriate. And I'll pause there, and I'll turn it over to Glenn to give you an update on some of the balance sheet initiatives that we have.

Great. Thanks, Conor. We went into the pandemic really in a very strong shape. We had just refinished -- renewed our $2 billion revolving credit facility at the end of February. It was something that we accelerated back in December of '19, not knowing if pandemic was coming. So we renewed our facility with a total of 5 years of term at the end of February of 2020. It was priced at 77.5 over LIBOR. And we also built into it a sustainability grid where if we reduce greenhouse gas emissions, the pricing went down by 1 basis point, which is modest, but it was more about the greenhouse gas emission objective, which we did meet during 2020. As you know, the pandemic got pretty heated, and we wanted to show up further liquidity, and we went to the bank market. We're one of the few that was actually able to access a term loan. So in April, we did a $590 million term loan. And then in July, we actually repaid that term loan by issuing our first green bond. We did a $500 million green bond in July as the capital markets, they remained open, but spreads had widened out pretty much. Our spreads had come back in. And then we went back to the bond market in August and did an 8-year deal at 1.9%. So we're really -- from a liquidity standpoint, we're really in great shape. We sit here today with about $250 million of cash. We have nothing on our line. We only have $140 million of debt maturing all this year, all of which is on a consolidated basis, all of which is our mortgage debt. So by the middle of this year, we're going to be down to only about $150 million of mortgage debt in total on the consolidated balance sheet. A couple of other interesting points. I guess it took a pandemic for Albertsons to go public. So we were successful in seeing that happen. We did, during 2020, get about $230 million of cash, which we used towards debt reduction. And we sit today with an investment and the stock that's worth in excess of $700 million. So when you think about net debt to EBITDA, if you were to monetize all of that, our net debt-to-EBITDA numbers would actually drop by almost a full turn. And we'd be down to levels better than where we were at the beginning of 2020. And I think the other thing that's really important to keep in mind is as we've now set the dividend at -- well, we just announced a new dividend at $0.17 a share. With that dividend level of $0.17 a quarter -- sorry, $0.68 annualized, the company is now in a position where it's going to generate in excess of $110 million of free cash flow after dividends. So if you think about 2021 where we only have $140 million of debt maturing, $250 million of cash and free cash flow coming, we're really well positioned to try and take advantage of the market. And I think, as most of you know, we really have a length in the debt maturity profile. We have one of the longest debt maturity profiles of any REIT. It's just under 11 years today. So very well positioned from a liquidity standpoint, a debt maturity profile standpoint and really just focused on the leasing efforts that Conor and others will be -- will talk about here. But that's going to be the driver. We need to drive EBITDA up, and that will continue to improve net debt to EBITDA as we go through the rest of the year.

Great. Conor, maybe we can just -- we've been kicking off each of these sessions asking each CEO, coming out of this pandemic, if an investor were to choose only 1 real estate stock to own, what are the 3 reasons why they should invest in Kimco?

So I'm raised the Milton way. So I would tell you that Milton has taught us that it starts with management. And if you believe in management and you believe that they can deliver on what they're saying and how -- if they're trustworthy and if they're honest and they can navigate tumultuous times and give you the good and the bad and let you decide if you feel like confident in investing in them, that's, I think, always been the starting point. The second piece of it today, I would say, is the growth profile of Kimco. I think when you look at the growth that we're anticipating, delivering, we feel very strong, as I mentioned earlier, that the organic growth is really well positioned to drive our earnings for the foreseeable future. And we're able to backfill vacancy with the best omni-channel players today. And then the third piece of it is still, I think the balance sheet is always critically important. Probably, it flip-flops, right? And if you're in the midst of the crisis, the balance sheet becomes the most important item. We feel like we're hopefully up towards the tail end of this, and we've flexed the balance sheet muscle during this time to showcase how important it is to be able to have that liquidity profile.

Right. In your opening comments, you were talking about communication with your retailers, and you mentioned how you've broadened your relationships at different points and relationships that you never had before. You're the largest shopping center owner. I would assume that you have people at all levels of these organizations. So maybe can you just unpack that a little bit about where are those relationships deeper? And what are they bringing to Kimco?

Sure. I think from a large national landlord, we have great relationships with, I would say, the consistent large retailers that have been, I would say, the predominant growth vehicles for the past decade. And so constant portfolio reviews, constant calls, we have -- they have our cellphone numbers, we have their cellphone numbers, right? So good and bad, we can access them, they can access us. And so those relationships, I think, really stood the test of time as we navigated through this unprecedented challenge, and we really crafted ways to help those that needed it most to get through this. I would say where we really saw a dramatic improvement is on the small shop side. And that's where -- we have 7,000 leases. And so we had to do a lot of blocking and tackling to say, let's divvy up the portfolio and figure out how do we go about connecting with all of these small shops that maybe are one-off operators but are critically important to the community and to our shopping centers and how do we go about helping them navigate the crisis that we're going through. And so we did have a pretty deep playbook of how we're going to tackle that. And what we did was, we tried to divvy it up typically by geography, whoever really has a point of contact or relationship, who did -- might have done the deal from the beginning, so who put that tenant in that space and how is the relationship? And what we did was we really sort of evolved a playbook of all the -- not only the information that was coming out because, as you know, COVID was -- everybody was flying blind for a little while. And so we're really proud that our website actually was used by ICSC. It was used by peers. It was used by a lot of folks to go for COVID information because we felt like we wanted to be the point of -- the touch point where people could come and figure out how to navigate this. And we did launch a tenant assistance program to help them secure PPP funding because there was a lot of confusion on the application process, who was qualified? We've navigated that, I think, with aligning ourselves with best-in-class partners that could almost white glove the process for our small shop tenants. Sophistication on the retail side is very varied when you go up and down sort of the anchor to the small shop side, and we wanted to do our part to be a best-in-class partner to help those that needed help to get through the toughest part.

Right. And how do -- you talked a little bit about this physical last-mile renaissance for fulfillment that you talked about. If you think about the office business, right, a lot of tech companies and a lot of corporate America probably didn't have the guts to do work from home as aggressively as everyone did, where we're all working from home. Just look at our screens here, right? Do you feel like the element of coming back, right, that -- they're going to figure it out in a couple of years where maybe that store is not going to be critical, the same way that you have companies that are saying, you know what, I don't need the office environment as much as anymore because people are fine working from home. So I guess how do you balance that of knowing whether maybe the puck is going to go somewhere else, and it's just a stage change for these retailers that are just going to do more e-commerce once they build out their fulfillment and do the things because we weren't ready for it beforehand?

So it's a good question. I think we always try and anticipate what the future is going to hold. And we always look and learn from our largest retailers that have a tremendous R&D program going on. And they're the ones that are constantly piloting different programs to figure out how do they go about solving that last-mile equation, making it more efficient, making it more profitable. And what we found is that, Target, I think, has done a wonderful job coming out with a blueprint of really what works, and when you look at, 95% of their orders are fulfilled by their store base. And then you take a look at what Amazon is doing and how they're pushing into grocery. And if you look when Jeff Bezos handed off the keys, where is he going to focus? Is he going to focus on space? Is he going to focus on grocery? And so if you look at what Amazon Fresh is doing and you look at how they're locating those stores in those last-mile locations, sure, there's going to be all sorts of different prototypes. There's going to be all sorts of different technology on how you go about shopping with all the tools that are now available and future tools that will come available. You have to think that it's all about figuring out that last mile. But if the store is the fixed cost of the retailer that's already located in those dense last-mile locations, you got to think that the innovation will continue to optimize that. And there will be some augmented micro fulfillment, there will be some other things that come along to potentially take some stress off the store if it's being overshopped or picked over by the online orders. But I still think when you look at the playbook of what's working today and who the real dominant players are and how they're navigating this so successfully, they're utilizing the store base as the distribution and fulfillment point. And I think technology will just overlay that because that network is already built, and it can be very successful as a profitable delivery service.

And Conor, could you talk about the differences that grocers, in particular, see between in-store versus delivery? And is that going to put a cap on the level that can shift to online for the grocery business?

Sure. So I think the secret that most everybody knows is that there's no margin in home delivery, right? So there's going to be incentives to get the customer to use their own time, their own gas, their own money to come and shop the store. And that could be buy online, pick up in store, that could be curbside pickup. But you're going to see that the home delivery as an amenity will continue to be offered. Now grocery has -- some of them have different programs in place. Some of them have used third-party or they don't necessarily want the erosion of margin, and they're having a third-party handle it. The issue and the big debate that's going on right now is if you have a third-party handle it, is that loyal customer, all of a sudden, becoming the data that's critically important, is that third-party now becoming the owner of that data? And so that's where the big debate is, is how do you go about driving profitability? And buy online, pick up in store and curbside pickup has been a big boost to the grocer because that margin looks very much like an in-store purchase. And my thought is that you're seeing Walmart and others incentivize. When you go to checkout online, you can get a further discount if you come to the store, if you come to the store and pick it up, if you come to the store and shop because that's typically where you get the impulse buying. And that's where you get a higher-margin item. And so that's what I anticipate starting to happen, and you're going to start to see those incentives layered in when you go to checkout online to incentivize folks to use their own car to come back to the shopping center. I will say that I think that the retailers have told me time and time again, don't underestimate Americans love for their automobile. They love to drive, and they love to actually control the time when they get the good. So back in the days when we all had The Cable Guy showing up between 9 and 5 p.m., and we were waiting all day for that, it's a little bit like delivery service today. So you never know when it's going to arrive. And I think what's really working for curbside and buy online, pick up in store is people are able to pick and choose when it works for them, when it's convenient, when they're dropping their kids off at school, when they're going out already, that they can schedule a time that works for them to go and get the good, even though they've started the process on their phone or on their laptop.

And for curbside, how are the retailers thinking about the trade-off between actually getting the customer in the store for those upselling opportunities as opposed to just picking it up from your car?

That's sort of the next step, I guess, of the process. As landlords, we have to figure out, not only how to get them out of the car but how to get them to cross shop, right? So that's sort of the secret sauce of how the halo effect can occur. And the curbside pickup program is great for getting people comfortable coming back to the shopping center as most people wanted touchless experiences during the pandemic. Now it's an extremely efficient model, and it's very CapEx light. So we do like those reasons why we've launched it nationwide. I do think it's here to stay. And in a lot of ways, it gives our retailers almost like a pseudo drive-through, where we don't have to have a reconfiguration of the parking lot to add all sorts of different drive-through lanes. And we did it very simply where if you've ever been to a big stadium and see the big light poles with the letters on it, that's pretty much what we did. We did letters on light poles, and we used some paint on -- neon paint on some parking stalls to number them, so that no matter what app you use, if you come to the shopping center and say, hey, I'm in A4. They're going to know where A4 is, and they're going to bring out the good. And so in a lot of ways, I think that drive-through effect is here for the long haul. And now it's -- the landlord and the retailers drive to make sure that as things reopen, we have some provocative offerings in this shopping center to get them out of their car and have them dwell longer.

So we have a question online on the same topic. So right now, grocer seems to be the latest buzzword in the shopping center space with everyone chasing grocery-anchored deals or looking to add groceries to existing centers. Has there been that much net new demand for grocery sales? Once the pandemic settles, how do you think things normalize? Who will be the winners and losers?

You're spot on, whoever asked the question about what's it going to look like post-pandemic? And there's been obviously a lot of cooking at home. A lot of people have shifted their wallet spend to the grocer versus the restaurant. There will be a normalization point where some consumer spending will shift back towards the restaurant. And I think for us, what we've continued to focus on making sure is that when we look to add a grocer or if we're doing a deal with a grocer, we want to be sure that they're the dominant player in that market. And that's what's really, I think, going to help make sure that as things come back to normal that those dominant grocers have utilized the pandemic to boost their cash flows, to reinvest in their stores, to understand their customer better than ever they've had before and align with a partner that is well positioned for the long term. The last thing you want to do is, I think, go in with the fourth or fifth strongest grocer at a time where they were pretty much thrown a life vest and all of a sudden think that they're going to be dominant forever because this is -- this period of time is not normal. And so you have to sort of make sure that you're picking the best-in-class for that demographic to be sure that you're aligning yourself with the offering that's going to work post-pandemic.

And maybe aside from grocery, you could touch on some of the key categories that are driving the most demand in your centers today from a leasing perspective? And which categories are self-frozen? And then are you starting to see a pickup in your leasing volumes as we've seen -- as we have more visibility on stimulus funding and vaccine rollout?

Yes. So the leasing demand from Q4, obviously, we were very pleased and proud that we were able to do more leasing in Q4 of 2020 than we were in Q4 of 2019, which is pretty remarkable. And if you think about it, the speed of not only the falloff from the pandemic but also the rebound in demand has actually created such a short window of time that the vacancy has sat on the market, but rents have not adjusted down. So we continue to see market rents be pre-pandemic levels for our spaces, and the demand being above pre-pandemic level. So we're cautiously optimistic that because of the portfolio upgrade that we made over the past few years. And because we have really some wonderful real estate with some great credit tenants that, that's what's really attracting the best-in-class to continue to come into our shopping centers going forward. And the demand is pretty broad based. Originally, I was anticipating the anchors to be the driver of the recovery because that's really what happened in the great financial crisis is the anchors came back quick, whereas the small shops lagged. What's interesting this time around is that the small shops are back looking for deals. And the categories on the anchor side, it's pretty much every category when you look at our demand drivers, grocery never took their foot off the gas. They were obviously winners in the pandemic and continue to expand. You've got -- anything touching the home is doing phenomenally well, home goods, home improvement, furniture, crafting, pet supply. I think most people on this call, a number of them anyways on the Kimco team have added to their family by adopting a dog. It seems like there's a lot of things that have happened in the pandemic that have helped our retailer base. And then on the small shop side, what's really interesting is some of the categories that were the most impacted of the pandemic, the capacity constraints, the forced shutdowns, they're back looking for space. Because if you think about it, there's a tremendous amount of market share up for grab. So if you're a well-capitalized restaurant tour and you see an area that you know your customers living but you have yet to really service them, all of those restaurants that did not make it have created a huge market share ground that if they sign a lease today, they can be in a position to open in 6 to 12 months and be able to turn the lights on right when the reopening is in full swing. And so that's what's driving, I think, a lot of the restaurant demand. Discount fitness, same thing. There's a lot of players that didn't make it through. Health and wellness was probably one of the biggest categories coming pre-pandemic. I still think health and wellness and medical will be one of the biggest categories going forward. It will look a little different. But if you're well capitalized, there's a lot of market share up for grab. And so we're seeing the best-in-class players really want to lease now, so they're in a position to take that market share when the reopening trade occurs.

Maybe if we can shift just to the investment market. One of the things you talked about at the beginning was the balance sheet strength and the liquidity that you have, and obviously, the Albertsons' stake, which provides further liquidity down the road, not immediate, but at some point down the road. I guess given your optimism around everything that's happening on the leasing front and sort of the -- of getting back out there, I guess, are there opportunities to deploy capital? Or is it really just internal opportunities at this point that's the main focus?

So I'll start, and then I'll hand it over to Ross. Predominantly, right now, we're focused on the leasing side of it. We see that, that's where the best risk-adjusted return is to invest our incremental dollar, and we see that the demand is there to continue on the path that we're on. Now after that, we do have some smaller redevelopments that are in play. They usually return double-digit-type returns, so they are probably the second most accretive in terms of investments that we can make. But Ross is out there shaking a lot of trees, and I'll hand it over to him and talk about how we've taken advantage of the dislocation.

Yes. So I think we started the conversation, Glenn talked about all the initiatives that we took in the midst of the pandemic to really strengthen the liquidity position, strengthen the balance sheet. And frankly, we were prepared alongside our balance sheet as well as conversations that we had with some deep-pocketed investors to go shopping for distress. And frankly, that never really materialized. I mean the transaction volumes were down significantly, close to 90% year-over-year, and partially because the only assets that transacted were essential retail grocery that were trading as aggressively as ever. And those that owned assets outside of that really were not forced to make any moves. So if there was financing on it, the lender typically was willing to kick the can and push that down the road a little bit. And so we just never saw the distress materialize. But what we did find was that there was a component of the capital stack where there was dislocation, there was the opportunity for us to come in and invest where we could generate very attractive returns and still feel very good about our downside protection. So that's really where the structured investment program came from. And we found several opportunities to provide either preferred equity or mezzanine financing to take that piece of the capital stack anywhere from, call it, 50% up to 85% LTV, where traditionally, that would get filled by financing lending sources or other deep-pocketed investors that really just weren't there for the time being. So whether it be on redevelopment capital, where we saw opportunity to come in on refinancings, where there was either a construction loan that was coming due or an existing loan was coming due that maybe the LTV was originally 50% and the lender then felt it was 75% or 80% on the balloon, so we came in, we filled the gap. And now what we're seeing this year and a couple of deals that we're actively working on right now is for a more traditional acquisition financing where we can come in, in a preferred position for new acquisitions. And between those sort of 3 initiatives, we think that there is a fair amount of capital that we can deploy in a preferred position with the right of first refusal or right of first offer, where we essentially see it as a future acquisition pipeline for us and call it the medium term as our cost of capital continues to improve, and hopefully, that will continue on that trajectory. So we like the position we're in. We are actively looking for traditional acquisitions, but the pricing still remains very competitive for institutional quality assets that we would be looking for.

How much capacity do you have to deploy before you need additional equity?

Well, I think when you think about what Glenn outlined at the beginning between the $250 million of cash, we have the Albertsons stake that over time, we have the ability to monetize when appropriate. We feel that we have plenty of sources for that capacity right now, but we do look at our cost of capital on a daily basis. We are looking at where the stock is performing, and clearly, at the opportune time for accretive acquisitions, we haven't been shy to utilize the ATM in the past, and we would do it judiciously if it made sense today as well.

So I guess, at these levels, now the stock is -- it's back to the pre-pandemic levels. You feel comfortable issuing it at this cost? I mean what's the hurdle rate that you're trying to get over to issue that equity?

Yes, Michael, it's one that we watch closely. It's -- again, because of our liquidity position, we don't have any need to tap it. But we have a lot of cash that's sitting in a checking and savings account that, as you know, Citi is not giving us a tremendous return on those savings accounts. So we have a lot of dry powder that we need to put to work. And so we continue to look, and obviously, want our cost of capital to continue to improve. But to Ross' point, the pricing on our core product has never been tighter, and so we still can't afford going out and buying the best quality shopping centers that we would want to own in our top 20 markets. And so we've got some ways to go, but we feel like we can take advantage of the disruption, as Ross mentioned, and really outlined, I think, a nice program for us to invest in the spread to our cost of capital today, and then, hopefully, set ourselves up for a future acquisition pipeline as well.

And Mike, but don't forget that also -- sorry.

So I think all these assets that Ross is talking about are all in areas that we want to own long term. They're in corridors where we have boots on the ground. We feel like we have the efficiencies, the economies of scale. It gives us the -- really the ability to underwrite the retail better than anybody else. Sorry, Glenn.

That's okay. No, sorry. Just -- don't forget also, we're in a little different position today. Generating over $100 million -- about $110 million of free cash flow a year is another -- it's just a change from where we've been for the last 3 or 4 years. So that is another reason why when you look at the capital stack of where we are, our liquidity position, we can be very judicious about when we think it's the right time to issue equity. And as Ross mentioned, we have used the ATM in the past when we thought we were really trading at the right level and had good use of proceeds to do it. So it's -- we have the tools. We always want to have the right tools. We'll have an ATM program. We'll have a buyback program always available to us so we can do the right thing with -- for the shareholders.

So Conor, you were recently listed on the Dow Jones Sustainability Index. Can you talk about the steps you've taken to get there? And within the 5- to 10-year ESG plan you just published, what are your top 3 priorities to improve upon your ESG score next year?

Yes. So sustainability and ESG is something that we've been focused on for over a decade. And I think the difference in some of the programs that you're seeing today versus our program is really we've integrated it throughout the organization. It's not a bolt-on approach where you have like an ESG expert come in, and all of a sudden, you have an ESG program. We've integrated it throughout the organization. And I think that's really important to being successful long term, and it includes the Board. And it's all the way up to the Board level. And so when you have that type of transparency and you have that type of involvement, I think it sets yourself up for a long-term success. And what we've done is we've outlined pretty lofty goals, to be quite honest, to get to where we want to be. We have not only on the ESG front but we've aligned with the Paris Accords. We've given ourselves the ability to really track and focus on disclosure frameworks like GRI, TCFD and SASB to give ourselves the ability to align with reducing greenhouse gas emissions. Glenn mentioned that even our line of credit had a sustainability aspect where we can get a lower rate if we hit our reduced emissions target, which we did. We want to try and reduce emissions by 30% by 2030. We also set a goal of diversity in our organization to try and get the management to 60% diverse by 2030. And we also have a giving program as well as ESG is not just sustainability, it's one thing that I think when you look at our portfolio and how important our assets are to communities, we feel like we have to be good stewards of the community. And one of, I think, the biggest benefits to shareholders that potentially might not be recognized is that we utilize our ESG program. When we go talk to these low local municipalities and we say, hey, we're not developers that are coming in and going to quick flip something that you're going to give us an entitlement to build. We're long-term stewards of this community and look at our ESG accomplishments to showcase that. We're going to do what's right for the community. We're going to do what's right for the long term. Because, in essence, our assets are the heart and soul of these communities. And so we have to build that trust. Just like we're building that trust with our shareholder base, we have to build that trust with the communities as well, knowing that Kimco is going to be a good steward of their community?

Great. Michael, shall we go into rapid fire? Okay. So our first question is when we're physically sitting together in Florida a year from today, what will be one thing that will surprise people the most about your business over the prior 12 months?

I guess a year from now, you'll see, hopefully, the growth profile that we're talking about and the leasing really driving that growth profile.

Okay. What do you think your corporate travel budget will be in 2022 as a rough percentage of what you've spent in 2019?

Yes. We've talked about how we desire to get back out there and go and meet people in person and go experience the interaction and the social network that we seem to have lost. I think there is a lot of Zoom fatigue right now, but probably not getting back to 100%, I would say, probably maybe in that 75% to 80% range, would be my guess.

Okay. What will the same-store NOI growth be for your property sector overall in 2022?

For the whole sector, 2022, there's obviously still a lot of variables. But if things trend the way they are, I would say it's going to be -- same-store NOI will be between 3% and 5%, same-store NOI.

And then what will the 10-year treasury yield be 1 year from today?

Oh, gosh, I guess, a little bit higher, but not much. So I would probably add another -- I don't know, Glenn, you're probably the one to answer this one better than anybody else.

I think it's going to be around 2%, 2%.

Yes. I would be in the range of 1.7% to 2%.

All right. We'll blend to 1.8564%. It's great seeing you. Yes. It's great seeing you all. Good luck at the rest of your meetings, and we look forward to seeing you in person again.

Thank you. Thank you, Michael.

Bye, everyone.

Thanks very much. Bye.