And that’s why I think it gives us a lot of encouragement, as well as the fact that we have all of this underutilized parking that we think has future outside in the long-term. So we always want to think long-term. We entitled over 800 units this quarter alone in the portfolio. We continue to think that the shopping center will evolve to include multiple uses, primarily multifamily for us. But we position the portfolio for long-term growth. We’ve been on a roller coaster of retail. As you know, there’s been retail apocalypse. There’s been the COVID pandemic. There’s been all things we’ve faced in terms of challenges. And we feel right now we’re in a really good spot, hopefully be the bright spot of commercial real estate, because Kimco is well positioned, I think, to be opportunistic and showcase that when times when people are nervous, if you have the capability to execute, you should be able to make generational deals.
And we feel like that’s what we’re intending to do at Kimco going forward and into the future.
Operator: The next question comes from Greg McGinniss with Scotiabank. Please go ahead.
Greg McGinniss: Hey, good morning. I’m just curious how you’re thinking about spending on acquisitions versus redevelopments at this point, where you see the bigger opportunity? Given the size of and growing size of the portfolio, whether or not you expect to see some increase in the redevelopment opportunities or whether the accretion yields there due to the cost or whatever it might be are just not worth the squeeze?
Ross Cooper: Sure, I’m happy to address that. Cost of capital is paramount in doing deals that are accretive to that cost of capital. It is something that we discuss and evaluate as a collective committee on a daily basis. To your point, acquisitions in this environment, at least one-off sort of third party acquisitions will be very challenging for us in the near-term as cap rates have not moved nearly at the same speed that interest rates and our cost of capital have moved. The bright spot is that redevelopments, particularly sort of the bread and butter retail redevelopments within our portfolio, continue at very high clips, double-digits on average. So that is an investment opportunity that we will continue to pursue and activate across our portfolio.
And to your point, as the portfolio continues to grow, those opportunities grow alongside it. So we do believe that leasing and redevelopment — retail redevelopment will continue to exceed our cost of capital and be where we put a significant amount of our available cash flow. And then we’ll be opportunistic with the structured investment program, which also has double-digit returns requirements for us to proceed. And we’ll prioritize each and every opportunity with that thought process in mind.
Operator: The next question comes from Anthony Powell with Barclays. Please go ahead.
Anthony Powell: Hi, good morning. I got a question on where do share repurchase has been into the capital allocation, I guess the matrix? I think you have about $224 million left in your authorization. How are these — how does that compare to a structured investments and other opportunities you have?
Ross Cooper: I think it’s a similar conversation. I think every investment opportunity that we look at is judged based upon our cost of capital and what is accreted to that. I think that we talked a little bit about our leverage being at the lowest levels historically that it’s ever been, which gives us a lot more optionality to consider anything that’s on the table. So we’ll look at every single investment opportunity, acquisition, leasing, redevelopment, structure investment, stock buybacks, whatever the case may be, and prioritize it based upon, you know, through that lens. So that’s where we sit and that’s how we consider it.
Operator: The next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead.
Caitlin Burrows: Hi, good morning everyone. Conor, you talked about small shop occupancy as a bright spot. Could you talk about what types of tenants you’re seeing that interest from, like local versus national, what industry? And also the timing, I feel like we hear that macro uncertainty is lengthening the time it takes to sign leases and other property types. So I’m wondering if you’re seeing that at all in your property type?
Conor Flynn: Sure, from a small shop perspective, I think it’s definitely a bright spot. When you look at the uses, you know, restaurants, specialty foods, like those types of users still dominate sort of the percentages of new leases that we signed this quarter. And then when you go past that, it’s really sort of the health and wellness and beauty category. That continues to evolve. You used to be dominated by sort of the old bus of the world. Now we’re seeing Sephora and a number of others continue to evolve to have open air shopping centers as a key component to their growth strategies. You know, when you look at the services category, that continues to evolve. We always have had hair and nail salons as a key component of the shopping center sector.
But when you add in all the medical uses that continue to evolve and want to be closer to the consumer and come out of the hospital, I think that continues to evolve as well. And then you’re seeing sort of these franchise-driven concepts that continue to be the growth driver. The mom-and-pop retailer today very different than it was even five years ago. And a lot of what’s being — what’s going on is they’re buying these franchises with a proven business model, and that’s how they’re starting the business. And I think when you look at the franchises that we’re doing deals with, you can actually improve the credit profile there, again, the corporate guarantee on it. And so as we evolve our leasing strategy, and we talked about the increases that we’re getting on small shops, continuing to improve the growth of the portfolio, all these things are adding up, obviously, to an enhanced growth profile.
Operator: The next question comes from Alec Feygin with Baird. Please go ahead.
Alec Feygin: Hi, there. Thank you for taking my question. I kind of wanted to dig into the structured investment conversation. You guys have mentioned that the conversations around those have been picking up lately. Can you guys provide us some more details about the return criteria on those and what we can expect that book to grow to?
Ross Cooper: Sure. Yes, the conversations are picking up and we do anticipate there’s going to be more optionality with that program as we enter 2024, continuing with the theme of cost of capital. As our hurdle rates increase, the quotes that we’re providing to potential borrowers of our capital have increased as well. So what was previously 8% to 9% with some back-end participation potentially is now double-digit as a starting point. So the blended average of our structure right now in terms of the rates that we’re obtaining in the current position are in the mid to high-9s. And we expect that anything going forward will certainly start in the double-digits. But we think that will ramp up. We have just under $200 million outstanding on the book right now within the program. So we’ll continue to be mindful of that, but we think that there’s room to run there.
Operator: The next question comes from Linda Tsai with Jefferies. Please go ahead.
Linda Tsai: Hi. You reduced your credit loss outlook as you’re trending at the low-end. Given the record low supply environment you’re operating in and your improved portfolio quality in terms of better credit tenants, do you think it’s premature to say credit loss will be a step function lower in the coming years?
Conor Flynn: Again, we’re happy with the improvement that we’ve seen. I think you’ve seen credit loss coming back to more normalized level similar to what we saw pre-pandemic. It’s a little early to put it into the guidance for next year. But as a run rate, if we’re in that 75, 100 basis point range, I think you’re back to pretty normalized levels.
Operator: The next question comes from Mike Mueller with JPMorgan. Please go ahead.
Mike Mueller: Yes, hi. Going back to the structured investment opportunities, are they all tied to real estate? Or are you evaluating some operator opportunities as well?
Ross Cooper: Yes. I mean the core program is looking at operating real estate in our core markets with strong demographics, the tenancy that we’re looking for, high-quality sponsors, and as we’ve talked about in the past, having that right of first offer, a right of first refusal is a critical component of that program. Now that being said, we do have our Plus business that has been active historically. And as there are retailers that are real estate rich that have capital needs, we believe that we’re typically 1 of their, if not their first phone call. So those conversations will continue and where we can be opportunistic and helpful with retailers that have a significant amount of owned real estate, we’ll always look at those opportunities as well.
Operator: The next question comes from Paulina Rojas with Green Street. Please go ahead.
