Approximately $1.5 Billion of Securities Affected.

New York, November 12, 2002 -- Moody's Investors Service lowered the ratings of Kimco Realty Corporation (senior debt to Baa1) and concurrently revised the rating outlook to stable, from negative. According to Moody's, this rating action reflects Kimco's increased risk profile, particularly from investments in joint ventures away from the REIT's core community shopping center portfolio. Moody's concerns are heightened by the uncertainty about the extent and the ultimate success of Kmart's reorganization efforts and the impact of potential future store closings. Moody's notes that Kimco has ceased paying debt service on several non-recourse mortgages on Kmart-occupied properties and is currently negotiating with the lenders.

Moody's said that Kimco has increased its risk appetite by shifting its strategic emphasis away from its core, directly owned, community shopping center business to higher risk joint ventures and ancillary lines of business, such as merchant building and disposition services, all of which provide higher cash flow volatility. Joint venture investments, which lever the REIT's well-established retail property skills, tend to be highly geared with secured debt. Kimco's investment in joint ventures, which range from its stake in the Kimco Income REIT (KIR) and ventures with RioCan in Canada and GE Capital, have risen over the past three years. In fact, joint ventures represent the most significant source of income for Kimco, aside from its core portfolio, with approximately 21% of the REIT's net operating income being derived from such joint ventures. In addition, Kimco's plans to expand its third-party property investment management business moves its business enterprise further away from its core franchise. Moody's notes that these new activities could exhibit more volatility than its core retail property activities, which could pressure future cash flows and debt coverages.

Moody's noted that Kimco maintains a well laddered lease and debt maturity schedule, consistent and sound financial coverage measures, a strong leasing and management infrastructure, and a well maintained and geographically diverse retail property portfolio. Moreover, Kmart, which has closed 31 of the 76 stores it leases from Kimco, now accounts for approximately 5% of Kimco's base rents, down from 11%.

A further rating downgrade would likely reflect material further growth in the REIT's joint venture and non-core investment activity, a rise in secured debt, or a substantial diminution in the REIT's fixed charge coverages -- events Moody's believes are unlikely in the intermediate term.

The following ratings were lowered:

Kimco Realty Corporation -- Senior unsecured debt to Baa1, from A3; senior unsecured debt shelf to (P)Baa1, from (P)A3; Series A, B and C preferred stock to Baa2, from Baa1; preferred stock shelves to (P)Baa2, from (P)Baa1.

The Price REIT -- Senior unsecured debt to Baa1, from A3.

Kimco Realty Corporation [NYSE: KIM], headquartered in New Hyde Park, New York, USA, is a self-administered and self-managed real estate investment trust (REIT) that operates neighborhood and community shopping centers, with interests in 569 properties comprising 79 million square feet of leasable space in 41 states, Canada and Mexico. At September 30, 2002, Kimco had assets of $3.7 billion and equity of $ 1.9 billion.

New York
Merrie S. Frankel
VP - Senior Credit Officer
Real Estate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
John J. Kriz
Managing Director
Real Estate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Copyright 2002 by Moody's Investors Service
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