UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-K

(Mark One)
☒Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended
December 31, 20192020
☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ___________to___________
Commission File Number:001-33268Kite Realty Group Trust
Commission File Number:333-202666-01Kite Realty Group, L.P.

Kite Realty Group Trust
Kite Realty Group, L.P.
(Exact name of registrant as specified in its charter)
MarylandKite Realty Group Trust11-3715772
DelawareKite Realty Group, L.P.20-1453863
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
MarylandKite Realty Group Trust11-3715772
DelawareKite Realty Group, L.P.20-1453863
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
30 S. Meridian StreetSuite 1100IndianapolisIndiana46204
(Address of principal executive offices)(Zip code)
Telephone317577-5600
(Registrant’s telephone number, including area code)
Telephone317577-5600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per common shareKRGNew York Stock Exchange
 
Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Kite Realty Group TrustYesxNo oKite Realty Group, L.P.YesxNo o
 
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 ofor Section 15(d) of the Act.
 
Kite Realty Group TrustYes   oNoxKite Realty Group, L.P.Yes   oNox
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Kite Realty Group TrustYesxNo oKite Realty Group, L.P.YesxNo o
 
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Kite Realty Group TrustYesxNo oKite Realty Group, L.P.YesxNo o
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Kite Realty Group Trust:
Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller reporting company☐
Emerging growth company☐
 
Kite Realty Group, L.P.:
Large accelerated fileroAccelerated fileroNon-accelerated filerxSmaller reporting company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act) o
Kite Realty Group TrustYes   ☐No xKite Realty Group, L.P.Yes   ☐No x
 
The aggregate market value of the voting and non-voting common sharesequity held by non-affiliates of the Registrant as of the last business day of the Registrant’s most recently completed second quarter was $1.3$1.0 billion based upon the closing price on the New York Stock Exchange on such date. 
 
The number of Common Shares outstanding as of February 14, 202016, 2021 was 83,984,71984,292,270 ($.01 par value).
  
Documents Incorporated by Reference
 
Portions of the definitive Proxy Statement relating to the Registrant’s Annual Meeting of Shareholders, scheduled to be held on May 14, 2020,12, 2021, to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K as indicated herein.



EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the year ended December 31, 20192020 of Kite Realty Group Trust, Kite Realty Group, L.P. and its subsidiaries. Unless stated otherwise or the context otherwise requires, references to “Kite Realty Group Trust” or the “Parent Company” mean Kite Realty Group Trust, and references to the “Operating Partnership” mean Kite Realty Group, L.P. and its consolidated subsidiaries. The terms “Company,” “we,” “us,” and “our” refer to the Parent Company and the Operating Partnership collectively, and those entities owned or controlled by the Parent Company and/or the Operating Partnership.

The Operating Partnership is engaged in the ownership, operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States. The Parent Company is the sole general partner of the Operating Partnership and as of December 31, 20192020 owned approximately 97.5%97.1% of the common partnership interests in the Operating Partnership (“General Partner Units”). The remaining 2.5%2.9% of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) are owned by the limited partners.

We believe combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report benefits investors by:
•enhancing investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•eliminating duplicative disclosure and providing a more streamlined and readable presentation of information because a substantial portion of the Company’s disclosure applies to both the Parent Company and the Operating Partnership; and
•creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. The Parent Company has no material assets or liabilities other than its investment in the Operating Partnership. The Parent Company issues public equity from time to time but does not have any indebtedness as all debt is incurred by the Operating Partnership. In addition, the Parent Company currently does not nor does it intend to guarantee any debt of the Operating Partnership. The Operating Partnership has numerous wholly-owned subsidiaries, and it also owns interests in certain joint ventures. These subsidiaries and joint ventures own and operate retail shopping centers and other real estate assets. The Operating Partnership is structured as a partnership with no publicly-traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for General Partner Units, the Operating Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.

Shareholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. In order to highlight this and other differences between the Parent Company and the Operating Partnership, there are separate sections in this report, as applicable, that separately discuss the Parent Company and the Operating Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.




KITE REALTY GROUP TRUST AND KITE REALTY GROUP, L.P. AND SUBSIDIARIES
Annual Report on Form 10-K
For the Fiscal Year Ended
December 31, 20192020  
 
TABLE OF CONTENTS 
  Page
   
   
Item No.  
   
Part I  
   
1
4
1A.
11
1B.
26
2
27
3
39
4
39
   
Part II  
   
5
40
6
42
7
43
7A.
59
8
59
9
59
9A.
59
9B.
63
   
Part III  
   
10
64
11
64
12
64
13
64
14
64
   
Part IV  
   
15
65
1672
   
73





Forward-Looking Statements

This Annual Report on Form 10-K, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed or implied by the forward-looking statements. Risks,

Currently, one of the most significant factors that could cause actual outcomes to differ significantly from our forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus ("COVID-19"), including possible resurgences and mutations, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The effects of COVID-19 have caused and may continue to cause many of our tenants to close stores, reduce hours or significantly limit service, making it difficult for them to meet their rent obligations, and therefore has and will continue to impact us significantly for the foreseeable future. COVID-19 has impacted us significantly, and the extent to which it will continue to impact us and our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the speed and effectiveness of vaccine and treatment developments and distribution pipeline, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

Additional risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: 
•national and local economic, business, real estate and other market conditions, particularly in connection with low or negative growth in the U.S. economy as well as economic uncertainty;
•financing risks, including the availability of, and costs associated with, sources of liquidity;
•our ability to refinance, or extend the maturity dates of, our indebtedness;
•the level and volatility of interest rates;
•the financial stability of tenants, including their ability to pay rent or request rent concessions and the risk of tenant insolvency or bankruptcies;
•the competitive environment in which we operate;operate, including potential oversupplies and reduction in demand for rental space;
•acquisition, disposition, development and joint venture risks;
•property ownership and management risks;risks, including the relative illiquidity of real estate investments, periodic costs to repair, renovate and re-lease spaces, operating costs and expenses, vacancies or the inability to rent space on favorable terms or at all;
•our ability to maintain our status as a real estate investment trust for U.S. federal income tax purposes;
•potential environmental and other liabilities;
•impairment in the value of real estate property we own;
•the attractiveness of our properties to tenants, the actual and perceived impact of e-commerce on the value of shopping center assets;assets and changing demographics and customer traffic patterns;
•risks related to the geographical concentration of our properties in Florida, Indiana, Texas, Nevada,North Carolina, and North Carolina;Nevada;
•civil unrest, acts of terrorism or war, acts of God, climate change, epidemics, pandemics (including COVID-19), natural disasters and severe weather conditions such as hurricanes, tropical storms, tornadoes, earthquakes, droughts, floods and fires, including such events or conditions that may result in underinsured or uninsured losses or other increased costs and expenses;
•changes in laws and government regulations including governmental orders affecting the use of our properties or the ability of our tenants to operate, and the costs of complying with such changed laws and government regulations;
•possible short-term or long-term changes in consumer behavior due to COVID-19 and the fear of future pandemics;
2

•insurance costs and coverage;
•risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions;
•other factors affecting the real estate industry generally; and
•other risks identified in this Annual Report on Form 10-K and, in other reports we file from time to time with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.

We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I
  
ITEM 1. BUSINESS
  
Unless the context suggests otherwise, references to “we,” “us,” “our” or the “Company” refer to Kite Realty Group Trust and our business and operations conducted through our directly or indirectly owned subsidiaries, including Kite Realty Group, L.P., our operating partnership (the “Operating Partnership”). 
 
Overview
  
Kite Realty Group Trust is a publicly-held real estate investment trust which, through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States.  We derive revenues primarily from activities associated with the collection of contractual rents and reimbursement payments from tenants at our properties.  Our operating results therefore depend materially on, among other things, the ability of our tenants to make required lease payments, the health and resilience of the United States retail sector, interest rate volatility, job growth and real estate market and overall economic conditions.

As of December 31, 2019,2020, we owned interests in 90 operating and redevelopment properties totaling approximately 17.417.3 million square feet. We also owned onetwo development projectprojects under construction as of this date.  Our retail operating portfolio was 96.1%91.2% leased to a diversified retail tenant base, with no single retail tenant accounting for more than 2.5% of our total annualized base rent. In the aggregate, our largest 25 tenants accounted for 32.1%33.3% of our annualized base rent.  See Item 2, “Properties” for a list of our top 25 tenants by annualized base rent.  

Impact of COVID-19

Since first being reported in December 2019, the novel strain of coronavirus (COVID-19) has spread globally. In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and how it impacts the Company's tenants and business partners. Certain segments of retailers and the Company experienced disruption during 2020, and, going forward, the potential adverse effect of the COVID-19 pandemic, including possible resurgences and mutations, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market, global economy, and financial markets, and the extent of such effects, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

The following operating trends, combined with macroeconomic trends such as a global economic slowdown or recession, reduced consumer spending and increased unemployment, lead us to believe that our operating results will continue to be significantly affected by COVID-19:

•As of December 31, 2020, over 98% of our tenants have reopened. However, many of these retailers are operating at a lower capacity than normal due to COVID-19. Store closures or the inability to return to full capacity, particularly if for an extended period, increase the risk of business failures and lease defaults.
•As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and 92% of rent billings for the period from April 1, 2020 through December 31, 2020.
•Many of our tenants have taken on additional debt as a result of COVID-19, including loans administered by the Small Business Administration. To the extent this debt is not forgiven, the increased debt load may hamper their ability to continue to operate and to pay rent, which could cause the Company to realize decreased cash flow and increased vacancies at its properties.

Starting in March 2020 and continuing through January 2021, the Company received rent relief requests from a significant proportion of its tenants. Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic; the Company and its legal advisers generally disagree with these legal arguments. The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant's financial strength, the tenant's operating history, potential co-tenancy impacts, the tenant's contribution to the shopping center in which it operates, the Company's assessment of the tenant's long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors.

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As a result of this evaluation, the Company has agreed to defer rent for approximately 375 of its tenants subject to certain conditions. The Company had deferred the collection of $6.1 million of rental income that remained outstanding as of December 31, 2020. To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company's operating and capital uses.

We have taken various steps to mitigate the impact of COVID-19 on our liquidity, including deferrals of certain planned capital expenditures for 2020. In March 2020, we borrowed $300 million on the unsecured revolving credit facility (the "Credit Facility") as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. Subsequent to the initial borrowing, we have repaid the $300 million of borrowings.

As of December 31, 2020, we have approximately $43.6 million of cash on hand, $523.2 million of remaining availability under our Credit Facility (based on the unencumbered pool allocated thereto), and no debt maturities until 2022.

The effects of COVID-19 have triggered a global and domestic economic recession, and if the recession continues well beyond the lifting of government restrictions related to COVID-19, many of our tenants could face financial distress. Historically, economic indicators such as GDP growth, consumer confidence and employment are correlated with demand for certain of our tenants’ products and services. These conditions could increase the number of our tenants that are unable to meet their lease obligations to us and could limit the demand for our space from new tenants.

We expect the significance of the COVID-19 pandemic, including the extent of its effects on our business, financial performance and condition, operating results and cash flows and the economic slowdown, to be dictated by, among other things, the duration of the COVID-19 pandemic, including possible resurgences and mutations, the success of efforts to contain it, the success of efforts to find and distribute effective drugs or vaccines and the impact of actions taken in response. These uncertainties make it difficult to predict operating results for our business for 2021.

Significant 20192020 Activities
 
Even in the face of the COVID-19 pandemic, the Company continued to perform at a high level including as follows:

Operating Activities
We continued to drive strong operating results from our portfolio as follows:  
Realized•The Company realized net loss attributable to common shareholders of $0.5$16.2 million;
•The Company generated Funds From Operations, as defined by NAREIT, of $108.7 million which included $37.7 millionand Funds From Operations, as adjusted for severance charges, of impairment charges;$112.0 million;
•
Generated Funds From Operations, as defined by NAREIT, of $131.4 million and Funds From Operations, as adjusted for a loss on debt extinguishment, of $143.0 million.
Same Property Net Operating Income ("Same Property NOI") increaseddecreased by 2.2%6.6% in 20192020 compared to 2018 primarily due to increases in rental rates2019 as a result of the impact of COVID-19;
•As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and an improved tenant mix driven by strong anchor and shop leasing activity;92% of rent billings for the period from April 1, 2020 through December 31, 2020.
•We executed new and renewal leases on 302215 individual spaces for approximately 2.01.5 million square feet of retail space, achieving a blended cash rentleasing spread of 9.2%7.0% and blended GAAP rentleasing spread of 14.5% for comparable leases; and
We opened 107 new tenant spaces totaling 657,000 square feet;
•Our operating portfolio annual base rent ("ABR") per square foot as of December 31, 20192020 was $17.83,$18.42, an increase of $0.99 or 5.9%$0.59 (or 3.3%) from the end of the prior year;year.
Total retail leased percentage and was 96.1% as of December 31, 2019; and
Small shop leased percentage was 92.5% as of December 31, 2019, which was an all-time Company high.

Disposition Activities
Strengthening our balance sheet continues to be one of our top priorities. In February 2019, we announced a plan, Project Focus, to market and sell up to $500 million in non-core assets as part of a program designed to improve the Company’s portfolio quality, reduce its leverage, and focus operations on markets where we believe the Company can gain scale and generate attractive risk-adjusted returns ("Project Focus"). This program was completed in October 2019.
Transaction highlights of Project Focus were the following:


Sold 23 non-core assets for a combined $544 million at a blended capitalization rate of approximately 8%.
Lowered leverage such that our ratio of net debt to EBITDA is 5.9x as of December 31, 2019.
Strengthened our liquidity profile as we have no debt maturing through 2021 and no balance on our unsecured revolving credit facility. The Company's existing unsecured revolving credit facility can pay all debt maturities through 2025.
Increased ABR to $17.83 as the retail assets sold had an ABR of $14.66, which was significantly lower than our current operating portfolio.

Financing and Capital Raising Activities. 
 
 In 2019,2020, we were able to further improveutilize our strong balance sheet, financial flexibility and liquidity to fund future growth.  handle the adversity and deliver strong results in the midst of the disruption caused by the COVID-19 pandemic. The Company had the following key investment highlights:

•Acquired Eastgate Crossing in Chapel Hill, North Carolina for $65.5 million; and

5

•Commenced construction on two development projects, consisting of approximately $12.6 million of capital commitments, that are anticipated to produce an average cash yield between 14.0% and 15.0%.

Through the COVID-19 pandemic, we paid $0.4495 in dividends in 2020 and were one of the few open-air peers to continuously pay a dividend.    

We ended the year with approximately $614.8$566.9 million of combined cash and borrowing capacity on our unsecured revolving credit facility.Credit Facility.

We have no debt scheduled to mature through December 31, 2021, and a debt service coverage ratio of 3.6x2.9x as of December 31, 2019.2020.  We have been assigned investment grade corporate credit ratings from two nationally recognized credit rating agencies. These ratings were unchanged during 2019.2020.

Business Objectives and Strategies
  
Our primary business objectives are to increase the cash flow and value of our properties, achieve sustainable long-term growth and maximize shareholder value primarily through the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers.  We invest in properties with well-located real estate and strong demographics, and we use our leasing and management strategies to improve the long-term values and economic returns of our properties.  We believe that certain of our properties represent attractive opportunities for profitable redevelopment, renovation, and expansion. 
 
We seek to implement our business objectives through the following strategies, each of which is more completely described in the sections that follow:  
•
•Operating Strategy: Maximizing the internal growth in revenue from our operating properties by leasing and re-leasing to a strong and diverse group of retail tenants at increasing rental rates, when possible, and redeveloping or renovating certain properties to make them more attractive to existing and prospective tenants and consumers;
•Financing and Capital Preservation Strategy: Maintaining a strong balance sheet with flexibility to fund our operating and investment activities.  Funding sources include the public equity and debt markets, an existing revolving Credit Facility with $25 million outstanding, new secured debt, internally generated funds, proceeds from selling land and properties that no longer fit our strategy, and potential strategic joint ventures; and
•Growth Strategy: Prudently using available cash flow, targeted asset recycling, equity, and debt capital to selectivelyacquire additional retail properties and redevelop or renovate our existing properties where we believe that investment returns would meet or exceed internal benchmarks.

: Maximizing the internal growth in revenue from our operating properties by leasing and re-leasing to a strong and diverse group of retail tenants at increasing rental rates, when possible, and redeveloping or renovating certain properties to make them more attractive to existing and prospective tenants and consumers;
•
Financing and Capital Preservation Strategy: Maintaining a strong balance sheet with flexibility to fund our operating and investment activities.  Funding sources include the public equity and debt markets, an existing revolving credit facility with zero outstanding, new secured debt, internally generated funds, proceeds from selling land and properties that no longer fit our strategy, and potential strategic joint ventures; and
•
Growth Strategy: Prudently using available cash flow, targeted asset recycling, equity, and debt capital to selectivelyacquire additional retail properties and redevelop or renovate our existing properties where we believe that investment returns would meet or exceed internal benchmarks.

Operating Strategy. Our primary operating strategy is to maximize our rental rates, our returns on invested capital, and occupancy levels by attracting and retaining a strong and diverse tenant base. Most of our properties are located in regional and neighborhood trade areas with attractive demographics, which allows us to maximize returns on invested capital, occupancy and rental rates. We seek to implement our operating strategy by, among other things:  
•increasing rental rates upon the renewal of expiring leases or re-leasing space to new tenants while minimizing vacancy to the extent possible;
•maximizing the occupancy of our operating portfolio;
•minimizing tenant turnover;
•maintaining leasing and property management strategies that maximize rent growth and cost recovery;
•maintaining a diverse tenant mix that limits our exposure to the financial condition of any one tenant or category of retail tenants;


•maintaining and improving the physical appearance, condition, layout and design of our properties and other improvements located on our properties to enhance our ability to attract customers;
•implementing offensive and defensive strategies against e-commerce competition;
6

•actively managing properties to minimize overhead and operating costs;
•maintaining strong tenant and retailer relationships in order to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-leasing space to new tenants; and
•taking advantage of under-utilized land or existing square footage, reconfiguring properties for more profitable use, and adding ancillary income sources to existing facilities.

We successfully executed our operating strategy in 20192020 in a number of ways, including Same Property NOI growthas best evidenced in leading our peer group in rent collection rates, based upon publicly reported information by each peer as of 2.2%,February 19, 2021. Additionally, our leasing process continues to perform at a blendedhigh level as evidence by the execution of 215 new and renewal cash leasing spread of 9.2%, an increase in our anchor leased percentage to 97.8% as of year-end, and an increase in our small shop leased percentage to 92.5% as of year-end.leases for approximately 1.5 million square feet. We have placed significant emphasis on maintaining a strong and diverse retail tenant mix, which has resulted in no tenant accounting for more than 2.5% of our annualized base rent. See Item 2, “Properties” for a list of our top tenants by gross leasable area ("GLA") and annualized base rent.
 
Financing and Capital Preservation Strategy. We finance our acquisition, development, and redevelopment activities seeking to use the most advantageous sources of capital available to us at the time.  These sources may include the reinvestment of cash flows generated by operations, the sale of common or preferred shares through public offerings or private placements, the reinvestment of net proceeds from the disposition of assets, the incurrence of additional indebtedness through secured or unsecured borrowings, and entering into real estate joint ventures. 
 
Our primary financing and capital preservation strategy is to maintain a strong balance sheet and enhance our flexibility to fund operating and investment activities in the most cost-effective way. We consider a number of factors when evaluating the amount and type of additional indebtedness we may elect to incur.  Among these factors are the construction costs or purchase prices of properties to be developed or acquired, the estimated market value of our properties and the Company as a whole upon consummation of the financing, and the ability to generate durable cash flow to cover expected debt service. 
 
Strengthening ourMaintaining a strong balance sheet continues to be one of our top priorities.  In February 2019, the Company announced a plan to market and sell up to $500 million in non-core assets as part of a program designed to improve the Company’s portfolio quality, reduce its leverage, and focus operations on markets where the Company believes it can gain scale and generate attractive risk-adjusted returns. The majority of the net proceeds were used to further strengthen our balance sheet.

We maintain an investment grade credit rating that we expect will continue to enable us to opportunistically access the public unsecured bond market and will allow us to lower our cost of capital and provide greater flexibility in managing the acquisition and disposition of assets in our operating portfolio.

We intend to continue implementing our financing and capital strategies in a number of ways, which may include one or more of the following actions:  
•prudently managing our balance sheet, including maintaining sufficient availability under our unsecured revolving credit facilityCredit Facility so that we have additional capacity to fund our development and redevelopment projects and pay down maturing debt if refinancing that debt is not desired or practical;
•extending the scheduled maturity dates of and/or refinancing our near-term mortgage, construction and other indebtedness;
•expanding our unencumbered asset pool;
•raising additional capital through the issuance of common shares, preferred shares or other securities;
•managing our exposure to interest rate increases on our variable-rate debt through the selective use of fixed rate hedging transactions;
•issuing unsecured bonds in the public markets, and securing property-specific long-term non-recourse financing; and
•entering into joint venture arrangements in order to access less expensive capital and mitigate risk.



Growth Strategy. Our growth strategy includes the selective deployment of financial resources to projects that are expected to generate investment returns that meet or exceed our internal benchmarks. We implement our growth strategy in a number of ways, including:  
•continually evaluating our operating properties for redevelopment and renovation opportunities that we believe will make them more attractive for leasing to new tenants, right-sizing of anchor spaces while increasing rental rates, and re-leasing spaces to existing tenants at increased rental rates;
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•disposing of selected assets that no longer meet our long-term investment criteria and recycling the net proceeds into properties that provide attractive returns and rent growth potential in targeted markets or using the proceeds to repay debt, thereby reducing our leverage; and
•selectively pursuing the acquisition of retail operating properties, portfolios and companies in markets with strong demographics.

In evaluating opportunities for potential acquisition, development, redevelopment and disposition, we consider a number of factors, including:  
•the expected returns and related risks associated with the investments relative to our weighted cost of capital to make such investments;
•the current and projected cash flow and market value of the property and the potential to increase cash flow and market value if the property were to be successfully re-leased or redeveloped;
•the price being offered for the property, the current and projected operating performance of the property, the tax consequences of the transaction, and other related factors;
•opportunities for strengthening the tenant mix at our properties through the placement of anchor tenants such as grocers, value retailers, grocers, soft goodspet supply stores, theaters,hardware stores, or sporting goods retailers, as well as further enhancing a diverse tenant mix that includes restaurants, specialty shops, serviceand other essential retailers such as banks, dry cleaners and hair salons, and shoe and clothing retailers, some of whichthat provide staple goods to the community and offer a high level of convenience;
•the configuration of the property, including ease of access, availability of parking, visibility, and the demographics of the surrounding area; and
•the level of success of existing properties in the same or nearby markets.

Competition 
 
The United States commercial real estate market continues to be highly competitive. We face competition from other REITs, including other retail REITs, and other owner-operators engaged in the ownership, leasing, acquisition, and development of shopping centers as well as from numerous local, regional and national real estate developers and owners in each of our markets.  Some of these competitors may have greater capital resources than we do, although we do not believe that any single competitor or group of competitors is dominant in any of the markets in which we own properties. 
 
We face significant competition in our efforts to lease available space to prospective tenants at our operating, development and redevelopment properties. The nature of the competition for tenants varies based on the characteristics of each local market in which we own properties. We believe that the principal competitive factors in attracting tenants in our market areas are location, demographics, rental rates, the presence of anchor stores, competitor shopping centers in the same geographic area and the maintenance, appearance, access and traffic patterns of our properties.  There can be no assurance in the future that we will be able to compete successfully with our competitors in our development, acquisition and leasing activities. 
 
Government Regulation
 
We and our properties are subject to a variety of federal, state, and local environmental, health, safety and similar laws, including: 
 
Americans with Disabilities Act.Act and Other Regulations. Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA"), to the extent that such properties are public accommodations as defined by the ADA. The ADA may require removal of


structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in orders requiring us to spend substantial sums to cure violations, pay attorneys' fees, or pay other amounts. The obligation to make readily accessible accommodations is an ongoing one, and we will continue to assess our properties and make alterations as appropriate in this respect. In addition, our properties are subject to fire and safety regulations, building codes and other land use regulations.

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Affordable Care Act. We may be subject to excise taxes under the employer mandate provisions of the Affordable Care Act ("ACA") if we (i) do not offer health care coverage to substantially all of our full-time employees and their dependents or (ii) do not offer health care coverage that meets the ACA's affordability and minimum value standards. The excise tax is based on the number of full-time employees. We do not anticipate being subject to a penalty under the ACA; however, even in the event that we are, any such penalty would be less than $0.3 million, as we had 133113 full-time employees as of December 31, 2019.2020. 
 
Environmental Regulations. Some properties in our portfolio contain, may have contained or are adjacent to or near other properties that have contained or currently contain underground storage tanks for petroleum products or other hazardous or toxic substances. These storage tanks may have released, or have the potential to release, such substances into the environment. 
 
In addition, some of our properties have tenants which may use hazardous or toxic substances in the routine course of their businesses. In general, these tenants have covenanted in their leases with us to use these substances, if any, in compliance with all environmental laws and have agreed to indemnify us for any damages we may suffer as a result of their use of such substances. However, these lease provisions may not fully protect us in the event that a tenant becomes insolvent. Finally, certain of our properties have contained asbestos-containing building materials or ACBM,("ACBM"), and other properties may have contained such materials based on the date of its construction. Environmental laws require that ACBM be properly managed and maintained, and fines and penalties may be imposed on building owners or operators for failure to comply with these requirements. The laws also may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers.

Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results operations, and management does not believe they will in the future. In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past. However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future. 
 
With environmental sustainability becoming a national priority, we have continued to demonstrate our strong commitment to be a responsible corporate citizen through resource reduction and employee training that have resulted in reductions of energy consumption, waste and improved maintenance cycles. 

COVID-19 Regulations. As discussed in this Annual Report on Form 10-K, during the COVID-19 pandemic, our properties and our tenants have been subject to public health regulations and control measures, including states of emergency, mandatory quarantines, "shelter in place" orders, border closures, restrictions on types of businesses that may continue to operate, "social distancing" guidelines and other travel and gathering restrictions and practices, that have significantly impacted our business, see page 11 of Item 1A. "Risk Factors" for further information.

Insurance 
 
We carry comprehensive liability, fire, extended coverage, and rental loss insurance that covers all properties in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage, geographic locations of our assets and industry practice. Certain risks such as loss from riots, war or acts of God, and, in some cases, flooding are not insurable or the cost to insure over these events is costs prohibitive; and therefore, we do not carry insurance for these losses. Some of our policies, such as those covering losses due to terrorism and floods, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. 
 
Offices 
 
Our principal executive office is located at 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204. Our telephone number is (317) 577-5600. 

Employees





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Human Capital 
 
As of December 31, 2019,2020, we had 133113 full-time employees. The majority of these employees were based at our Indianapolis, Indiana headquarters. We believe our employees are the most important part of our business. We are committed to providing a work environment that attracts, develops and retains high-performing individuals and that treats employees with dignity and respect.


When attracting, developing and retaining talent, we seek individuals who hold varied experiences and viewpoints and embody our core values to create an inclusive and diverse culture and workplace that allows each employee to do their best work and drive our collective success. We focus on leadership development at every level of the organization. We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company and then provide effective feedback on their performance towards goals to ensure their growth.

We believe a commitment to our employees’ learning and development through training, educational opportunities and mentorship is critical to our ability to continue to innovate. Through performance plans, talent recognition and individual development planning, along with reward packages, we advance our talent pool and create a sustainable and long-term enterprise.

We seek to foster a corporate culture where our many stakeholders, including our employees, engage in the topic of community development and collaborate to extend resources towards the advancement of this principle. In furtherance of this commitment, we partner with and support local charitable organizations that we believe are contributing to the growth and development of the community. In recent years, our employees have donated and coordinated substantial fundraising and have spent many hours volunteering to support a variety of charities with which we partner.

The health, safety and well-being of our employees are always top priorities, and we believe our actions in response to COVID-19 were appropriate and in accordance with state and local health and safety laws. Among other things, we adopted remote working and flexible scheduling arrangements and implemented additional health and safety measures for employees working in our offices.
 
Environmental, Social and Governance Matters

The Company strives to be a responsible corporate citizen, and we recognize the importance that environmental, social, and governance ("ESG") initiatives play in our ability to generate long-term, sustainable returns. To assist us in setting and meeting ESG goals, we have formed a cross-functional task force ("ESG Task Force") to review ESG issues that are important to investors and regularly report to the Board of Trustees on ESG efforts. The ESG Task Force is led by our Chief Executive Officer and includes members from our asset management, employee experience, investor relations, marketing, internal audit, and legal groups.

In 2020, the ESG Task Force issued our ESG Policy and Corporate Citizenship Report, which we have published on our website. The Company has undertaken multiple projects to make its operations more efficient and to reduce energy and water consumption, including installing LED lighting at various parking lots, solar panels at three properties, and electric-vehicle charging stations at six properties, and implementing smart meters and other initiatives aimed at water conservation, recycling and waste diversion at our properties.Recent business initiatives encourage tenants to adopt green leases, also known as “high-performance” or “energy-aligned” leases, to equitably align the costs and benefits of energy and water efficiency investments for building owners and tenants, based on principles and best practices from the Green Lease Leaders Reference Guide by the Institute for Market Transformation and the U.S. Department of Energy.The Company also has partnered with One Tree Planted, a non-profit organization committed to reforestation, to plant new trees in 2020.We also are evaluating potential actions that might reduce our carbon footprint or otherwise mitigate our environmental impact.

As described above, we are highly committed to our employees, and our policies are designed to promote fairness, equal opportunities, diversity, well-being and professional development within the Company.Our corporate governance structure, led by our Board of Trustees, closely aligns our interests with those of our shareholders, as further described in our annual Proxy Statement.




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Segment Reporting 
 


Our primary business is the ownership and operation of neighborhood and community shopping centers. We do not distinguish or group our operations on a geographical basis, or any other basis, when measuring performance. Accordingly, we have one operating segment, which also serves as our reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States ("GAAP").  
 
Available Information
  
Our Internet website address is www.kiterealty.com. You can obtain on our website, free of charge, a copy of our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. 
 
Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our Board of Trustees—the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. Copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and our committee charters are also available from us in print and free of charge to any shareholder upon request. Any person wishing to obtain such copies in print should contact our Investor Relations department by mail at our principal executive office.

The Securities and Exchange Commission maintains a website (http://www.sec.gov) that contains reports, proxy statements, information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission.




ITEM 1A. RISK FACTORS 
 
The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by our management from time to time. These factors, among others, may have a material adverse effect on our business, financial condition, operating results and cash flows, including our ability to make distributions to our shareholders, and you should carefully consider them. It is not possible to predict or identify all such factors. You should not consider this list to be a complete statement of all potential risks or uncertainties. Past performance should not be considered an indication of future performance. 
 
We have separated the risks into three categories:
  
•risks related to our operations;
•risks related to our organization and structure; and
•risks related to tax matters.

RISKS RELATED TO OUR OPERATIONS 

Our business, financial condition, performance, and value are subject to risks and conditions associated with real estate assets and the real estate industry.

Our primary business is the ownership and operation of neighborhood and community shopping centers and other real estate assets. Our business, financial condition, results of operations, cash flow, per share trading price of our common shares, ability to satisfy debt service obligations, and ability to make distributions to shareholders are subject to, and could be materially and adversely affected by, risks associated with owning and operating such real estate assets including events and conditions that are beyond our control, such as periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur. See the risk factors described in “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.
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The COVID-19 pandemic is currently having a significant adverse impact on our business, financial performance and condition, operating results and cash flows, and future outbreaks of highly infectious or contagious disease or other public health crises could have similar adverse effects on our business. Further, the COVID-19 pandemic has caused severe disruptions in the U.S. and global economy and financial markets and could potentially create widespread business continuity issues of a magnitude and duration not yet known.

Since first being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The COVID-19 pandemic has had, and a future outbreak of highly infectious or contagious disease or other public health crisis, could similarly have, significant repercussions across local, regional, national and global economies and financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting a wide variety of control measures including states of emergency, mandatory quarantines, “shelter in place” orders, border closures, restrictions on types of businesses that may continue to operate, “social distancing” guidelines and other travel and gathering restrictions and practices that may significantly impact our business. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, with a particularly adverse effect on many of our tenants. A number of our tenants have announced temporary closures of their stores, reduced hours or significantly limited services, and requested rent deferral or rent abatement during this pandemic. Many economists predict that the outbreak will trigger, or has already triggered, a period of United States and global economic slowdown or recession.

The COVID-19 pandemic has disrupted our business and has had a significant adverse effect, and could continue to significantly adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows. The economic slowdown or recession could continue to significantly adversely affect our business, financial performance and condition even as some government restrictions related to COVID-19 are lifted or phased out and stores reopen. Additional factors that have already and/or may in the future negatively impact our ability to operate successfully during or following the COVID-19 pandemic or a similar event, or that could otherwise significantly adversely impact and disrupt our business, financial performance and condition, operating results and cash flows, include, among others:
•the inability of our tenants to meet their lease obligations to us due to (i) continuing or increased closures of stores at our properties resulting from government or tenant actions related to the pandemic; or (ii) local, regional or national economic conditions, including high unemployment and reduced consumer discretionary spending, caused by the pandemic (for example, as of February 11, 2021, approximately 5% of our billed base rent and recoveries for the fourth quarter were uncollected);
•liquidity issues resulting from (i) reduced cash flow from operations due to the pandemic, (ii) the impact that lower operating results could have on the financial covenants in our debt agreements, and (iii) difficulty in our accessing debt and equity capital on attractive terms, or at all, and severe disruptions or instability in the global financial markets or deteriorations in credit and financing conditions;
•our increased indebtedness and decreased operating revenues, which could increase our risk of default on our loans;
•an acceleration of changes in consumer behavior in favor of e-commerce over certain of our tenants’ stores due to responses to the pandemic and concerns about contracting COVID-19 or other highly infectious or contagious diseases;
•business continuity disruptions and a deterioration in the ability of us or our tenants to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants’ efficient operations;
•issues related to personnel management and remote working, including increased cybersecurity risk and other technology and communication issues and increased costs and other disruptions in the event that our employees become unable to work as a result of health issues related to COVID-19;
•the scaling back or delay of a significant amount of planned capital expenditures, including planned redevelopment projects, which could adversely affect the value of our properties;
•reduction or elimination of quarterly dividends; and
•continued volatility of our share price.

The significance, extent and duration of the impacts caused by the COVID-19 pandemic on our business, financial performance and condition, operating results and cash flows and those of our tenants, remains highly uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, including possible resurgences and mutations, the extent and effectiveness of the containment measures and other actions taken, the success of efforts to find and distribute drugs or vaccines and the responses of the overall economy, the financial markets and the population, particularly in areas in which we operate,
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once the current containment measures are lifted. Additional closures by our tenants of their stores, the continuing ability of our tenants to meet their lease obligations and/or the possibility of tenants filing for bankruptcy protection would reduce our cash flows, which would impact our ability to continue paying dividends to our shareholders at expected levels or at all. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. As a result, we cannot provide an estimate of the overall impact of the COVID-19 pandemic on our business or when, or if, we will be able to resume normal operations. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial performance and condition, operating results and cash flows.

Ongoing challenging conditions in the United States and global economies and the challenges facing our retail tenants and non-owned anchor tenants, including bankruptcies, financial instability and consolidations, may have a material adverse effect on our business, financial performance and condition, operating results and results of operations.cash flows. 
 
Certain sectorsWe derive the majority of our revenue from retail tenants who lease space from us at our properties, and our ability to generate cash from operations is dependent on the United States economy have experiencedrents that we are able to charge and could continue to experience sustained weakness.  collect.Over the past several years, thissustained weakness in certain sectors of the U.S. economy has resulted in the bankruptcy or weakened financial condition of a number of retailers, increased store closures, and reduced demand and rental rates for certain retail space. For example, Earth FareStein Mart, Ascena, and Pier 1Tailored Brands have filed for bankruptcy since the end of 2019,during 2020, and several other retailers, including Bed Bath & Beyond, The Gap,Office Depot, and Walgreens,Party City, recently announced multiple store closings. Additionally, in the event our tenants are involved in mergers or acquisitions or undertake other restructurings, such tenants may choose to consolidate, downsize or relocate their operations. These events, or other similar events with other retailers, and other economic conditions are beyond our control and could affect the overall economy as well as specific leases atproperties in our properties,portfolio, including the following (any of which could have a material adverse effect on our business, financial performance and condition, operating results and results of operations. General economic factors that are beyond our control, including, but not limited to, economic recessions, decreases in consumer confidence and spending, decreases in business confidence and business spending, reductions in consumer credit availability, increasing consumer debt levels, rising energy costs, higher tax rates or other changes in taxation, rising interest rates, business layoffs, downsizing and industry slowdowns, unemployment and/or rising or falling inflation, could have a negative impact on the business of our retail tenants.  In turn, this could have a material adverse effect on our business because current or prospective tenantscash flows):

•Collections. Tenants may among other things, (i) have difficulty paying their rent obligations when due as they struggle to sell goods and


services to consumers, (ii) be unwilling to enter into or renew leases with us on favorable terms or at all, (iii) seek to terminate their existing leases with us orthey may request rent concessions on such leases,deferrals, reductions or (iv) be forced to curtail operations or declare bankruptcy.  We are also susceptible to other developments and conditions thatabatements, which could have a material adverse effect on our business. These developments and conditions include relocations of businesses, changing demographics (including the number of households and average household income surrounding our properties), increasing consumer shopping via e-commerce, other changes in retailers' and consumers' preferences and behaviors, infrastructure quality, federal, state, and local budgetary constraints and priorities, increases in real estate and other taxes, increased government regulation and the related compliance cost, decreasing valuations of real estate, and other factors. 
Further, we continually monitor events and changes in circumstances that could indicate that the carrying value of our real estate assets may not be recoverable, and in the past, we have recorded impairment charges related to some properties.  Challenging market conditions could require us to recognize impairment charges with respect to one or more of our properties, or a loss on the disposition of one or more of our properties.  

The expansion of e-commerce may impact our tenants and our business.

The prominence of e-commerce continues to increase and its growth is likely to continue or accelerate in the future. Continued expansion of e-commerce could result in an adverse impact on some of our tenants and affect decisions made by current and prospective tenants in leasing space or operating their businesses, including reduction of the size or number of their retail locations in the future. We cannot predict with certainty how the growth in e-commerce will impact the demand for space at our properties or the revenue generated at our properties in the future. Although we continue to aggressively respond to these trends, including by entering into or renewing leases with tenants whose businesses are either more resistant to or are synergistic with, e-commerce (such as services, restaurant, grocery, specialty, experiential retailers and value retailers that have benefitted from omni-channel consumer trends), the risks associated with e-commerce could have a material adverse effect on the business outlook and financial results of our present and future tenants, which in turn could have a material adverse effect on our cash flow and results of operations.

If our tenants are unable to secure financing necessary to continue to operate and grow their businesses and pay us rent, we could be materially and adversely affected.
Many of our tenants rely on external sources of financing to operate and grow their businesses.  Future economic downturns and disruptions in credit markets may adversely affect our tenants’ ability to obtain debt financing at favorable rates or at all.  If our tenants are unable to secure financing necessary to operate or expand their businesses, they may be unable to meet their rent obligations to us or enter into new leases with us or be forced to declare bankruptcy and reject our leases with them, which could materially and adversely affect our cash flow and results of operations. 

Our business is significantly influenced by demand for retail space generally, a decrease in which may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.
Because our portfolio of properties consists primarily of community and neighborhood shopping centers, a decrease in the demand for retail space, due to the economic factors discussed above or otherwise, may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate property portfolio. The market for retail space has been, and could be in the future, adversely affected by weakness in the national, regional and local economies, the adverse financial condition of certain large retailing companies, the ongoing consolidation and contraction in the retail sector, the excess amount of retail space in a number of markets and increasing e-commerce and the perception such retail competition has on the value of shopping center assets. To the extent that any of these conditions occur, they could negatively affect market rents for retail space, which in turn could materially and adversely affect our financial condition, results of operations and cash flow, common share trading price, and ability to satisfy our debt service obligations and to pay distributions to our shareholders. 
flows.
The closure of any stores by any non-owned anchor tenant or the bankruptcy of a major tenant with leases in multiple locations, because of a deterioration of its financial condition or otherwise, could have a material adverse effect on our results of operations.
We derive the majority of our revenue from tenants who lease space from us at our properties. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our tenants. Our leases generally do not contain provisions designed to ensure the creditworthiness of our tenants. At any time, our tenants may experience a downturn in their business that may significantly weaken their financial condition, particularly in the face of online competition and during periods of economic or political uncertainty.  Economic and political uncertainty, including uncertainty related to taxation, may affect our tenants, joint venture partners, lenders, financial institutions and general economic conditions, such as consumer confidence and spending, business confidence and spending and the volatility of the stock market. In the event of


prolonged severe economic conditions, our tenants•Leasing. Tenants may delay or cancel lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare bankruptcy. Any of these actions could result in the termination of the tenant’s leases with us and the related loss of rental income. LeaseAlso, lease terminations or failure of a major tenant or non-owned anchor to occupy the premises could result in lease terminations or reductions in rent by other tenants in the same shopping centers because of contractual co-tenancy termination or rent reduction rights contained in some leases.  In such an event, we

•Re-leasing. We may be unable to re-lease the vacated space at attractive rents or at all. In some cases, it may take extended periods of time to re-lease a space, particularly one previously occupied by a major tenant or non-owned anchor. Additionally, in the event our tenants are involved in mergers or acquisitions with or by third parties or undertake other restructurings, such tenants may choose to consolidate, downsize or relocate their operations, resulting in terminating or not renewing their leases with us or vacating the leased premises. The occurrence of any of the situations described above, particularly if it involves a substantial tenant or a non-owned anchor with ground leases in multiple locations, could have a material adverse effect on our results of operations.

operations and cash flows.
We face potential material adverse effects from tenant bankruptcies, and we may be unable to collect balances due from such tenants, replace the tenant at current rates, or at all.
Tenant bankruptcies may increase during periods of difficult economic conditions. We cannotcould present difficulties for our business to collect rent or make any assurances thatclaims against a tenant filing for bankruptcy protection will continue to pay its rent obligations. in bankruptcy.

A bankruptcy filing by one of our tenants or a lease guarantor would legally prohibit us from collecting pre-bankruptcy debts, or unpaid rent, from that tenant or the lease guarantor, unless we receive an order from the bankruptcy court permitting us to do so. Such bankruptcies could delay, reduce, or ultimately preclude collection of amounts owed to us. A tenant in bankruptcy may attempt to renegotiate the lease or request significant rent concessions. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages, including pre-bankruptcy balances. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. There are restrictions under bankruptcy laws that limit the amount of the claim we can make for future rent under a lease if the lease is rejected. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold from a tenant in bankruptcy, which would result in a reduction in our cash flow and in the amount of cash available for distribution to our shareholders and could have a material adverse effect on our results of operations.

Moreover, we are continually re-leasing vacant spaces resulting from tenant lease terminations. The bankruptcyexpansion of a tenant, particularly an anchor tenant,e-commerce may make it more difficult to lease the remainder of the affected properties. Future tenant bankruptcies could materially adversely affect our properties or impact our ability to successfully executetenants and our re-leasing strategy. 

Our performance and value are subject to risks associated with real estate assets and the real estate industry.business. 
 
Our abilityThe prominence of e-commerce continues to make distributionsincrease and its growth is likely to our shareholders depends on our ability to generate substantial revenues from our properties. Periods of economic slowdowncontinue or recession, rising interest rates or declining demand for real estate, oraccelerate in the public perception that any of these events may occur,future, which could result in an adverse impact on some of our tenants and affect decisions made by current and prospective tenants in
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leasing space or operating their businesses, including reduction of the size or number of their retail locations in the future. We cannot predict with certainty how the growth in e-commerce will impact the demand for space at our properties or the revenue generated at our properties in the future. Although we continue to aggressively respond to these trends, including by entering into or renewing leases with tenants whose businesses are either more resistant to or are synergistic with, e-commerce (such as services, restaurant, grocery, specialty, essential retailers and value retailers that have benefitted from omni-channel consumer trends), the risks associated with e-commerce could have a general declinematerial adverse effect on the business outlook and financial results of our present and future tenants, which in rentsturn could have a material adverse effect on our cash flow and results of operations.
Our business is significantly influenced by demand for retail space generally, a decrease in which may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.

Because our portfolio of properties consists primarily of community and neighborhood shopping centers, a decrease in the demand for retail space, due to the economic factors discussed above elsewhere in this Annual Report on Form 10-K or an increased incidence of defaults under existing leases. Such events would materially and adversely affectotherwise, may have a greater adverse effect on our business, financial condition, results of operations, cash flow, percommon share trading price, of our common shares,and ability to satisfy our debt service obligations and ability to makepay distributions to shareholders. 
In addition, other events and conditions generally applicable to owners and operators of real property that are beyond our control may decrease cash available for distribution and the value of our properties. These events include but are not limited to: 
adverse changes in the national, regional and local economic climate, particularly in Florida, Indiana, Texas, Nevada, and North Carolina where 26%, 16%, 15%, 10%, and 10%, respectively, of our total base rent is earned;
tenant bankruptcies or insolvencies;
local oversupply of rental space, increased competition or reduction in demand for rentable space;
inability to collect rent from tenants or having to provide significant rent concessions to tenants;
vacancies or our inability to rent space on favorable terms or at all;
downward trends in market rental rates;
inability to finance property development, tenant improvements and acquisitions on favorable terms;


increased operating costs, including maintenance, insurance, utilities andshareholders than if we owned a more diversified real estate taxes and a decrease in our ability to recover such increased costs from our tenants;property portfolio.
the need to periodically fund the costs to repair, renovate and re-lease spaces in our operating properties;
decreased attractiveness of our properties to tenants;
weather and climate conditions that may increase energy costs and other weather-related expenses, such as snow removal costs and storm or flood damage repairs;
changes in laws and governmental regulations and costs of complying with such changed laws and governmental regulations, including those involving health, safety, usage, zoning, the environment and taxes;
civil unrest, acts of terrorism, earthquakes, hurricanes and other national disasters or acts of God that may result in underinsured or uninsured losses;
the relative illiquidity of real estate investments;
changing demographics (including the number of households and average household income surrounding our properties); and
changing customer traffic patterns.

We face significant competition, which may impedeimpact our ability to renew leases or re-lease space as leases expire or require us to undertake unexpectedrental rates, leasing terms and capital improvements. 
 
We compete for tenants with numerous developers, owners and operators of retail shopping centers, regional malls, and outlet malls, for tenants. These competitors includeincluding institutional investors, other REITs, including other retail REITs, and other owner-operators of community and neighborhood shopping centers, some of which own or may in the future own properties similar to ours in the same markets but which have greater capital resources.owner-operators. As of December 31, 2019,2020, leases representing 7.2%8.0% of our total annualized base rent were scheduled to expire in 2020.  If our2021.  Our competitors may have greater capital resources or be willing to offer space atlower rental rates below current market rates, or below the rental rates we currently charge ourmore favorable terms for tenants, we may be unable to lease on satisfactory terms and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our leases with them expire. We also may be required to offer moresuch as substantial rent reductions or abatements, tenant improvements, andother improvements, early termination rights, which may pressure us to reduce our rental rates, undertake unexpected capital improvements or accommodate requests for renovations, build-to-suit remodeling andoffer other improvements than we have done historically.  As a result,terms less favorable to us, which could adversely affect our financial condition, results of operations, cash flow, trading price of our common shares and ability to satisfy our debt service obligations and to pay distributions to our shareholders may be materially adversely affected. In addition, increased competition for tenants may require us to make capital improvements to properties that we would not have otherwise planned to make, which would reduce cash available for distributions to shareholders. IfAdditionally, if retailers or consumers perceive that shopping at other venues, online or by phone is more convenient, cost-effective or otherwise more attractive, our revenues and results of operations also may suffer. 

Because of our geographic concentrations, a prolonged economic downturn in certain states and regions could materially and adversely affect our financial condition and results of operations. 
 
The specific markets in which we operate may face challenging economic conditions that could persist into the future.  In particular, as of December 31, 2019,2020, rents from our owned square footage in the states of Florida, Indiana, Texas, Nevada,North Carolina, and North CarolinaNevada comprised 26%, 16%, 15%, 10%14%, 11%, and 10%11% of our base rent, respectively.  This level of concentration could expose us to greater economic risks than if we owned properties in more geographic regions. Adverse economic or real estate trends in Florida, Indiana, Texas, Nevada, North Carolina, and Nevada, or the surrounding regions, or any decrease in demand for retail space resulting from the local regulatory environment, business climate or fiscal problems in these states, could materially and adversely affect our financial condition, results of operations, cash flow, the trading price of our common shares and our ability to satisfy our debt service obligations and to pay distributions to our shareholders. 
 
DisruptionsWe depend on external financings to fulfill our capital needs, and disruptions in the financial markets could affect our ability to obtain financing on reasonable terms, or at all, and have other material adverse effects on our business. 
 
Partly because of the distribution requirements of being a REIT, we may not be able to fund all future capital needs, including capital for property development, redevelopment and acquisitions, with income from operations, and we rely on external financings to fulfill our capital needs. Disruptions in the financial markets generally, or relating to the real estate industry specifically, may adversely affect our ability to obtain debt financing on favorable terms or at all.all, which could impact our ability to acquire or develop properties when strategic opportunities exist, satisfy our principal and interest obligations or make distributions to shareholders.  These disruptions could impact the overall amount of equity and debt financing available, lower loan to value ratios, cause a tightening of lender underwriting standards and terms and cause higher interest rate spreads. As a result, we may be unable to refinance or extend our existing indebtedness on favorable terms or at all. We do not have any debt scheduled to mature through December 31, 2021. If we are not successful in refinancing our outstanding


debt when it becomes due, we may have to dispose of properties on disadvantageous terms, which could adversely affect our ability to service other debt and to meet our other obligations. While we currently have sufficient capacity under our unsecured revolving credit facilityCredit Facility and operating cash flows to retire outstanding debt maturing through 2025 in the event we are not able to refinance such debt when it becomes due, but our credit facilityCredit Facility has a maturity date in April 2022 (which may be extended for two additional periods of six
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months subject to certain conditions), and there can be no assurance that the credit facilityCredit Facility will remain outstanding or be renewed through 2025 or that our operating cash flows will continue to provide sufficient liquidity to retire any or all of our outstanding debt during this period or beyond. 
If economic conditions deteriorate in any of our markets, we may have to seek less attractive, alternative sources of financing and adjust our business plan accordingly. These factors may make it more difficult for us to sell properties or may adversely affect the selling price, as prospective buyers may experience increased costs of financing or difficulties in obtaining financing. These events also may make it difficult or costly to raise capital through the issuance of our common shares or preferred shares. The disruptions in the financial markets have had, and may continue to have, a material adverse effect on the market value of our common shares and other aspects of our business, as well as the economy in general. Furthermore, there can be no assurances that government responses to disruptions in the financial markets will restore consumer confidence, stabilize the markets or increase liquidity and the availability of equity or debt financing.
 
Some of our real estate assets have been subject to impairment charges and others may be subject to impairment charges in the future, which may negatively affect our net income. 
 
Our long-lived assets, primarily real estate held for investment, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable through future operations. In 2019, we recorded impairment charges totaling $37.7 million related to a reduction in the expected holding period of certain operating properties, which impairment charges negatively affected our net income for the applicable periods. There can be no assurances that we will not take additional charges in the future related to the impairment of our assets, which could result in an immediate negative adjustment to net income and have a material adverse effect on our results of operations in the period in which the charge is taken. Management reviews operational and development projects, land parcels and intangible assets on a property-by-property basis on at least a quarterly basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We evaluate whether there are any indicators, including poor operating performance or deteriorating general market conditions, that the carrying value of our real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. As part of this evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. This review for possible impairment requires certain assumptions, estimates, and significant judgment. Our estimated cash flows are based on several key assumptions, including projected net operating income, anticipated hold period, expected capital expenditures, and the capitalization rate used to estimate the property's residual value. These key assumptions are subjective in nature and could differ materially from actual results if the property was disposed. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss, and such loss could be material to our financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over estimated fair value. If the above-described negative indicators are not identified during our period property evaluations, management will not assess the recoverability of a property's carrying value. 
 
The estimation of the fair value of real estate assets is highly subjective, involving a significant degree of management judgment regarding various inputs, and is typically determined through comparable sales information and other market data if available or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors, including expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject toapproach, which involve a significant degree of management judgment. Changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

These subjective assessments have a direct impact on our net income because recording an impairment charge results in an immediate negative adjustment to net income. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.judgment regarding various inputs.
  
We had $1.15$1.17 billion of consolidated indebtedness outstanding as of December 31, 2019,2020, which may have a material adverse effect on our financial condition and results of operations and reduce our ability to incur additional indebtedness to fund our growth. 
 
Required repayments of debt and related interest charges, along with any applicable prepayment premium, may materially adversely affect our operating performance. We had $1.15$1.17 billion of consolidated outstanding indebtedness as of December 31, 2019.2020.  At December 31, 2019, $305.82020, $330.1 million of our debt bore interest at variable rates ($39.680.1 million when reduced by $266.2$250.0 million of fixed interest rate swaps). Interest rates are currently low relative to historical levels and may increase significantly in


the future. If our interest expense increased significantly, it could materially adversely affect our results of operations. For example, if market rates of interest on our variable rate debt outstanding, net of cash flow hedges, as of December 31, 20192020 increased by 1%, the increase in interest expense on our unhedged variable rate debt would decrease future cash flows by approximately $0.4$0.8 million annually. 
 
We may incur additional debt in connection with various development and redevelopment projects and may incur additional debt upon the future acquisition of operating properties. Our organizational documents do not limit the amount of indebtedness that we may incur. We may borrow new funds to develop or acquire properties. In addition, we may increase our mortgage debt by obtaining loans secured by some or all of the real estate properties we develop or acquire. We also may borrow funds if necessary to satisfy the requirement that we distribute to shareholders at least 90% of our annual “REIT taxable income” (determined before the deduction of dividends paid and excluding net capital gains) or otherwise as is necessary or advisable to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes or otherwise avoid paying taxes that can be eliminated through distributions to our shareholders. 
 
Our substantial debt could materially and adversely affect our business in other ways, including by, among other things:
 
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•requiring us to use a substantial portion of our funds from operations to pay principal and interest, which reduces the amount available for distributions;
•placing us at a competitive disadvantage compared to our competitors that have less debt;
•making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and
•limiting our ability to borrow more money for operating or capital needs or to finance development and acquisitions in the future.

Agreements with lenders supporting our unsecured revolving credit facilityCredit Facility and various other loan agreements contain default provisions which, amongacceleration features and other things, could result in the acceleration of principalcovenants that restrict our operating and interest payments or the termination of the facilities.acquisition activities. 
 
Our unsecured revolving credit facilityCredit Facility and various other debt agreements contain certain Events of Default which include, but are not limited to, failure to make principal or interest payments when due, failure to perform or observe any term, covenant or condition contained in the agreements, failure to maintain certain financial and operating ratios and other criteria, misrepresentations, acceleration of other material indebtedness and bankruptcy proceedings.  In the event of a default under any of these agreements, the lender would have various rights including, but not limited to, the ability to require the acceleration of the payment of all principal and interest due and/or to terminate the agreements and, to the extent such debt is secured, to foreclose on the properties.  The declaration of a default and/or the acceleration of the amount due under any such credit agreement could have a material adverse effect on our business, limit our ability to make distributions to our shareholders, and prevent us from obtaining additional funds needed to address cash shortfalls or pursue growth opportunities.

Certain of our loan agreements contain cross-default provisions which provide that a violation by the Company of any financial covenant set forth in our unsecured revolving credit facility agreement will constitute an event of default under such loans.  The agreements relating to our unsecured revolving credit facility,Credit Facility, unsecured term loan and seven-year unsecured term loan contain provisions providing that any “Event of Default” under one of these facilities or loans will constitute an “Event of Default” under the other facility or loan. In addition, these agreements relating to our unsecured revolving credit facility,Credit Facility, unsecured term loan and seven-year unsecured term loan, as well as the agreement relating to our senior unsecured notes, include a provision providing that any payment default under an agreement relating to any material indebtedness will constitute an “Event of Default” thereunder. These provisions could allow the lending institutions to accelerate the amount due under the loans.  If payment is accelerated,Our Credit Facility also contains certain coverage ratios and limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets may not be sufficient to repay such debtand engage in full,mergers and as a result, such an eventconsolidations and certain acquisitions. These restrictions or any acceleration or payment may have a material adverse effect on our cash flow, financial condition and results of operations.  We were in compliance with all applicable covenants under the agreements relating to our unsecured revolving credit facility,Credit Facility, seven-year unsecured term loan, and senior unsecured notes as of December 31, 2019,2020, although there can be no assurance that we will continue to remain in compliance in the future.
 
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. 
 
A significant amount of our indebtedness is secured by our real estate assets. If a property or group of properties is mortgaged to secure payment of debt andassets, which if we are unablefail to make the required periodic mortgage payments, could be subject to foreclosure by the lender or the holder of the


mortgage, could foreclose on the property, resulting in the loss of our investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but we would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code of 1986, as amended (the "Code"). If any of our properties are foreclosed on due to a default, our ability to pay cash distributions to our shareholders and our earnings will be limited.  In addition, as a result oflimited, and due to cross-collateralization or cross-default provisions, contained in certain of our mortgage loans, a default under one mortgage loan could result in a default on other indebtedness and cause us to lose other better performing properties, which could materially and adversely affect our financial condition and results of operations. 
 
We are subject to risks associated with hedging agreements.agreement, including potential performance failures by counterparties and termination costs.
 
We use a combination of interest rate protection agreements, including interest rate swaps, to manage risk associated with interest rate volatility. This may expose us to additional risks, including a risk that the counterparty to a hedging arrangement may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial effect on our results of operations or financial condition. Further, should we choose to terminate
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a hedging agreement, there could be significant costs and cash requirements involved to fulfill our initial obligation under such agreement. 
 
We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates.

As of December 31, 2019,2020, we had approximately $305.8$330.1 million of debt outstanding that was indexed to the London Interbank Offered Rate (“LIBOR”). In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021. It is not possible to predictAs a result, the further effectFederal Reserve Board and the Federal Reserve Bank of this announcement, any changes in the methods by which LIBOR is determined or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere.  In April 2018, the New York Federal Reserve commenced publishing an alternative reference rate,organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”), proposed by a group of major market participants convened by the U.S. Federal Reserve with participation by SEC Staff and other regulators, the Alternative Reference Rates Committee ("ARRC"). SOFR is based on transactions in the more robust U.S. Treasury repurchase market and has been proposed as theits preferred alternative to LIBOR for use in derivatives and other financial contracts that currently rely on LIBOR as a reference rate. ARRC has proposed a paced market transition plan to SOFR from LIBOR and organizations are currently working on industry-wide and company-specific transition plans as it relates to derivatives and cash markets exposed to LIBOR.contracts. At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions toor the administrator of LIBOR, whetherexact time when LIBOR rates will cease to be published or supported before or after 2021 or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere. Such developments and any other legal or regulatory changes in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination and, in certain situations, could result in LIBOR no longer being determined and published.supported. If a published U.S. dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows.




Our financial covenants may restrict our operating and acquisition activities.
Our unsecured revolving credit facility contains certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or certain acquisition transactions. In addition, certain of our mortgages contain customary covenants which, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property, to enter into new leases or materially modify existing leases, and to discontinue insurance coverage.  Failure to meet any of the financial


covenants could cause an event of default under and/or accelerate some or all of our indebtedness, which could have a material adverse effect on us. 
 
Our current and any future joint ventureventures, and the value and performance of such investments, could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners’ financial condition, any disputes that may arise between usthe structure and our joint venture partnersterms thereof and our exposure to potential losses from the actionsactivities of our joint venture partners.
 
As of December 31, 2019,2020, we owned interests in two of our operating properties through consolidated joint ventures and interests in four properties through unconsolidated joint ventures. In addition,ventures, and in the future, we currently own land held for developmentmay seek to co-invest with third parties through one consolidatedother joint venture.ventures.  Our joint ventures and the value and performance of such investments may involve risks not present with respect to our wholly owned properties, including the following:
we may shareshared decision-making authority with our joint venture partners, regarding certain major decisions affectingrestrictions on the ownership or operation of the joint venture and the joint venture property, such as the sale of the property or the making of additional capital contributions for the benefit of the property, which may prevent us from taking actions that are opposed by our joint venture partners;
prior consent of our joint venture partners may be required for a sale or transferability to a third party ofsell our interests in the joint venture, which restrictsventures without the other partners' consent, potential conflicts of interest or other disputes between us and our ability to disposepartners (including potential litigation or arbitration), potential losses or increased costs or expenses arising from actions taken in respect of our interest in the joint venture;
our joint venture partners might become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture;
our joint venture partners may have business interests or goals with respect to the property that conflict with our business interestsventures, and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property;
disputes may develop with our joint venture partners over decisions affecting the property or the joint venture, which may result in litigation or arbitration that would increase our expenses and distract our officers and/or trustees from focusing their time and effortpotential impacts on our business and possibly disrupt the day-to-day operations of the property, such as by delaying the implementation of important decisions until the conflict or dispute is resolved; and
we may suffer losses as a result of the actions of our joint venture partners with respect to our joint venture investments, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we may not control the joint venture.

In the future, we may seek to co-invest with third parties through joint ventures that may involve similar or additional risks. REIT.
  
Our future developments, redevelopments and acquisitions may not yield the returns we expect or may result in dilution in shareholder value. 
 
As of December 31, 2019,2020, we have onetwo development projectprojects under construction and threetwo redevelopment opportunities currently in the planning stage, including de-leasing space and evaluating development plans and costs with potential tenants and partners.Some of these plans include non-retail uses, such as multifamily housing. New development and redevelopment projects and property acquisitions are subject to a number of risks, including but not limited to: 
abandonment of development and redevelopment activitiesa project after expending resources to determine feasibility;
on due diligence, feasibility or other upfront costs, construction delays or cost overruns, that may increase project costs;
the failure of our pre-acquisition investigation of a propertyunknown risks, integration issues, tenant termination or building,withdrawal rights, and any related representations we may receive from the seller, to reveal various liabilities or defects or identify necessary repairs until after the property is acquired, which could reduce the cash flow from the property or increase our acquisition costs;
as a result of competition for attractive development and acquisition opportunities, we may be unable to acquire assets as we desire or the purchase price may be significantly elevated, which may impede our growth;
the failure to meet anticipated occupancy or rent levels within the projected time frame, if at all;


inability to operate successfully in new markets where new properties are located;
inability to successfully integrate new properties into existing operations;
exposure to fluctuations in the general economy due to the significant time lag between commencement and completion of development and redevelopment projects;
failure to receive required zoning, occupancy, land use and otherobtain governmental permits and authorizations and changes in applicable zoning and land use laws; and
difficulty or inability to obtain any required consents of third parties, such as tenants, mortgage lenders and joint venture partners.

In addition, if a project is delayed or if we are unable to lease designated space to anchor tenants, certain other tenants may have the right to terminate their leases or modify the terms in a manner that is disadvantageous to us. If any of these situations occur, development costs for a project may increase, which may result in reduced returns, or even losses, from such investments.third-party approvals. In deciding whether to acquire, develop, or redevelop a particular property, we make certain assumptions regarding the expected future performance of that property. If these properties do not perform as expected,property, and our financial performance may be materially and adversely affected, or in the case of an unsuccessful redevelopment project, our entire investment could be at risk for loss, or an impairment charge could occur. In addition, the issuance of equity securities as consideration for any significant acquisitions could be dilutive to our shareholders.
 
To the extent that we pursue acquisitions in the future, we may not be successful in acquiring desirable operating properties for which we face significant competition, or identifying development and redevelopment projects that meet our investment criteria, both of which may impede our growth. 
 
From time to time, consistent with our business strategy, we evaluate the market and may acquire properties when we believe strategic opportunities exist. When we pursue acquisitions, we may be unable to acquire a desired property because offace competition from other real estate investors with substantial capital, including other REITs and institutional investment funds. Even if we are ablefunds, which could limit our ability to acquire a desired property, competition from other potential acquirers may significantlyproperties, increase the purchase price we are required to pay, reducing the return to our shareholders.shareholders, and we may agree to material restrictions or limitations in the acquisition agreements. Additionally, we may not be successful in identifying suitable real estate properties or other assets that meet our development or redevelopment criteria, or we may fail to complete developments, redevelopments, acquisitions or investments on satisfactory terms. Failure to identify or complete developments, redevelopments or acquisitions could slow our growth, which could in turn materially adversely affect our operations.  Furthermore, when we pursue acquisitions, we may agree to provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as limitations on the amount of debt that can be placed or repaid on that property. These factors and any others that wouldcould impede our ability to respond to adverse changes in the performance of our properties couldgrowth and adversely affect our financial condition and results of operations.
 
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Development and redevelopment activities may be delayed or may not perform as expected and, in the case of an unsuccessful project, our entire investment could be at risk for loss.
We currently have one development project under construction. We have also identified three additional redevelopment opportunities and expect to commence redevelopment in the future. In connection with any development or redevelopment of our properties, we will bear certain risks, including the risk of construction delays or cost overruns that may increase project costs and make a project uneconomical, the risk that occupancy or rental rates at a completed project will not be sufficient to enable us to pay operating expenses or earn the targeted rate of return on investment, and the risk of incurrence of predevelopment costs in connection with projects that are not pursued to completion. In addition, various tenants may have the right to withdraw from a property if a development or redevelopment project is not completed on schedule and required third-party consents may be withheld. In the case of an unsuccessful redevelopment project, our entire investment could be at risk for loss, or an impairment charge could occur. 
We may not be able to sell properties when appropriate or on terms favorable to us and could, under certain circumstances, be required to pay a 100% "prohibited transaction" penalty tax related to the properties we sell. 
 
Real estate property investments generally cannot be sold quickly. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties, and we cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future.  Before a property can be sold, we may need to make expenditures to correct defects or to make improvements. We may not have funds available to correct such defects or to make such improvements, and if we cannot do so, we might not be able to sell the property or might be required to sell the property on unfavorable terms. We may


not be able to dispose of any of the properties on terms favorable to us or at all, and each individual sale will depend on, among other things, economic and market conditions, individual asset characteristics and the availability of potential buyers and favorable financing terms at the time. Further, we will incur marketing expenses and other transaction costs in connection with dispositions, and the process of marketing and selling a large pool of properties may distract the attention of our personnel from the operation of our business.
 
Also, the tax laws applicable to REITs impose a 100% penalty tax on any net income from “prohibited transactions.” In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. The need to avoid prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell. Therefore, we may be unable to adjust our portfolio mix promptly in response to market conditions, which may adversely affect our financial position. In addition, we will be subject to income taxes on gains from the sale of any properties owned by any taxable REIT subsidiary.subsidiary ("TRS). 
 
Uninsured losses or losses in excess of insurance coverage could materially and adversely affect our cash flow, financial condition and results of operations. 
 
We do not carry insurance for generally uninsurable losses such as loss from riots, war or acts of God, and, in some cases, flooding.flooding, and insurance companies may no longer offer coverage against certain types of losses, such as environmental liabilities or other catastrophic events, or, if offered, the expense of obtaining such coverage may not be justified. Some of our policies, such as those covering losses due to terrorism and floods, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover all losses.losses, and in the future, we may be unable to renew or duplicate our current insurance coverage at adequate levels or at reasonable prices.  In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property, on the premises, due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination) and, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. However, tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies.  If we experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties.properties, and the loss could seriously disrupt our operations, delay revenue and result in significant expenses. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical or undesirable to use insurance proceeds to replace a property after it has been damaged or destroyed. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. 
 
Insurance coverage on our propertiesOur expenses may be expensiveremain constant or difficult to obtain, exposing us to potential risk of loss.
In the future, we may be unable to renew or duplicate our current insurance coverage at adequate levels or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts, environmental liabilities, or other catastrophic events including hurricanes and floods, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property after a covered period of time, but still remain obligated for any mortgage debt or other financial obligations related to the property. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Events such as these could adversely affect our results of operations and our ability to meet our financial obligations. 
Rising operating expensesincrease, which could reduce our cash flow and funds available for future distributions, particularly if such expenses are not offset by an increase in corresponding revenues. 
 
Our existing properties and any properties we develop or acquire in the future are and will continue to be subject to operating risks common to real estate in general, any or all of which may negatively affect us. The expenses of owning and operating properties generally do not decrease, and may increase, when circumstances such as market factors and competition cause a reduction in income from the properties. Our properties continue to be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses, regardless of occupancy rates. As a result, if any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds for that property’s operating expenses. Therefore, constant or rising operating expenses could reduce our cash flow and funds available for future distributions, particularly if such expenses are not offset by corresponding revenues.



Our business faces potential risks associated with natural disasters, severe weather conditions and climate change and related legislation and regulations, which could have an adverse effect on our cash flow and operating results.
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Global climate change continues to attract considerable public and scientific attention with widespread concern about the impact of human activity on the environment, including effects on the frequency and scale of natural disasters.disasters, and federal and state legislation and regulations in these areas continue to pose risks. Changing weather patterns and climatic conditions may affect the predictability and frequency of natural disasters in some parts of the world and create additional uncertainty as to future trends and exposures, including certain areas in which our portfolio is concentrated such as Texas, Indiana, Florida, Nevada,North Carolina, and North Carolina.Nevada. Our properties are located in many areas that are subject to or have been affected by natural disasters and severe weather conditions such as hurricanes, tropical storms, tornadoes, earthquakes, droughts, floods and fires. Over time, the occurrence of natural disasters, severe weather conditions and changing climatic conditions can delay new development and redevelopment projects, increase repair costs and future insurance costs and negatively impact the demand for lease space in the affected areas, or in extreme cases, affect our ability to operate the properties at all. These risks could have an adverse effect on our cash flow and operating results.


Regulation regarding climate change may adversely affect our financial condition and results of operations.

Changes in federal and state legislation and regulations on climate changecontrol could result in increased costs and expenses, such as utility expenses and/or capital expenditures to improve the energy efficiency of our existing properties, or other related aspects of our propertiespotentially result in order to comply with such regulations or otherwise adapt to climate change. These regulations may require unplanned capital improvements, and increased engagement to manage occupant energy use, which is a large driver of building performance. If our properties cannot meet performance standards, we could be exposed to fines for non-compliance, as well as a decrease in demandnon-compliance. These risks could have an adverse effect on our cash flow and a decline in value. As a result, our financial condition and results of operations could be adversely affected.operating results.

We could incur significant costs related to environmental matters.matters, and our efforts to identify environmental liabilities may not be successful. 
 
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination. Some of the properties in our portfolio contain, may have contained or are adjacent to or near other properties that have contained or currently contain underground storage tanks for petroleum products or other hazardous or toxic substances, and some of our properties have tenants that may use hazardous or toxic substances in the routine course of their businesses. Indemnities in our leases may not fully protect us in the event that a tenant becomes insolvent. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral. In connection with the ownership, operation and management of real properties, we are potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and injuries to persons and property.property, liens on contaminated sites, and restrictions on operations.  We may also be liable to third parties for damage and injuries resulting from environmental contamination emanating from the real estate.  Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination.  Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property. 
Some of the properties in our portfolio contain, may have contained or are adjacent to or near other properties that have contained or currently contain underground storage tanks for petroleum products or other hazardous or toxic substances. These tanks may have released, or have the potential to release, such substances into the environment. In addition, some of our properties have tenants that may use hazardous or toxic substances in the routine course of their businesses. In general, these tenants have covenanted in their leases with us to use these substances, if any, in compliance with all environmental laws and have agreed to indemnify us for any damages that we may suffer as a result of their use of such substances. However, these lease provisions may not fully protect us in the event that a tenant becomes insolvent. Finally, certain of our properties have contained asbestos-containing building materials or ACBM,("ACBM") and other properties may have contained such materials based on the date of its construction. Environmental laws require that ACBM be properly managed and maintained, and may impose fines and penalties on building owners or operators for failure to comply with these requirements. The laws also may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. 
Our efforts to identify environmental liabilities may not be successful.
 
We test our properties for compliance with applicable environmental laws on a limited basis. Webasis, and we cannot give assurance that: 

that existing environmental studies with respect to our properties reveal all potential environmental liabilities;


any previous owner, occupantliabilities or tenant of one of our properties did not create any material environmental condition not known to us;
thethat current environmental condition of our properties will not be affected by tenants and occupants, by the condition of nearby properties, or by other unrelated third parties; or
future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in environmental liabilities.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely affect our cash flows and results of operations. 
 
Our properties must comply with Title III of the ADA to the extent that such properties are public accommodations as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Noncompliance with the ADA could result in orders requiring us to spend substantial sums to cure violations, pay attorneys' fees, or pay other amounts. Although we believe the properties in our portfolio substantially comply with present requirements of the ADA, we have not conducted an audit or investigation of all of our properties to determine our compliance. While thecompliance, and while our tenants to whom our properties are leased are obligated by law to comply with the ADA provisions, and typically under tenant leases are obligated to cover costs associated with compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basisfaster timelines than anticipated, the ability of these tenants to cover costs could be adversely affected. As a result, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our results of operations and financial condition. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. We may be required to make substantial capital expenditures to comply with, and we may be restricted in our ability to renovate the properties subject to, those requirements. The resulting expenditures and restrictionsthese requirements, which could have a material adverse effect on our ability to meet our financial obligations, as well asaffect our cash flows and results of operations.

Inflation may adversely affect our financial condition and results of operations. 
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Most of our leases contain provisions requiring the tenant to pay a share of operating expenses, including common area maintenance real estate taxes and insurance.  In many of our leases, the tenant's obligation for common area maintenance or other operating expenses may be based on a fixed amount ofor fixed percentage, not subject to adjustment for inflation. However, increased inflation could have a more pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time.  It may also limit our ability to recover all of our operating expenses. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our average rents, and in some cases, our percentage rents, where applicable.  In addition, renewals of leases or future leases may not be negotiated on current terms, in which event we may recover a smaller percentage of our operating expenses. 
 
Rising interest rates could increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distributions to our shareholders, as well as decrease our share price, if investors seek higher yields through other investments.

An environment of rising interest rates could lead investors to seek higher yields through other investments, which could adversely affect the market price of our common shares. One of the factors that may influence the price of our common shares in public markets is the rate of annual cash distributions we pay as compared with the yields on alternative investments. Several other factors, such as governmental regulatory action and tax laws, could have a significant impact on the future market price of our common shares. In addition, increases in market interest rates could result in increased borrowing costs for us, which may adversely affect our cash flow and the amounts available for distributions to our shareholders.

We and our tenants face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions.

We and our tenants rely extensively on computer systems to process transactions and manage our business,respective businesses, and although we utilize various measures are utilized to prevent, detect and mitigate threats, we have been targeted by e-mail phishing attempts and scams in the past, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be both individual and/or highly organized attempts by very sophisticated


hacking organizations. A cybersecurity attack could compromise the confidential information of our employees, tenants, and vendors. Additionally, we rely on a number of service providers and vendors, and cybersecurity risks at these service providers and vendors create additional risks for our information and business. A successful attack could lead to identity theft, fraud or other disruptions to our business operations, any of which may negatively affect our results of operations.

We employ a number of measures to prevent, detect and mitigate these threats. These prevention measures include password protection, frequent password change events, firewall detection systems, frequent backups, a redundant data system for core applications and penetration testing. We conduct periodic assessments of (i)and use the nature, sensitivity and location of information that we collect, process and store and the technology systems we use; (ii) internal and external cybersecurity threats to and vulnerabilities of our information and technology systems; (iii) security controls and processes currently in place; (iv) the impact should our technology systems become compromised; and (v) the effectiveness of our management of cybersecurity risk. The results of these assessments are usedsuch to create and implement a strategy designed to prevent, detect and respond to cybersecurity threats. However, there is no guarantee such efforts will be successful in preventing a cyber-attack.  
 
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE 
 
Our organizational documents contain provisions that generally would prohibit any person (other than members of the Kite family who, as a group, are currently allowed to own up to 21.5% of our outstanding common shares) from beneficially owning more than 7% of our outstanding common shares (or up to 9.8% in the case of certain designated investment entities, as defined in our declaration of trust), which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders. 
 
Our organizational documents contain provisions that may have an anti-takeover effect and inhibit a change inof control transaction, which could prevent our management.shareholders from being paid a premium for their common shares over the then-prevailing market prices. 
 
(1)  There are ownership limits and restrictions on transferability in our declaration of trust. In order for us to qualify as a REIT, no more than 50% of the value of our outstanding shares may be owned, actually or constructively, by five or fewer individuals at any time during the last half of each taxable year. To make sure that we will not fail to satisfy this requirement and for anti-takeover reasons, our declaration of trust generally prohibits any shareholder (other than an excepted holder or certain designated investment entities, as defined in our declaration of trust) from owning (actually, constructively or by attribution), more than 7% of the value or number of our outstanding common shares. Our declaration of trust provides an excepted holder limit that allows members of the Kite family (Al Kite, John Kite and Paul Kite, their family members and
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certain entities controlled by one or more of the Kites), as a group, to own more than 7% of our outstanding common shares, so long as, under thesubject to applicable tax attribution rules, no one excepted holder treated as an individual would hold more than 21.5% of our common shares, no two excepted holders treated as individuals would own more than 28.5% of our common shares, no three excepted holders treated as individuals would own more than 35.5% of our common shares, no four excepted holders treated as individuals would own more than 42.5% of our common shares, and no five excepted holders treated as individuals would own more than 49.5% of our common shares.rules. Currently, one of the excepted holders would be attributed all of the common shares owned by each other excepted holder and, accordingly, the excepted holders as a group would not be allowed to own in excess of 21.5% of our common shares. If at a later time, there were not one excepted holder that would be attributed all of the shares owned by the excepted holders as a group, the excepted holder limit would not permit each excepted holder to own 21.5% of our common shares. Rather, the excepted holder limit would prevent two or more excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common shares than the maximum amount of common shares that could be owned by any one excepted holder (21.5%), plus the maximum amount of common shares that could be owned by any one or more other individual common shareholders who are not excepted holders (7%). Certain entities that are defined as designated investment entities in our declaration of trust, which generally include pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of our outstanding common shares, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the 7% ownership limit if those beneficial owners owned directly their proportionate share of the common shares owned by the designated investment entity. Our Board of Trustees may waive, and has waived in the past, the 7% ownership limit or the 9.8% designated investment entity limit for a shareholder that is not an individual if such shareholder provides information and makes representations that are satisfactorylimits subject to the Board of Trustees, in its reasonable discretion, to establish that such person’s ownership in excess of the 7% limit or the 9.8% limit, as applicable, would not jeopardize our qualification as a REIT.certain conditions. In addition, our declaration of trust contains certain other ownership restrictions intended to prevent us from earning income from related parties if such income would cause us to fail to comply with the REIT gross income requirements. The various ownership restrictions may:

may discourage a tender offer or other transactionschange of control transaction or compel a change in management or control that might involve a premium price forshareholder who has acquired our shares or otherwise be in excess of these ownership limitations to dispose of the best interestsadditional shares. Any acquisition of our shareholders; orcommon shares in violation of these ownership restrictions will be void ab initio and will result in automatic transfers of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees.


•
compel a shareholder who has acquired our shares in excess of these ownership limitations to dispose of the additional shares and, as a result, to forfeit the benefits of owning the additional shares. Any acquisition of our common shares in violation of these ownership restrictions will be void ab initio and will result in automatic transfers of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees.

(2)   Our declaration of trust permits our Board of Trustees to issue preferred shares with terms that may discourage a third party from acquiring us. Our declaration of trust permits our Board of Trustees to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our Board of Trustees. Thus, our Board of Trustees could authorize the issuance of additional preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price of our shares. In addition, anyAny preferred shares that we issue likely would rank senior to our common shares with respect to payment of distributions, in which case we could not pay any distributions on our common shares until full distributions were paid with respect to such preferred shares. 
 
(3)   Our declaration of trust and bylaws contain other possible anti-takeover provisions. Our declaration of trust and bylaws contain other provisions, such as advance notice requirements for shareholder proposals, the ability of our Board of Trustees' to reclassify shares or issue additional shares, and the absence of cumulative voting rights that may have the effect of delaying, deferring or preventing a change in control of our company or the removal of existing management and, as a result, could prevent our shareholders from being paid a premium for their common shares over the then-prevailing market prices. These provisions include advance notice requirements for shareholder proposals and our Board of Trustees’ power to reclassify shares and issue additional common shares or preferred shares and the absence of cumulative voting rights.  Furthermore, our Board of Trustees has the sole power to amend our bylaws and may amend our bylaws in a way that may have the effect of delaying, deferring or preventing a change in control of our company or the removal of existing management or may otherwise be detrimental to your interests.management. 

Certain provisions of Maryland law could inhibit changes in control. 
 
Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

“businessincludes “business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations between us andwith an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these combinations;business combinations, and
“control “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer)certain acquisitions have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances.

We Although we have opted out of these provisions of Maryland law. However,law, our Board of Trustees may opt to make these provisions applicable to us at any time.time, which may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of such shares. 
 
A substantial number of common shares eligible for future issuance or sale could cause our common share price to decline significantly and may be dilutive to current shareholders. 
 
Our declaration of trust authorizes our Board of Trustees to, among other things, issue additional common shares without shareholder approval. The issuance of substantial numbers of our common shares in the public market or the sale by existing shareholders, or the perception that such issuances or sales might occur, could adversely affect the per share trading price of our common shares. In addition, any such issuance couldshares, dilute our existing shareholders' interests in our company. Furthermore, ifcompany or impact our shareholders sell, or the market perceives that our shareholders intend to sell, substantial amounts of our common shares in the public market, the market price of our common shares could decline significantly. These sales also might make it more difficult for usability to sell equity or equity-related securities


in the future at a time and price that we deem appropriate. As of December 31, 2019,2020, we had outstanding 83,963,36984,187,999 common shares, substantially all of which are freely tradable.  In addition, 2,110,0372,523,861 units of our Operating Partnership were
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owned by our executive officers and other individuals as of December 31, 2019,2020, and are redeemable by the holder for cash or, at our election, common shares. Pursuant to registration rights of certain of our executive officers and other individuals, we filed a registration statement with the SEC to register common shares issued (or issuable upon redemption of units in our Operating Partnership) in our formation transactions. As units are redeemed for common shares, the market price of our common shares could drop significantly if the holders of such shares sell them or are perceived by the market as intending to sell them. 
 
Certain officers and trustees may have interests that conflict with the interests of shareholders. 
 
Certain of our officers own limited partner units in our Operating Partnership. These individuals may have personal interests that conflict with the interests of our shareholders with respect to business decisions affecting us and our Operating Partnership, such as interests in the timing and pricing of property sales or refinancing transactions in order to obtain favorable tax treatment. As a result, the effect of certain transactions on these unit holders may influence our decisions affecting these properties. 
 
Departure or loss of our key officers could have an adverse effect on us. 
 
Our future success depends, to a significant extent, upon the continued services of our existing executive officers. Theofficers, whose experience of our executive officers in the areas of real estate acquisition, development, finance and management is a critical element of our future success. We have entered into employment agreements with certain members of executive management. Each agreement will continue to renew after expiration of its initial term or applicable renew periods unless we or the individual elects not to renew the agreement. If one or more of our key executive officers were to die, become disabled or otherwise leave our employ, we may not be able to replace this person with an executive of equal skill, ability, and industry expertise within a reasonable timeframe. Until suitable replacementstimeframe, which could be identified and hired,negatively affect our operations and financial condition could be negatively affected.


We depend on external capital to fund our capital needs.
To qualify as a REIT, we are required to distribute to our shareholders each year at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains). In order to eliminate U.S. federal income tax, we are required to distribute annually 100% of our net taxable income, including capital gains. Partly because of these distribution requirements, we may not be able to fund all future capital needs, including capital for property development, redevelopment and acquisitions, with income from operations. We therefore may have to rely on third-party sources of capital, which may or may not be available on favorable terms, if at all.  Any additional debt we incur will increase our leverage, expose us to the risk of default and may impose operating restrictions on us, and any additional equity we raise could be dilutive to existing shareholders.  Our access to third-party sources of capital depends on a number of things, including: 
general market conditions;
the market’s perception of our growth potential;
our current debt levels;
our current and potential future earnings;
our cash flow and cash distributions;
our ability to qualify as a REIT for U.S. federal income tax purposes; and
the market price of our common shares.

If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our principal and interest obligations or make distributions to our shareholders. condition.
 
Our rights and the rights of our shareholders to take action against our trustees and officers are limited. 
 
Maryland law provides that a director or officer has limited liability in that capacity if he or she performs his or her duties in good faith and in a manner that he or she reasonably believes to be in our best interests and that an ordinarily prudent person


in a like position would use under similar circumstances. Our declaration of trust and bylaws require us to indemnify our trustees and officers for actions taken by them in those capacities to the extent permitted by Maryland law. 
 
Our shareholders have limited ability to prevent us from making any changes to our policies that they believe could harm our business, prospects, operating results or share price. 
 
Our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, will be determined by our management and, in certain cases, approved by our Board of Trustees. These policies may be amended or revised from time to time at the discretion of our Board of Trustees without a vote of our shareholders. This means that our shareholders will have limited control over changes in our policies. Such changes in our policies intended to improve, expand or diversify our business may not have the anticipated effects and consequently may adversely affect our business and prospects, results of operations and share price. 
 
Our common share price could be volatile and could decline, resulting in a substantial or complete loss of our shareholders’ investment. 
 
The stock markets (including The New York Stock Exchange (the “NYSE”) on which we list our common shares) have experienced and from time to time do experience significant price and volume fluctuations. The market price of our common shares could be similarly volatile, and investors in our shares may experience a decrease in the value of their shares, including decreases unrelatedthat may not be related to our operating performance or prospects. Amongprospects, including the market conditions that may affect the market price of our publicly traded securities are the following: 
our financial condition and operating performance and the performance of other similar companies;
actual or anticipated differencesrisk factors described in our quarterly operating results;
changes"Forward-Looking Statements" included elsewhere in our revenues or earnings estimates or recommendations by securities analysts;
perceived or actual effects of e-commerce competition;
bankruptcy or negative publicity about one or more of our larger tenants;
our credit or analyst ratings;
publication by securities analysts of research reports about us, our industry, or the retail industry;
additions and departures of key personnel;
strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy;
the reputation of REITs generally and the reputation of REITs with portfolios similar to ours;
the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies);
an increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for our shares;
the passage of legislation or other regulatory developments that adversely affect us or our industry including tax reform;
speculation in the press or investment community;
actions by institutional shareholders, hedge funds or other investors;
increases or decreases in dividends;
changes in accounting principles;
terrorist acts; and
general market conditions, including factors unrelated to our performance.



 In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources. this Annual Report on From 10-K.
 
Changes in accounting standards may adversely impact our financial results.

The Financial Accounting Standards Board (the “FASB”), in conjunction with the SEC, has issued and may issue key pronouncements that impact how we account for our material transactions, including, but not limited to, lease accounting, business combinations and the recognition of other revenues. We are unable to predict which, if any, proposals may be issued in the future or what level of impact any such proposal could have on the presentation of our consolidated financial statements, our results of operations and the financial ratio required by our debt covenants.

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The cash available for distribution to shareholders may not be sufficient to pay distributions at expected levels, nor can we assure you of our ability to make distributions in the future. Wefuture, and we may use borrowed funds to make cash distributions and/or may choose to make distributions in partypart payable in our common shares. 
 
To qualify as a REIT, we are required to distribute to our shareholders each year at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains). In order to eliminate U.S. federal income tax, we are required to distribute annually 100% of our net taxable income, including capital gains.If cash available for distribution generated by our assets decreases in future periods from expected levels, our inability to make expected distributions could result in a decrease in the market price of our common shares.  All distributions will be made at the discretion of our Board of Trustees and will depend on our earnings, our financial condition, maintenance of our REIT qualification and other factors as our Board of Trustees may deem relevant from time to time. We may not be able to make distributions in the future. In addition, some of our distributions may include a return of capital. To the extent that we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder’s adjusted tax basis in his or her shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such shares. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. Finally, although we do not currently intend to do so, in order to maintain our REIT qualification, we may make distributions that are in part payable in our common shares. Taxable shareholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits and may be required to sell shares received in such distribution or may be required to sell other shares or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a significant number of our shareholders determine to sell common shares in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our common shares.

Future offerings of debt securities, which would be senior to our equity securities, may adversely affect the market prices of our common shares. 
 
In the future, we may attempt to increase our capital resources by making offerings of debt securities, including unsecured notes, medium term notes, and senior or subordinated notes.notes, as well as debt securities that are convertible into equity. Holders of our debt securities will generally be entitled to receive interest payments, both current and in connection with any liquidation or sale, prior to the holders of our common shares being entitled to receive distributions. Future offerings of debt securities, or the perception that such offerings may occur, may reduce the market prices of our common shares and/or the distributions that we pay with respect to our common shares. Because we may generally issue such debt securities in the future without obtaining the consent of our shareholders, our shareholders will bear the risk of our future offerings reducing the market prices of our equity securities. 

If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common shares, our share price and trading volume could be negatively affected.RISKS 
The trading market for our shares is influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us downgrade our common shares or publish inaccurate or unfavorable research about our business, our share price may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our common share price or trading volume to decline and our shares to be less liquid. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire additional properties or other businesses by using our shares as consideration, which in turn could materially adversely affect our business. In addition, the stock market in general, and the NYSE and REITs in particular, have within the last year experienced significant price and volume fluctuations. These broad market and industry factors may decrease the market price of our shares, regardless of our actual operating performance. For these reasons, among others, the market price of our shares may decline substantially and quickly. 


RELATED TO TAX RISKSMATTERS
 
Failure of our company to qualify as a REIT would have serious adverse consequences to us and our shareholders. 
 
We believe that we have qualified for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2004.  We intend to continue to meet the requirements for qualification and taxation as a REIT, but we cannot assure shareholders that we will qualify as a REIT. We have not requested and do not plan to request a ruling from the IRS that we qualify as a REIT, and the statements in this Annual Report on Form 10-K are not binding on the IRS or any court. As a REIT, we generally will not be subject to U.S. federal income tax on our income that we distribute currently to our shareholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws. In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers. We also are required to distribute to our shareholders with respect to each year at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains). The fact that we hold substantially all of our assets through our Operating Partnership and its subsidiaries and joint ventures further complicates the application of the REIT requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT status, and, given the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations, we cannot provide any assurance that we will continue to qualify as a REIT. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new ruling, that make it more difficult, or impossible, for us to remain qualified as a REIT. 
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If we fail to qualify as a REIT for U.S. federal income tax purposes and are unable to avail ourselves of certain savings provisions set forth in the Code:

•We would be taxed as a non-REIT "C" corporation, which under current laws, among other things, means not being able to take a deduction for distributions to shareholders in computing our taxable income or pass through long term capital gains to individual shareholders at favorable rates and being subject to the federal alternative minimum tax (for taxable years beginning before December 31, 2017) and possibly increased state and local taxes;

•We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify. Since we are the successor to Inland Diversified Real Estate Trust, Inc. ("Inland Diversified") for U.S. federal income tax purposes as a result of its merger with us (the "Merger"), the rule against re-electing REIT status following a loss of such status also would apply to us if Inland Diversified failed to qualify as a REIT in any of its 2012 through 2014 tax years.  Although Inland Diversified believed that it was organized and operated in conformity with the requirements for qualification and taxation as a REIT for each of its taxable years prior to the Merger, Inland Diversified did not request a ruling from the IRS that it qualified as a REIT, and thus no assurance can be given that it qualified as a REIT;qualify;

•We would have to pay significant income taxes, which would reduce our net earnings available for investment or distribution to our shareholders. Moreover, such failure would cause an event of default under our unsecured revolving credit facilityCredit Facility and unsecured term loans and may adversely affect our ability to raise capital and to service our debt.  This likely would have a significant adverse effect on our earnings and the value of our securities. In addition, we would no longer be required to pay any distributions to shareholders; and

•We would be required to pay penalty taxes of $50,000 or more for each such failure.  

If Inland Diversified failed to qualify as a REIT for a taxable year before the Merger or for the taxable year that includes the Merger and no relief is available, in connection with the Merger we would succeed to any earnings and profits accumulated by Inland Diversified for the taxable periods that it did not qualify as a REIT, and we would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including significant interest payments to the IRS) to eliminate such earnings and profits. 
 
We will pay some taxes even if we qualify as a REIT. 
 
Even if we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay certain U.S. federal, state and local taxes on our income and property. For example, we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable income (including capital gains). Additionally, we will be subject to a 4% nondeductible excise tax on


the amount, if any, by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we will undertake sales of assets if those assets become inconsistent with our long-term strategic or return objectives, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise. The need to avoid prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell. 
 
In addition, any net taxable income earned directly by our taxable REIT subsidiaries,TRS, or through entities that are disregarded for U.S. federal income tax purposes as entities separate from our taxable REIT subsidiaries,TRS, will be subject to U.S. federal and possibly state corporate income tax. We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiary,TRS, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiaryTRS will be subject to an appropriate level of U.S. federal income taxation. For example, a taxable REIT subsidiaryTRS is limited in its ability to deduct interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by the taxable REIT subsidiaries if the economic arrangements between the REIT, the REIT’s tenants, and the taxable REIT subsidiaryTRS are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to U.S. federal income tax on that income because not all states and localities treat REITs the same way they are treated for U.S. federal income tax purposes. To the extent that we and our affiliates are required to pay U.S. federal, state and local taxes, we will have less cash available for distributions to our shareholders.
If Inland Diversified failed to qualify as a REIT for a taxable year before the Merger or the taxable year that includes the Merger and no relief is available, as a result of the Merger (a) we would inherit any corporate tax liabilities of Inland Diversified for Inland Diversified’s open tax years possibly extending back six years or Inland Diversified’s 2013 and 2014 tax years and (b) we would be subject to tax on the built-in gain on each asset of Inland Diversified existing at the time of the Merger if we were to dispose of the Inland Diversified asset within five years following the Merger (i.e. before  July 1, 2019). 
 
REIT distribution requirements may increase our indebtedness. 
 
We may be required from time to time, under certain circumstances, to accrue income for tax purposes that has not yet been received. In such event, or upon our repayment of principal on debt, we could have taxable income without sufficient cash to enable us to meet the distribution requirements of a REIT. Accordingly, we could be required to borrow funds or liquidate investments on adverse terms in order to meet these distribution requirements. Additionally, the sale of properties resulting in significant tax gains could require higher distributions to our shareholders or payment of additional income taxes in order to maintain our REIT status.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. 
 
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate risk will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges interest rate risk on liabilities used to carry or acquire real estate assets or manages the risk of certain currency fluctuations, and such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we
24

may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a taxable REIT subsidiary.TRS. This could increase the cost of our hedging activities because our taxable REIT subsidiaryTRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our taxable REIT subsidiary will generally not provide any tax benefit, except for being carried back or forward against past or future taxable income in the taxable REIT subsidiary, provided, however, losses in our taxable REIT subsidiary arising in taxable years beginning after December 31, 2017 may only be carried forward and may only be deducted against 80% of future taxable income in the taxable REIT subsidiary. 
 
Complying with the REIT requirements may cause us to forgo and/or liquidate otherwise attractive investments. 
 
To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts that we distribute to our shareholders and the ownership of our shares. To meet these tests, we may be required to take actions we would otherwise prefer not to take or forgo taking actions that we would otherwise consider advantageous. For instance, in order to satisfy the gross income or asset tests applicable to REITs


under the Code, we may be required to forgo investments that we otherwise would make. Furthermore, we may be required to liquidate from our portfolio otherwise attractive investments. In addition, we may be required to make distributions to shareholders at disadvantageous times or when we do not have funds readily available for distribution. These actions could reduce our income and amounts available for distribution to our shareholders. Thus, compliance with the REIT requirements may hinder our investment performance. 
 
Dividends paid by REITs generally do not qualify for effective tax rates as low as dividends paid by non-REIT "C" corporations. 
 
The maximum rate applicable to “qualified dividend income” paid by non-REIT “C” corporations to certain non-corporate U.S. shareholders has been reduced by legislation to 23.8% (taking into account the 3.8% Medicare tax applicable to net investment income).  Dividends payable by REITs, however, generally are not eligible for the reduced rates. Effective for taxable years beginning after December 31, 2017 and before January 1, 2026, non-corporate shareholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends). For non-corporate shareholders in the top marginal tax bracket of 37%, the deduction for REIT dividends yields an effective income tax rate of 29.6% on REIT dividends, which is higher than the 20% tax rate on qualified dividend income paid by non-REIT “C” corporations. This does not adversely affect the taxation of REITs, however, it could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT “C” corporations that pay dividends, which could adversely affect the value of our common shares. 
 
If the Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we could fail to qualify as a REIT and suffer other adverse consequences. 
 
We believe that our Operating Partnership is organized and operated in a manner so as to be treated as a partnership and not an association or a publicly traded partnership taxable as a corporation, for U.S. federal income tax purposes. As a partnership, our Operating Partnership is not subject to U.S. federal income tax on its income. Instead, each of the partners is allocated its share of our Operating Partnership’s income. No assurance can be provided, however, that the IRS will not challenge our Operating Partnership’s status as a partnership for U.S. federal income tax purposes or that a court would not sustain such a challenge. If the IRS waswere successful in treating our Operating Partnership as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of its cash available for distribution to its partners, including us.

There is a risk that the tax laws applicable to REITs may change. 
 
The IRS, the United States Treasury Department and Congress frequently review U.S. federal income tax legislation, regulations and other guidance. The Company cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted. Any legislative action may prospectively or retroactively modify the Company's tax treatment and, therefore, may adversely affect our taxation or taxation of our shareholders. We urge you to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. Although REITs generally receive certain tax advantages compared to entities taxed as non-REIT “C” corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a non-REIT “C” corporation.



25

ITEM 1B. UNRESOLVED STAFF COMMENTS 
 
None




ITEM 2. PROPERTIES
  
Retail Operating Properties 
 
As of December 31, 2019,2020, we owned interests in a portfolio of 8283 retail operating properties totaling approximately 16.016.3 million square feet of total GLA (including approximately 4.54.6 million square feet of non-owned anchor space).  The following table sets forth more specific information with respect to our retail operating properties as of December 31, 2019:2020:



Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Arizona
The CornerTucson200879,902 55,883 24,019 100.0 %100.0 %100.0 %$30.87 Total Wine & MoreNordstrom Rack, Panera Bread, (Home Depot)
Connecticut
Crossing at Killingly CommonsWillimantic, CT2010206,560 149,202 57,358 79.0 %85.7 %61.7 %14.77 Stop & Shop Supermarket, (Target)TJ Maxx, Michaels, Petco, Staples, Lowe's Home Improvement Center
Florida
12th Street PlazaVero Beach1978/2003135,016 121,376 13,640 75.7 %73.0 %100.0 %11.32 PublixTuesday Morning
Bayport CommonsTampa200898,668 73,045 25,623 100.0 %100.0 %100.0 %17.85 (Target)Burlington, PetSmart, Michaels
Centre Point CommonsSarasota2007119,366 93,574 25,792 97.4 %100.0 %88.2 %17.75 Best Buy, Dick's Sporting Goods, Office Depot, Panera Bread, (Lowe's Home Improvement Center)
Cobblestone PlazaMiami2011133,251 68,219 65,032 96.7 %100.0 %93.2 %28.72 Whole FoodsParty City, Planet Fitness
Colonial SquareFort Myers2010186,517 150,505 36,012 88.1 %100.0 %38.4 %11.89 Kohl's, Hobby Lobby, PetSmart
Delray MarketplaceMiami2013260,347 118,136 142,211 94.9 %100.0 %90.6 %26.39 PublixParagon Theatres, Burt & Max's, Ann Taylor Loft, Chico's, White House Black Market
Estero Town CommonsFort Meyers200625,696 — 25,696 94.7 %0.0 %94.7 %15.53 Lowe's Home Improvement Center, Dollar Tree
Hunter's Creek PromenadeOrlando1994119,738 55,999 63,739 99.1 %100.0 %98.3 %15.94 Publix
Indian River SquareVero Beach1997/2004142,622 109,000 33,622 95.9 %100.0 %82.7 %11.2 (Target)Beall's, Office Depot, Dollar Tree, Panera
International Speedway SquareDaytona Beach1999/2013233,424 203,405 30,019 79.2 %82.3 %57.9 %12.24 Total Wine & MoreBed Bath & Beyond, Old Navy, Staples, Michaels, Dick’s Sporting Goods, Shoe Carnival
Kings Lake SquareNaples1986/201488,611 45,600 43,011 99.1 %100.0 %98.1 %19.37 Publix
Lake City CommonsLake City200865,746 45,600 20,146 100.0 %100.0 %100.0 %15.92 Publix
Lake City Commons - Phase IILake City201116,291 12,131 4,160 100.0 %100.0 %100.0 %15.89 PublixPetSmart
Lake Mary PlazaOrlando200921,385 14,880 6,505 100.0 %100.0 %100.0 %38.22 Walgreens
Lithia CrossingTampa2003/201390,522 53,547 36,975 58.9 %32.8 %96.8 %22.8 The Fresh MarketChili's, Panera Bread
Miramar SquareMiami2008231,680 147,505 84,175 94.7 %100.0 %85.3 %18.13 Sprouts Farmers MarketKohl's, Miami Children's Hospital
Northdale PromenadeTampa1985/2017179,559 130,269 49,290 95.0 %100.0 %81.9 %12.64 (Winn Dixie)TJ Maxx, Ulta Beauty, Beall's, Crunch Fitness, Tuesday Morning
Pine Ridge CrossingNaples1993105,986 66,435 39,551 94.2 %100.0 %84.5 %18.1 Publix, (Target)Ulta Beauty, (Beall's)
Pleasant Hill CommonsOrlando200870,645 45,600 25,045 100.0 %100.0 %100.0 %16.06 Publix
Riverchase PlazaNaples1991/200178,291 48,890 29,401 96.3 %100.0 %90.3 %17.24 Publix
Saxon CrossingDaytona Beach2009119,909 95,304 24,605 96.0 %100.0 %80.5 %15.29 (Target)Hobby Lobby, LA Fitness, (Lowe's Home Improvement Center)
Shoppes of EastwoodOrlando199769,076 51,512 17,564 90.1 %100.0 %61.1 %12.52 Publix
Shops at Eagle CreekNaples1983/201370,731 50,187 20,544 95.8 %100.0 %85.7 %16.23 The Fresh MarketStaples, Panera Bread, (Lowe's Home Improvement Center)
Tamiami CrossingNaples2016121,591 121,591 — 73.7 %73.7 %0.0 %13.46 Aldi, (Walmart)Marshalls, Michaels, PetSmart, Ross Stores, Ulta Beauty


28


Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Tarpon Bay PlazaNaples200781,864 59,442 22,422 100.0 %100.0 %100.0 %17.77 (Target)PetSmart, Cost Plus World Market, Ross Stores, Panera Bread
The Landing at TraditionPort St. Lucie2007359,227 283,208 76,019 88.4 %89.8 %82.9 %15.39 (Target)TJ Maxx, Ulta Beauty, Burlington, Bed Bath & Beyond, LA Fitness, Michaels, Old Navy, PetSmart, DSW, Five Below, Ross Stores
The Shops at Julington CreekJacksonville201140,254 21,038 19,216 100.0 %100.0 %100.0 %20.87 The Fresh Market
Tradition Village CenterPort St. Lucie200685,057 45,600 39,457 96.9 %100.0 %93.3 %18.75 Publix
Waterford Lakes VillageOrlando199778,007 51,703 26,304 98.4 %100.0 %95.2 %13.91 
Georgia
Mullins CrossingAugusta2005276,318 228,224 48,094 99.3 %100.0 %96.1 %13.39 (Target)Ross Stores, Old Navy, Five Below, Kohls, La-Z-Boy, Marshalls, Office Max, Petco, Ulta Beauty, Panera Bread
Illinois
Naperville MarketplaceChicago200883,759 61,683 22,076 97.7 %100.0 %91.1 %14.01 (Caputo's Fresh Market)TJ Maxx, PetSmart
Indiana
54th & CollegeIndianapolis2008— — — — %— %— %— The Fresh Market
Bridgewater MarketplaceWestfield200825,975 — 25,975 100.0 %0.0 %100.0 %22.15 (Walgreens), The Local Eatery, Original Pancake House
Castleton CrossingIndianapolis1975/2012286,377 247,710 38,667 97.4 %100.0 %80.6 %12.21 TJ Maxx/HomeGoods, Burlington, Shoe Carnival, Value City Furniture, K&G Menswear, Chipotle, Verizon, Five Below
Cool Creek CommonsWestfield2005125,072 54,401 70,671 68.1 %36.0 %92.8 %23.50 The Fresh MarketMcAlister's Deli, Buffalo Wild Wings, Pet People
Depauw University Bookstore and CaféIndianapolis201211,974 — 11,974 100.0 %0.0 %100.0 %9.17 Follett's, Starbucks
Eddy Street Commons at Notre DameSouth Bend200987,987 20,154 67,833 96.1 %100.0 %95.0 %27.32 Hammes Bookstore & Cafe, Chipotle, Urban Outfitters, Five Guys, Kilwins, Blaze Pizza
Fishers StationFishers1989/201852,395 15,441 36,954 78.8 %100.0 %70.0 %16.83 Dollar Tree, Goodwill
Geist PavilionFishers200663,910 29,700 34,210 97.6 %100.0 %95.6 %17.6 Ace Hardware, Goodwill, Ale Emporium, Pure Barre
Greyhound CommonsCarmel20059,152 — 9,152 100.0 %0.0 %100.0 %15.33 (Lowe's Home Improvement Center), Koto Japenese Steakhouse
Nora PlazaIndianapolis2004139,670 73,589 66,081 94.1 %100.0 %87.6 %15.29 Whole Foods, (Target)Marshalls
Rangeline CrossingCarmel1986/201399,497 48,171 51,326 66.4 %47.7 %84.0 %25.05 Walgreens, Panera Bread, City BBQ
Rivers EdgeIndianapolis2011150,463 117,890 32,573 98.9 %100.0 %95.0 %22.10 Nordstrom Rack, The Container Store, Arhaus Furniture, Bicycle Garage of Indy, Buy Buy Baby
Stoney Creek CommonsNoblesville2000/201384,226 84,226 — 64.1 %64.1 %0.0 %14.38 LA Fitness, Goodwill, (Lowe's Home Improvement Center)
Traders Point IIndianapolis2005211,545 170,809 40,736 94.4 %100.0 %70.9 %14.47 Dick's Sporting Goods, AMC Theatres, Michaels, Old Navy, PetSmart, Books-A-Million
Traders Point IIIndianapolis200545,978 — 45,978 90.4 %0.0 %90.4 %27.72Starbucks, Noodles & Company, Qdoba
29

Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Arizona           
The CornerTucson200879,902
55,883
24,019
100.0%100.0%100.0%30.87
Total Wine & MoreNordstrom Rack, Panera Bread, (Home Depot)
Connecticut           
Crossing at Killingly Commons 
Willimantic, CT2010205,683
148,250
57,433
86.0%86.2%85.5%14.50
Stop & Shop Supermarket, (Target)TJ Maxx, Michaels, Petco, Staples, Lowe's Home Improvement Center
Florida           
12th Street PlazaVero Beach1978/2003135,016
121,376
13,640
100.0%100.0%100.0%10.32
PublixStein Mart, Tuesday Morning
Bayport CommonsTampa200897,163
71,540
25,623
100.0%100.0%100.0%15.38
(Target)PetSmart, Michaels
Centre Point CommonsSarasota2007119,320
93,574
25,746
98.7%100.0%93.8%17.74
 Best Buy, Dick's Sporting Goods, Office Depot, Panera Bread, (Lowe's Home Improvement Center)
Cobblestone PlazaMiami2011133,259
68,219
65,040
96.7%100.0%93.2%28.16
Whole FoodsParty City, Planet Fitness
Colonial SquareFort Myers2010186,517
150,505
36,012
92.4%100.0%60.7%11.94
 Kohl's, Hobby Lobby, PetSmart,
Delray Marketplace 3
Miami2013260,298
118,136
142,162
91.6%100.0%84.6%26.42
PublixFrank Theatres, Burt & Max's, Ann Taylor Loft, Chico's, White House Black Market
Estero Town CommonsFort Meyers200625,696
—
25,696
94.7%—%94.7%15.23
 Lowe's Home Improvement Center, Dollar Tree
Hunter's Creek PromenadeOrlando1994119,759
55,999
63,760
100.0%100.0%100.0%15.60
Publix 
Indian River SquareVero Beach1997/2004142,592
109,000
33,592
95.9%100.0%82.7%12.17
(Target)Beall's, Office Depot, Dollar Tree, Panera
International Speedway SquareDaytona Beach1999/2013233,424
203,405
30,019
94.6%100.0%57.9%11.23
Total Wine & MoreBed Bath & Beyond, Stein Mart, Old Navy, Staples, Michaels, Dick’s Sporting Goods, Shoe Carnival
Kings Lake SquareNaples1986/201488,611
45,600
43,011
100.0%100.0%100.0%19.30
Publix 
Lake City CommonsLake City200865,746
45,600
20,146
100.0%100.0%100.0%15.58
Publix 
Lake City Commons - Phase IILake City201116,291
12,131
4,160
100.0%100.0%100.0%15.80
PublixPetSmart
Lake Mary PlazaOrlando200921,385
14,880
6,505
100.0%100.0%100.0%38.00
 Walgreens
Lithia CrossingTampa2003/201390,515
53,547
36,968
100.0%100.0%100.0%16.06
The Fresh MarketStein Mart, Chili's, Panera Bread
Miramar SquareMiami2008225,205
147,505
77,700
99.5%100.0%98.5%17.53
Sprouts Farmers MarketKohl's, Miami Children's Hospital
Northdale PromenadeTampa1985/2017179,602
130,269
49,333
96.6%100.0%87.5%13.00
(Winn Dixie)TJ Maxx, Ulta Beauty, Beall's, Crunch Fitness, Tuesday Morning
Pine Ridge CrossingNaples1993105,962
66,435
39,527
96.3%100.0%90.0%18.06
Publix, (Target)Ulta Beauty, (Beall's)
Pleasant Hill CommonsOrlando200870,645
45,600
25,045
100.0%100.0%100.0%15.86
Publix 
Riverchase PlazaNaples1991/200178,291
48,890
29,401
96.3%100.0%90.3%16.77
Publix 
Saxon CrossingDaytona Beach2009119,907
95,304
24,603
97.2%100.0%86.2%15.39
(Target)Hobby Lobby, LA Fitness, (Lowe's Home Improvement Center)
Shoppes of EastwoodOrlando199769,076
51,512
17,564
98.1%100.0%92.5%13.87
Publix 
Shops at Eagle CreekNaples1983/201370,731
50,187
20,544
100.0%100.0%100.0%16.53
The Fresh MarketStaples, Panera Bread, (Lowe's Home Improvement Center)
Tamiami Crossing 3
Naples2016121,705
121,705
—
100.0%100.0%—%12.55
Aldi, (Walmart)Marshalls, Michaels, PetSmart, Ross Stores, Stein Mart, Ulta Beauty
Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Nevada
Centennial CenterLas Vegas2002334,023 147,824 186,199 99.2 %100.0 %98.6 %25.95Sam's Club, WalmartRoss Stores, Big Lots, Famous Footwear, Michaels, Petco, Home Depot, HomeGoods, Skechers, Five Below, Sephora, Tillys
Centennial GatewayLas Vegas2005193,452 140,277 53,175 99.4 %100.0 %97.9 %24.40 Trader Joe'sParty City, Sportsman's Warehouse, Walgreens, UFC Fit
Eastern Beltway CenterLas Vegas1998/2006162,318 77,436 84,882 88.7 %100.0 %78.4 %27.21Sam's Club, WalmartPetco, Ross Stores, Skechers, Old Navy, (Home Depot)
Rampart CommonsLas Vegas2002/201879,314 11,965 67,349 100.0 %100.0 %100.0 %33.55Athleta, North Italia, Pottery Barn, Williams Sonoma, Flower Child, Crunch Fitness
New Jersey
Bayonne CrossingNew York / Northern New Jersey2011112,871 52,219 60,652 72.8 %41.2 %100.0 %34.41WalmartMichaels, Lowe's Home Improvement Center
Livingston Shopping CenterNew York / Northern New Jersey1997139,022 133,125 5,897 97.9 %100.0 %50.8 %20.93Cost Plus World Market, Buy Buy Baby, Nordstrom Rack, DSW, TJ Maxx, Ulta Beauty
New York
City CenterNew York / Northern New Jersey2004/2018363,023 325,139 37,884 97.0 %100.0 %70.9 %25.97ShopRiteNordstrom Rack, New York Sports Club, Burlington, Club Champion Golf, National Amusements
North Carolina
Eastgate CrossingRaleigh1958/2007156,276 62,386 93,890 72.7 %55.4 %84.2 %32.90Trader Joe'sChipotle, Petco, Starbucks, Ulta Beauty
Holly Springs Towne Center - Phase IRaleigh2013209,811 121,761 88,050 91.7 %100.0 %80.1 %18.28(Target)Dick's Sporting Goods, Marshalls, Petco, Ulta Beauty, Michaels, Old Navy, Five Below
Holly Springs Towne Center - Phase IIRaleigh2016145,043 111,843 33,200 98.8 %100.0 %94.6 %17.94(Target)Bed Bath & Beyond, DSW, AMC Theatres, 02 Fitness
Northcrest Shopping CenterCharlotte2008133,621 65,576 68,045 94.2 %100.0 %88.6 %23.74(Target)REI Co-Op, David's Bridal, Old Navy, Five Below
Oleander PlaceWilmington201245,524 30,144 15,380 100.0 %100.0 %100.0 %18.05Whole Foods
Parkside Town Commons - Phase IRaleigh201555,368 22,500 32,868 100.0 %100.0 %100.0 %26.23Harris Teeter/Kroger, (Target)Petco, Guitar Center
Parkside Town Commons - Phase IIRaleigh2017298,094 188,785 109,309 67.5 %50.6 %96.7 %22.21(Target)Golf Galaxy, Hobby Lobby, Chuy's, Starbucks, Panera Bread, Levity Live
Perimeter WoodsCharlotte2008125,579 105,175 20,404 100.0 %100.0 %100.0 %20.82Best Buy, Off Broadway Shoes, PetSmart, Michaels, (Lowe's Home Improvement Center)
Toringdon MarketCharlotte200461,101 26,546 34,555 97.9 %100.0 %96.3 %23.34Earth Fare
Ohio
Eastgate PavilionCincinnati1995236,230 231,730 4,500 100.0 %100.0 %100.0 %9.38Best Buy, Dick's Sporting Goods, Value City Furniture, Petsmart, DSW
Oklahoma
Belle Isle StationOklahoma City2000196,164 115,783 80,381 85.9 %100.0 %65.5 %17.42(Walmart)REI, Shoe Carnival, Old Navy, Ross Stores, Nordstrom Rack, Ulta Beauty, Five Below
Shops at MooreOklahoma City2010260,625 188,037 72,588 92.6 %94.6 %87.2 %12.35Bed Bath & Beyond, Best Buy, Hobby Lobby, Old Navy, PetSmart, Ross Stores




30

Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Tarpon Bay PlazaNaples200781,864
59,442
22,422
97.4%100.0%90.6%17.43
(Target)PetSmart, Cost Plus World Market, Ross Stores, Panera Bread
The Landing at TraditionPort St. Lucie2007359,474
283,064
76,410
78.7%79.4%76.2%16.33
(Target)TJ Maxx, Ulta Beauty, Bed Bath & Beyond, LA Fitness, Michaels, Old Navy, PetSmart, Pier 1, DSW, Five Below, Ross Stores
The Shops at Julington CreekJacksonville201140,254
21,038
19,216
100.0%100.0%100.0%20.48
The Fresh Market 
Tradition Village CenterPort St. Lucie200684,086
45,600
38,486
98.6%100.0%97.0%18.55
Publix 
Waterford Lakes VillageOrlando199777,975
51,703
26,272
96.7%100.0%90.2%13.20
Winn Dixie 
Georgia           
Mullins CrossingAugusta2005276,318
228,224
48,094
99.3%100.0%96.1%13.35
(Target)Ross Stores, Old Navy, Five Below, Kohls, La-Z-Boy, Marshalls, Office Max, Petco, Ulta Beauty, Panera Bread
Illinois           
Naperville MarketplaceChicago200883,759
61,683
22,076
97.7%100.0%91.1%13.91
(Caputo's Fresh Market)TJ Maxx, PetSmart
Indiana           
54th & CollegeIndianapolis2008—
—
—
—%—%—%—
The Fresh Market 
Bridgewater MarketplaceWestfield200825,975
—
25,975
100.0%—%100.0%21.49
 (Walgreens), The Local Eatery, Original Pancake House
Castleton CrossingIndianapolis1975/2012286,377
247,710
38,667
100.0%100.0%100.0%12.30
 TJ Maxx/HomeGoods, Burlington, Shoe Carnival, Value City Furniture, K&G Menswear, Chipotle, Verizon, Five Below
Cool Creek CommonsWestfield2005124,303
53,600
70,703
96.4%100.0%93.7%19.30
The Fresh MarketStein Mart, McAlister's Deli, Buffalo Wild Wings, Pet People
Depauw University Bookstore and CaféIndianapolis201211,974
—
11,974
100.0%—%100.0%9.17
 Follett's, Starbucks
Eddy Street Commons at Notre DameSouth Bend200987,987
20,154
67,833
98.8%100.0%98.4%26.66
 Hammes Bookstore & Cafe, Chipotle, Urban Outfitters, Five Guys, Kilwins, Blaze Pizza
Fishers StationFishers1989/201852,400
15,441
36,959
97.8%100.0%96.9%17.72
 Dollar Tree, Goodwill
Geist PavilionFishers200663,910
29,700
34,210
100.0%100.0%100.0%17.43
 Ace Hardware, Goodwill, Ale Emporium, Pure Barre
Greyhound CommonsCarmel20059,152
—
9,152
100.0%—%100.0%14.74
 (Lowe's Home Improvement Center), Abuelo's Mexican, Koto Japenese Steakhouse
Nora PlazaIndianapolis2004139,743
73,589
66,154
100.0%100.0%100.0%15.17
Whole Foods, (Target)Marshalls
Rangeline CrossingCarmel1986/201399,226
47,962
51,264
97.2%100.0%94.5%22.94

Walgreens, Panera Bread, Pet Valu, City BBQ
Rivers EdgeIndianapolis2011150,428
117,890
32,538
100.0%100.0%100.0%22.20
 Nordstrom Rack, The Container Store, Arhaus Furniture, Bicycle Garage of Indy, Buy Buy Baby, J Crew Mercantile
Stoney Creek CommonsNoblesville2000/201384,226
84,226
—
64.1%64.1%—%14.38
 LA Fitness, Goodwill, (Lowe's Home Improvement Center)
Traders Point IIndianapolis2005279,786
238,721
41,065
73.9%71.6%87.5%14.69
 Dick's Sporting Goods, AMC Theatres, Bed Bath & Beyond, Michaels, Old Navy, PetSmart, Books-A-Million
Traders Point IIIndianapolis200545,977
—
45,977
92.2%—%92.2%27.59
 Starbucks, Noodles & Company, Qdoba



Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Silver Springs PointeOklahoma City200148,440 20,515 27,925 83.0 %100.0 %70.4 %14.38(Sam's Club), (Walmart)Kohls, Office Depot, (Home Depot)
South Carolina
Publix at WoodruffGreenville199768,103 47,955 20,148 91.0 %100.0 %69.5 %10.54Publix
Shoppes at Plaza GreenGreenville2000189,730 162,068 27,662 82.6 %87.0 %56.8 %12.87 Bed Bath & Beyond, Christmas Tree Shops, American Freight, Party City, Shoe Carnival, Old Navy
Tennessee
Cool Springs MarketNashville1995230,981 172,712 58,269 97.8 %100.0 %91.4 %16.69 (Kroger)Dick's Sporting Goods, Marshalls, Buy Buy Baby, DSW, Staples, Jo-Ann Fabric, Panera Bread
Texas
Chapel Hill Shopping CenterDallas/Ft. Worth2001126,812 43,450 83,362 100.0 %100.0 %100.0 %26.68 H-E-B GroceryThe Container Store, Cost Plus World Market
Colleyville DownsDallas/Ft. Worth2014194,744 139,219 55,525 94.4 %100.0 %80.4 %15.68 Whole FoodsWestlake Hardware, Goody Goody Liquor, Petco, Fit Factory
Kingwood CommonsHouston1999158,109 74,836 83,273 51.5 %14.5 %84.7 %28.28 Petco, Chico's, Talbots, Ann Taylor
Market Street Village/
Pipeline Point		Dallas/Ft. Worth1970/2011156,621 136,742 19,879 100.0 %100.0 %100.0 %13.67 Jo-Ann Fabric, Ross Stores, Buy Buy Baby, Party City, Spec's Wine Spirits & Finer Foods
Plaza at Cedar HillDallas/Ft. Worth2000/2010295,665 234,358 61,307 92.4 %100.0 %63.1 %13.67 Sprouts Farmers Market, Total WineDSW, Ross Stores, Hobby Lobby, Office Max, Marshalls, Home Goods
Plaza VolenteAustin2004156,146 105,000 51,146 94.8 %100.0 %84.2 %$17.34 H-E-B Grocery
Portofino Shopping CenterHouston1999/2010369,802 218,861 150,941 83.2 %83.6 %82.6 %21.38(Sam's Club)DSW, Michaels, PGA Superstore, PetSmart, Old Navy, TJ Maxx, Nordstrom Rack, Five Below
Sunland Towne CentreEl Paso1996/2014306,454 265,037 41,417 98.9 %100.0 %91.7 %11.27Sprouts Farmers MarketPetSmart, Ross Stores, Bed Bath & Beyond, Spec's Fine Wines, At Home
Waxahachie CrossingDallas/Ft. Worth201097,127 72,191 24,936 100.0 %100.0 %100.0 %15.55Best Buy, PetSmart, Ross Stores, (Home Depot)
Westside MarketDallas/Ft. Worth201393,377 70,000 23,377 100.0 %100.0 %100.0 %16.66Randalls Tom Thumb
Utah
Draper CrossingSalt Lake City2012164,657 115,916 48,741 100.0 %100.0 %100.0 %17.28Kroger/Smith'sTJ Maxx, Dollar Tree, Downeast Home
Draper PeaksSalt Lake City2012227,667 101,464 126,203 91.5 %100.0 %84.7 %21.27 Michaels, Office Depot, Petco, Quilted Bear, Ross Stores, (Kohl's)
 Total11,661,7317,878,9593,782,77291.2 %92.9 %87.6 %$18.42 
Total at Pro-Rata Share11,328,3247,591,1863,737,13891.2 %93.0 %87.7 %$18.44 
31

Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Nevada           
Centennial CenterLas Vegas2002334,042
147,824
186,218
96.5%100.0%93.7%25.45
Sam's Club, WalmartRoss Stores, Big Lots, Famous Footwear, Michaels, Petco, Home Depot, HomeGoods, Skechers, Five Below, Sephora
Centennial GatewayLas Vegas2005193,072
139,913
53,159
99.4%100.0%97.8%25.55
Trader Joe's24 Hour Fitness, Party City, Sportsman's Warehouse, Walgreens
Eastern Beltway CenterLas Vegas1998/2006162,317
77,436
84,881
90.9%100.0%82.5%27.36
Sam's Club, WalmartPetco, Ross Stores, Skechers, Old Navy, (Home Depot)
Rampart CommonsLas Vegas2002/201879,314
11,965
67,349
100.0%100.0%100.0%33.45
 Athleta, North Italia, Pottery Barn, Williams Sonoma, Flower Child, Crunch Fitness
New Jersey           
Bayonne CrossingNew York / Northern New Jersey2011106,146
52,219
53,927
100.0%100.0%100.0%29.46
WalmartMichaels, New York Sports Club, Lowe's Home Improvement Center
Livingston Shopping Center 3
New York / Northern New Jersey1997139,022
133,125
5,897
100.0%100.0%100.0%20.26
 Cost Plus World Market, Buy Buy Baby, Nordstrom Rack, DSW, TJ Maxx, Ulta Beauty
New York           
City CenterNew York / Northern New Jersey2004/2018363,103
325,139
37,964
96.9%100.0%70.7%26.43
ShopRiteNordstrom Rack, New York Sports Club, Burlington, Club Champion Golf, National Amusements
North Carolina           
Holly Springs Towne Center - Phase IRaleigh2013209,852
121,761
88,091
95.9%100.0%90.2%18.04(Target)Dick's Sporting Goods, Marshalls, Petco, Ulta Beauty, Michaels, Old Navy, Five Below
Holly Springs Towne Center - Phase IIRaleigh2016144,995
111,843
33,152
100.0%100.0%100.0%17.83
(Target)Bed Bath & Beyond, DSW, AMC Theatres, 02 Fitness
Northcrest Shopping CenterCharlotte2008133,627
65,576
68,051
97.0%100.0%94.1%23.77
(Target)REI Co-Op, David's Bridal, Old Navy, Five Below
Oleander PlaceWilmington201245,524
30,144
15,380
100.0%100.0%100.0%17.91
Whole Foods 
Parkside Town Commons - Phase IRaleigh201555,368
22,500
32,868
100.0%100.0%100.0%25.61
Harris Teeter/Kroger, (Target)Petco, Guitar Center
Parkside Town Commons - Phase IIRaleigh2017296,715
187,406
109,309
99.5%100.0%98.6%17.33
(Target)Frank Theatres, Golf Galaxy, Hobby Lobby, Stein Mart, Chuy's, Starbucks, Panera Bread, Levity Live
Perimeter WoodsCharlotte2008125,646
105,262
20,384
100.0%100.0%100.0%20.71
 Best Buy, Off Broadway Shoes, PetSmart, Michaels, (Lowe's Home Improvement Center)
Toringdon MarketCharlotte200460,627
26,072
34,555
97.9%100.0%96.3%22.71Earth Fare 
Ohio           
Eastgate PavilionCincinnati1995236,230
231,730
4,500
100.0%100.0%100.0%9.12 Best Buy, Dick's Sporting Goods, Value City Furniture, Petsmart, DSW, Bed Bath & Beyond
Oklahoma           
Belle Isle StationOklahoma City2000196,298
115,783
80,515
96.9%100.0%92.4%17.92(Walmart)REI, Shoe Carnival, Old Navy, Ross Stores, Nordstrom Rack, Ulta Beauty, Five Below
Shops at MooreOklahoma City2010260,482
187,916
72,566
97.2%100.0%90.0%12.25 Bed Bath & Beyond, Best Buy, Hobby Lobby, Office Depot, PetSmart, Ross Stores, (J.C. Penney)





Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Silver Springs PointeOklahoma City200148,440
20,515
27,925
83.0%100.0%70.4%13.28(Sam's Club), (Walmart)Kohls, Office Depot, (Home Depot)
South Carolina           
Publix at WoodruffGreenville199768,119
47,955
20,164
96.8%100.0%89.3%11.06Publix 
Shoppes at Plaza GreenGreenville2000189,564
161,900
27,664
98.2%100.0%87.6%13.51
 Bed Bath & Beyond, Christmas Tree Shops, Sears, Party City, Shoe Carnival, AC Moore, Old Navy
Tennessee           
Cool Springs MarketNashville1995230,980
172,712
58,268
100.0%100.0%100.0%16.48
(Kroger)Dick's Sporting Goods, Marshalls, Buy Buy Baby, DSW, Staples, Jo-Ann Fabric, Panera Bread
Texas           
Chapel Hill Shopping CenterDallas/Ft. Worth2001126,986
43,450
83,536
97.2%100.0%95.8%26.28
H-E-B GroceryThe Container Store, Cost Plus World Market
Colleyville DownsDallas/Ft. Worth2014194,666
139,219
55,447
97.3%100.0%90.4%15.45
Whole FoodsWestlake Hardware, Goody Goody Liquor, Petco, Fit Factory
Kingwood CommonsHouston1999158,109
74,836
83,273
94.3%100.0%89.2%21.24
Randall's Food and DrugPetco, Chico's, Talbots, Ann Taylor
Market Street Village/
Pipeline Point		Dallas/Ft. Worth1970/2011156,621
136,742
19,879
100.0%100.0%100.0%13.20
 Jo-Ann Fabric, Ross Stores, Office Depot, Buy Buy Baby, Party City
Plaza at Cedar HillDallas/Ft. Worth2000/2010295,758
234,358
61,400
98.5%100.0%92.6%13.75
Sprouts Farmers Market, Total WineDSW, Ross Stores, Hobby Lobby, Office Max, Marshalls, Home Goods
Plaza Volente 3
Austin2004156,150
105,000
51,150
100.0%100.0%100.0%$17.94
H-E-B Grocery 
Portofino Shopping CenterHouston1999/2010369,846
218,861
150,985
94.0%100.0%85.2%19.72
(Sam's Club)DSW, Michaels, PGA Superstore, SteinMart, PetSmart, Old Navy, TJ Maxx, Nordstrom Rack, Five Below
Sunland Towne CentreEl Paso1996/2014306,454
265,037
41,417
98.9%100.0%91.7%11.26
Sprouts Farmers MarketPetSmart, Ross Stores, Bed Bath & Beyond, Spec's Fine Wines, At Home
Waxahachie CrossingDallas/Ft. Worth201097,127
72,191
24,936
100.0%100.0%100.0%15.07
 Best Buy, PetSmart, Ross Stores, (Home Depot), (J.C. Penney)
Westside MarketDallas/Ft. Worth201393,377
70,000
23,377
100.0%100.0%100.0%16.61Randalls Tom Thumb 
Utah           
Draper CrossingSalt Lake City2012164,657
115,916
48,741
100.0%100.0%100.0%16.97
Kroger/Smith'sTJ Maxx, Dollar Tree, Downeast Home
Draper PeaksSalt Lake City2012227,500
101,464
126,036
95.2%100.0%91.3%20.64
 Michaels, Office Depot, Petco, Quilted Bear, Ross Stores, (Kohl's)
 Total  11,554,229
7,878,569
3,675,660
96.1%97.8%92.5%17.83
  
            
Total at Pro-Rata Share  11,220,882
7,590,705
3,630,177
96.0%97.7%92.4%17.85
  






____________________
1All properties are wholly owned, except as indicated through reference to Note 3 below. Unless otherwise noted, each property is owned in fee simple by the Company.
2Percentage of Owned GLA Leased reflects Owned GLA/NRA leased as of December 31, 2019,2020, except for Greyhound Commons and 54th & College.
3Asset is owned in a joint venture.
4Tenants within parentheses are non-owned.

32

Office Operating Properties and Other 

As of December 31, 2019,2020, we owned interests in one office operating property, and two parking garages.garages, and one triple-net leased property. In addition, two of our retail properties contain stand-alone office components. Together, these properties have a total of 0.5 million square feet of net rentable area (“NRA”) officeof space.  The following table sets forth more specific information with respect to our office, parking and other properties as of December 31, 2019:2020: 
 
($ in thousands, except per square foot data)
PropertyMSAYear Built/
Renovated		Acquired,
Redeveloped
or Developed		Owned
NRA		Percentage
Of Owned
NRA
Leased
Annualized
Base Rent1
Percentage
of
Annualized
Office and Other
Base Rent
Base Rent
Per Leased
Sq. Ft.		Major Tenants
Commercial Properties
Thirty South Meridian2
Indianapolis1905/2002Redeveloped284,874 94.6 %$5,448 67.2 %$20.22 Carrier, Kite Realty Group, Lumina Foundation
Union Station Parking Garage3
Indianapolis1986AcquiredN/AN/AN/AN/AN/ADenison Parking (manager)
Pan Am Plaza Parking Garage3
IndianapolisAcquiredN/AN/AN/AN/AN/ADenison Parking (manager)
Stand-alone Office Components of Retail Properties
Eddy Street Office (part of Eddy Street Commons)4
South Bend2009Developed81,628 100.0 %1,32416.4 %16.23 University of Notre Dame Offices
Tradition Village Office (part of Tradition Village Square)Port St. Lucie2006Acquired24,340 100.0 %7359.1 %30.19 
Total Commercial Properties390,842 96.1 %$7,507 92.7 %$20.00 
Other Properties
BurlingtonSan Antonio1992/2000Acquired107,400 100.0 %$591 7.3 %$5.50 Burlington
107,400 100.0 %$591 7.3 %$5.50 
Total Commercial and Other498,242 96.9 %$8,098 100.0 %$16.77 
Multi-Family/Lodging
Embassy Suites South Bend at Notre Dame5
South Bend2018Developed— N/A$— — %$— Full service hotel with 164 rooms
The Foundry Lofts and Apartments at Eddy StreetSouth Bend2009Developed— 100.0 %— — $— Air rights lease for apartment complex with 266 units
The Foundry Lofts and Apartments at Eddy Street Phase IISouth Bend2020Developed— 100.0 %— — $— Air rights lease for apartment complex with 453 units
Summit at City Center ApartmentsNew York / Northern New Jersey2004Acquired— 100.0 %— — $— Apartment complex with 24 units.
($ in thousands, except per square foot data)        
PropertyMSAYear Built/
Renovated		Acquired,
Redeveloped
or Developed		Owned
NRA		Percentage
Of Owned
NRA
Leased
Annualized
Base Rent1
Percentage
of
Annualized
Office and Other
Base Rent		Base Rent
Per Leased
Sq. Ft.		 Major Tenants
Commercial Properties          
Thirty South Meridian2
Indianapolis1905/2002Redeveloped284,874
95.9%$5,392
67.5%$19.74
 Carrier, Kite Realty Group, Lumina Foundation
Union Station Parking Garage3
Indianapolis1986AcquiredN/A
N/A
N/A
N/A
N/A
 Denison Parking (manager)
Pan Am Plaza Parking Garage3
Indianapolis AcquiredN/A
N/A
N/A
N/A
N/A
 Denison Parking (manager)
Stand-alone Office Components of Retail Properties       
Eddy Street Office (part of Eddy Street Commons)4
South Bend2009Developed81,628
100.0%1,292
16.2%15.82
 University of Notre Dame Offices
Tradition Village Office (part of Tradition Village Square)Port St. Lucie2006Acquired24,340
100.0%713
8.9%29.30
  
Total Commercial Properties   390,842
96.2%$7,397
92.6%$19.51
  
           
Other Properties          
Burlington1992/2000Acquired107,400
100.0%$591
7.4%$5.50
 Burlington
    107,400
100.0%$591
7.4%$5.50
  
           
Total Commercial and Other   498,242
97.7%$7,988
100.0%$16.42
  
           
Multi-Family/Lodging          
Embassy Suites South Bend at Notre Dame5
South Bend2018Developed—
N/A
$—
—%$—
 Full service hotel with 164 rooms
The Foundry Lofts and Apartments at Eddy StreetSouth Bend2009Developed—
100.0%—
—
$—
 Air rights lease for apartment complex with 266 units
Summit at City Center ApartmentsNew York / Northern New Jersey2004Acquired—
100.0%—
—
$—
 Apartment complex with 26 units.



33

____________
1Annualized Base Rent represents the monthly contractual rent as of December 31, 20192020 for each applicable property, multiplied by 12.
2Annualized Base Rent includes $929,157$859,256 from the Company and subsidiaries as of December 31, 2019,2020, which is eliminated for purposes of our consolidated financial statement presentation.
3The garage is managed by a third party.
4The Company also owns the Eddy Street Commons retail shopping center in South Bend, Indiana, along with a parking garage that serves a hotel and the office and retail components of the property.
5Property owned in an unconsolidated joint venture.


Development ProjectProjects Under Construction

     In addition to our retail and office operating properties, as of December 31, 2019,2020, we owned an interest in onetwo development projectprojects currently under construction.  The following table sets forth more specific information with respect to the Company’s development propertyprojects as of December 31, 2019:2020:

($ in thousands)
ProjectMSAAnticipated Start Date
Projected Stabilization Date1
Projected New Total GLAProjected New Owned GLATotal Project CostKRG Equity RequirementKRG Remaining Spend
Estimated Return on Project2
Glendale Town Center ApartmentsIndianapolis, INQ2 2020Q2 2022207,000 24,000 $38,400 $1,200 $900 7.0% - 8.0%
Eddy Street Commons at Notre Dame, IN - Phase IIISouth Bend, INQ3 2020Q1 202268,500 18,600 $7,500 7,500 6,1008.5% - 9.5%
Glendale Town Center Retail3
Indianapolis, INQ1 2021Q1 202254,500 54,500 $11,000 3,900 3,90027.0% - 28.0%
($ in thousands)         
ProjectMSAAnticipated Start Date
Projected Stabilization Date1
Projected New Total GLAProjected New Owned GLAKRG Share of Estimated Project CostKRG Share of Cost Incurred
Estimated Return on Investment3
 
Eddy Street Commons at Notre Dame, IN - Phase II 2
South Bend, INN/AQ4 2020530,000
8,500
$10,000
$6,286
11.0% - 13.0% 

____________________
1Stabilization date represents near completion of project construction and substantial occupancy of the property.
2Total estimated cost of all components of Eddy Street Phase II equals $90.8 million, consisting of KRG estimated project cost ($10.0 million), TIF ($16.1 million), and residential apartments and townhomes to be ground subleased to unrelated third party ($64.7 million).
3Projected ROI for redevelopments is an estimate of the expected incremental stabilized annual operating cash flows to be generated divided by the estimated project costs, including construction, development, financing, and other soft costs, when applicable to the project.
3Equity requirement is lower than total project cost due to a $7.1 million TIF received from the City of Indianapolis.


34

Tenant Diversification 
 
No individual retail or office tenant accounted for more than 2.5% of the portfolio’s annualized base rent for the year ended December 31, 2019.2020. The following table sets forth certain information for the largest 25 tenants open for business at the Company’s retail properties based on minimum rents in place as of December 31, 2019:2020: 
 
TOP 25 TENANTS BY ANNUALIZED BASE RENT
 
($ in thousands, except per square foot data)
Number of Stores
TenantWholly Owned
JV1
Total Leased GLA/NRA2
ABR at Pro-Rata Share 3
ABR psf at Pro-Rata
% of Total
Portfolio
Annualized
Base Rent4
Publix Super Markets, Inc.11—535,466 $5,455 $10.19 2.50 %
The TJX Companies, Inc.5
142471,684 4,845 11.22 2.22 %
PetSmart, Inc.131291,379 4,084 14.62 1.87 %
Ross Stores, Inc.121364,442 4,000 11.61 1.83 %
Dick's Sporting Goods, Inc.6
7—340,502 3,741 10.99 1.71 %
Bed Bath & Beyond, Inc.7
132387,848 3,718 10.53 1.70 %
Nordstrom Rack51197,797 3,571 20.75 1.64 %
Michaels Stores, Inc.111253,849 3,283 13.66 1.50 %
Burlington Stores, Inc.5—310,423 3,039 9.79 1.39 %
National Amusements1—80,000 2,953 36.92 1.35 %
Old Navy (11) / Athleta (1)12—183,599 2,868 15.62 1.31 %
Kohl's Corporation4—184,516 2,832 7.87 1.30 %
Walmart Stores, Inc.8
5—— 2,776 3.42 1.27 %
Best Buy Co., Inc.5—183,604 2,627 14.31 1.20 %
Petco Animal Supplies, Inc.10—136,669 2,526 18.48 1.16 %
Lowe's Companies, Inc.3—— 2,375 4.91 1.09 %
LA Fitness3—125,209 2,292 18.31 1.05 %
Hobby Lobby Stores, Inc.5—271,254 2,248 8.29 1.03 %
Whole Foods Market, Inc.4—139,781 2,130 15.24 0.98 %
Mattress Firm, Inc.9
16—76,408 2,121 27.75 0.97 %
Walgreens4—63,462 2,104 33.15 0.96 %
The Kroger Co.10
3—60,268 2,099 9.19 0.96 %
Five Below, Inc.11—92,694 1,738 18.75 0.80 %
DSW61133,255 1,687 14.33 0.77 %
Sprouts Farmers Market, Inc.3—83,985 1,589 18.92 0.73 %
TOTAL18694,968,094 $72,702 $11.55 33.3 %
($ in thousands, except per square foot data)      
  Number of Stores      
Tenant Wholly Owned 
JV1
Total Leased GLA/NRA2
 
Annualized Base Rent 3
 Annualized Base Rent per Sq. Ft. 
% of Total
Portfolio
Annualized
Base Rent4
Publix Super Markets, Inc. 11 —535,466
 $5,454
 $10.19
 2.5%
The TJX Companies, Inc.5
 14 2471,798
 4,749
 11.00
 2.2%
Bed Bath & Beyond, Inc.6
 14 2422,348
 4,281
 11.04
 1.9%
PetSmart, Inc. 13 1291,389
 4,077
 14.59
 1.8%
Ross Stores, Inc. 12 1364,476
 3,986
 11.57
 1.8%
Dick's Sporting Goods, Inc.7
 7 —340,502
 3,647
 10.71
 1.7%
Nordstrom Rack 5 1197,797
 3,571
 20.75
 1.6%
Michaels Stores, Inc. 11 1253,936
 3,222
 13.41
 1.5%
National Amusements 1 —80,000
 2,953
 36.92
 1.3%
Kohl's Corporation 4 —184,516
 2,832
 7.87
 1.3%
Walmart Stores, Inc.8
 5 ——
 2,652
 3.27
 1.2%
Best Buy Co., Inc. 5 —183,604
 2,612
 14.22
 1.2%
The Gap9
 11 —162,773
 2,588
 15.90
 1.2%
Lowe's Companies, Inc. 3 ——
 2,375
 4.91
 1.1%
LA Fitness 3 —125,209
 2,292
 18.31
 1.0%
Burlington Stores, Inc. 3 —238,400
 2,226
 9.34
 1.0%
Hobby Lobby Stores, Inc. 5 —271,254
 2,190
 8.07
 1.0%
Petco Animal Supplies, Inc. 9 —125,897
 2,188
 17.38
 1.0%
Whole Foods Market, Inc. 4 —139,781
 2,130
 15.24
 1.0%
The Kroger Co.10
 3 —60,268
 2,099
 9.19
 1.0%
Mattress Firm Holdings Corp (12) / Sleepy's (4) 16 —76,408
 2,069
 27.08
 0.9%
Office Depot (6) / Office Max (2) 8 —167,606
 1,957
 11.67
 0.9%
New York Sports Club 2 —86,717
 1,921
 22.16
 0.9%
Randall's Food and Drugs 2 —133,990
 1,754
 13.09
 0.8%
Walgreens 3 —52,662
 1,726
 32.78
 0.8%
TOTAL 174 84,966,797
 $71,553
 $11.18
 32.1%



35

___
1JV Stores represent stores at unconsolidated properties.
2Excludes the estimated size of the structures located on land owned by the Company and ground leased to tenants.
3Annualized base rent represents the monthly contractual rent for December 31, 2019,2020, for each applicable tenant multiplied by 12. Annualized base rent does not include tenant reimbursements. Annualized base rent represents 100% of the annualized base rent at consolidated properties and our share of the annualized base rent at unconsolidated properties.
4Annualized base rent and percent of total portfolio includes ground lease rent.
5Includes TJ Maxx (9), Marshalls (5) and HomeGoods (2).
6Includes Dick's Sporting Goods (6) and Golf Galaxy (1).
7Includes Bed Bath and Beyond (8), Buy Buy Baby (4) Christmas Tree Shops,(1), and Cost Plus World Market (3).
78Includes Dick's Sporting Goods (6)Walmart (3) and Golf Galaxy (1)Sam's Club (2).
89Includes Sam's Club.Mattress Firm (12) and Sleepy's (4).
910Includes Old Navy (10) and Athleta (1).
10Includes Kroger (1), Harris Teeter (1), and Smith's (1).
Ascena Retail Group announced plans to commence a wind down of Dressbarn's operations. Excluding Dressbarn stores, Ascena Retail Group accounts for 0.6% of total portfolio annualized base rent.


36

Geographic Diversification – Annualized Base Rent by Region and State
 
The Company owns interests in 90 operating and redevelopment properties. We also own interests in onetwo development projectprojects under construction. The total operating portfolio consists of approximately 12.712 million of owned square feet in 16 states. The following table summarizes the Company’s operating properties by region and state as of December 31, 2019:2020: 
($ in thousands)                    
  Total Operating Portfolio Excluding Developments and Redevelopments 
Developments and Redevelopments2
 
Joint Ventures 3
 Total Operating Portfolio Including
Developments and Redevelopments
Region/State 
Owned
GLA/NRA1
 Annualized
Base Rent		 
Owned
GLA/NRA1
 Annualized
Base Rent		 
Owned
GLA/NRA1
 Annualized
Base Rent		 Number of Properties 
Owned
GLA/NRA1
 Annualized Base Rent - Ground Leases Total Annualized
Base Rent		 Percent of
Annualized
Base Rent
South                      
Florida 3,323,004
 $53,003
 124,802
 $251
 121,705
 $1,528
 30 3,569,511
 $3,845
 $58,627
 25.9%
Texas 1,798,944
 28,690
 —
 —
 156,150
 2,801
 10 1,955,094
 1,351
 32,842
 14.5%
North Carolina 1,072,354
 20,596
 —
 —
 —
 —
 8 1,072,354
 2,004
 22,600
 10.0%
Oklahoma 505,220
 7,044
 —
 —
 —
 —
 3 505,220
 850
 7,894
 3.5%
Georgia 276,318
 3,664
 —
 —
 —
 —
 1 276,318
 336
 4,000
 1.8%
Tennessee 230,980
 3,808
 —
 —
 —
 —
 1 230,980
 —
 3,808
 1.7%
South Carolina 257,683
 3,245
 —
 —
 ���
 —
 2 257,683
 —
 3,245
 1.4%
Texas - Other 107,400
 591
 —
 —
 —
 —
 1 107,400
 —
 591
 0.3%
Total South 7,571,903
 120,641
 124,802
 251
 277,855
 4,329
 56 7,974,560
 8,386
 133,607
 59.1%
                       
Midwest                    
Indiana - Retail 1,461,464
 23,634
 519,216
 3,071
 —
 —
 19 1,980,680
 1,626
 28,331
 12.5%
Indiana - Other 366,502
 6,684
 —
 —
 —
 —
 3 366,502
 —
 6,684
 3.0%
Illinois 83,759
 1,138
 —
 —
 —
 —
 1 83,759
 —
 1,138
 0.5%
Ohio 236,230
 2,155
 —
 —
 —
 —
 1 236,230
 —
 2,155
 1.0%
Total Midwest 2,147,955
 33,611
 519,216
 3,071
 —
 —
 24 2,667,171
 1,626
 38,308
 17.0%
                       
West                      
Nevada 768,745
 19,791
 —
 —
 —
 —
 4 768,745
 3,592
 23,383
 10.3%
Utah 392,157
 7,263
 —
 —
 —
 —
 2 392,157
 —
 7,263
 3.2%
Arizona 79,902
 2,467
 —
 —
 —
 —
 1 79,902
 —
 2,467
 1.1%
Total West 1,240,804
 29,521
 —
 —
 —
 —
 7 1,240,804
 3,592
 33,113
 14.6%
                       
Northeast                      
New York 363,103
 9,302
 —
 —
 —
 —
 1 363,103
 —
 9,302
 4.1%
New Jersey 106,146
 3,127
 —
 —
 139,022
 2,817
 2 245,168
 2,263
 8,207
 3.6%
Connecticut 205,683
 2,566
 —
 —
 —
 —
 1 205,683
 1,061
 3,627
 1.6%
Total Northeast 674,932
 14,995
 —
 —
 139,022
 2,817
 4 813,954
 3,324
 21,136
 9.3%
  11,635,594
 $198,768
 644,018
 $3,322
 416,877
 $7,146
 91 12,696,489
 $16,928
 $226,164
 100.0%
($ in thousands)
Total Operating Portfolio Excluding Developments and Redevelopments
Developments and Redevelopments2
Joint Ventures 3
Total Operating Portfolio Including
Developments and Redevelopments
Region/State
Owned
GLA/NRA1
Annualized
Base Rent
Owned
GLA/NRA1
Annualized
Base Rent
Owned
GLA/NRA1
Annualized
Base Rent		Number of Properties
Owned
GLA/NRA1
Annualized Base Rent - Ground LeasesTotal Annualized
Base Rent		Percent of
Annualized
Base Rent
South
Florida3,331,826 $52,799 — $— 121,591 $1,206 293,453,417 $3,740 $57,745 25.9%
Texas1,798,711 27,500 — — 156,146 2,568 101,954,857 1,374 31,442 14.1%
North Carolina1,230,417 23,564 — — — — 91,230,417 2,041 25,605 11.5%
Oklahoma505,229 6,493 — — — — 3505,229 861 7,354 3.3%
Georgia276,318 3,676 — — — — 1276,318 345 4,021 1.8%
Tennessee230,981 3,771 — — — — 1230,981 — 3,771 1.7%
South Carolina257,833 2,670 — — — — 2257,833 — 2,670 1.2%
Texas - Other107,400 591 — — — — 1107,400 — 591 0.3%
Total South7,738,715 121,064 — — 277,737 3,774 56 8,016,452 8,361 133,199 59.8 %
Midwest
Indiana - Retail1,394,221 22,110 344,890 2,572 — — 191,739,111 1,518 26,200 11.7%
Indiana - Other366,502 6,773 24,000 — — — 4390,502 — 6,773 3.0%
Ohio236,230 2,217 — — — — 1236,230 — 2,217 1.0%
Illinois83,759 1,146 — — — — 183,759 — 1,146 0.5%
Total Midwest2,080,712 32,246 368,890 2,572 — — 252,449,602 1,518 36,336 16.3%
West
Nevada769,107 19,873 — — — — 4769,107 3,717 23,590 10.6%
Utah392,324 7,279 — — — — 2392,324 — 7,279 3.3%
Arizona79,902 2,467 — — — — 179,902 — 2,467 1.1%
Total West1,241,333 29,619 — — — — 71,241,333 3,717 33,336 14.9%
Northeast
New York363,023 9,142 — — — — 1363,023 — 9,142 4.1%
New Jersey112,871 2,827 — — 139,022 2,849 2251,893 2,103 7,779 3.5%
Connecticut206,560 2,411 — — — — 1206,560 1,061 3,472 1.6%
Total Northeast682,454 14,380 — — 139,022 2,849 4821,476 3,164 20,393 9.1%
11,743,214 $197,309 368,890 $2,572 416,759 $6,623 9212,528,863 $16,760 $223,264 100.0%
____________________
1Owned GLA/NRA represents gross leasable area or net leasable area owned by the Company. It also excludes the square footage of Union Station Parking Garage and Pan Am Plaza Parking Garage.
2Represents the fourthree redevelopment and onetwo development projectprojects not in the retail operating portfolio.
3Represents the three operating properties owned in unconsolidated joint ventures.

37

Lease Expirations 
 
In 2020,2021, leases representing 7.2%8.0% of total annualized base rent are scheduled to expire. The following tables show scheduled lease expirations for retail and office tenants and in-process development property tenants open for business as of December 31, 2019,2020, assuming none of the tenants exercise renewal options. 
 
LEASE EXPIRATION TABLE – OPERATING PORTFOLIO 

($ in thousands, except per square foot data)
Expiring GLA2
Expiring Annualized Base Rent per Sq. Ft.3
Number of Expiring Leases1
Shop TenantsAnchor TenantsOffice and Other TenantsExpiring Annualized Base Rent (Pro-rata)% of Total Annualized Base Rent (Pro-rata)Shop TenantsAnchor TenantsOffice and Other TenantsTotal
2021170 359,532 393,054 21,110 $16,106 8.0 %$29.22 $13.95 $19.25 $18.56 
2022253 520,386 1,058,556 65,020 29,293 14.6 %27.55 13.04 21.97 16.88 
2023242 493,066 1,120,690 113,177 32,012 15.9 %29.19 15.07 19.67 17.85 
2024206 451,867 744,562 33,827 22,193 11.0 %29.76 14.13 9.17 18.42 
2025200 413,172 1,178,558 124,107 27,545 13.7 %30.38 11.39 13.96 20.38 
2026133 322,876 896,743 — 17,174 8.5 %26.12 10.34 16.39 15.85 
202780 212,014 367,192 9,154 10,830 5.4 %29.11 12.57 — 15.24 
202872 176,834 272,757 61,747 11,103 5.5 %31.84 15.21 31.29 19.06 
202950 126,717 177,159 — 6,087 3.0 %30.96 12.21 22.19 19.77 
203048 148,081 266,032 — 7,887 3.9 %28.53 14.51 62.73 19.23 
Beyond66 147,592 925,503 54,721 20,975 10.4 %26.57 17.02 23.16 18.61 
1,520 3,372,137 7,400,806 482,863 $201,205 100.0 %$28.92 $13.53 $16.94 $17.99 
($ in thousands, except per square foot data)          
    
Expiring GLA2
     
Expiring Annualized Base Rent per Sq. Ft.3
  
Number of Expiring Leases1
 Shop Tenants Anchor Tenants Office and Other Tenants Expiring Annualized Base Rent (Pro-rata) % of Total Annualized Base Rent (Pro-rata) Shop Tenants Anchor TenantsOffice and Other TenantsTotal
2020 154
 332,585
 534,529
 3,242
 $14,567
 7.2% $25.24
 $11.83
$19.25
$16.90
2021 212
 451,708
 865,234
 17,868
 22,455
 11.0% 27.19
 11.65
21.97
16.96
2022 256
 535,220
 1,078,093
 65,020
 29,813
 14.6% 26.94
 13.17
19.67
17.80
2023 252
 536,662
 1,125,475
 129,935
 33,020
 16.2% 28.29
 14.86
9.15
18.45
2024 210
 458,244
 868,181
 33,827
 24,609
 12.1% 29.30
 15.08
13.96
20.38
2025 149
 310,145
 1,015,606
 116,988
 21,270
 10.5% 29.05
 10.77
16.20
15.24
2026 78
 212,668
 496,033
 —
 10,007
 4.9% 26.49
 9.85
—
15.23
2027 70
 192,682
 365,093
 9,154
 9,875
 4.9% 28.23
 12.99
31.29
18.94
2028 70
 163,274
 371,802
 61,747
 11,524
 5.7% 30.71
 14.02
21.75
19.36
2029 54
 128,882
 243,700
 2,200
 7,186
 3.5% 29.90
 13.11
62.73
19.17
Beyond 67
 159,699
 820,149
 54,721
 19,192
 9.4% 28.73
 16.70
21.59
18.72
  1,572
 3,481,769
 7,783,895
 494,702
 $203,520
 100.0% $27.93
 $13.25
$16.66
$17.81


____
1Lease expiration table reflects rents in place as of December 31, 20192020 and does not include option periods; 20202021 expirations include 8 month-to-month tenants. This column also excludes ground leases.
2Expiring GLA excludes estimated square footage attributable to non-owned structures on land owned by the Company and ground leased to tenants.
3Annualized base rent represents the monthly contractual rent as of December 31, 20192020 for each applicable tenant multiplied by 12. Excludes tenant reimbursements and ground lease revenue.

Lease Activity – New and Renewal 
 
In 2019,2020, the Company executed new and renewal leases on 302215 individual spaces totaling 2.01.5 million square feet (9.2%(7.0% cash leasing spread and 14.5% GAAP leasing spread on 242158 comparable leases).  New leases were signed on 11459 individual spaces for 0.50.4 million square feet of GLA (35.5%(9.1% cash leasing spread and 44.8%21.3% GAAP leasing spread on 6442 comparable leases), while renewal leases were signed on 188156 individual spaces for 1.51.1 million square feet of GLA (3.3%(6.1% cash leasing spread and 7.5%12.0% GAAP leasing spread on 178116 comparable leases).










38





ITEM 3. LEGAL PROCEEDINGS 
 
We are not subject to any material litigation nor, to management’s knowledge, is any material litigation currently threatened against us. We are parties to routine litigation, claims, and administrative proceedings arising in the ordinary course of


business.  Management believes that such matters will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows taken as a whole.  
 
ITEM 4. MINE SAFETY DISCLOSURES 
 
Not applicable.

39

PART II 
 
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 
 
Market Information 
 
Our common shares are currently listed and traded on the NYSE under the symbol “KRG.”  On February 14, 2020,16, 2021, the closing price of our common shares on the NYSE was $17.92.$18.12. 
 
 Holders 
 
The number of registered holders of record of our common shares was 1,1431,082 as of February 14, 2020.16, 2021.  This total excludes beneficial or non-registered holders that held their shares through various brokerage firms.  This figure does not represent the actual number of beneficial owners of our common shares because our common shares are frequently held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares. 
 
Distributions, if any, will be declared and paid at the discretion of our Board of Trustees and will depend upon a number of factors, including cash generated by operating activities, our financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as our Board of Trustees deem relevant. 
 
Distributions by us to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes will be taxable to shareholders as either ordinary dividend income or capital gain income if so declared by us.  Distributions in excess of taxable earnings and profits generally will be treated as a non-taxable return of capital.  These distributions, to the extent that they do not exceed the shareholder’s adjusted tax basis in its common shares, have the effect of deferring taxation until the sale of a shareholder’s common shares.  To the extent that distributions are both in excess of taxable earnings and profits and in excess of the shareholder’s adjusted tax basis in its common shares, the distribution will be treated as gain from the sale of common shares.  In order to maintain our qualification as a REIT, we must make annual distributions to shareholders of at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) and we must make distributions to shareholders equal to 100% of our net taxable income to eliminate U.S. federal income tax liability.  Under certain circumstances, we could be required to make distributions in excess of cash available for distributions in order to meet such requirements.  For the taxable year ended December 31, 2019,2020, approximately 35%89% of our distributions to shareholders constituted a return of capital,taxable ordinary income dividends and approximately 35%11% constituted taxable capital gains dividends, and approximately 30% constituted taxable ordinary income dividends. 
 
Under our unsecured revolving credit facility,Credit Facility, we are permitted to make distributions to our shareholders provided that no event of default exists. If an event of default exists, we may only make distributions sufficient to maintain our REIT status.  However, we may not make any distributions if any event of default resulting from nonpayment or bankruptcy exists, or if our obligations under the unsecured revolving credit facilityCredit Facility are accelerated.
  
Issuer Repurchases; Unregistered Sales of Securities 
 
During the three months ended December 31, 2019,2020, certain of our employees surrendered common shares owned by them to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of restricted common shares of beneficial interest issued under our Plan. These shares were repurchased by the Company.

The following table summarizes all of these repurchases during the three months ended December 31, 2019:2020:





Period Total number
of shares
purchased		 Average price
paid per share		 Total number of
shares purchased
as part of publicly
announced plans
or programs		 Maximum number
of shares that may
yet be purchased
under the plans or
programs		PeriodTotal number
of shares
purchased		Average price
paid per share		Total number of
shares purchased
as part of publicly
announced plans
or programs		Maximum number
of shares that may
yet be purchased
under the plans or
programs
October 1 - October 31 — — N/A N/AOctober 1 - October 31——N/AN/A
November 1 - November 30 5,505 $18.03 N/A N/ANovember 1 - November 3027,125$12.42N/AN/A
December 1 - December 31 — — N/A N/ADecember 1 - December 31——N/AN/A
Total 5,505 Total27,125

We did not sell any unregistered securities during 2019.2020.
 
 Issuances Under Equity Compensation Plans 
 
For information regarding the securities authorized for issuance under our equity compensation plans, see Item 12 of this Annual Report on Form 10-K. 
 
Performance Graph 
 
Notwithstanding anything to the contrary set forth in any of our filings under the Securities Act or the Exchange Act that might incorporate SEC filings, in whole or in part, the following performance graph will not be incorporated by reference into any such filings. 
 
The following graph compares the cumulative total shareholder return of our common shares for the period from December 31, 20142015 to December 31, 2019,2020, to the S&P 500 Index and to the published NAREIT All Equity REIT Index over the same period.  The graph assumes that the value of the investment in our common shares and each index was $100 at December 31, 20142015 and that all cash distributions were reinvested.  The shareholder return shown on the graph below is not indicative of future performance



a20191231krg20195yearreturng.jpg

41

  12/14
 6/15
 12/15
 6/16
 12/16
 6/17
 12/17
 6/18
 12/18
 6/19
 12/19
Kite Realty Group Trust 100.00
 86.75
 94.00
 103.79
 88.78
 73.53
 78.47
 70.96
 60.85
 69.56
 93.16
S&P 500 100.00
 101.23
 101.38
 105.27
 113.51
 124.11
 138.29
 141.95
 132.23
 156.74
 173.86
FTSE NAREIT Equity REITs 100.00
 94.33
 103.20
 117.00
 111.99
 115.01
 117.84
 119.04
 112.39
 132.38
 141.61
krg-20201231_g1.jpg

 12/15/6/16/12/166/1712/176/1812/186/1912/196/2012/20
Kite Realty Group Trust100.00 110.42 94.45 78.22 83.48 75.49 64.73 74.00 99.10 60.36 79.13 
S&P 500100.00 103.84 111.96 122.42 136.40 140.02 130.42 154.60 171.49 166.20 203.04 
FTSE NAREIT Equity REITs100.00 113.38 108.52 111.45 114.19 115.35 108.92 128.28 137.23 111.55 126.25 




ITEM 6. SELECTED FINANCIAL DATA 
 
The following tables set forth, on a historical basis, selected unaudited financial and operating information. The financial information has been derived from our consolidated balance sheets and statements of operations.   This information should be read in conjunction with our audited consolidated financial statements and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Annual Report on Form 10-K.Not applicable.




 



42
($ in thousands, except per share data) Year Ended December 31 (Unaudited)
  2019 2018 2017 2016 2015
Operating Data:      
  
  
Revenues:          
Rental income and other property related revenue $314,725
 $351,661
 $358,442
 $354,122
 $347,005
Fee income 448
 2,523
 377
 —
 —
Total revenues 315,173
 354,184
 358,819
 354,122
 347,005
Expenses:          
Property operating 45,575
 50,356
 49,643
 47,923
 49,973
Real estate taxes 38,777
 42,378
 43,180
 42,838
 40,904
General, administrative, and other 28,214
 21,320
 21,749
 20,603
 18,709
Transaction costs —
 —
 —
 2,771
 1,550
Non-cash gain from release of assumed earnout liability —
 —
 —
 —
 (4,832)
Depreciation and amortization 132,098
 152,163
 172,091
 174,564
 167,312
Impairment charge 37,723
 70,360
 7,411
 —
 1,592
Total expenses 282,387
 336,577
 294,074
 288,699
 275,208
Gains on sales of operating properties, net 38,971
 3,424
 15,160
 4,253
 4,066
Operating income 71,757
 21,031
 79,905
 69,676
 75,863
Interest expense (59,268) (66,785) (65,702) (65,577) (56,432)
Income tax benefit (expense) of taxable REIT subsidiary 282
 227
 100
 (814) (186)
(Loss) gain on debt extinguishment (11,572) —
 —
 —
 5,645
Gain on settlement —
 —
 —
 —
 4,520
Equity in loss of unconsolidated subsidiaries (628) (278) —
 —
 —
Other expense, net (573) (646) (415) (169) (95)
Consolidated net (loss) income (2) (46,451) 13,888
 3,116
 29,315
Net income attributable to noncontrolling interests: (532) (116) (2,014) (1,933) (2,198)
Net (loss) income attributable to Kite Realty Group Trust: (534) (46,567) 11,874
 1,183
 27,117
Dividends on preferred shares —
 —
 —
 —
 (7,877)
Non-cash adjustment for redemption of preferred shares —
 —
 —
 —
 (3,797)
Net (loss) income attributable to common shareholders $(534) $(46,567) $11,874
 $1,183
 $15,443
           
(Loss) income per common share – basic:          
(Loss) income from continuing operations attributable to Kite Realty Group Trust common shareholders $(0.01) $(0.56) $0.14
 $0.01
 $0.19
Income from discontinued operations attributable to Kite Realty Group Trust common shareholders —
 —
 —
 —
 —
Net (loss) income attributable to Kite Realty Group Trust common shareholders $(0.01) $(0.56) $0.14
 $0.01
 $0.19
(Loss) income per common share – diluted:          
(Loss) income from continuing operations attributable to Kite Realty Group Trust common shareholders $(0.01) $(0.56) $0.14
 $0.01
 $0.18
Income from discontinued operations attributable to Kite Realty Group Trust common shareholders —
 —
 —
 —
 —
Net (loss) income attributable to Kite Realty Group Trust common shareholders $(0.01) $(0.56) $0.14
 $0.01
 $0.18
           
Weighted average Common Shares outstanding – basic 83,926,296
 83,693,385
 83,585,333
 83,436,511
 83,421,904
Weighted average Common Shares outstanding – diluted 83,926,296
 83,693,385
 83,690,418
 83,465,500
 83,534,831
Distributions declared per Common Share $1.2700
 $1.2700
 $1.2250
 $1.1700
 $1.0900





($ in thousands) As of December 31
  2019 2018 2017 2016 2015
Balance Sheet Data (Unaudited):          
Investment properties, net $2,420,439
 $2,941,193
 $3,293,270
 $3,435,382
 $3,500,845
Cash and cash equivalents 31,336
 35,376
 24,082
 19,874
 33,880
Assets held for sale —
 5,731
 —
 —
 —
Total assets 2,648,887
 3,172,013
 3,512,498
 3,656,371
 3,756,428
Mortgage and other indebtedness 1,146,580
 1,543,301
 1,699,239
 1,731,074
 1,724,449
Total liabilities 1,306,577
 1,712,867
 1,874,285
 1,923,940
 1,937,364
Limited partners' interests in Operating Partnership and other redeemable noncontrolling interests 52,574
 45,743
 72,104
 88,165
 92,315
Kite Realty Group Trust shareholders’ equity 1,289,038
 1,412,705
 1,565,411
 1,643,574
 1,725,976
Noncontrolling interests 698
 698
 698
 692
 773
Total liabilities and equity 2,648,887
 3,172,013
 3,512,498
 3,656,371
 3,756,428

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 
The following discussion should be read in conjunction with the accompanying audited consolidated financial statements and related notes thereto and Item 1A, “Risk Factors,” appearing elsewhere in this Annual Report on Form 10-K. In this discussion, unless the context suggests otherwise, references to “our Company,” “we,” “us,” and “our” mean Kite Realty Group Trust and its direct and indirect subsidiaries, including Kite Realty Group, L.P. 
 
Overview 
 
In the following overview, we discuss, among other things, the status of our business and properties, the effect that current United States economic conditions is having on our retail tenants and us, and the current state of the financial markets and how it impacts our financing strategy. 
 
Our Business and Properties 
 
Kite Realty Group Trust is a publicly-held real estate investment trust which, through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States.  We derive revenues primarily from activities associated with the collection of contractual rents and reimbursement payments from tenants at our properties.  Our operating results therefore depend materially on, among other things, the ability of our tenants to make required lease payments, the health and resilience of the United States retail sector, interest rate volatility, job growth and real estate market and overall economic conditions. 
 
As of December 31, 2019,2020, we owned interests in 90 operating and redevelopment properties totaling approximately 17.417.3 million square feet. We also owned onetwo development projectprojects under construction as of this date.  
 
Portfolio Update 
 
As has become more evident during the COVID-19 pandemic, strong real estate matters. The strength of the Company's real estate is evidenced by our higher rent collection rates as compared to our peers, based upon publicly reported information by each peer as of February 19, 2021. The Company has continued to improve its asset quality. In addition, the Company's property type lends itself to retailers' current needs including curbside pick-up and buying online and picking up in store (BOPIS) that we believe will benefit from tenant demand for additional space.
The Company's operations were impacted by the bankruptcies of retailers during the COVID-19 pandemic. The Company had leased space to national retailers that declared bankruptcy during 2020 that comprised 5.9% of our annualized base rent. A portion of the retailers have vacated their space with us, which will lead to an expected decline in occupancy and rental revenue in 2021.

Project Focus, our disposition program completed in 2019, allowed us to dispose of weaker, non-core assets and reduce our exposure to at-risk tenants and resulted in $502 million in combined sales, the majority of which net proceeds were used to repay debt. It also allowed us to focus our geographic footprint on locations that are benefiting from accelerating migration shifts.

In evaluating potential acquisition, development, and redevelopment opportunities, we look for strong sub-markets where average household income, population density, traffic counts and daytime workforce populations are above the broader market average.  We also focus on locations that are benefitting from current population migratory patterns, namely major cities in states with no or relatively low income taxes, and mild or temperate climates.  In our largest sub-markets, household incomes are significantly higher and state income taxes are relatively lower than the medians for those broader markets. 
In February 2019, we announced a plan to market and sell up to $500 million in non-core assets as part of a program designed to improve the Company’s portfolio quality, reduce its leverage, and focus operations on markets where we believe the Company can gain scale and generate attractive risk-adjusted returns. This program ("Project Focus 2019") was completed in October 2019. The majority of the net proceeds were used to repay debt, further strengthening our balance sheet.



In addition to the delevering, we improved the quality of our portfolio. We increased the ABR of our portfolio to $17.83 as the retail assets sold had a weighted average ABR of $14.66, which is significantly lower than our current portfolio.

In addition to targeting sub-markets with strong consumer demographics, we focus on having the most desirable tenant mix at each center.  We have aggressively targeted and executed leases with prominent grocers including Publix, Aldi, Whole Foods, and Trader Joe's, expanding retailers such as TJ Maxx, Ross Dress for Less, Burlington, and Old Navy, service and restaurant retailers such as and other retailers such as Ulta, REI, Party CityFive Below and Total Wine.  Additionally, we have identified cost-efficient ways to relocate, re-tenant and renegotiate leases at several of our properties allowing us to attract more suitable tenants.
 




Capital and Financing Activities 
 
Our ability to obtain capital on satisfactory terms and to refinance borrowings as they mature is affected by the condition of the economy in general and by the financial strength of properties securing borrowings. 
 
With the successful completion of Project Focus in 2019, we were able to enhance our already-strong balance sheet, increase our financial flexibility, and improve our liquidity to fund future growth. We ended the year2020 with approximately $614.8$566.9 million of combined cash and borrowing capacity on our unsecured revolving credit facility.Credit Facility.  In addition, as of December 31, 2019,2020, we did not have any debt principal scheduled to mature through December 31, 2021.

The amount that we may borrow under our unsecured revolving credit facilityCredit Facility is limited by the value of the assets in our unencumbered asset pool.  As of December 31, 2019,2020, the value of the assets in our unencumbered asset pool was $1.4$1.3 billion.

The investment grade credit ratings we have received provide us with access to the unsecured public bond market, which we may continue to use in the future to finance acquisition activity, repay maturing debt and fix interest rates.  
 
Summary of Critical Accounting Policies and Estimates 
 
Our significant accounting policies are more fully described in Note 2 to the accompanying consolidated financial statements. As disclosed in Note 2, the preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the compilation of our financial condition and results of operations and, in some cases, require management’s most difficult, subjective, and complex judgments. 
 
Valuation of Investment Properties 
 
Management reviews operational and development projects, land parcels and intangible assets for impairment on a property-by-property basis on at least a quarterly basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. This review for possible impairment requires certain assumptions, estimates, and significant judgment. Impairment losses for investment properties and intangible assets are measured when the undiscounted cash flows estimated to be generated by the investment properties during the expected holding period are less than the carrying amounts of those assets. The evaluation of impairment is subject to certain management assumptions including projected net operating income, anticipated hold period, expected capital expenditures and the capitalization rate used to estimate the property's residual value. Impairment losses are recorded as the excess of the carrying value over the estimated fair value of the asset. Our impairment review for land and development properties assumes we have the intent and the ability to complete the developments or projected uses for the land parcels. If we determine those plans will not be completed or our assumptions with respect to operating assets are not realized, an impairment loss may be appropriate.
 
Depreciation may be accelerated for a redevelopment project, including partial demolition of existing structures after the asset is assessed for impairment. 
 
Operating properties will be classified as held for sale only when those properties are available for immediate sale in their present condition and for which management believes it is probable that a sale of the property will be completed within one year, among other factors. Operating properties classified as held for sale are carried at the lower of cost or fair value less estimated costs to sell. Depreciation and amortization are suspended during the held-for-sale period.
Our operating properties have operations and cash flows that can be clearly distinguished from the rest of our activities. Historically, the operations reported in discontinued operations include those operating properties that were sold or were considered


held for sale and for which operations and cash flows can be clearly distinguished. The operations from these properties are eliminated from ongoing operations, and we will not have a continuing involvement after disposition. In 2014, we adopted the provisions of ASU 2014-08, 
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which will result in fewer real estate sales being classified within discontinued operations, as only disposals representing a strategic shift in operations will be presented as discontinued operations.  No properties that have been sold, or designated as held-for-sale, since the adoption of ASU 2014-08, have met the revised criteria for classification within discontinued operations.

Acquisition of Real Estate Investments 
 
Upon acquisition of real estate operating properties, we estimate the fair value of acquired identifiable tangible assets and identified intangible assets and liabilities, assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition, based on evaluation of information and estimates available at that date.  Based on these estimates, we record the estimated fair value to the applicable assets and liabilities.  In making estimates of fair values, a number of sources are utilized, including information obtained as a result of pre-acquisition due diligence, marketing and leasing activities. The estimates of fair value were determined to have primarily relied upon Level 2 and Level 3 inputs, as defined below.



44

Fair value is determined for tangible assets and intangibles, including:   
•
•the fair value of the building on an as-if-vacant basis and the fair value of land determined either by comparable market data, real estate tax assessments, independent appraisals or other relevant data;
•
above-market and below-market in-place lease values for acquired properties, which are based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases.  Any below-market renewal options are also considered in the in-place lease values.  The capitalized above-market and below-market lease values are amortized as a reduction of or addition to rental income over the term of the lease.  Should a tenant vacate, terminate its lease, or otherwise notify us of its intent to do so, the unamortized portion of the lease intangibles would be charged or credited to income;
•
the value of having a lease in place at the acquisition date.  We utilize independent and internal sources for our estimates to determine the respective in-place lease values.  Our estimates of value are made using methods similar to those used by independent appraisers.  Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and foregone costs and rent received during the estimated lease-up period as if the space was vacant.  The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases; and
•
the fair value of any assumed financing that is determined to be above or below market terms.  We utilize third party and independent sources for our estimates to determine the respective fair value of each mortgage payable.  The fair market value of each mortgage payable is amortized to interest expense over the remaining initial terms of the respective loan.

•above-market and below-market in-place lease values for acquired properties, which are based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases.  Any below-market renewal options are also considered in the in-place lease values.  The capitalized above-market and below-market lease values are amortized as a reduction of or addition to rental income over the term of the lease.  Should a tenant vacate, terminate its lease, or otherwise notify us of its intent to do so, the unamortized portion of the lease intangibles would be charged or credited to income;
•the value of having a lease in place at the acquisition date.  We utilize independent and internal sources for our estimates to determine the respective in-place lease values.  Our estimates of value are made using methods similar to those used by independent appraisers.  Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and foregone costs and rent received during the estimated lease-up period as if the space was vacant.  The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases; and
•the fair value of any assumed financing that is determined to be above or below market terms.  We utilize third party and independent sources for our estimates to determine the respective fair value of each mortgage payable.  The fair market value of each mortgage payable is amortized to interest expense over the remaining initial terms of the respective loan.

We also consider whether there is any value to in-place leases that have a related customer relationship intangible value.  Characteristics we consider in determining these values include the nature and extent of existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, among other factors.  To date, a tenant relationship has not been developed that is considered to have a current intangible value.
 
Revenue Recognition 
 
As a lessor of real estate assets, the Company retains substantially all of the risks and benefits of ownership and accounts for its leases as operating leases.  
 
Contractual minimum base rent, percentage rent, and expense reimbursements from tenants for common area maintenance costs, insurance and real estate taxes are our principal sources of revenue.  Base minimum rents are recognized on a straight-line basis over the terms of the respective leases.  Certain lease agreements contain provisions that grant additional rents based on a tenant’s sales volume (contingent overage rent). Overage rent is recognized when tenants achieve the specified sales targets as defined in their lease agreements.  Overage rent is included in rental income in the accompanying consolidated statements of operations for the yearyears ended December 31, 2020 and 2019. If we determine that collectibility is probable, we recognize income from rentals


based on the methodology described above. We have accounts receivable due from tenants and are subject to the risk of tenant defaults and bankruptcies that may affect the collection of outstanding receivables. These receivables are reduced for credit loss that is recognized as a reduction to rental income. We regularly evaluate the collectibility of these lease-related receivables by analyzing past due account balances and consider such facts as the credit quality of our customer, historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the collectibility of rental income. Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.  
 
We recognize the sale of real estate when control transfers to the buyer.  As part of our ongoing business strategy, we will, from time to time, sell land parcels and outlots, some of which are ground leased to tenants.


Fair Value Measurements




45

 
We follow the framework established under accounting standard FASB ASC 820, Fair Value Measurements and Disclosures, for measuring fair value of non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis but only in certain circumstances, such as a business combination or upon determination of impairment.

Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

•
Level 1 fair value inputs are quoted prices in active markets for identical instruments to which we have access.

•
Level 2 fair value inputs are inputs other than quoted prices included in Level 1 that are observable for similar instruments, either directly or indirectly, and appropriately consider counterparty creditworthiness in the valuations.

•
Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an instrument at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. 

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As discussed in Note 8 to the Financial Statements, we have determined that derivative valuations are classified in Level 2 of the fair value hierarchy.

Cash and cash equivalents, accounts receivable, escrows and deposits, and other working capital balances approximate fair value.  

Note 6 to the Financial Statements includes a discussion of the fair values recorded when we recognized impairment charges in 2019, 2018 and 2017. Level 3 inputs to these transactions include our estimations of disposal values.

Income Taxes and REIT Compliance
Parent Company

The Parent Company, which is considered a corporation for U.S. federal income tax purposes, has been organized and intends to continue to operate in a manner that will enable it to maintain its qualification as a REIT for federal income tax purposes. As a result, it generally will not be subject to U.S. federal income tax on the earnings that it distributes to the extent it distributes its “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to shareholders of the Parent Company and meets certain other requirements on a recurring basis. To the extent that it satisfies this distribution requirement, but distributes less than 100% of its taxable income, it will be subject to U.S. federal corporate income tax on its undistributed REIT taxable income. REITs are subject to a number of organizational and operational requirements. If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost. We may also be subject to certain U.S. federal, state and local taxes on our income and property and to federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT. The Operating Partnership intends to continue to make distributions to the Parent Company in amounts sufficient to assist the Parent Company in adhering to REIT requirements and maintaining its REIT status.



We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiary of the Operating Partnership, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. This election enables us to receive income and provide services that would otherwise be impermissible for a REIT. Deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Operating Partnership

The allocated share of income and loss, other than the operations of our taxable REIT subsidiary, is included in the income tax returns of the Operating Partnership's partners. Accordingly, the only U.S. federal income taxes included in the accompanying consolidated financial statements are in connection with the taxable REIT subsidiary.

Inflation
Inflation rates have been near historical lows in recent years and, therefore, have not had a significant impact on our results of operations. Most of our leases contain provisions designed to mitigate the adverse impact of inflation by requiring the tenant to pay its share of operating expenses, including common area maintenance, real estate taxes and insurance, or include a fixed amount for these costs that escalates over time, thereby reducing our exposure to increases in operating expenses resulting from inflation. Also, most of our leases have original terms of fewer than ten years, which enables us to adjust rental rates to market upon lease renewal. 
Results of Operations 

As of December 31, 2019,2020, we owned interests in 90 operating and redevelopment properties and onetwo development project currently under construction. The following table sets forth the total operating and redevelopment properties and development projects that we owned as of December 31, 2020, 2019 2018 and 2017:2018:

 # of Properties# of Properties
 2019 2018 2017202020192018
Operating Retail Properties 82
 105
 105
Operating Retail Properties83 82 105 
Operating Office Properties and Other 4
 3
 4
Operating Office Properties and Other4 4 3 
Redevelopment Properties 4
 3
 8
Redevelopment Properties34 3 
Total Operating and Redevelopment Properties 90
 111
 117
Total Operating and Redevelopment Properties90 90 111 
Development Projects: 1
 1
 2
Development Projects:211
Total All Properties 91
 112
 119
Total All Properties92 91 112 
 
The comparability of results of operations is affected by our development, redevelopment, and operating property disposition activities in 2018 through 2019.2020. Therefore, we believe it is most useful to review the comparisons of our results of operations for these years (as set forth below under “Comparison of Operating Results for the Years Ended December 31, 20192020 and 20182019”) in conjunction with the discussion of these activities during those periods, which is set forth below. 
 
Property Acquisition Activities 
 
During the yearyears ended December 31, 2020 and 2019, we acquired the properties listed in the table below. We did not acquire any properties in 2018.  

Property NameMSAAcquisition DateOwned GLA
Pan Am Plaza GarageIndianapolis, INMarch 2019N/A
Nora PlazaIndianapolis, INAugust 2019139,743139,670 
Eastgate CrossingRaleigh, NCDecember 2020156,276 




Operating Property Disposition Activities 
 
During the two years ended December 31, 2020, 2019, and 2018, we sold the operating properties listed in the table below.  
46

Property NameMSADisposition DateOwned GLA
Trussville PromenadeBirmingham, ALFebruary 2018463,836
Memorial CommonsGoldsboro, NCMarch 2018111,022
Tamiami Crossing 1
Naples, FLJune 2018121,705
Plaza Volente 1
Austin, TXJune 2018156,296
Livingston Shopping Center 1
Newark, NJJune 2018139,559
Hamilton CrossingAlcoa, TNNovember 2018175,464
Fox Lake CrossingChicago, ILDecember 201899,136
Lowe's PlazaLas Vegas, NVDecember 201830,210
Whitehall PikeBloomington, INMarch 2019128,997
Beechwood PromenadeAthens, GAApril 2019297,369
Village at Bay ParkGreen Bay, WIMay 201982,254
Lakewood PromenadeJacksonville, FLMay 2019196,655
Palm Coast LandingPalm Coast, FLMay 2019168,352
Lowe's - Perimeter WoodsCharlotte, NCMay 2019166,085
Cannery CornerLas Vegas, NVMay 201930,738
Temple TerraceTampa, FLJune 201990,328
University Town CenterOklahoma City, OKJune 2019348,877
Gainesville PlazaGainesville, FLJuly 2019162,189
Bolton PlazaJacksonville, FLJuly 2019154,155
Eastgate PlazaLas Vegas, NVJuly 201996,594
Burnt StorePunta Gorda, FLJuly 201995,625
Landstown CommonsVirginia Beach, VAAugust 2019398,139
Lima MarketplaceFort Wayne, INSeptember 2019100,461
Hitchcock PlazaAiken, SCSeptember 2019252,211
Merrimack Village CenterManchester, NHSeptember 201978,892
Publix at AcworthAtlanta, GAOctober 201969,628
The Centre at PanolaAtlanta, GAOctober 201973,075
Beacon HillCrown Point, INOctober 201956,820
Bell Oaks CentreEvansville, INNovember 201994,958
Boulevard CrossingKokomo, INDecember 2019124,634
South Elgin CommonsChicago, ILDecember 2019128,000

____________________
1The Company has retained a 20% ownership interest in this property.
  
 Redevelopment Activities 
 
During portions of the two years ended December 31, 2020, 2019, and 2018, the following properties were under active redevelopment and removed from our operating portfolio: 
 


47

Property NameMSA
Transition to
Redevelopment1
Transition to Operating PortfolioOwned GLA
Courthouse Shadows2
Naples, FLJune 2013Pending124,802
Hamilton Crossing Centre2, 3, 4
Indianapolis, INJune 2014Pending89,983
City Center4
White Plains, NYDecember 2015June 2018363,103
Fishers Station4
Indianapolis, INDecember 2015September 201852,414
Beechwood Promenade 4, 5
Athens, GADecember 2015December 2018297,369
The Corner2, 3, 4
Indianapolis, INDecember 2015Pending27,731
Rampart Commons4
Las Vegas, NVMarch 2016December 201879,314
Burnt Store Marketplace 4, 5
Punta Gorda, FLJune 2016March 201895,625
Glendale Town Center 23
Indianapolis, INMarch 2019Pending393,002

____________________
1Transition date represents the date the property was transferred from our operating portfolio into redevelopment status.
2This property was sold in 2020.
3This property has been identified as a redevelopment property and is not included in the operating portfolio or the same property pool.
34This redevelopment would potentially include the creation of a mixed-use (office, retail, and multi-family) development.
45This property was transitioned to the operating portfolio; however, it remains excluded from the same property pool for at least a portion of 2019 because it has not been in the operating portfolio four full quarters after the property was transitioned to operations.
5This property was sold in 2019.

 Net Operating Income and Same Property Net Operating Income

We use property net operating income (“NOI”), a non-GAAP financial measure, to evaluate the performance of our properties. We define NOI as income from our real estate, including lease termination fees received from tenants, less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and certain corporate level expenses. We believe that NOI is helpful to investors as a measure of our operating performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as depreciation and amortization, interest expense, and impairment, if any.

We also use same property NOI ("Same Property NOI"), a non-GAAP financial measure, to evaluate the performance of our retail properties. Same Property NOI excludes properties that have not been owned for the full period presented. It also excludes net gains from outlot sales, straight-line rent revenue, lease termination fees,income in excess of lost rent, amortization of lease intangibles and significant prior period expense recoveries and adjustments, if any. When the Company receives payments in excess of any accounts receivable for terminating a lease, Same Property NOI will include such excess payments as monthly rent until the earlier of the following: the expiration of 12 months or the start date of a replacement tenant. We believe that Same Property NOI is helpful to investors as a measure of our operating performance because it includes only the NOI of properties that have been owned for the full period presented, whichpresented. We believe such presentation eliminates disparities in net income due to the acquisition or disposition of properties during the particular period presented and thus provides a more consistent metric for the comparison of our properties. Full year Same Property NOI representsincludes the sumresults of properties that have been owned for the four quarters, as reported.entire current and prior year reporting periods.

NOI and Same Property NOI should not, however, be considered as alternatives to net income (calculated in accordance with GAAP) as indicators of our financial performance. Our computation of NOI and Same Property NOI may differ from the methodology used by other REITs, and therefore may not be comparable to such other REITs.

When evaluating the properties that are included in the same property pool, we have established specific criteria for determining the inclusion of properties acquired or those recently under development. An acquired property is included in the same property pool when there is a full quarter of operations in both years subsequent to the acquisition date. Development and redevelopment properties are included in the same property pool four full quarters after the properties have been transferred to the operating portfolio. A redevelopment property is first excluded from the same property pool when the execution of a redevelopment plan is likely and we 1) begin recapturing space from tenants.tenants or b) the contemplated plan significantly impacts the operations of the property. At December 31, 2019,2020, the same property pool excluded fourthree properties in redevelopment, one recently completed redevelopment, onedevelopment, two acquired property,properties, and three commercial properties.
48



The following table reflects Same Property NOI1 and a reconciliation to net income attributable to common shareholders for the years ended December 31, 20192020 and 20182019 (unaudited):

($ in thousands)Years Ended December 31, 
20202019% Change
Leased percentage at period end91.5 %96.1 % 
Economic Occupancy percentage2
92.1 %92.8 % 
Same Property NOI$179,304 $191,970 (6.6)%
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure:    
Net operating income - same properties$179,304 $191,970  
Net operating income - non-same activity3
10,084 38,403  
Other (expense) income, net(357)(471) 
General, administrative and other(30,840)(28,214) 
Loss on debt extinguishment— (11,572)
Impairment charges— (37,723)
Depreciation and amortization expense(128,648)(132,098)
Interest expense(50,399)(59,268) 
Gains on sales of operating properties4,733 38,971  
Net income attributable to noncontrolling interests(100)(532)
Net loss attributable to common shareholders$(16,223)$(534)
($ in thousands) Years Ended December 31,  
  2019 2018 % Change
Leased percentage at period end 96.0% 95.0%  
Economic Occupancy percentage2
 92.6% 92.6%  
       
Same Property NOI3
 $204,586
 $200,111
 2.2%
       
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure:   
  
  
       
Net operating income - same properties $204,586
 $200,111
  
Net operating income - non-same activity4
 25,787
 58,816
  
Other (expense) income, net (471) 1,826
  
General, administrative and other (28,214) (21,320)  
Loss on debt extinguishment (11,572) —
  
Impairment charges (37,723) (70,360)  
Depreciation and amortization expense (132,098) (152,163)  
Interest expense (59,268) (66,785)  
Gains on sales of operating properties 38,971
 3,424
  
Net income attributable to noncontrolling interests (532) (116)  
Net (loss) income attributable to common shareholders $(534) $(46,567)  

____
1Same Property NOI excludes (i) The Corner, Courthouse Shadows, Glendale Town Center, and Hamilton Crossing redevelopments, (ii) the recently completed RampartEddy Street Commons redevelopment,- Phases II and III developments, (iii) the recently acquired Eastgate Crossing and Nora Plaza, and (iv) office properties.
2Excludes leases that are signed but for which tenants have not yet commenced the payment of cash rent. Calculated as a weighted average based on the timing of cash rent commencement and expiration during the period.
3Same Property NOI excludes net gains from outlot sales, straight-line rent revenue, lease termination fees, amortization of lease intangibles, fee income and significant prior period expense recoveries and adjustments, if any.
4Includes non-cash activity across the portfolio as well as net operating income from properties not included in the same property pool including properties sold during both periods.
 
Our Same Property NOI increased 2.2%decreased 6.6% in 20192020 compared to 2018.2019. This increasedecrease was primarily due to growthbad debt expense of $12.1 million in rental rates and contractual rent increases in existing leases.2020 related to certain tenants that were impacted by the COVID-19 pandemic.  


Funds From Operations 
 
Funds from Operations ("FFO") is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. We calculate FFO, a non-GAAP financial measure, in accordance with the best practices described in the April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts ("NAREIT"), as restated in 2018. The NAREIT white paper defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

Considering the nature of our business as a real estate owner and operator, the Company believes that FFO is helpful to investors in measuring our operational performance because it excludes various items included in net income that do not


relate to or are not indicative of our operating performance, such as gains or losses from sales of depreciated property and
49

depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO (a) should not be considered as an alternative to net income (calculated in accordance with GAAP) for the purpose of measuring our financial performance, (b) is not an alternative to cash flow from operating activities (calculated in accordance with GAAP) as a measure of our liquidity, and (c) is not indicative of funds available to satisfy our cash needs, including our ability to make distributions. Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. For informational purposes, we have also provided FFO adjusted for loss on debt extinguishment.

From time to time, the Company may report or provide guidance with respect to “NAREIT FFO as adjusted” which removes the impact of certain non-recurring and non-operating transactions or other items the Company does not consider to be representative of its core operating results including without limitation, gains or losses associated with the early extinguishment of debt, gains or losses associated with litigation involving the Company that is not in the normal course of business, the impact on earnings from executive separation,employee severance, and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company’s calculation of FFO.
Our calculations of FFO1 and reconciliation to consolidated net income and FFO, as adjusted for the years ended December 31, 2020, 2019 2018 and 20172018 (unaudited) are as follows:
 
($ in thousands) Years Ended December 31,($ in thousands)Years Ended December 31,
 2019 2018 2017202020192018
Consolidated net (loss) income $(2) $(46,451) $13,888
Consolidated net lossConsolidated net loss$(16,123)$(2)$(46,451)
Less: net income attributable to noncontrolling interests in properties (528) (1,151) (1,731)Less: net income attributable to noncontrolling interests in properties(528)(528)(1,151)
Less: (Gain) loss on sales of operating properties (38,971) (3,424) (15,160)
Less: Gain on sales of operating propertiesLess: Gain on sales of operating properties(4,733)(38,971)(3,424)
Add: impairment charges 37,723
 70,360
 7,411
Add: impairment charges— 37,723 70,360 
Add: depreciation and amortization of consolidated and unconsolidated entities, net of noncontrolling interests 133,184
 151,856
 170,315
Add: depreciation and amortization of consolidated and unconsolidated entities, net of noncontrolling interests130,091 133,184 151,856 
FFO of the Operating Partnership1
 131,406
 171,190
 174,723
FFO of the Operating Partnership1
108,707 131,406 171,190 
Less: Limited Partners' interests in FFO (3,153) (4,109) (3,966)Less: Limited Partners' interests in FFO(2,826)(3,153)(4,109)
FFO attributable to Kite Realty Group Trust common shareholders1
 $128,253
 $167,081
 $170,757
FFO attributable to Kite Realty Group Trust common shareholders1
$105,881 $128,253 $167,081 
      
FFO of the Operating Partnership1
 $131,406
 $171,190
 $174,723
FFO of the Operating Partnership1
$108,707 $131,406 $171,190 
Add: severance chargeAdd: severance charge3,253 — — 
Add: loss on debt extinguishment 11,572
 —
 —
Add: loss on debt extinguishment— 11,572 — 
FFO, as adjusted, of the Operating Partnership $142,978
 $171,190
 $174,723
FFO, as adjusted, of the Operating Partnership$111,960 $142,978 $171,190 
  
____________________
1“FFO of the Operating Partnership" measures 100% of the operating performance of the Operating Partnership’s real estate properties. “FFO attributable to Kite Realty Group Trust common shareholders” reflects a reduction for the redeemable noncontrolling weighted average diluted interest in the Operating Partnership.
  
Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) 
 
We define EBITDA, a non-GAAP financial measure, as net income before depreciation and amortization, interest expense and income tax expense of taxable REIT subsidiary.TRS. For informational purposes, we have also provided Adjusted EBITDA, which we define as EBITDA less (i) EBITDA from unconsolidated entities, (ii) gains on sales of operating properties or impairment charges, (iii) other income and expense, (iv) noncontrolling interest EBITDA and (v) other non-recurring activity or items impacting comparability from period to period. Annualized Adjusted EBITDA is Adjusted EBITDA for the most recent quarter multiplied by four. Net Debt to Adjusted EBITDA is our share of net debt divided by Annualized Adjusted EBITDA. EBITDA, Adjusted EBITDA, Annualized Adjusted EBITDA and Net Debt to Adjusted EBITDA, as calculated by us, are not comparable to EBITDA and EBITDA-related measures reported by other REITs that do not define EBITDA and EBITDA-related measures exactly as we do. EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA do not represent cash generated from operating activities in accordance with GAAP, and should not be considered alternatives to net income as an indicator of performance or as alternatives to cash flows from operating activities as an indicator of liquidity.


50

Considering the nature of our business as a real estate owner and operator, we believe that EBITDA, Adjusted EBITDA and the ratio of Net Debt to Adjusted EBITDA are helpful to investors in measuring our operational performance because they exclude various items included in net income that do not relate to or are not indicative of our operating performance, such as gains or losses from sales of depreciated property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. For informational purposes, we have also provided Annualized Adjusted EBITDA, adjusted as described above. We believe this supplemental information provides a meaningful measure of our operating performance. We believe presenting EBITDA and the related measures in this manner allows investors and other interested parties to form a more meaningful assessment of our operating results.
  
The following table presents a reconciliation of our EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA to consolidated net income (the most directly comparable GAAP measure) and a calculation of Net Debt to Adjusted EBITDA.
 
($ in thousands) Three Months Ended
December 31, 2019
Consolidated net income $15,855
Adjustments to net income:  
Depreciation and amortization 30,765
Interest expense 12,383
Income tax benefit of taxable REIT subsidiary (94)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) 58,909
Adjustments to EBITDA:  
Unconsolidated EBITDA 774
Gain on sales of operating properties (14,005)
Loss on debt extinguishment 1,950
Other income and expense, net 92
Noncontrolling interest (132)
Pro-forma adjustments 1
 (1,519)
Adjusted EBITDA 46,069
   
Annualized Adjusted EBITDA1
 $184,276
   
Company share of net debt:  
Mortgage and other indebtedness 1,146,580
Less: Partner share of consolidated joint venture debt (1,117)
Less: Cash, cash equivalents, and restricted cash (53,464)
Plus: Company share of unconsolidated joint venture debt 22,148
Plus: Debt Premium 6,722
Less: Pro-forma adjustment 3
 (27,200)
Company Share of Net Debt 1,093,669
Net Debt to Adjusted EBITDA 5.9x
($ in thousands)Three Months Ended
December 31, 2020
Consolidated net loss$(6,842)
Adjustments to net income:
Depreciation and amortization31,818 
Interest expense12,284 
Income tax benefit of taxable REIT subsidiary(200)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)37,060 
Adjustments to EBITDA:
Unconsolidated EBITDA352 
Gain on sales of operating properties159 
Severance charges3,253 
Other income and expense, net408 
Noncontrolling interest(132)
Adjusted EBITDA41,100 
____________________
Annualized Adjusted EBITDA1
$164,402 
1Relates to annualized EBITDA for properties sold during the quarter and timing of overage rent and lease termination income.
2Company Share of Net Debt:
Mortgage and other indebtedness$1,170,794 
Less: Partner share of consolidated joint venture debt 2
(1,102)
Less: Cash, cash equivalents, and restricted cash(47,760)
Plus: Company share of unconsolidated joint venture debt22,150 
Plus: Debt Premium5,282 
Company Share of Net Debt$1,149,364 
Net Debt to Adjusted EBITDA7.0x
____________________
1Represents Adjusted EBITDA for the three months ended December 31, 20192020 (as shown in the table above) multiplied by four. 
32Relates to timingPartner share of quarterly dividend payment being made prior to quarter-end resulting in five payments year to date.consolidated joint venture debt is calculated based upon the partner's pro-rata ownership of the joint venture, multiplied by the related secured debt balance.


Comparison of Operating Results for the Years Ended December 31, 20192020 and 20182019 
 


The following table reflects changes in the components of our consolidated statements of operations for the years ended December 31, 20192020 and 2018:2019:
51

($ in thousands)2019 2018 Net change 2018 to 2019($ in thousands)20202019Net change 2019 to 2020
Revenue:     Revenue:   
Rental income$308,399
 $338,523
 $(30,124)Rental income$257,670 $308,399 $(50,729)
Other property related revenue6,326
 13,138
 (6,812)Other property related revenue8,597 6,326 2,271 
Fee income448
 2,523
 (2,075)Fee income378 448 (70)
Total revenue315,173
 354,184
 (39,011)Total revenue266,645 315,173 (48,528)
Expenses: 
  
  
Expenses:   
Property operating45,575
 50,356
 (4,781)Property operating41,012 45,575 (4,563)
Real estate taxes38,777
 42,378
 (3,601)Real estate taxes35,867 38,777 (2,910)
General, administrative, and other28,214
 21,320
 6,894
General, administrative, and other30,840 28,214 2,626 
Depreciation and amortization132,098
 152,163
 (20,065)Depreciation and amortization128,648 132,098 (3,450)
Impairment charge37,723
 70,360
 (32,637)Impairment charge— 37,723 (37,723)
Total expenses282,387
 336,577
 (54,190)Total expenses236,367 282,387 (46,020)
Gains on sale of operating properties, net38,971
 3,424
 35,547
Gains on sale of operating properties, net4,733 38,971 (34,238)
Operating income71,757
 21,031
 50,726
Operating income35,011 71,757 (36,746)
Interest expense(59,268) (66,785) 7,517
Interest expense(50,399)(59,268)8,869 
Income tax benefit of taxable REIT subsidiary282
 227
 55
Income tax benefit of taxable REIT subsidiary696 282 414 
Loss on debt extinguishment(11,572) —
 (11,572)Loss on debt extinguishment— (11,572)11,572 
Equity in loss of unconsolidated subsidiary(628) (278) (350) Equity in loss of unconsolidated subsidiary(1,685)(628)(1,057)
Other expense, net(573) (646) 73
Consolidated net loss(2) (46,451) 46,449
Other income (expense), net Other income (expense), net254 (573)827 
Consolidated net incomeConsolidated net income(16,123)(2)(16,121)
Net income attributable to noncontrolling interests(532) (116) (416)Net income attributable to noncontrolling interests(100)(532)432 
Net loss attributable to Kite Realty Group Trust common shareholders$(534) $(46,567) $46,033
Net (loss) income attributable to Kite Realty Group TrustNet (loss) income attributable to Kite Realty Group Trust(16,223)(534)$(15,689)
     
Property operating expense to total revenue ratio14.5% 14.2% 0.3%Property operating expense to total revenue ratio15.4 %14.5 %0.9 %

Rental income decreased $30.1$50.7 million, or 8.9%16.4%, due to the following:
 
($ in thousands)Net change 2018 to 2019
Properties sold during 2018 and 2019$(37,041)
Properties under redevelopment or acquired during 2018 and/or 2019923
Properties fully operational during 2018 and 2019 and other5,994
Total$(30,124)
($ in thousands)Net change 2019 to 2020
Properties sold during 2019$(31,809)
Properties under redevelopment or acquired during 2019 and/or 2020856 
Properties fully operational during 2019 and 2020 and other(19,776)
Total$(50,729)
 
 
The net increasedecrease of $6.0$19.8 million in rental income for properties that were fully operational during 20182019 and 20192020 is attributable to an increase in rental rates along with an increase in occupancy. Rental income for recently completed redevelopment projects and acquisitions increased $0.9 million primarily due to the completion$17.4 million of Rampart Commonsbad debt expense for certain non-cash straight-line rent and acquisition of Nora Plaza. Tenant reimbursements increased $3.3 million from 2018billed rent receivables related to 2019tenants that are financially distressed due to an increasethe COVID-19 pandemic. In addition, the Company had a reduction in minimum rent due to a decrease in occupancy due to certain closures, most notably by certain anchor tenants, such as noted above. The Company's recovery levels of recoverable operating expensesStein Mart, 24 Hour Fitness, and real estate taxes were 89.7% and 87.7%, forNew York Sports Club that have declared bankruptcy during the years ended December 31, 2019 and 2018.COVID-19 pandemic.

TheWhile leasing activity was reduced during 2020, the Company has been able to continue to generate higher rents in its leasing process.on new leases and renewals. The average rents for new comparable leases signed in 20192020 were $21.62$20.77 per square foot compared to average expiring base rents of $15.96$19.04 per square foot in that period. The average base rents for renewals signed in 20192020 were $14.71$16.10 per square foot compared to average expiring base rents of $14.24$15.18 per square foot in that period.


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Due toFollowing the completion of Project Focus in 2019 and the current year leasing activity, the quality of our operating retail portfolio continued to improve. This is evidenced by the increase in the annualized base rent per square foot to $18.42 per square foot as of December 31, 2020 from $17.83 per square foot as of December 31, 2019 from $16.84 per square foot as of December 31, 2018.2019.

In 2019, otherOther property related revenue primarily consists of parking revenues and gains on sales of undepreciated assets.  In 2018, other property-related revenue also included overage rent and lease termination income. In 2019, these items are included in rental income. This revenue decreasedincreased by $6.8$2.3 million, primarily as a result of non-recurring business interruption income of $2.8 million in 2018 and a decrease inhigher gains on sales of undepreciated assets of $2.9$5.7 million partially offset by a decrease in parking revenues of $2.0 million.

We recorded fee income of $0.4 million for the yearyears ended December 31, 2020 and 2019, compared to fee income of $2.5 million for the year ended December 31, 2018. The 2018 activity is for developmentrespectively, from property management services provided as part of a multi-family development at our Eddy Street Commons operating property.to unconsolidated joint ventures.
 
Property operating expenses decreased $4.8$4.6 million, or 9.5%10.0%, due to the following: 
 
($ in thousands)Net change 2018 to 2019
Properties sold during 2018 and 2019$(4,772)
Properties under redevelopment or acquired during 2018 and/or 2019996
Properties fully operational during 2018 and 2019 and other(1,005)
Total$(4,781)
($ in thousands)Net change 2019 to 2020
Properties sold during 2019$(4,592)
Properties under redevelopment or acquired during 2019 and/or 2020381 
Properties fully operational during 2019 and 2020 and other(352)
Total$(4,563)
 
The net decrease of $1.0$0.4 million in property operating expenses for properties that were fully operational during 20182019 and 20192020 is primarily due to bad debt being included as a component of rental income in 2019 while it was a component ofcontinued focus on cost controls over certain operating expense spend in 2018. This decrease due to the reclassification was2020. These provided savings of $1.4 million that were partially offset by increases of $0.4 million in repairs and maintenance costs and $0.6 millionan increase in insurance expense.costs of $1.0 million due to higher premiums across the real estate industry that were realized upon renewal.

As a percentage of rental revenue, property operating expenses increased between years from 14.2%14.5% to 14.5%15.4%. The increase was mostly due to lower other property relateda decline in revenue in 2019.2020 due to the impact of the COVID-19 pandemic.

Real estate taxes decreased $3.6$2.9 million, or 8.5%7.5%, due to the following: 
 
($ in thousands)Net change 2018 to 2019
Properties sold during 2018 and 2019$(4,223)
Properties under redevelopment or acquired during 2018 and/or 2019151
Properties fully operational during 2018 and 2019 and other471
Total$(3,601)
($ in thousands)Net change 2019 to 2020
Properties sold during 2019$(3,607)
Properties under redevelopment or acquired during 2019 and/or 202073 
Properties fully operational during 2019 and 2020 and other624 
Total$(2,910)
 
The net increase of $0.5$0.6 million in real estate taxes for properties that were fully operational during 20182019 and 20192020 is primarily due to an increase in current year tax assessments at certain operating properties. The majority of real estate tax expense is recoverable from tenants and such recovery is reflected in rental income.

General, administrative and other expenses increased $6.9$2.6 million, or 32.3%9.3%. The increase is primarily due to costs$3.3 million of severance charges incurred that are not incremental costsduring the fourth quarter of obtaining a lease contract. These costs were $5.4 million in 2019 and are now expensed upon the adoption of ASU 2016-02, Leases. See additional discussion in Note 2 to the financial statements. The remainder of the increase is due to higher personnel costs.2020.

Depreciation and amortization expense decreased $20.1$3.5 million, or 13.2%2.6%, due to the following:

($ in thousands)Net change 2019 to 2020
Properties sold during 2019$(12,880)
Properties under redevelopment or acquired during 2019 and/or 20201,146 
Properties fully operational during 2019 and 2020 and other8,284 
Total$(3,450)

53
($ in thousands)Net change 2018 to 2019
Properties sold during 2018 and 2019$(19,523)
Properties under redevelopment or acquired during 2018 and/or 20193,846
Properties fully operational during 2018 and 2019 and other(4,388)
Total$(20,065)

The net increase of $3.8$1.1 million in properties under redevelopment or acquired during 20182019 and 20192020 is primarily due to the acquisitiona full year of operations for Nora Plaza and Pan Am Plaza Garage.Garage that were acquired in 2019. The net decreaseincrease of $4.4$8.3 million in depreciation and amortization at properties fully operational during 20182019 and 20192020 is primarily due to accelerated depreciation of certain tenant-related assets becoming fully depreciated in 2018.for tenants that vacated their spaces during 2020.
 
In 2019, we recorded impairment charges totaling $37.7 million related to a reduction in the expected holding period of certain operating properties. In 2018,2020, we recordeddid not record any impairment charges totaling $70.4 million related to a reduction in the expected holding period of certain operating and development properties.charges. See additional discussion in Note 8 to the consolidated financial statements.

Interest expense decreased $7.5$8.9 million or 11.3%15.0%. The decrease is due to the significant debt reduction fromfollowing the successful completion of Project Focus.Focus in 2019.

The Company incurred an $11.6 million loss on debt extinguishment for the year ended December 31, 2019 related to costs incurred to retire certain secured loans that were paid off in connection with property sales. There was no such activity in 2020.

We recorded a net gain of $39.0$4.7 million for the year ended December 31, 20192020 on the sale of twenty-three assets,one redevelopment property, compared to a net gain of $3.4$39.0 million on the sale of six operating properties and the sale of an 80% interest in three operating properties to a joint venture with TH Real Estate23 assets for the year ended December 31, 2018.2019.
 

Management’s discussion of the financial condition, changes in financial condition and results of operations for the year ended December 31, 2017,2019, with comparison to the year ended December 31, 2018, was included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2018.2019.
 

Liquidity and Capital Resources 
 
Overview 
 
Our primary finance and capital strategy is to maintain a strong balance sheet with sufficient flexibility to fund our operating and investment activities in a cost-effective manner. We consider a number of factors when evaluating our level of indebtedness and when making decisions regarding additional borrowings or equity offerings, including the estimated value of properties to be developed or acquired, the estimated market value of our properties and the Company as a whole upon placement of the borrowing or offering, and the ability of particular properties to generate cash flow to cover debt service. We will continue to monitor the capital markets and may consider raising additional capital through the issuance of our common or preferred shares, unsecured debt securities, or other securities. 
 
Our Principal Capital Resources 
 
For a discussion of cash generated from operations, see “Cash Flows,” beginning on page 59.56.  In addition to cash generated from operations, we discuss below our other principal capital resources. 
 
In February 2019, we announced a plan to market and sell up to $500 million in non-core assets as partThe completion of a program designed to improve the Company’s portfolio quality, reduce its leverage, and focus operations on markets where we believe the Company can gain scale and generate attractive risk-adjusted returns. This program ("Project Focus") was completed in October 2019. The majority of the net proceeds were used to repay debt, further strengthening its balance sheet.



The recently-completed Project Focus in 2019 has enhanced our liquidity position, reduced our leverage, and reduced our borrowing costs. We continue to focus on a balanced approach to growth and staggering and extending debt maturities in order to retain our financial flexibility.
  
As of December 31, 2019,2020, we had approximately $583$523 million available under our unsecured revolving credit facilityCredit Facility for future borrowings based on the unencumbered asset pool allocated to the unsecured revolving credit facility. We also had $31.3$43.6 million in cash and cash equivalents as of December 31, 2019.2020.  

We were in compliance with all applicable financial covenants under our unsecured revolving credit facility,Credit Facility, our unsecured term loans, and our senior unsecured notes as of December 31, 2019.2020.

We have on file with the SEC a shelf registration statement on Form S-3 relating to the offer and sale, from time to time, of an indeterminate amount of equity and debt securities. Equity securities may be offered and sold by the Parent Company, and the net proceeds of any such offerings would be contributed to the Operating Partnership in exchange for additional General Partner Units. Debt securities may be offered and sold by the Operating Partnership with the Operating Partnership receiving the proceeds. From time to time, we may issue securities under this shelf registration statement to fund the repayment of long-term debt upon maturity, for other general corporate purposes or as otherwise set forth in the applicable prospectus supplement.
54

supplement. We plan to file a new shelf registration statement on Form S-3 prior to or upon expiration of the current registration statement.

In the future, we will continue to monitor the capital markets and may consider raising additional capital through the issuance of our common shares, preferred shares or other securities. We may also raise capital by disposing of properties, land parcels or other assets that are no longer core components of our growth strategy.  The sale price may differ from our carrying value at the time of sale. 

Our Principal Liquidity Needs 
 
Short-Term Liquidity Needs 
 
Near-Term Debt Maturities. As of December 31, 2019,2020, we did not have any debt scheduled to mature in 2020 or 2021, excluding scheduled monthly principal payments.
  
Other Short-Term Liquidity Needs. The requirements for qualifying as a REIT and for a tax deduction for some or all of the dividends paid to shareholders necessitate that we distribute at least 90% of our taxable income on an annual basis. Such requirements cause us to have substantial liquidity needs over both the short term and the long term. Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our operating properties, interest expense and scheduled principal payments on our debt, expected dividend payments to our common shareholders and to Common Unit holders, and recurring capital expenditures.

 In February 2020,2021, our Board of Trustees declared a cash distribution of $0.3175$0.17 per common share and Common Unit for the first quarter of 2020.2021. This distribution is expected to be paid on or about April 3, 202015, 2021 to common shareholders and Common Unit holders of record as of March 27, 2020.April 8, 2021.
 
Other short-term liquidity needs also include expenditures for tenant improvements, renovation costs, external leasing commissions and recurring capital expenditures.  During the year ended December 31, 2019,2020, we incurred $4.3$1.7 million of costs for recurring capital expenditures on operating properties, $10.3$12.0 million of costs for tenant improvements and external leasing commissions, and $14.3$17.4 million to re-lease anchor space at our operating properties related to tenants open and operating as of December 31, 20192020 (excluding development and redevelopment properties). We currently anticipate incurring approximately $14$16 million to $20 million of additional major tenant improvements and $14 million to $18 millioncosts related to releasing vacant anchor space at a number of our operating properties.

As of December 31, 2019,2020, we had onetwo development projectprojects under construction at ourconstruction: Eddy Street Commons property across the street from the University of Notre Dame in South Bend, Indiana and Glendale Town Center in Indianapolis, Indiana. Total estimated costs for this project, Eddy Street Commons - Phase II,these projects are $90.8$56.9 million, of which our share is estimated to be $12.6 million.  This estimate consists of our projected costs of $10.0 million, tax increment financing of $16.1 million, and construction costs of $64.7 million for residential apartments and townhomes costs that we expect will be covered by an unrelated third party under a ground sublease that is currently being negotiated.  We have provided a completion guaranty to the South Bend Redevelopment Commission and the South Bend Economic Development Commission on the construction of the entire project.  We anticipate incurring the majority of the remaining costs for the projectprojects over the next 1218 months.  We believe we have the ability to fund this projectthese projects through cash flow from operations.operations or by borrowing on the Credit Facility. 



Long-Term Liquidity Needs 
 
Our long-term liquidity needs consist primarily of funds necessary to pay for any new development projects, redevelopment of existing properties, non-recurring capital expenditures, acquisitions of properties, and payment of indebtedness at maturity.

Potential Redevelopment Opportunities. We are currently evaluating additional redevelopment of several other properties. We believe we will have sufficient funding for these projects through cash flow from operations, borrowings on our unsecured revolving credit facilityCredit Facility and proceeds from asset sales. 
 
Selective Acquisitions, Developments and Joint Ventures. We may selectively pursue the acquisition and development of other properties, which would require additional capital.  It is unlikely that we would have sufficient funds on hand to meet these long-term capital requirements, requiring us to satisfy these needs through additional borrowings, sales of common or preferred shares, issuance of Operating Partnership units, cash generated through property dispositions and/or participation in joint venture arrangements.  We cannot be certain that we would have access to these sources of capital on satisfactory terms, if at all, to fund our long-term liquidity requirements.  We evaluate all future opportunities against pre-established criteria including, but not limited to, location, demographics, expected return, tenant credit quality, tenant relationships, and the amount of existing retail space in the market.  Our ability to access the capital markets will be dependent on a number of factors, including general capital market conditions.
55

 
Capitalized Expenditures on Consolidated Properties 
 
The following table summarizes cash capital expenditures for our development and redevelopment properties and other capital expenditures for the year ended December 31, 2019:2020:
Year Ended
($ in thousands)December 31, 2020
Developments$2,919 
Redevelopment Opportunities308 
Recently completed redevelopments and other4,244 
Big Box Surge activity17,998 
Recurring operating capital expenditures (primarily tenant improvement payments)12,797 
Total$38,266 
 Year Ended
($ in thousands)December 31, 2019
Developments$1,445
Redevelopment Opportunities1,021
Recently completed redevelopments and other13,755
Big Box Surge activity24,197
Recurring operating capital expenditures (primarily tenant improvement payments)12,860
Total$53,278

We capitalize certain indirect costs such as interest, payroll, and other general and administrative costs related to these development activities.  If we had experienced a 10% reduction in development and redevelopment activities, without a corresponding decrease in indirect project costs, we would have recorded additional expense of $0.2 million for the year ended December 31, 2019.2020.

Impact of Changes in Credit Ratings on Our Liquidity

We have been assigned investment grade corporate credit ratings from two nationally recognized credit rating agencies. These ratings were unchanged during 2019.2020.

In the future, the ratings could change based upon, among other things, the impact that prevailing economic conditions may have on our results of operations and financial condition. Credit rating reductions by one or more rating agencies could also adversely affect our access to funding sources, the cost and other terms of obtaining funding, as well as our overall financial condition, operating results and cash flow.

Cash Flows 

As of December 31, 2019,2020, we had cash and cash equivalents on hand of $31.3$43.6 million. We may be subject to concentrations of credit risk with regard to our cash and cash equivalents.  We place our cash and short-term cash investments with highly rated financial institutions.  While we attempt to limit our exposure at any point in time, occasionally, such cash and investments may temporarily be in excess of FDIC and SIPC insurance limits.  We also maintain certain compensating balances in several financial institutions in support of borrowings from those institutions.  Such compensating balances were not material to the consolidated balance sheets.



Comparison of the Year Ended December 31, 20192020 to the Year Ended December 31, 20182019  
 
Cash provided by operating activities was $138.0$95.5 million for the year ended December 31, 2019,2020, a decrease of $16.4$42.4 million from the same period of 2018.2019.  The decrease was primarilycash flows were negatively impacted due to a decrease in cash provided by operating activitiesthe significant property sales activity throughout 2019 and reduced collection activity due to our significant property sale activity partially offset by improvement in anchor and shop occupancy.the COVID-19 pandemic.
 
Cash provided byused in investing activities was $416.6$80.8 million for the year ended December 31, 2019,2020, as compared to cash provided by investing activities of $148.3$416.6 million in the same period of 2018.2019.  The major changes in cash used in and provided by investing activities are as follows: 
 
•Net proceeds of $529.4$23.0 million related to the sale of twenty-three assetsone redevelopment property and five parcels of land in 20192020 compared to sale proceeds of $208.4$529.4 million from the sale of six23 assets in 20182019;

•Acquisition of Eastgate Crossing in 2020 for net proceeds of $119$65.3 million andcompared to the sale of an 80% interest in three core assets for net proceeds of $89 million;

Acquisitionacquisition of Nora Plaza and Pan Am Plaza Parking Garage in 2019 for $58.2 million; and

•Decrease in capital expenditures of $6.0$15.0 million, partially offset by a decreasechange in construction payables of $0.5 million. $2.4 million in 2020. 
56


Cash used in financing activities was $547.2$20.9 million for the year ended December 31, 2019,2020, compared to cash used in financing activities of $289.4$547.2 million in the same period of 2018.2019.  Highlights of significant cash sources and uses in financing activities during 20192020 are as follows:
 
•In March 2020, we borrowed $300.0 million on the Credit Facility as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic;

•During the remainder of 2020, we repaid the $300.0 million borrowing on the Credit Facility as we became incrementally more confident in the recovery from the COVID-19 pandemic;

•We borrowed $25.0 million on the Credit Facility to fund a portion of the purchase price of Eastgate Crossing;

•In 2019, we used the proceeds from the sale of operating properties to pay down $395.5 million of secured and unsecured debt;

We•In 2019, we paid $14.5 million of debt extinguishment costs; and

We•In 2020, we made distributions to common shareholders and Common Unit holders of $39.7 million, compared to distributions of $137.1 million.million in 2019.

Management’s discussion of the cash flows for the year ended December 31, 2017,2018, with comparison to the year ended December 31, 2018,2019, was included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2018.2019.


Other Matters

Financial Instruments

We are exposed to capital market risk, such as changes in interest rates. In order to reduce the volatility relating to interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

Off-Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements that in our opinion have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.  We do, however, have certain obligations related to some of the projects in our operating and development properties.
As of December 31, 2019, we have outstanding letters of credit totaling $1.2 million, against which no amounts were advanced. 

Contractual Obligations
The following table summarizes our contractual obligations based on contracts executed as of December 31, 2019.  


($ in thousands) 
Consolidated
Long-term
Debt and Interest1
 
Development Activity and Tenant
Allowances2
 Operating Ground
Leases		 
Employment
Contracts3
 
 
Total
2020 $50,122
 $8,927
 $1,777
 $1,263
 $62,089
2021 50,093
 —
 1,789
 375
 52,257
2022 223,743
 —
 1,815
 —
 225,558
2023 310,147
 —
 1,636
 —
 311,783
2024 29,609
 —
 1,600
 —
 31,209
Thereafter 751,997
 —
 70,554
 —
 822,551
Total $1,415,711
 $8,927
 $79,171
 $1,638
 $1,505,447

____________________
1Our long-term debt consists of both variable and fixed-rate debt and includes both principal and interest.  Interest expense for variable-rate debt was calculated using the interest rates as of December 31, 2019.
2Tenant allowances include commitments made to tenants at our operating and under construction development project.
3We have entered into employment agreements with certain members of senior management that have various expiration dates.
  
Obligations in Connection with Projects Under Construction 
 
We are obligated under various completion guarantees with lenders and tenants to complete all or portions of a development project and tenant-specific spacescurrentlyspaces currently under construction. We believe we currently have sufficient financing in place to fund our investment in any existing or future projects through cash from operations or borrowings on our unsecured revolving credit facility.Credit Facility.   

In addition, we have provided a repayment guaranty on a $33.8 million construction loan with the development of Embassy Suites at the University of Notre Dame consistent with our 35% ownership interest. As of December 31, 2019,2020, the current outstanding loan balance is $33.6 million, of which our share is $11.8 million.  

Our share of estimated future costs for under construction and future developments and redevelopments is further discussed on page 5855 in the "Short and Long-Term Liquidity Needs" section.


Outstanding Indebtedness 
 
The following table presents details of outstanding consolidated indebtedness as of December 31, 20192020 and 20182019 adjusted for hedges: 
57

($ in thousands)  December 31,
2019		 December 31,
2018		($ in thousands) December 31,
2020		December 31,
2019
Senior unsecured notes $550,000
 $550,000
Senior unsecured notes$550,000 $550,000 
Unsecured revolving credit facility —
 45,600
Unsecured revolving credit facility25,000 — 
Unsecured term loans 250,000
 345,000
Unsecured term loans250,000 250,000 
Mortgage notes payable - fixed rate 297,472
 534,679
Mortgage notes payable - fixed rate295,966 297,472 
Mortgage notes payable - variable rate 55,830
 73,491
Mortgage notes payable - variable rate55,110 55,830 
Net debt premiums and issuance costs, net (6,722) (5,469)Net debt premiums and issuance costs, net(5,282)(6,722)
Total mortgage and other indebtedness $1,146,580
 $1,543,301
Total mortgage and other indebtedness$1,170,794 $1,146,580 
  
 Consolidated indebtedness, including weighted average maturities and weighted average interest rates at December 31, 2019,2020, is summarized below:  

($ in thousands)Outstanding AmountRatioWeighted Average
Interest Rate		Weighted Average
Maturity
(in years)
Fixed Rate Debt$1,095,966 94 %4.17 %5.0 
Variable Rate Debt 1
80,110 6 %1.60 %1.5 
Net Debt Premiums and Issuance Costs, Net(5,282)N/AN/AN/A
Total Consolidated Debt$1,170,794 100 %4.00 %4.7 

($ in thousands)Outstanding Amount Ratio Weighted Average
Interest Rate		 Weighted Average
Maturity
(in years)
Fixed rate debt1
$1,113,672
 97% 3.94% 5.7
Variable rate debt39,630
 3% 3.68% 7.6
Net debt premiums and issuance costs, net(6,722) N/A
 N/A
 N/A
Total$1,146,580
 100% 3.93% 5.8

_______
1Fixed rate debt includes, and variable rate date excludes, the portion of such debt that has been hedged by interest rate derivatives. As of December 31, 2019, $266.22020, $250 million in variable rate debt is hedged for a weighted average of 3.02.2 years.

Mortgage indebtedness is collateralized by certain real estate properties and leases.  Mortgage indebtedness is generally repaid in monthly installments of interest and principal and matures over various terms through 2030.
 
Variable interest rates on mortgage indebtedness is based on LIBOR plus 160 basis points.  At December 31, 2019,2020, the one-month LIBOR interest rate was 1.76%0.14%.  Fixed interest rates on mortgage loans range from 3.78% to 5.73%.


58

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  
 
Our future income, cash flows and fair values relevant to financial instruments depend upon prevailing interest rates. We are exposed to interest rate changes primarily through our variable-rate unsecured credit facilityCredit Facility and unsecured term loans and other property-specific variable-rate mortgages. Our objectives with respect to interest rate risk are to limit the impact of interest rate changes on operations and cash flows, and to lower its overall borrowing costs. To achieve these objectives, we may borrow at fixed rates and may enter into derivative financial instruments such as interest rate swaps, hedges, etc., in order to mitigate its interest rate risk on a related variable-rate financial instrument.  As a matter of policy, we do not utilize financial instruments for trading or speculative transactions. 
 
We had $1.1$1.2 billion of outstanding consolidated indebtedness as of December 31, 20192020 (inclusive of net unamortized net debt premiums and issuance costs of $6.7$5.3 million). As of December 31, 2019,2020, we were party to various consolidated interest rate hedge agreements totaling $266.2$250.0 million, with maturities over various terms through 2025. Reflecting the effects of these hedge agreements, our fixed and variable rate debt would have been $1.1 billion (97%(94%) and $39.6$80.1 million (3%(6%), respectively, of our total consolidated indebtedness at December 31, 2019.2020. 
 
We do not have any fixed rate debt scheduled to mature during 2020 or 2021.  A 100-basis point change in interest rates on our unhedged variable rate debt as of December 31, 20192020 would change our annual cash flow by $0.4$0.8 million.  Based upon the terms of our variable rate debt, we are most vulnerable to a change in short-term LIBOR interest rates.  

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
 
The consolidated financial statements of the Company included in this Report are listed in Part IV, Item 15(a) of this report. 
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
 
None. 
 
ITEM 9A. CONTROLS AND PROCEDURES 

Kite Realty Group Trust
 
Evaluation of Disclosure Controls and Procedures 
 
An evaluation was performed under the supervision and with the participation of the Parent Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Parent Company's Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting 
 
There has been no change in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(b) under the Securities Exchange Act of 1934 of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 20192020 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Management Report on Internal Control Over Financial Reporting 
 
The Parent Company is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision of and with the participation of the Parent Company's management, including its Chief Executive Officer and Chief Financial Officer, the Parent Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on its evaluation under the framework in Internal Control – Integrated Framework, the Parent Company's management has concluded that its internal control over financial reporting was effective as of December 31, 2019.2020. 
59



The Parent Company's independent auditors, Ernst & YoungKPMG LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein. 
 
The Parent Company's internal control system was designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 

Kite Realty Group, L.P.

Evaluation of Disclosure Controls and Procedures 
 
An evaluation was performed under the supervision and with the participation of the Operating Partnership’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Operating Partnership's Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective. 
 
Changes in Internal Control Over Financial Reporting 
 
There has been no change in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(b) under the Securities Exchange Act of 1934 of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 20192020 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Management Report on Internal Control Over Financial Reporting 
 
The Operating Partnership is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision of and with the participation of the Operating Partnership's management, including its Chief Executive Officer and Chief Financial Officer, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting based on the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on its evaluation under the framework in Internal Control – Integrated Framework, the Operating Partnership's management has concluded that its internal control over financial reporting was effective as of December 31, 2019.2020. 
 
The Operating Partnership's independent auditors, Ernst & YoungKPMG LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein. 
 
The Operating Partnership's internal control system was designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 




Report of Independent Registered Public Accounting Firm


TheTo the Shareholders and the Board of Trustees of Kite Realty Group Trust:

Opinion on Internal Control overOver Financial Reporting

We have audited Kite Realty Group Trust’sTrust and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019,2020, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria).Commission. In our opinion, Kite Realty Group Trust (the Company)the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO criteria.Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheetssheet of the Company as of December 31, 2019 and 2018,2020, the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the periodyear ended December 31, 2019,2020, and the related notes and financial statement schedule listed inIII – Consolidated Real Estate and Accumulated Depreciation (collectively, the Index at Item 15(a)consolidated financial statements), and our report dated February 20, 2020,22, 2021 expressed an unqualified opinion thereon.on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, andrisk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



 
/s/ Ernst & YoungKPMG LLP

Indianapolis, Indiana
February 20, 202022, 2021





Report of Independent Registered Public Accounting Firm


TheTo the Partners of Kite Realty Group, L.P. and subsidiaries and the Board of Trustees of Kite Realty Group Trust:

Opinion on Internal Control overOver Financial Reporting

We have audited Kite Realty Group, L.P. and subsidiaries’ (the Partnership) internal control over financial reporting as of December 31, 2019,2020, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria).Commission. In our opinion, Kite Realty Group, L.P and subsidiaries (the Partnership)the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO criteria.Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheetssheet of the Partnership as of December 31, 2019 and 2018,2020, the related consolidated statements of operations and comprehensive income, partners’partner’s equity, and cash flows for each of the three years in the periodyear ended December 31, 2019,2020, and the related notes and financial statement schedule listed inIII – Consolidated Real Estate and Accumulated Depreciation (collectively, the Index at Item 15(a)consolidated financial statements), and our report dated February 20, 202022, 2021 expressed an unqualified opinion thereon.on those consolidated financial statements.

Basis for Opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, andrisk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



 
/s/ Ernst & YoungKPMG LLP
 
Indianapolis, Indiana
February 20, 202022, 2021





ITEM 9B. OTHER INFORMATION 
 
None
 
 

63

PART III 
 
ITEM 10. INFORMATION ABOUT OUR EXECUTIVE OFFICERS   
 
The information required by this Item is hereby incorporated by reference to the material appearing in our 20202021 Annual Meeting Proxy Statement (the “Proxy Statement”), which we intend to file within 120 days after our fiscal year-end in accordance with Regulation 14A. 
 
ITEM 11. EXECUTIVE COMPENSATION  
 
The information required by this Item is hereby incorporated by reference to the material appearing in our Proxy Statement. 
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS  
 
The information required by this Item is hereby incorporated by reference to the material appearing in our Proxy Statement. 
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 
 
The information required by this Item is hereby incorporated by reference to the material appearing in our Proxy Statement. 
 
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES  
 
The information required by this Item is hereby incorporated by reference to the material appearing in our Proxy Statement.






PART IV 
 
ITEM 15. EXHIBITS,EXHIBIT AND FINANCIAL STATEMENT SCHEDULESCHEDULES 
(a)Documents filed as part of this report:
(1)Financial Statements:
Consolidated financial statements for the Company listed on the index immediately preceding the financial statements at the end of this report.
(2)Financial Statement Schedule:
Financial statement schedule for the Company listed on the index immediately preceding the financial statements at the end of this report.
(3)Exhibits:
The Company files as part of this report the exhibits listed on the Exhibit Index.
(b)Exhibits:
The Company files as part of this report the exhibits listed on the Exhibit Index. Other financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(c)Financial Statement Schedule:
The Company files as part of this report the financial statement schedule listed on the index immediately preceding the financial statements at the end of this report.





EXHIBIT INDEX
Exhibit No.DescriptionLocation
2.1Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on February 11, 2014
3.1Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
3.2Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015
3.3Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 20, 2020
3.4Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
3.5Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015
3.6Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 20, 2020
3.7Filed herewith
4.1Incorporated by reference to Exhibit 4.1 to Kite Realty Group Trust’s registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10, 2004
4.2Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.3Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.4

Incorporated by reference to Exhibits 4.2 and 4.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.5Filed herewith
66

10.1Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.2Incorporate by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 13, 2010
10.3Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 12, 2012
10.4Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.5Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 5, 2019
10.6Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 26, 2019
10.7Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020
10.8Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020
10.9Incorporated by reference to Exhibit 10.3 the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020
10.10Incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 10, 2014
10.11Filed herewith
10.12Incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.13Incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.14Incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
67

10.15Incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.16Incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.17Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 7, 2018
10.18Incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.19Incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.20Incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.21Incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.22Incorporated by reference to Exhibit 10.24 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.23Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 11, 2008
10.24Incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 8, 2013
10.25Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 7, 2014
10.26Incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 7, 2014
10.27Incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Kite Realty Group Trust filled with the SEC on March 7, 2014
10.28Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
68

10.29Incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.30Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.31Filed herewith
10.32Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 12, 2008
10.33Incorporated by reference to Exhibit 10.32 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.34Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 14, 2005
10.35Incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.36Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.37Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on February 3, 2016
10.38Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 17, 2019
10.39Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 14, 2013
10.40Incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 14, 2013
10.41Incorporated by reference to Exhibit 10.49 of the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 20, 2018
10.42Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on August 9, 2006
69

10.43Incorporated by reference to Exhibit 10.38 of the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2017
10.44Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 7, 2018
10.45Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 5, 2019
10.46Filed herewith
10.47Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2016
10.48Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2016
10.49Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 4, 2012
10.50Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 4, 2013
10.51Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 27, 2013
10.52Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 4, 2012
10.53Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on April 25, 2018
10.54Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 26, 2018
10.55Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 26, 2018
70

10.56Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 3, 2015
21.1Filed herewith
23.1Filed herewith
23.2Filed herewith
23.3Filed herewith
23.4Filed herewith
31.1Filed herewith
31.2Filed herewith
31.3Filed herewith
31.4Filed herewith
32.1Filed herewith
32.2Filed herewith
99.1Filed herewith
101.INSInline XBRL Instance DocumentFiled herewith
101.SCHInline XBRL Taxonomy Extension Schema DocumentFiled herewith
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentFiled herewith
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentFiled herewith
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)Filed herewith

71

____________________
* Denotes a management contract or compensatory, plan contract or arrangement.


ITEM 16. FORM 10-K SUMMARY

Not applicable.

72




EXHIBIT INDEX
Exhibit No.DescriptionLocation
2.1
Agreement and Plan of Merger by and among Kite Realty Group Trust, KRG Magellan, LLC and Inland Diversified Real Estate Trust, Inc., dated February 9, 2014
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on February 11, 2014
3.1
Articles of Amendment and Restatement of Declaration of Trust of the Company, as supplemented and amended
Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
3.2
Articles of Amendment to the Articles of Amendment and Restatement of Declaration of Trust of Kite Realty Group Trust, as supplemented and amended
Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015
3.3
Second Amended and Restated Bylaws of the Company, as amended
Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
3.4
First Amendment to the Second Amended and Restated Bylaws of Kite Realty Group Trust, as amended
Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015
4.1
Form of Common Share Certificate
Incorporated by reference to Exhibit 4.1 to Kite Realty Group Trust’s registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10, 2004
4.2
Indenture, dated September 26, 2016, between Kite Realty Group, L.P., as issuer, and U.S. Bank National Association, as trustee
Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.3
First Supplemental Indenture, dated September 26, 2016, among Kite Realty Group, L.P., Kite Realty Group Trust, as possible future guarantor, and U.S. Bank National Association
Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.4
Form of Global Note representing the Notes

Incorporated by reference to Exhibits 4.2 and 4.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016
4.5
Description of Registrant's Securities
Filed herewith
10.1
Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of August 16, 2004
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.2
Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of December 7, 2010
Incorporate by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 13, 2010
10.3
Amendment No. 2 to Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P.
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 12, 2012


10.4
Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P.
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.5
Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P.
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 5, 2019
10.6
Amendment No. 5 to Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P.
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 26, 2019
10.7
Executive Employment Agreement, dated as of July 28, 2014, by and between the Company and John A. Kite*
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.8
Executive Employment Agreement, dated as of July 28, 2014, by and between the Company and Thomas K. McGowan*
Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.9
Executive Employment Agreement, dated as of August 6, 2014, by and between the Company and Scott E. Murray*
Incorporated by reference to Exhibit 10.8 the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2014.
10.10
Executive Employment Agreement, dated as of October 1, 2018, by and between Kite Realty Group Trust and Heath R. Fear*
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 4, 2018
10.11
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Alvin E. Kite*
Incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.12
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and John A. Kite*
Incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.13
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Thomas K. McGowan*
Incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.14
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Daniel R. Sink*
Incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.15
Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Scott E. Murray*
Incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.16
Indemnification Agreement, dated as of November 5, 2018, by and among Kite Realty Group Trust, Kite Realty Group, L.P. and Heath R. Fear*
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 7, 2018
10.17
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and William E. Bindley*
Incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004


10.18
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Michael L. Smith*
Incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.19
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Eugene Golub*
Incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.20
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Richard A. Cosier*
Incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.21
Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Gerald L. Moss*
Incorporated by reference to Exhibit 10.24 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.22
Indemnification Agreement, dated as of November 3, 2008, by and between Kite Realty Group, L.P. and Darell E. Zink, Jr.*
Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2008
10.23
Indemnification Agreement, dated as of March 8, 2013, by and between Kite Realty Group, L.P. and Victor J. Coleman*
Incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Kite Realty Group Trust for the period ended December 31, 2012
10.24
Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P. and Christie B. Kelly*
Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013
10.25
Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P. and David R. O’Reilly*
Incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013
10.26
Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P. and Barton R. Peterson*
Incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013
10.27
Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Lee A. Daniels*
Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.28
Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Gerald W. Grupe*
Incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.29
Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Charles H. Wurtzebach*
Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015
10.30
Kite Realty Group Trust 2008 Employee Share Purchase Plan*
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 12, 2008
10.31
Registration Rights Agreement, dated as of August 16, 2004, by and among the Company, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas K. McGowan, Daniel R. Sink, George F. McMannis, Mark Jenkins, C. Kenneth Kite, David Grieve and KMI Holdings, LLC
Incorporated by reference to Exhibit 10.32 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004


10.32
Amendment No. 1 to Registration Rights Agreement, dated August 29, 2005, by and among the Company and the other parties listed on the signature page thereto
Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2005
10.33
Tax Protection Agreement, dated August 16, 2004, by and among the Company, Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas K. McGowan and C. Kenneth Kite
Incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004
10.34
Form of 2014 Outperformance LTIP Unit Award Agreement *
Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014
10.35
Form of 2016 Outperformance Plan LTIP Unit Agreement*
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on February 3, 2016
10.36
Kite Realty Group Trust 2013 Equity Incentive Plan, as amended and restated as of February 28, 2019 *
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 17, 2019
10.37
Form of Nonqualified Share Option Agreement under 2013 Equity Incentive Plan*
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 14, 2013
10.38
Form of Restricted Share Agreement under 2013 Equity Incentive Plan*
Incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 14, 2013
10.39
Schedule of Non-Employee Trustee Fees and Other Compensation*
Incorporated by reference to Exhibit 10.49 of the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 20, 2018
10.40
Kite Realty Group Trust Trustee Deferred Compensation Plan*
Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended June 30, 2006
10.41
Form of Performance Share Unit Agreement under 2013 Equity Incentive Plan*
Incorporated by reference to Exhibit 10.38 of the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2017
10.42Form of Performance Restricted Share Agreement under 2013 Equity Incentive Plan*Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 7, 2018
10.43
Form of Appreciation Only LTIP Unit Agreement*
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 5, 2019
10.44
Fifth Amended and Restated Credit Agreement, dated as of July 28, 2016, by and among Kite Realty Group, L.P., KeyBank National Association, as Administrative Agent, and the other lenders party thereto
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2016
10.45
First Amended and Restated Springing Guaranty, dated as of July 28, 2016, by Kite Realty Group Trust
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2016


10.46
Term Loan Agreement, dated as of April 30, 2012, by and among the Operating Partnership, the Company, KeyBank National Association, as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, the Huntington National Bank, as Documentation Agent, Keybanc Capital Markets and Wells Fargo Securities, LLC, as Joint Bookrunners and Joint Lead Arrangers, and the other lenders
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 4, 2012
10.47
First Amendment to Term Loan Agreement, dated as of February 26, 2013, by and among the Operating Partnership, the Company, certain subsidiaries of the Operating Partnership party thereto, KeyBank National Association, as a lender and as Administrative Agent, and the other lenders party thereto
Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 4, 2013
10.48
Second Amendment to Term Loan Agreement, dated as of August 21, 2013, by and among the Operating Partnership, the Company, certain subsidiaries of the Operating Partnership party thereto, KeyBank National Association, as a lender and as Administrative Agent, and the other lenders party thereto
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 27, 2013
10.49
Guaranty, dated as of April 30, 2012, by the Company and certain subsidiaries of the Operating Partnership party thereto
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 4, 2012
10.50
First Amendment to Fifth Amended and Restated Credit Agreement, dated as of April 24, 2018, by and among Kite Realty Group, L.P., Kite Realty Group Trust, KeyBank National Association, as Administrative Agent, and the other lenders party thereto
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on April 25, 2018
10.51
Term Loan Agreement, dated as of October 25, 2018, by and among Kite Realty Group, L.P., KeyBank National Association, as Administrative Agent, and the other lenders party thereto
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 26, 2018
10.52
Springing Guaranty, dated as of October 25, 2018, by Kite Realty Group Trust
Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 26, 2018
10.53
Note Purchase Agreement, dated as of August 28, 2015, by and among Kite Realty Group, L.P., and the other parties named therein as Purchasers
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 3, 2015
21.1
List of Subsidiaries
Filed herewith
23.1
Consent of Ernst & Young LLP relating to the Parent Company
Filed herewith
23.2
Consent of Ernst & Young LLP relating to the Operating Partnership
Filed herewith
31.1
Certification of principal executive officer of the Parent Company required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.2
Certification of principal financial officer of the Parent Company required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.3
Certification of principal executive officer of the Operating Partnership required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith


31.4
Certification of principal financial officer of the Operating Partnership required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.1
Certification of Chief Executive Officer and Chief Financial Officer of the Parent Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.2
Certification of Chief Executive Officer and Chief Financial Officer of the Operating Partnership pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
99.1
Material U.S. Federal Income Tax Considerations
Filed herewith
101.INSXBRL Instance DocumentFiled herewith
101.SCHXBRL Taxonomy Extension Schema DocumentFiled herewith
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentFiled herewith
101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
101.LABXBRL Taxonomy Extension Label Linkbase DocumentFiled herewith
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)Filed herewith

____________________
* Denotes a management contract or compensatory, plan contract or arrangement.



SIGNATURES 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant hasRegistrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
KITE REALTY GROUP TRUST
(Registrant)
/s/ John A. Kite
John A. Kite
February 22, 2021Chairman and Chief Executive Officer
(Date)(Principal Executive Officer)
/s/ Heath R. Fear
Heath R. Fear
February 22, 2021Executive Vice President and Chief Financial Officer
(Date)(Principal Financial Officer)
KITE REALTY GROUP TRUSTL.P.
(Registrant)
By: Kite Realty Group Trust, its sole general partner
/s/ John A. Kite
John A. Kite
February 20, 202022, 2021Chairman and Chief Executive Officer
(Date)(Principal Executive Officer)
/s/ Heath R. Fear
Heath R. Fear
February 20, 202022, 2021Executive Vice President and Chief Financial Officer
(Date)(Principal Financial Officer)
KITE REALTY GROUP L.P. AND SUBSIDIARIES
(Registrant)
/s/ John A. Kite
John A. Kite
February 20, 2020Chairman and Chief Executive Officer
(Date)(Principal Executive Officer)
/s/ Heath R. Fear
Heath R. Fear
February 20, 2020Executive Vice President and Chief Financial Officer
(Date)(Principal Financial Officer)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 


73

SignatureTitleDate
/s/ John A. KiteChairman, Chief Executive Officer, and Trustee
(Principal Executive Officer)		February 22, 2021
(John A. Kite)
/s/ William E. BindleyTrusteeFebruary 22, 2021
(William E. Bindley)
/s/ Victor J. ColemanTrusteeFebruary 22, 2021
(Victor J. Coleman)
/s/ Christie B. KellyTrusteeFebruary 22, 2021
(Christie B. Kelly)
/s/ David R. O’ReillyTrusteeFebruary 22, 2021
(David R. O’Reilly)
/s/ Barton R. PetersonTrusteeFebruary 22, 2021
(Barton R. Peterson)
/s/ Lee A. DanielsTrusteeFebruary 22, 2021
(Lee A. Daniels)
/s/ Charles H. WurtzebachTrusteeFebruary 22, 2021
(Charles H. Wurtzebach)
Signature/s/ Caroline L. YoungTitleTrusteeDateFebruary 22, 2021
(Caroline L. Young)
/s/ John A. Kite
Chairman, Chief Executive Officer, and Trustee
(Principal Executive Officer)
February 20, 2020
(John A. Kite)
/s/ William E. BindleyTrusteeFebruary 20, 2020
(William E. Bindley)
/s/ Victor J. ColemanTrusteeFebruary 20, 2020
(Victor J. Coleman)
/s/ Christie B. KellyTrusteeFebruary 20, 2020
(Christie B. Kelly)
/s/ David R. O’ReillyTrusteeFebruary 20, 2020
(David R. O’Reilly)
/s/ Barton R. PetersonTrusteeFebruary 20, 2020
(Barton R. Peterson)
/s/ Lee A. DanielsTrusteeFebruary 20, 2020
(Lee A. Daniels)
/s/ Charles H. WurtzebachTrusteeFebruary 20, 2020
(Charles H. Wurtzebach)
/s/ Heath R. FearExecutive Vice President and Chief Financial Officer (Principal Financial Officer)February 20, 202022, 2021
(Heath R. Fear)
/s/ David E. BuellSenior Vice President, Chief Accounting OfficerFebruary 20, 202022, 2021
(David E. Buell)


74

Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries

Index to Financial Statements
 
Page
Consolidated Financial Statements:
Kite Realty Group Trust:
Page
Consolidated Financial Statements:
Kite Realty Group Trust:
Reports of Independent Registered Public Accounting FirmFirms
F-1
Kite Realty Group, L.P. and subsidiaries
Reports of Independent Registered Public Accounting FirmFirms
F-3
Kite Realty Group Trust:
Balance Sheets as of December 31, 20192020 and 20182019
F-4F-7
Statements of Operations and Comprehensive Income for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-5F-8
Statements of Shareholders’ Equity for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-6F-9
Statements of Cash Flows for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-7F-10
Kite Realty Group, L.P. and subsidiaries
Balance Sheets as of December 31, 20192020 and 20182019
F-8F-11
Statements of Operations and Comprehensive Income for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-9F-12
Statements of Partner's Equity for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-10F-13
Statements of Cash Flows for the Years Ended December 31, 2019, 2018,2020, 2019, and 20172018
F-11F-14
Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries:
Notes to Consolidated Financial Statements
F-12F-15
Financial Statement Schedule:
Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries:
Schedule III – Consolidated Real Estate and Accumulated Depreciation
F-37F-41
Notes to Schedule III
F-41F-45
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.



Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of Kite Realty Group Trust:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Kite Realty Group Trust and subsidiaries (the Company) as of December 31, 2020, the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2021 expressed an unqualified opinion on the effectiveness of the Partnership’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of investment properties for potential impairment

As discussed in Note 2 of the consolidated financial statements, land, buildings, and improvements as of December 31, 2020 was $3,109,122 thousand. The Company’s investment properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. This review for possible impairment triggering events requires certain assumptions, estimates, and significant judgment. The evaluation of investment properties for potential impairment is subject to certain management assumptions which includes the anticipated holding period for a real estate investment property.

We identified the evaluation of investment properties for potential impairment as a critical audit matter. Subjective and challenging auditor judgment was required to evaluate the Company’s intent and ability to hold investment properties for particular periods of time. A shortening of the anticipated holding period could indicate a potential impairment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control over the Company’s process to evaluate potential impairment triggering events, including evaluation of holding period. We compared the holding period assumed in the
F-1

Company’s analysis to the Company’s historical holding period for similar assets. We inquired of Company officials and inspected documents, such as meeting minutes of the board of trustees and sub-committees and the capital allocation committee to evaluate the Company’s intent and ability to hold investment properties for particular periods of time. We read external communications with investors and analysts in order to identify information regarding potential sales of the Company’s investment properties.


/s/ KPMG LLP

We have served as the Company’s auditor since 2020.

Indianapolis, Indiana
February 22, 2021
















































F-2



Report of Independent Registered Public Accounting Firm

To the Partners of Kite Realty Group, L.P. and subsidiaries and Board of Trustees of Kite Realty Group Trust:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Kite Realty Group, L.P. and subsidiaries (the Partnership) as of December 31, 2020, the related consolidated statements of operations and comprehensive income, partner’s equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of investment properties for potential impairment

As discussed in Note 2 of the consolidated financial statements, land, buildings, and improvements as of December 31, 2020 was $3,109,122 thousand. The Partnership’s investment properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. This review for possible impairment triggering events requires certain assumptions, estimates, and significant judgment. The evaluation of investment properties for potential impairment is subject to certain management assumptions which includes the anticipated holding period for a real estate investment property.

We identified the evaluation of investment properties for potential impairment as a critical audit matter. Subjective and challenging auditor judgment was required to evaluate the Partnership’s intent and ability to hold investment properties for particular periods of time. A shortening of the anticipated holding period could indicate a potential impairment.

F-3

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control over the Partnership’s process to evaluate potential impairment triggering events, including evaluation of holding period. We compared the holding period assumed in the Partnership’s analysis to the Partnership’s historical holding period for similar assets. We inquired of Partnership officials and inspected documents, such as meeting minutes of the Parent Company’s board of trustees and sub-committees and the capital allocation committee to evaluate the Partnership’s intent and ability to hold investment properties for particular periods of time. We read external communications with investors and analysts in order to identify information regarding potential sales of the Partnership’s investment properties.


/s/ KPMG LLP

We have served as the Partnership’s auditor since 2020.

Indianapolis, Indiana
February 22, 2021













































F-4






Report of Independent Registered Public Accounting Firm 


The Shareholders and Board of Trustees of Kite Realty Group Trust:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetssheet of Kite Realty Group Trust (the Company) as of December 31, 2019, and 2018, the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the threetwo years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and 2018, and the results of its operations and its cash flows for each of the threetwo years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), and the related amendments.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.



Impairment of Investment Property
Description of the Matter
At December 31, 2019, the Company’s net consolidated investment properties totaled $2.4 billion. As discussed in Note 2 of the consolidated financial statements, the Company’s investment properties are reviewed for impairment on a property-by-property basis on at least a quarterly basis, or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Impairment losses for investment properties are measured when the undiscounted cash flows estimated to be generated by the investment properties during the expected holding period are less than the carrying amounts of those assets. Impairment losses are recorded as the excess of the carrying value over the estimated fair value of the asset.
Auditing management’s evaluation of investment properties for impairment was complex due to the significant estimation uncertainty in determining the estimated future undiscounted cash flows and fair value of investment properties where an indicator of potential impairment was identified. In particular, these estimates were sensitive to significant assumptions such as projected net operating income, anticipated hold period, expected capital expenditures and the capitalization rate used to estimate the property’s residual value, all of which can be affected by expectations about future market conditions, rental demand, and competition, as well as management’s intent to hold and operate the property over the term assumed in the analysis.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to the Company’s process for evaluating investment properties for impairment, including controls over management’s review of the significant assumptions described above.
To test the Company’s evaluation of investment properties for impairment, we performed audit procedures that included, among others, assessing the methodologies, evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by management in its analysis. We compared the significant assumptions used by management to historical actual results of the property, relevant observable market information for recent sales of comparable assets, real estate industry publications, current industry trends or other relevant factors. We also involved a valuation specialist to assist in evaluating certain assumptions. As part of our evaluation, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the future undiscounted cash flows and fair value of certain properties that would result from changes in the assumptions.



 
  
/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2004.from 2004 until 2020.
Indianapolis, Indiana
February 20, 2020
F-5




Report of Independent Registered Public Accounting Firm 


The Partners of Kite Realty Group, L.P. and subsidiaries and the Board of Trustees of Kite Realty Group Trust:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetssheet of Kite Realty Group, L.P. and subsidiaries (the Partnership) as of December 31, 2019, and 2018, the related consolidated statements of operations and comprehensive income, partner’s equity and cash flows for each of the threetwo years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2019, and 2018, and the results of its operations and its cash flows for each of the threetwo years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 2 to the consolidated financial statements, the Partnership changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), and the related amendments.

Basis for Opinion
These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



 
/s/ Ernst & Young LLP

We have served as the Partnership’s auditor since 2015.from 2015 until 2020.
Indianapolis, Indiana
February 20, 2020



F-6


Kite Realty Group Trust
Consolidated Balance Sheets
($ in thousands, except share data)
  
December 31,
2019		 December 31,
2018		 December 31,
2020		December 31,
2019
Assets:   
Assets:  
Investment properties at cost:$3,087,391
 $3,641,120
Investment properties at cost:$3,143,961 $3,087,391 
Less: accumulated depreciation(666,952) (699,927) Less: accumulated depreciation(755,100)(666,952)
2,420,439
 2,941,193
2,388,861 2,420,439 
   
Cash and cash equivalents31,336
 35,376
Cash and cash equivalents43,648 31,336 
Tenant and other receivables, including accrued straight-line rent of $27,256 and $31,347, respectively55,286
 58,059
Tenant and other receivables, including accrued straight-line rent of $24,783 and $27,256, respectivelyTenant and other receivables, including accrued straight-line rent of $24,783 and $27,256, respectively57,154 55,286 
Restricted cash and escrow deposits21,477
 10,130
Restricted cash and escrow deposits2,938 21,477 
Deferred costs, net73,157
 95,264
Deferred costs, net63,171 73,157 
Prepaid and other assets34,548
 12,764
Prepaid and other assets39,975 34,548 
Investments in unconsolidated subsidiaries12,644
 13,496
Investments in unconsolidated subsidiaries12,792 12,644 
Assets held for sale—
 5,731
Total Assets$2,648,887
 $3,172,013
Total Assets$2,608,539 $2,648,887 
   
Liabilities and Shareholders' Equity:   Liabilities and Shareholders' Equity:
Mortgage and other indebtedness, net$1,146,580
 $1,543,301
Mortgage and other indebtedness, net$1,170,794 $1,146,580 
Accounts payable and accrued expenses69,817
 85,934
Accounts payable and accrued expenses77,469 69,817 
Deferred revenue and other liabilities90,180
 83,632
Deferred revenue and other liabilities85,649 90,180 
Total Liabilities1,306,577
 1,712,867
Total Liabilities1,333,912 1,306,577 
Commitments and contingencies


 


Commitments and contingencies00
Limited Partners' interests in Operating Partnership and other52,574
 45,743
Limited Partners' interests in Operating Partnership and other43,275 52,574 
Equity:   Equity:
Kite Realty Group Trust Shareholders' Equity:   Kite Realty Group Trust Shareholders' Equity:
Common Shares, $.01 par value, 225,000,000 shares authorized, 83,963,369 and 83,800,886 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively840
 838
Common Shares, $0.01 par value, 225,000,000 shares authorized, 84,187,999 and 83,963,369 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectivelyCommon Shares, $0.01 par value, 225,000,000 shares authorized, 84,187,999 and 83,963,369 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively842 840 
Additional paid in capital2,074,436
 2,078,099
Additional paid in capital2,085,003 2,074,436 
Accumulated other comprehensive loss(16,283) (3,497)Accumulated other comprehensive loss(30,885)(16,283)
Accumulated deficit(769,955) (662,735)Accumulated deficit(824,306)(769,955)
Total Kite Realty Group Trust Shareholders' Equity1,289,038
 1,412,705
Total Kite Realty Group Trust Shareholders' Equity1,230,654 1,289,038 
Noncontrolling Interest698
 698
Noncontrolling Interest698 698 
Total Equity1,289,736
 1,413,403
Total Equity1,231,352 1,289,736 
Total Liabilities and Shareholders' Equity$2,648,887
 $3,172,013
Total Liabilities and Shareholders' Equity$2,608,539 $2,648,887 
 
The accompanying notes are an integral part of these consolidated financial statements.

F-7

Kite Realty Group Trust
Consolidated Statements of Operations and Comprehensive Income
($ in thousands, except share and per share data) 
 Year Ended December 31,
 202020192018
Revenue:   
Rental income$257,670 $308,399 $338,523 
Other property related revenue8,597 6,326 13,138 
Fee income378 448 2,523 
Total revenue266,645 315,173 354,184 
Expenses: 
  Property operating41,012 45,575 50,356 
  Real estate taxes35,867 38,777 42,378 
  General, administrative, and other30,840 28,214 21,320 
  Depreciation and amortization128,648 132,098 152,163 
  Impairment charges0 37,723 70,360 
Total expenses236,367 282,387 336,577 
Gains on sale of operating properties, net4,733 38,971 3,424 
Operating income35,011 71,757 21,031 
  Interest expense(50,399)(59,268)(66,785)
  Income tax benefit of taxable REIT subsidiary696 282 227 
  Loss on debt extinguishment0 (11,572)0 
  Equity in loss of unconsolidated subsidiary(1,685)(628)(278)
  Other income (expense), net254 (573)(646)
Consolidated net loss(16,123)(2)(46,451)
Net income attributable to noncontrolling interests(100)(532)(116)
Net loss attributable to Kite Realty Group Trust(16,223)(534)(46,567)
Net income per common share – basic & diluted$(0.19)$(0.01)$(0.56)
Weighted average common shares outstanding - basic84,142,261 83,926,296 83,693,385 
Weighted average common shares outstanding - diluted84,142,261 83,926,296 83,693,385 
Dividends declared per common share$0.4495 $1.2700 $1.2700 
Consolidated net loss$(16,123)$(2)$(46,451)
Change in fair value of derivatives(14,969)(13,158)(6,647)
Total comprehensive loss(31,092)(13,160)(53,098)
Comprehensive loss (income) attributable to noncontrolling interests367 (160)44 
Comprehensive loss attributable to Kite Realty Group Trust$(30,725)$(13,320)$(53,054)
 Year Ended December 31,
 2019 2018 2017
Revenue:   
  
Rental income$308,399
 $338,523
 $346,444
Other property related revenue6,326
 13,138
 11,998
Fee income448
 2,523
 377
Total revenue315,173
 354,184
 358,819
Expenses:     
  Property operating45,575
 50,356
 49,643
  Real estate taxes38,777
 42,378
 43,180
  General, administrative, and other28,214
 21,320
 21,749
  Depreciation and amortization132,098
 152,163
 172,091
  Impairment charges37,723
 70,360
 7,411
Total expenses282,387
 336,577
 294,074
Gains on sale of operating properties, net38,971
 3,424
 15,160
Operating income71,757
 21,031
 79,905
  Interest expense(59,268) (66,785) (65,702)
  Income tax benefit of taxable REIT subsidiary282
 227
 100
  Loss on debt extinguishment(11,572) —
  
  Equity in loss of unconsolidated subsidiary(628) (278) —
  Other expense, net(573) (646) (415)
Consolidated net (loss) income(2) (46,451) 13,888
Net income attributable to noncontrolling interests(532) (116) (2,014)
Net (loss) income attributable to Kite Realty Group Trust(534) (46,567) 11,874
      
Net (loss) income per common share – basic$(0.01) $(0.56) $0.14
Net (loss) income per common share – diluted$(0.01) $(0.56) $0.14
      
Weighted average common shares outstanding - basic83,926,296
 83,693,385
 83,585,333
Weighted average common shares outstanding - diluted83,926,296
 83,693,385
 83,690,418
      
Dividends declared per common share$1.270
 $1.270
 $1.225
      
Consolidated net (loss) income$(2) $(46,451) $13,888
Change in fair value of derivatives(13,158) (6,647) 3,384
Total comprehensive (loss) income(13,160) (53,098) 17,272
Comprehensive loss (income) attributable to noncontrolling interests(160) 44
 (2,092)
Comprehensive (loss) income attributable to Kite Realty Group Trust$(13,320) $(53,054) $15,180

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Kite Realty Group Trust
Consolidated Statements of Shareholders’ Equity
($ in thousands, except share data)
Common SharesAdditional
Paid-in Capital		Accumulated Other
Comprehensive (Loss) Income		Accumulated
Deficit
 
Total
 Common Shares 
Additional
Paid-in Capital
 
Accumulated Other
Comprehensive (Loss) Income
 
Accumulated
Deficit
 
 
Total
SharesAmount
Shares Amount 
Balances, December 31, 2016 83,545,398
 $835
 $2,062,360
 $(316) $(419,305) $1,643,574
Stock compensation activity 48,670
 1
 5,915
 —
 —
 5,916
Other comprehensive income attributable to Kite Realty Group Trust —
   —
 3,306
 —
 3,306
Distributions declared to common shareholders —
 —
 —
 —
 (102,402) (102,402)
Net income attributable to Kite Realty Group Trust —
 —
 —
 —
 11,874
 11,874
Acquisition of partner's noncontrolling interest in Fishers Station operating property     (3,750) —
 —
 (3,750)
Exchange of redeemable noncontrolling interests for common shares 12,000
 —
 236
 —
 —
 236
Adjustment to redeemable noncontrolling interests     6,657
 —
 —
 6,657
Balances, December 31, 2017 83,606,068
 $836
 $2,071,418
 $2,990
 $(509,833) $1,565,411
Balances, December 31, 201783,606,068 $836 $2,071,418 $2,990 $(509,833)$1,565,411 
Stock compensation activity 163,318
 2
 5,695
 —
 —
 5,697
Stock compensation activity163,318 2 5,695 — — 5,697 
Other comprehensive loss attributable to Kite Realty Group Trust —
   —
 (6,487) —
 (6,487)Other comprehensive loss attributable to Kite Realty Group Trust— — (6,487)— (6,487)
Distributions declared to common shareholders —
 —
 —
 —
 (106,335) (106,335)Distributions declared to common shareholders— — — — (106,335)(106,335)
Net loss attributable to Kite Realty Group Trust —
 —
 —
 —
 (46,567) (46,567)Net loss attributable to Kite Realty Group Trust— — — — (46,567)(46,567)
Exchange of redeemable noncontrolling interests for common shares 31,500
 —
 561
 —
 —
 561
Exchange of redeemable noncontrolling interests for common shares31,500 — 561 — — 561 
Adjustment to redeemable noncontrolling interests —
 —
 425
 —
 —
 425
Adjustment to redeemable noncontrolling interests00425 — — 425 
Balances, December 31, 2018 83,800,886
 $838
 $2,078,099
 $(3,497) $(662,735) $1,412,705
Balances, December 31, 201883,800,886 $838 $2,078,099 $(3,497)$(662,735)$1,412,705 
Stock compensation activity 152,184
 2
 6,147
 —
 —
 6,149
Stock compensation activity152,184 2 6,147 — — 6,149 
Other comprehensive loss attributable to Kite Realty Group Trust —
   —
 (12,786) —
 (12,786)Other comprehensive loss attributable to Kite Realty Group Trust— — (12,786)— (12,786)
Distributions declared to common shareholders —
 —
 —
 —
 (106,686) (106,686)Distributions declared to common shareholders— — — — (106,686)(106,686)
Net loss attributable to Kite Realty Group Trust —
 —
 —
 —
 (534) (534)Net loss attributable to Kite Realty Group Trust— — — — (534)(534)
Exchange of redeemable noncontrolling interests for common shares 10,299
 —
 167
 —
 —
 167
Exchange of redeemable noncontrolling interests for common shares10,299 — 167 — — 167 
Adjustment to redeemable noncontrolling interests —
 —
 (9,977) —
 —
 (9,977)Adjustment to redeemable noncontrolling interests— — (9,977)— — (9,977)
Balances, December 31, 2019 83,963,369
 $840
 $2,074,436
 $(16,283) $(769,955) $1,289,038
Balances, December 31, 201983,963,369 $840 $2,074,436 $(16,283)$(769,955)$1,289,038 
Stock compensation activityStock compensation activity206,591 2 5,483 — — 5,485 
Other comprehensive loss attributable to Kite Realty Group TrustOther comprehensive loss attributable to Kite Realty Group Trust— — (14,602)— (14,602)
Distributions declared to common shareholdersDistributions declared to common shareholders— — — — (38,128)(38,128)
Net loss attributable to Kite Realty Group TrustNet loss attributable to Kite Realty Group Trust— — — — (16,223)(16,223)
Acquisition of partner's noncontrolling interest in Pan Am PlazaAcquisition of partner's noncontrolling interest in Pan Am Plaza— — (2,500)— — (2,500)
Exchange of redeemable noncontrolling interests for common sharesExchange of redeemable noncontrolling interests for common shares18,039 — 187 — — 187 
Adjustment to redeemable noncontrolling interestsAdjustment to redeemable noncontrolling interests— — 7,397 — — 7,397 
Balances, December 31, 2020Balances, December 31, 202084,187,999 $842 $2,085,003 $(30,885)$(824,306)$1,230,654 
 
The accompanying notes are an integral part of these consolidated financial statements.


F-9

Kite Realty Group Trust
Consolidated Statements of Cash Flows
($ in thousands)
Year Ended December 31, Year Ended December 31,
2019 2018 2017 202020192018
Cash flow from operating activities:   
  
Cash flow from operating activities:   
Consolidated net (loss) income$(2) $(46,451) $13,888
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: 
  
  
Consolidated net lossConsolidated net loss$(16,123)$(2)$(46,451)
Adjustments to reconcile consolidated net income to net cash provided by operating activities:Adjustments to reconcile consolidated net income to net cash provided by operating activities:   
Gain on sale of operating properties(38,971) (3,424) (15,160)Gain on sale of operating properties(4,733)(38,971)(3,424)
Impairment charge37,723
 70,360
 7,411
Impairment charge0 37,723 70,360 
Loss on debt extinguishment11,572
 —
 —
Loss on debt extinguishment0 11,572 0 
Straight-line rent(2,158) (3,060) (4,696)Straight-line rent3,131 (2,158)(3,060)
Depreciation and amortization134,860
 156,107
 174,625
Depreciation and amortization130,783 134,860 156,107 
Compensation expense for equity awards5,375
 4,869
 5,988
Compensation expense for equity awards5,998 5,375 4,869 
Amortization of debt fair value adjustment(1,467) (2,630) (2,913)Amortization of debt fair value adjustment(444)(1,467)(2,630)
Amortization of in-place lease liabilities(3,776) (6,360) (3,677)Amortization of in-place lease liabilities(3,822)(3,776)(6,360)
Changes in assets and liabilities: 
  
  
Changes in assets and liabilities:   
Tenant receivables3,170
 (642) (3,442)Tenant receivables(3,062)3,170 (642)
Deferred costs and other assets(6,265) (13,396) (11,569)Deferred costs and other assets(7,618)(6,265)(13,396)
Accounts payable, accrued expenses, deferred revenue, and other liabilities(2,099) (990) (5,832)Accounts payable, accrued expenses, deferred revenue, and other liabilities(8,595)(2,099)(990)
Net cash provided by operating activities137,962
 154,383
 154,623
Net cash provided by operating activities95,515 137,962 154,383 
Cash flow from investing activities: 
  
  
Cash flow from investing activities:   
Acquisitions of interests in properties(58,205) —
 —
Acquisitions of interests in properties(65,298)(58,205)0 
Capital expenditures, net(53,278) (59,304) (72,433)
Capital expendituresCapital expenditures(38,266)(53,278)(59,304)
Net proceeds from sales of landNet proceeds from sales of land9,134 0 0 
Net proceeds from sales of operating properties529,417
 218,387
 76,075
Net proceeds from sales of operating properties13,888 529,417 218,387 
Small business loan fundingSmall business loan funding(2,199)0 0 
Change in construction payables(542) (777) (4,276)Change in construction payables2,442 (542)(777)
Capital contribution to unconsolidated joint venture(798) (9,973) (1,400)Capital contribution to unconsolidated joint venture(541)(798)(9,973)
Net cash provided by (used in) investing activities416,594
 148,333
 (2,034)
Net cash (used in) provided by investing activitiesNet cash (used in) provided by investing activities(80,840)416,594 148,333 
Cash flow from financing activities: 
  
  
Cash flow from financing activities:   
Proceeds from issuance of common shares, net350
 76
 28
Proceeds from issuance of common shares, net72 350 76 
Repurchases of common shares upon the vesting of restricted shares(533) (350) (835)Repurchases of common shares upon the vesting of restricted shares(1,336)(533)(350)
Acquisition of partner's interest in Fishers Station operating property—
 —
 (3,750)
Loan proceeds75,000
 399,500
 97,700
Loan proceeds325,000 75,000 399,500 
Loan transaction costs—
 (5,208) (357)Loan transaction costs0 0 (5,208)
Loan payments(470,515) (551,379) (128,800)Loan payments(302,477)(470,515)(551,379)
Debt extinguishment costs(14,455) —
 —
Debt extinguishment costs0 (14,455)0 
Distributions paid – common shareholders(133,258) (106,316) (101,128)Distributions paid – common shareholders(38,128)(133,258)(106,316)
Distributions paid – redeemable noncontrolling interests(3,838) (3,716) (3,922)Distributions paid – redeemable noncontrolling interests(1,533)(3,838)(3,716)
Acquisition of partner's interest in Pan Am Plaza joint ventureAcquisition of partner's interest in Pan Am Plaza joint venture(2,500)0 0 
Acquisition of partners' interests in Territory joint venture—
 (21,993) (8,261)Acquisition of partners' interests in Territory joint venture0 0 (21,993)
Net cash used in financing activities(547,249) (289,386) (149,325)Net cash used in financing activities(20,902)(547,249)(289,386)
Increase in cash, cash equivalents, and restricted cash7,307
 13,330
 3,264
Cash, cash equivalents, and restricted cash beginning of year45,506
 32,176
 28,912
Cash, cash equivalents, and restricted cash end of year$52,813
 $45,506
 $32,176
Net change in cash, cash equivalents, and restricted cashNet change in cash, cash equivalents, and restricted cash(6,227)7,307 13,330 
Cash, cash equivalents, and restricted cash beginning of periodCash, cash equivalents, and restricted cash beginning of period52,813 45,506 32,176 
Cash, cash equivalents, and restricted cash end of periodCash, cash equivalents, and restricted cash end of period$46,586 $52,813 $45,506 
Supplemental disclosures 
  
  
Supplemental disclosures   
Cash paid for interest, net of capitalized interest$60,534
 $67,998
 $68,819
Cash paid for interest, net of capitalized interest$50,387 $60,534 $67,998 
Non-cash investing activitiesNon-cash investing activities
Net investment in sales-type leaseNet investment in sales-type lease$4,665 $0 $0 
The accompanying notes are an integral part of these consolidated financial statements.

F-10

Kite Realty Group, L.P. and subsidiaries
Consolidated Balance Sheets
($ in thousands, except unit data)
  
December 31,
2019		 December 31,
2018		 December 31,
2020		December 31,
2019
Assets:

   
Assets:
  
Investment properties at cost:$3,087,391
 $3,641,120
Investment properties at cost:$3,143,961 $3,087,391 
Less: accumulated depreciation(666,952) (699,927) Less: accumulated depreciation(755,100)(666,952)
2,420,439
 2,941,193
 2,388,861 2,420,439 
   
Cash and cash equivalents31,336
 35,376
Cash and cash equivalents43,648 31,336 
Tenant and other receivables, including accrued straight-line rent of $27,256 and $31,347, respectively55,286
 58,059
Tenant and other receivables, including accrued straight-line rent of $24,783 and $27,256, respectivelyTenant and other receivables, including accrued straight-line rent of $24,783 and $27,256, respectively57,154 55,286 
Restricted cash and escrow deposits21,477
 10,130
Restricted cash and escrow deposits2,938 21,477 
Deferred costs, net73,157
 95,264
Deferred costs, net63,171 73,157 
Prepaid and other assets34,548
 12,764
Prepaid and other assets39,975 34,548 
Investments in unconsolidated subsidiaries12,644
 13,496
Investments in unconsolidated subsidiaries12,792 12,644 
Asset held for sale—
 5,731
Total Assets$2,648,887
 $3,172,013
Total Assets$2,608,539 $2,648,887 
   
Liabilities and Equity: 
  
Liabilities and Equity:  
Mortgage and other indebtedness, net$1,146,580
 $1,543,301
Mortgage and other indebtedness, net$1,170,794 $1,146,580 
Accounts payable and accrued expenses69,817
 85,934
Accounts payable and accrued expenses77,469 69,817 
Deferred revenue and other liabilities90,180
 83,632
Deferred revenue and other liabilities85,649 90,180 
Total Liabilities1,306,577
 1,712,867
Total Liabilities1,333,912 1,306,577 
Commitments and contingencies


 


Commitments and contingencies00
Limited Partners' interests in Operating Partnership and other52,574
 45,743
Limited Partners' interests in Operating Partnership and other43,275 52,574 
Partners Equity:   Partners Equity:
Parent Company:    Parent Company:
Common equity, 83,963,369 and 83,800,886 units issued and outstanding at December 31, 2019 and December 31, 2018, respectively1,305,321
 1,416,202
Common equity, 84,187,999 and 83,963,369 units issued and outstanding at December 31, 2020 and December 31, 2019, respectivelyCommon equity, 84,187,999 and 83,963,369 units issued and outstanding at December 31, 2020 and December 31, 2019, respectively1,261,539 1,305,321 
Accumulated other comprehensive loss(16,283) (3,497)Accumulated other comprehensive loss(30,885)(16,283)
Total Partners Equity1,289,038
 1,412,705
 Total Partners Equity1,230,654 1,289,038 
Noncontrolling Interests698
 698
Noncontrolling Interests698 698 
Total Equity1,289,736
 1,413,403
Total Equity1,231,352 1,289,736 
Total Liabilities and Equity$2,648,887
 $3,172,013
Total Liabilities and Equity$2,608,539 $2,648,887 
 
The accompanying notes are an integral part of these consolidated financial statements.


F-11

Kite Realty Group, L.P. and subsidiaries
Consolidated Statements of Operations and Comprehensive Income
($ in thousands, except unit and per unit data) 
 Year Ended December 31,
 202020192018
Revenue:   
Rental income$257,670 $308,399 $338,523 
Other property related revenue8,597 6,326 13,138 
Fee income378 448 2,523 
Total revenue266,645 315,173 354,184 
Expenses:   
Property operating41,012 45,575 50,356 
Real estate taxes35,867 38,777 42,378 
General, administrative, and other30,840 28,214 21,320 
Depreciation and amortization128,648 132,098 152,163 
Impairment charge0 37,723 70,360 
Total expenses236,367 282,387 336,577 
Gain on sale of operating properties, net4,733 38,971 3,424 
Operating income35,011 71,757 21,031 
Interest expense(50,399)(59,268)(66,785)
Income tax benefit of taxable REIT subsidiary696 282 227 
Loss on debt extinguishment0 (11,572)0 
Equity in loss of unconsolidated subsidiaries(1,685)(628)(278)
Other income (expense), net254 (573)(646)
Net loss(16,123)(2)(46,451)
Net income attributable to noncontrolling interests(528)(528)(1,151)
Net loss attributable to common unitholders$(16,651)$(530)$(47,602)
Allocation of net (loss) income:
Limited Partners$(428)$4 $(1,035)
Parent Company(16,223)(534)(46,567)
$(16,651)$(530)$(47,602)
Net loss per unit - basic and diluted$(0.19)$(0.01)$(0.56)
Weighted average common units outstanding - basic86,361,139 86,027,409 85,740,449 
Weighted average common units outstanding - diluted86,361,139 86,027,409 85,740,449 
Distributions declared per common unit$0.4495 $1.2700 $1.2700 
Consolidated net loss$(16,123)$(2)$(46,451)
Change in fair value of derivatives(14,969)(13,158)(6,647)
Total comprehensive loss(31,092)(13,160)(53,098)
Comprehensive income attributable to noncontrolling interests(528)(528)(1,151)
Comprehensive loss attributable to common unitholders$(31,620)$(13,688)$(54,249)
 Year Ended December 31,
 2019 2018 2017
Revenue:   
  
Rental income$308,399
 $338,523
 $346,444
Other property related revenue6,326
 13,138
 11,998
Fee income448
 2,523
 377
Total revenue315,173
 354,184
 358,819
Expenses: 
  
  
Property operating45,575
 50,356
 49,643
Real estate taxes38,777
 42,378
 43,180
General, administrative, and other28,214
 21,320
 21,749
Depreciation and amortization132,098
 152,163
 172,091
Impairment charge37,723
 70,360
 7,411
Total expenses282,387
 336,577
 294,074
Gain on sale of operating properties, net38,971
 3,424
 15,160
Operating income71,757
 21,031
 79,905
Interest expense(59,268) (66,785) (65,702)
Income tax benefit of taxable REIT subsidiary282
 227
 100
Loss on debt extinguishment(11,572) —
 —
Equity in loss of unconsolidated subsidiaries(628) (278) —
Other expense, net(573) (646) (415)
Consolidated net (loss) income(2) (46,451) 13,888
Net income attributable to noncontrolling interests(528) (1,151) (1,733)
Net (loss) income attributable to common unitholders$(530) $(47,602) $12,155
      
Allocation of net (loss) income:     
Limited Partners$4
 $(1,035) $281
Parent Company(534) (46,567) 11,874
 $(530) $(47,602) $12,155
      
Net (loss) income per unit - basic$(0.01) $(0.56) $0.14
Net (loss) income per unit - diluted$(0.01) $(0.56) $0.14
      
Weighted average common units outstanding - basic86,027,409
 85,740,449
 85,566,272
Weighted average common units outstanding - diluted86,027,409
 85,740,449
 85,671,358
      
Distributions declared per common unit$1.270
 $1.270
 $1.225
      
Consolidated net (loss) income$(2) $(46,451) $13,888
Change in fair value of derivatives(13,158) (6,647) 3,384
Total comprehensive (loss) income(13,160) (53,098) 17,272
Comprehensive income attributable to noncontrolling interests(528) (1,151) (1,733)
Comprehensive (loss) income attributable to common unitholders$(13,688) $(54,249) $15,539

The accompanying notes are an integral part of these consolidated financial statements.

F-12

Kite Realty Group, L.P. and subsidiaries
Consolidated Statements of Partner's Equity
($ in thousands)
General PartnerTotal
General Partner TotalCommon EquityAccumulated
Other
Comprehensive
(Loss) Income
Common Equity 
Accumulated
Other
Comprehensive
(Loss) Income
 
Balances, December 31, 2016$1,643,890
 $(316) $1,643,574
Stock compensation activity5,916
 —
 5,916
Other comprehensive income attributable to Parent Company—
 3,306
 3,306
Distributions declared to Parent Company(102,402) —
 (102,402)
Net income attributable to Parent Company11,874
 —
 11,874
Acquisition of partner's interest in Fishers Station operating property(3,750) —
 (3,750)
Conversion of Limited Partner Units to shares of the Parent Company236
 —
 236
Adjustment to redeemable noncontrolling interests6,657
 —
 6,657
Balances, December 31, 2017$1,562,421
 $2,990
 $1,565,411
Balances, December 31, 2017$1,562,421 $2,990 $1,565,411 
Stock compensation activity5,697
 —
 5,697
Stock compensation activity5,697 — 5,697 
Other comprehensive loss attributable to Parent Company—
 (6,487) (6,487)Other comprehensive loss attributable to Parent Company— (6,487)(6,487)
Distributions declared to Parent Company(106,335) —
 (106,335)Distributions declared to Parent Company(106,335)— (106,335)
Net loss attributable to Parent Company(46,567) —
 (46,567)Net loss attributable to Parent Company(46,567)— (46,567)
Conversion of Limited Partner Units to shares of the Parent Company561
 —
 561
Conversion of Limited Partner Units to shares of the Parent Company561 — 561 
Adjustment to redeemable noncontrolling interests425
 —
 425
Adjustment to redeemable noncontrolling interests425 — 425 
Balances, December 31, 2018$1,416,202
 $(3,497) $1,412,705
Balances, December 31, 2018$1,416,202 $(3,497)$1,412,705 
Stock compensation activity6,149
 —
 6,149
Stock compensation activity6,149 — 6,149 
Other comprehensive loss attributable to Parent Company—
 (12,786) (12,786)Other comprehensive loss attributable to Parent Company— (12,786)(12,786)
Distributions declared to Parent Company(106,686) —
 (106,686)Distributions declared to Parent Company(106,686)— (106,686)
Net loss attributable to Parent Company(534) —
 (534)Net loss attributable to Parent Company(534)— (534)
Conversion of Limited Partner Units to shares of the Parent Company167
 —
 167
Conversion of Limited Partner Units to shares of the Parent Company167 — 167 
Adjustment to redeemable noncontrolling interests(9,977) —
 (9,977)Adjustment to redeemable noncontrolling interests(9,977)— (9,977)
Balances, December 31, 2019$1,305,321
 $(16,283) $1,289,038
Balances, December 31, 2019$1,305,321 $(16,283)$1,289,038 
Stock compensation activityStock compensation activity5,485 — 5,485 
Other comprehensive loss attributable to Parent CompanyOther comprehensive loss attributable to Parent Company— (14,602)(14,602)
Distributions declared to Parent CompanyDistributions declared to Parent Company(38,128)— (38,128)
Net loss attributable to Parent CompanyNet loss attributable to Parent Company(16,223)— (16,223)
Acquisition of partner's noncontrolling interest in Pan Am PlazaAcquisition of partner's noncontrolling interest in Pan Am Plaza(2,500)— (2,500)
Conversion of Limited Partner Units to shares of the Parent CompanyConversion of Limited Partner Units to shares of the Parent Company187 — 187 
Adjustment to redeemable noncontrolling interestsAdjustment to redeemable noncontrolling interests7,397 — 7,397 
Balances, December 31, 2020Balances, December 31, 2020$1,261,539 $(30,885)$1,230,654 
 
The accompanying notes are an integral part of these consolidated financial statements.


F-13

Kite Realty Group, L.P. and subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
Year Ended December 31, Year Ended December 31,
2019 2018 2017 202020192018
Cash flow from operating activities:   
  
Cash flow from operating activities:   
Consolidated net (loss) income$(2) $(46,451) $13,888
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: 
  
  
Gain on sale of operating properties, net of tax(38,971) (3,424) (15,160)
Consolidated net lossConsolidated net loss$(16,123)$(2)$(46,451)
Adjustments to reconcile consolidated net income to net cash provided by operating activities:Adjustments to reconcile consolidated net income to net cash provided by operating activities:   
Gain on sales of operating propertiesGain on sales of operating properties(4,733)(38,971)(3,424)
Impairment charge37,723
 70,360
 7,411
Impairment charge0 37,723 70,360 
Loss on debt extinguishment11,572
 —
 —
Loss on debt extinguishment0 11,572 0 
Straight-line rent(2,158) (3,060) (4,696)Straight-line rent3,131 (2,158)(3,060)
Depreciation and amortization134,860
 156,107
 174,625
Depreciation and amortization130,783 134,860 156,107 
Compensation expense for equity awards5,375
 4,869
 5,988
Compensation expense for equity awards5,998 5,375 4,869 
Amortization of debt fair value adjustment(1,467) (2,630) (2,913)Amortization of debt fair value adjustment(444)(1,467)(2,630)
Amortization of in-place lease liabilities(3,776) (6,360) (3,677)Amortization of in-place lease liabilities(3,822)(3,776)(6,360)
Changes in assets and liabilities: 
  
  
Changes in assets and liabilities:   
Tenant receivables3,170
 (642) (3,442)Tenant receivables(3,062)3,170 (642)
Deferred costs and other assets(6,265) (13,396) (11,569)Deferred costs and other assets(7,618)(6,265)(13,396)
Accounts payable, accrued expenses, deferred revenue, and other liabilities(2,099) (990) (5,832)Accounts payable, accrued expenses, deferred revenue, and other liabilities(8,595)(2,099)(990)
Net cash provided by operating activities137,962
 154,383
 154,623
Net cash provided by operating activities95,515 137,962 154,383 
Cash flow from investing activities: 
  
  
Cash flow from investing activities:   
Acquisitions of interests in properties(58,205) —
 —
Acquisitions of interests in properties(65,298)(58,205)0 
Capital expenditures, net(53,278) (59,304) (72,433)
Capital expendituresCapital expenditures(38,266)(53,278)(59,304)
Net proceeds from sales of landNet proceeds from sales of land9,134 0 0 
Net proceeds from sales of operating properties529,417
 218,387
 76,075
Net proceeds from sales of operating properties13,888 529,417 218,387 
Change in construction payables(542) (777) (4,276)Change in construction payables2,442 (542)(777)
Small business loan fundingSmall business loan funding(2,199)0 0 
Capital contribution to unconsolidated joint venture(798) (9,973) (1,400)Capital contribution to unconsolidated joint venture(541)(798)(9,973)
Net cash provided by (used in) investing activities416,594
 148,333
 (2,034)
Net cash (used in) provided by investing activitiesNet cash (used in) provided by investing activities(80,840)416,594 148,333 
Cash flow from financing activities: 
  
  
Cash flow from financing activities:   
Contributions from the Parent Company350
 76
 28
Distributions to the Parent Company for repurchases of common shares upon the vesting of restricted shares(533) (350) (835)
Acquisition of partner's interest in Fishers Station operating property—
 —
 (3,750)
Contributions from the General PartnerContributions from the General Partner72 350 76 
Repurchases of common shares upon the vesting of restricted sharesRepurchases of common shares upon the vesting of restricted shares(1,336)(533)(350)
Loan proceeds75,000
 399,500
 97,700
Loan proceeds325,000 75,000 399,500 
Loan transaction costs—
 (5,208) (357)Loan transaction costs0 0 (5,208)
Loan payments(470,515) (551,379) (128,800)Loan payments(302,477)(470,515)(551,379)
Debt extinguishment costs(14,455) —
 —
Debt extinguishment costs0 (14,455)0 
Distributions paid – common unitholders(133,258) (106,316) (101,128)Distributions paid – common unitholders(38,128)(133,258)(106,316)
Distributions paid – redeemable noncontrolling interests(3,838) (3,716) (3,922)Distributions paid – redeemable noncontrolling interests(1,533)(3,838)(3,716)
Acquisition of partner's interest in Pan Am Plaza joint ventureAcquisition of partner's interest in Pan Am Plaza joint venture(2,500)0 0 
Acquisition of partners' interests in Territory joint venture—
 (21,993) (8,261)Acquisition of partners' interests in Territory joint venture0 0 (21,993)
Net cash used in financing activities(547,249) (289,386) (149,325)Net cash used in financing activities(20,902)(547,249)(289,386)
Increase in cash, cash equivalents, and restricted cash7,307
 13,330
 3,264
Cash, cash equivalents, and restricted cash beginning of year45,506
 32,176
 28,912
Cash, cash equivalents, and restricted cash end of year$52,813
 $45,506
 $32,176
Net change in cash, cash equivalents, and restricted cashNet change in cash, cash equivalents, and restricted cash(6,227)7,307 13,330 
Cash, cash equivalents, and restricted cash beginning of periodCash, cash equivalents, and restricted cash beginning of period52,813 45,506 32,176 
Cash, cash equivalents, and restricted cash end of periodCash, cash equivalents, and restricted cash end of period$46,586 $52,813 $45,506 
Supplemental disclosures 
  
  
Supplemental disclosures   
Cash paid for interest, net of capitalized interest$60,534
 $67,998
 $68,819
Cash paid for interest, net of capitalized interest$50,387 $60,534 $67,998 
Non-cash investing activitiesNon-cash investing activities
Net investment in sales-type leaseNet investment in sales-type lease$4,665 $0 $0 
The accompanying notes are an integral part of these consolidated financial statements.

F-14

Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries
Notes to Consolidated Financial Statements
December 31, 20192020
($ in thousands, except share, per share, unit and per unit amounts and where indicated in millions or billions.)
 
Note 1. Organization 
 
Kite Realty Group Trust (the "Parent Company"), through its majority-owned subsidiary, Kite Realty Group, L.P. (the “Operating Partnership”), owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States. The terms "Company," "we," "us," and "our" refer to the Parent Company and the Operating Partnership, collectively, and those entities owned or controlled by the Parent Company and/or the Operating Partnership.

The Operating Partnership was formed on August 16, 2004, when the Parent Company contributed properties and the net proceeds from an initial public offering of shares of its common stock to the Operating Partnership. The Parent Company was organized in Maryland in 2004 to succeed in the development, acquisition, construction and real estate businesses of its predecessor. We believe the Company qualifies as a real estate investment trust (a “REIT”) under provisions of the Internal Revenue Code of 1986, as amended.

The Parent Company is the sole general partner of the Operating Partnership, and as of December 31, 20192020 owned approximately 97.5%97.1% of the common partnership interests in the Operating Partnership (“General Partner Units”). The remaining 2.5%2.9% of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) were owned by the limited partners. As the sole general partner of the Operating Partnership, the Parent Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. The Parent Company and the Operating Partnership are operated as one enterprise. The management of the Parent Company consists of the same members as the management of the Operating Partnership. As the sole general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have any significant assets other than its investment in the Operating Partnership.  
   
At December 31, 2020, we owned interests in 90 operating and redevelopment properties totaling approximately 17.3 million square feet. We also owned 2 development projects under construction as of this date. Of the 90 properties, 87 are consolidated in these financial statements, and the remaining 3 are accounted for under the equity method.

At December 31, 2019, we owned interests in 90 operating and redevelopment properties totaling approximately 17.4 million square feet. We also owned 1 development project under construction as of this date.  Of the 90 properties, 87 are consolidated in these financial statements and the remaining 3 are accounted for under the equity method.

At December 31, 2018, we owned interests in 111 operating and redevelopment properties totaling approximately 21.9 million square feet. We also owned 1 development project under construction as of this date.  Of the 111 properties, 108 are consolidated in these financial statements and the remaining 3 are accounted for under the equity method.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies 
 
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period.  Actual results could differ from these estimates.
 
Components of Investment Properties 
 
The Company’s investment properties as of December 31, 20192020 and December 31, 20182019 were as follows:
($ in thousands)Balance at
December 31,
2020		December 31,
2019
Investment properties, at cost:  
Land, buildings and improvements$3,109,122 $3,038,412 
Furniture, equipment and other6,979 7,775 
Construction in progress27,860 41,204 
 $3,143,961 $3,087,391 
($ in thousands) Balance at
  December 31,
2019		 December 31,
2018
Investment properties, at cost:    
Land, buildings and improvements $3,038,412
 $3,600,743
Furniture, equipment and other 7,775
 7,741
Construction in progress 41,204
 32,636
  $3,087,391
 $3,641,120

F-15






Consolidation and Investments in Joint Ventures 
 
The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiaryTRS of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.  In general, a VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) has equity investors that do not provide sufficient financial resources for the entity to support its activities, (b) does not have equity investors with voting rights or (c) has equity investors whose votes are disproportionate from their economics and substantially all of the activities are conducted on behalf of the investor with disproportionately fewer voting rights.   

The Operating Partnership accounts for properties that are owned by joint ventures in accordance with the consolidation guidance.  The Operating Partnership evaluates each joint venture and determines first whether to follow the VIE or the voting interest entity ("VOE") model. Once the appropriate consolidation model is identified, the Operating Partnership then evaluates whether it should consolidate the joint venture. Under the VIE model, the Operating Partnership consolidates an entity when it has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the VOE model, the Operating Partnership consolidates an entity when (i) it controls the entity through ownership of a majority voting interest if the entity is not a limited partnership or (ii) it controls the entity through its ability to remove the other partners or owners in the entity, at its discretion, when the entity is a limited partnership.

In determining whether to consolidate a VIE with the Operating Partnership, we consider all relationships between the Operating Partnership and the applicable VIE, including development agreements, management agreements and other contractual arrangements, in determining whether we have the power to direct the activities of the VIE that most significantly affect the VIE's performance.  As of December 31, 2019,2020, we owned investments in 2 consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.  As of this date, these VIEs had total debt of $55.8$55.1 million, which were secured by assets of the VIEs totaling $114.1$113.3 million.  The Operating Partnership guarantees the debt of these VIEs.

The Operating Partnership is considered a VIE as the limited partners do not hold kick-out rights or substantive participating rights. The Parent Company consolidates the Operating Partnership as it is the primary beneficiary in accordance with the VIE model.

TH Real Estate Joint Venture

On June 29, 2018, the Company formed a joint venture involving TH Real Estate (the "TH Real Estate joint venture"). The Company sold 3 properties to the joint venture valued in the aggregate at $99.8 million and, after considering third party debt obtained by the venture upon formation, the Company contributed $10.0 million for a 20% noncontrolling ownership interest in the venture. The Company serves as the operating member responsible for day-to-day management of the properties and receives property management and leasing fees. Both members have substantive participating rights over major decisions that impact the economics and operations of the joint venture. The Company is accounting for the joint venture on the equity method as it has the ability to exercise influence, but not control over operating and financial policies.

Embassy Suites at the University of Notre Dame

In December 2017, we formed a new joint venture with an unrelated third party to develop and own an Embassy Suites full-service hotel next to our Eddy Street Commons operating property at the University of Notre Dame. We contributed $1.4 million of cash to the joint venture in return for a 35% ownership interest in the venture. The joint venture has entered into a $33.8 million construction loan, against which $33.6 million was drawn as of December 31, 2019.2020. The joint venture is not considered a VIE. We are accounting for the joint venture under the equity method as both members have substantive participating rights and we do not control the activities of the venture.

Glendale Multifamily Joint Venture

In May 2020, the Company formed a joint venture for the planned development of a multifamily project adjacent to our Glendale Town Center retail property. The Company contributed land valued at $1.6 million to the joint venture and retained a 12% interest in the joint venture. The Company's partner serves as the operating member responsible for day-to-day management. Both members have substantive participating rights over major decisions that impact the economics and
F-16

operations of the joint venture. The Company is accounting for the joint venture on the equity method as it has the ability to exercise influence but not control over operating and financial policies.

Acquisition of Real Estate Properties 
 
Upon acquisition of real estate operating properties, we estimate the fair value of acquired identifiable tangible assets and identified intangible assets and liabilities, assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition, based on evaluation of information and estimates available at that date.  Based on these estimates, we record the estimated fair value to the applicable assets and liabilities.  In making estimates of fair values, a number of sources are utilized, including


information obtained as a result of pre-acquisition due diligence, marketing and leasing activities. The estimates of fair value were determined to have primarily relied upon Level 2 and Level 3 inputs, as defined below. 
 
Fair value is determined for tangible assets and intangibles, including: 
 
•the fair value of the building on an as-if-vacant basis and the fair value of land determined either by comparable market data, real estate tax assessments, independent appraisals or other relevant data;
•
•above-market and below-market in-place lease values for acquired properties, which are based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases.  Any below-market renewal options are also considered in the in-place lease values.  The capitalized above-market and below-market lease values are amortized as a reduction of or addition to rental income over the term of the lease.  Should a tenant vacate, terminate its lease, or otherwise notify us of its intent to do so, the unamortized portion of the lease intangibles would be charged or credited to income;
•
the value of having a lease in place at the acquisition date.  We utilize independent and internal sources for our estimates to determine the respective in-place lease values.  Our estimates of value are made using methods similar to those used by independent appraisers.  Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and foregone costs and rent received during the estimated lease-up period as if the space was vacant.  The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases; and
•the fair value of any assumed financing that is determined to be above or below market terms.  We utilize third party and independent sources for our estimates to determine the respective fair value of each mortgage payable.  The fair market value of each mortgage payable is amortized to interest expense over the remaining initial terms of the respective loan.

We also consider whether there is any value to in-place leases that have a related customer relationship intangible value.  Characteristics we consider in determining these values include the nature and extent of existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, among other factors.  To date, a tenant relationship has not been developed that is considered to have a current intangible value.

Investment Properties 
 
Capitalization and Depreciation 
 
Investment properties are recorded at cost and include costs of land acquisition, development, pre-development, construction, certain allocated overhead, tenant allowances and improvements, and interest and real estate taxes incurred during construction.  Significant renovations and improvements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset.  If a tenant vacates a space prior to the lease expiration, terminates its lease, or otherwise notifies the Company of its intent to do so, any related unamortized tenant allowances are expensed over the shortened lease period.  Maintenance and repairs that do not extend the useful lives of the respective assets are reflected in property operating expense.

Pre-development costs are incurred prior to vertical construction and for certain land held for development during the due diligence phase and include contract deposits, legal, engineering, cost of internal resources and other professional fees related to evaluating the feasibility of developing or redeveloping a shopping center or other project.  These pre-development
F-17

costs are capitalized and included in construction in progress in the accompanying consolidated balance sheets.  If we determine that the completion of a development project is no longer probable, all previously incurred pre-development costs are immediately expensed.  Land is transferred to construction in progress once construction commences on the related project. 
 
We also capitalize costs such as land acquisition, building construction, interest, real estate taxes, and the costs of personnel directly involved with the development of our properties.  As a portion of a development property becomes operational, we expense a pro rata amount of related costs. 
 


Depreciation on buildings and improvements is provided utilizing the straight-line method over estimated original useful lives ranging from 10 to 35 years.  Depreciation on tenant allowances and tenant improvements are provided utilizing the straight-line method over the term of the related lease.  Depreciation on equipment and fixtures is provided utilizing the straight-line method over 5 to 10 years. Depreciation may be accelerated for a redevelopment project including partial demolition of existing structure after the asset is assessed for impairment.  

Impairment 
 
Management reviews operational and development projects, land parcels and intangible assets for impairment on a property-by-property basis on at least a quarterly basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. This review for possible impairment requires certain assumptions, estimates, and significant judgment. Impairment losses for investment properties and intangible assets are measured when the undiscounted cash flows estimated to be generated by the investment properties during the expected holding period are less than the carrying amounts of those assets. The evaluation of impairment is subject to certain management assumptions including projected net operating income, anticipated hold period, expected capital expenditures and the capitalization rate used to estimate the property's residual value. Impairment losses are recorded as the excess of the carrying value over the estimated fair value of the asset. Our impairment review for land and development properties assumes we have the intent and the ability to complete the developments or projected uses for the land parcels. If we determine those plans will not be completed or our assumptions with respect to operating assets are not realized, an impairment loss may be appropriate.

Asset Held for Sale and Discontinued Operations 
 
Operating properties will be classified as held for sale only when those properties are available for immediate sale in their present condition and for which management believes it is probable that a sale of the property will be completed within one year, among other factors. Operating properties classified as held for sale are carried at the lower of cost or fair value less estimated costs to sell. Depreciation and amortization are suspended during the held-for-sale period.  

Restricted Cash and Escrow Deposits 
 
Escrow deposits consist of cash held for real estate taxes, property maintenance, insurance and other requirements at specific properties as required by lending institutions and certain municipalities. In addition at December 31, 2019, escrow deposits includeincluded $13.2 million of proceeds from the sale of an operating property to be utilized to acquire a potential asset in a tax-deferred exchange.

Cash and Cash Equivalents 
 
We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents.  From time to time, such investments may temporarily be held in accounts that are in excess of FDIC and SIPC insurance limits; however the Company attempts to limit its exposure at any one time.   

The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the years ended December 31, 2020, 2019, 2018, and 2017:2018:

  2019 2018 2017
Cash and cash equivalents 31,336

35,376

24,082
Restricted cash and escrow deposits 21,477

10,130

8,094
Total cash, cash equivalents, restricted cash, and escrow deposits $52,813

$45,506

$32,176

202020192018
Cash and cash equivalents43,648 31,336 35,376 
Restricted cash and escrow deposits2,938 21,477 10,130 
Total cash, cash equivalents, restricted cash, and escrow deposits$46,586 $52,813 $45,506 

  
F-18


Fair Value Measurements 
 
We follow the framework established under accounting standard FASB ASC 820, Fair Value Measurements and Disclosures, for measuring fair value of non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis but only in certain circumstances, such as a business combination or upon determination of impairment.

Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:



•Level 1 fair value inputs are quoted prices in active markets for identical instruments to which we have access.

•Level 2 fair value inputs are inputs other than quoted prices included in Level 1 that are observable for similar instruments, either directly or indirectly, and appropriately consider counterparty creditworthiness in the valuations.

•
Level 2 fair value inputs are inputs other than quoted prices included in Level 1 that are observable for similar instruments, either directly or indirectly, and appropriately consider counterparty creditworthiness in the valuations.

Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an instrument at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. 

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As discussed in Note 8 to the Financial Statements, we have determined that derivative valuations are classified in Level 2 of the fair value hierarchy.

Cash and cash equivalents, accounts receivable, escrows and deposits, and other working capital balances approximate fair value. 

Note 6 to the Financial Statements includes a discussion of the fair values recorded when we recognized impairment charges in 2019 2018 and 2017.2018. Level 3 inputs to these transactions include our estimations of disposal values. 
 
Derivative Financial Instruments 
 
The Company accounts for its derivative financial instruments at fair value calculated in accordance with ASC 820, Fair Value Measurements and Disclosures.  Gains or losses resulting from changes in the fair values of those derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting.  We use derivative instruments such as interest rate swaps or rate locks to mitigate interest rate risk on related financial instruments. 
 
Changes in the fair values of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while any ineffective portion of a derivative’s change in fair value is recognized immediately in earnings.  Gains and losses associated with the transaction are recorded in OCI and amortized over the underlying term of the hedged transaction.  As of December 31, 20192020 and 2018,2019, all of our derivative instruments qualify for hedge accounting. 
 
Revenue Recognition 
 
As a lessor of real estate assets, the Company retains substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. 

Contractual minimum base rent, percentage rent, and expense reimbursements from tenants for common area maintenance costs, insurance and real estate taxes are our principal sources of revenue.  Base minimum rents are recognized on a straight-line basis over the terms of the respective leases.  Certain lease agreements contain provisions that grant additional rents based on a tenant’s sales volume (contingent overage rent). Overage rent is recognized when tenants achieve the specified sales targets as defined in their lease agreements.  Overage rent is included in rental income in the accompanying consolidated statements of operations for the yearyears ended December 31, 2020 and 2019. If we determine that collectibility is probable, we recognize income from rentals based on the methodology described above. We have accounts receivable due from tenants and are subject to the risk of tenant defaults and bankruptcies that may affect the collection of outstanding receivables. These receivables are reduced for credit loss that is recognized as a reduction to rental income. We regularly evaluate the collectibility
F-19

of these lease-related receivables by analyzing past due account balances and consider such facts as the credit quality of our customer, historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the collectibility of rental income. Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.

We recognize the sale of real estate when control transfers to the buyer.  As part of our ongoing business strategy, we will, from time to time, sell land parcels and outlots, some of which are ground leased to tenants.  Net gains realized on such sales were $5.9 million, $0.2 million, $3.1 million, and $5.2$3.1 million for the years ended December 31, 2020, 2019, 2018, and 2017,2018, respectively, and are classified as other property related revenue in the accompanying consolidated statements of operations. 
 





Tenant and Other Receivables and Allowance for Uncollectible Accounts 
 
Tenant receivables consist primarily of billed minimum rent, accrued and billed tenant reimbursements, and accrued straight-line rent.  The Company generally does not require specific collateral from its tenants other than corporate or personal guarantees. Other receivables consist primarily of amounts due from municipalities and from tenants for non-rental revenue related activities. 
 
An allowance for uncollectible accounts is maintained for estimated losses resulting from the inability of certain tenants or others to meet contractual obligations under their lease or other agreements.  Accounts are written off when, in the opinion of management, the balance is uncollectible. 
 
 The provision for revenues deemed uncollectible, represented 6.0%, 1.1%, 1.0%, 0.8% of total revenues in each of the years ended December 31, 2020, 2019 2018 and 2017.2018. 
 
Concentration of Credit Risk 
 
We may be subject to concentrations of credit risk with regards to our cash and cash equivalents.  We place cash and temporary cash investments with high-credit-quality financial institutions.  From time to time, such cash and investments may temporarily be in excess of insurance limits.  

In addition, our accounts receivable from and leases with tenants potentially subjects us to a concentration of credit risk related to our accounts receivable and revenue.

Total billed receivables due from tenants leasing space in the states of Florida, Indiana, Texas, North Carolina, and Texas,Nevada, consisted of the following as of December 31, 2019 and 2018:2020: 

 As of December 31, 2019
 2019 2018
Florida36% 56%
Indiana19% 14%
Texas7% 3%

Florida39 %
Indiana14 %
Texas7 %
North Carolina11 %
Nevada4 %

For the yearsyear ended December 31, 2019, 2018, and 2017,2020, the Company's revenue recognized from tenants leasing space in the states of Florida, Indiana, Texas, North Carolina, and Texas,Nevada, were as follows:  

 Year Ended December 31,
 2019 2018 2017
Florida25% 25% 24%
Indiana16% 15% 14%
Texas14% 12% 13%

Florida26 %
Indiana15 %
Texas14 %
North Carolina12 %
Nevada11 %




F-20

Earnings Per Share 
 
Basic earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period.  Diluted earnings per share or unit is determined based on the weighted average common number of shares or units outstanding during the period combined with the incremental average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible. 
 
Potentially dilutive securities include outstanding options to acquire common shares; Limited Partner Units, which may be exchanged for either cash or common shares, at the Parent Company’s option and under certain circumstances; appreciation only LTIP units, and deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of the payment of cash compensation or the issuance of common shares to such trustees.  Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the denominator would have no dilutive impact. Weighted average Limited Partner Units outstanding for the years ended December 31, 2020, 2019 and 2018 and 2017 were 2.12.2 million, 2.02.1 million and 2.0 million, respectively.




Less than 0.1 million outstanding options to acquire common shares were excluded from the computations of diluted earnings per share or unit because their impact was notThese potentially dilutive for each of the twelve months ended December 31, 2019, 2018 and 2017. In addition, Limited Partner Units, appreciation only LTIP units, and deferred common share unitssecurities are excluded from the computation of diluted earnings per share due to the net loss position in 2018, 2019, and 2019.2020.

Segment Reporting

Our primary business is the ownership and operation of neighborhood and community shopping centers. We do not distinguish or group our operations on a geographical basis, or any other basis, when measuring and evaluating financial performance. Accordingly, we have 1 operating segment, which also serves as our reportable segment for disclosure purposes in accordance with GAAP.

Income Taxes and REIT Compliance  

Parent Company

The Parent Company which is considered a corporation for U.S. federal income tax purposes, has been organized and operated, and intends to continue to operate, in a manner that will enable it to maintain its qualification as a REIT for U.S. federal income tax purposes. As a result, it generally will not be subject to U.S. federal income tax on the earnings that it distributes to the extent it distributes its “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to shareholders of the Parent Company and meets certain other requirements on a recurring basis. To the extent that it satisfies this distribution requirement, but distributes less than 100% of its taxable income, it will be subject to U.S. federal corporate income tax on its undistributed REIT taxable income. REITs are subject to a number of organizational and operational requirements. If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost. We may also be subject to certain U.S. federal, state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT. The Operating Partnership intends to continue to make distributions to the Parent Company in amounts sufficient to assist the Parent Company in adhering to REIT requirements and maintaining its REIT status.


We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiaryTRS of the Operating Partnership, and we may elect to treat other subsidiaries as taxable REIT subsidiariesTRSs in the future. This election enables us to receive income and provide services that would otherwise be impermissible for a REIT. Deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

F-21

On March 27, 2020 and December 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Consolidated Appropriations Act, 2021 (CAA). Among other provisions, the CARES Act and the CAA provide relief to U.S. federal corporate taxpayers through temporary adjustments to net operating loss rules, changes to limitations on interest expense deductibility, and the acceleration of available refunds for minimum tax credit carryforwards. The CARES Act and the CAA did not have a material effect on the Company’s consolidated financial statements.

Our tax return for the year ended December 31, 20192020 has not been filed. The taxability information presented for our dividends paid in 20192020 is based upon management's estimate. Consequently, the taxability of dividends is subject to change. A summary of the tax characterization of the dividends paid by the Parent Company for the years ended December 31, 2020, 2019, 2018, and 20172018 is as follows:

  2019 2018 2017
Ordinary income 29.7%
56.0%
65.2%
Return of capital 35.2%
44.0%
24.3%
Capital gains 35.1%
—%
10.5%
Balance, end of year 100.0%
100.0%
100.0%


202020192018
Ordinary income89.3 %29.7 %56.0 %
Return of capital0 %35.2 %44.0 %
Capital gains10.7 %35.1 %0 %
Balance, end of year100.0 %100.0 %100.0 %


Operating Partnership

The allocated share of income and loss, other than the operations of our taxable REIT subsidiary,TRS, is included in the income tax returns of the Operating Partnership's partners. Accordingly, the only U.S. federal income taxes included in the accompanying consolidated financial statements are in connection with the taxable REIT subsidiary.TRS.
 


Noncontrolling Interests 
 
We report the non-redeemable noncontrolling interests in subsidiaries as equity and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the consolidated financial statements.  The non-redeemable noncontrolling interests in consolidated properties for the years ended December 31, 2020, 2019, 2018, and 20172018 were as follows:

($ in thousands) 2019 2018 2017
Noncontrolling interests balance January 1 $698
 $698
 $692
Net income allocable to noncontrolling interests,
  excluding redeemable noncontrolling interests		 —
 —
 6
Distributions to noncontrolling interests —
 —
 —
Noncontrolling interests balance at December 31 $698
 $698
 $698


($ in thousands)202020192018
Noncontrolling interests balance January 1$698 $698 $698 
Net income allocable to noncontrolling interests,
  excluding redeemable noncontrolling interests		0 0 0 
Distributions to noncontrolling interests0 0 0 
Noncontrolling interests balance at December 31$698 $698 $698 




Redeemable Noncontrolling Interests – Limited Partners
 
Limited Partner Units are redeemable noncontrolling interests in the Operating Partnership. We classify redeemable noncontrolling interests in the Operating Partnership in the accompanying consolidated balance sheets outside of permanent equity because we may be required to pay cash to holders of Limited Partner Units upon redemption of their interests in the Operating Partnership or deliver registered shares upon their conversion.  The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital. At December 31, 2019, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balance was accordingly adjusted to redemption value. At December 31, 2018,2020, the redemption value of the redeemable noncontrolling interests in the Operating Partnership did not exceed the historical book value, and the balance was accordingly adjusted to historical book value. At December 31, 2019, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balance was accordingly adjusted to redemption value. 
 
F-22

We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest.  We adjust the redeemable noncontrolling interests in the Operating Partnership at the end of each reporting period to reflect their interests in the Operating Partnership or redemption value.  This adjustment is reflected in our shareholders’ and Parent Company's equity.  For the years ended December 31, 2020, 2019, 2018, and 2017,2018, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:  
  Year Ended December 31,
  2019 2018 2017
Parent Company’s weighted average interest in
  Operating Partnership		 97.6% 97.6% 97.7%
Limited partners' weighted average interests in
Operating Partnership		 2.4% 2.4% 2.3%

 Year Ended December 31,
 202020192018
Parent Company’s weighted average interest in Operating Partnership97.4 %97.6 %97.6 %
Limited partners' weighted average interests in Operating Partnership2.6 %2.4 %2.4 %
  
At December 31, 2020, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.1% and 2.9%. At December 31, 2019, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.5% and 2.5%. At December 31, 2018, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.6% and 2.4%. 
  
Concurrent with the Parent Company’s initial public offering and related formation transactions, certain individuals received Limited Partner Units of the Operating Partnership in exchange for their interests in certain properties. The limited partners have the right to redeem Limited Partner Units for cash or, at the Parent Company's election, common shares of the Parent Company in an amount equal to the market value of an equivalent number of common shares of the Parent Company at the time of redemption. Such common shares must be registered, which is not fully in the Parent Company’s control. Therefore, the limited partners’ interest is not reflected in permanent equity. The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed.

There were 2,110,0372,532,861 and 2,035,3492,110,037 Limited Partner Units outstanding as of December 31, 20192020 and 2018,2019, respectively. The increase in Limited Partner Units outstanding from December 31, 20182019 is due primarily to non-cash compensation awards made to our executive officers. 


 
Redeemable Noncontrolling Interests - Subsidiaries 
 
Prior to our merger with Inland Diversified Real Estate Trust, Inc. ("Inland Diversified") in 2014, Inland Diversified formed joint ventures with the previous owners of certain properties and issued Class B units in 3 joint ventures that indirectly own those properties.  The Class B units related to 1 of these three joint ventures remain outstanding and are accounted for as noncontrolling interests in these properties.  The remaining Class B units will become redeemable at our partner's election in October 2022 based on the joint venture agreement and the fulfillment of certain redemption criteria.  Beginning in November 2022, with respect to the remaining joint venture, the Class B units can be redeemed at the election of either our partner or us for cash or Limited Partner Units in the Operating Partnership.  None of the issued Class B units have a maturity date and none are mandatorily redeemable unless either party has elected for the units to be redeemed. We consolidate this joint venture because we control the decision making and our joint venture partner has limited protective rights.

In March 2017,2018, certain Class B unit holders exercised their right to redeem $8.3 million of their Class B units for cash. We funded the redemption in December 2017 using operating cash flows. In 2018, the same Class B unit holders exercised their right to redeem their remaining Class B units for cash. We funded $10.0 million of the redemption in August 2018 and the remaining $12.0 million in November 2018.
 
We classify the remainder of the redeemable noncontrolling interests in a subsidiary in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to Class B unitholders in specific subsidiaries upon redemption of their interests.  The carrying amount of these redeemable noncontrolling interests is required to be reflected at the greater of initial book value or redemption value with a corresponding adjustment to additional paid-in capital. As of December 31, 20192020 and 2018,2019, the redemption amounts of these interests did not exceed their fair value, nor did they exceed the initial book value.  

The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the years ended December 31, 2020, 2019, 2018, and 20172018 were as follows: 
 
($ in thousands) 2019 2018 2017
Redeemable noncontrolling interests balance January 1 $45,743
 $72,104
 $88,165
Net income allocable to redeemable noncontrolling interests 532
 116
 2,009
Distributions declared to redeemable noncontrolling interests (3,191) (3,788) (4,155)
Payment for partial redemption of redeemable noncontrolling interests —
 (22,461) (8,261)
Other, net including adjustments to redemption value 9,490
 (228) (5,654)
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at December 31 $52,574
 $45,743
 $72,104
       
       
Limited partners' interests in Operating Partnership $42,504
 $35,673
 $39,573
Other redeemable noncontrolling interests in certain subsidiaries 10,070
 10,070
 32,531
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at December 31 $52,574
 $45,743
 $72,104
F-23

($ in thousands)202020192018
Redeemable noncontrolling interests balance January 1$52,574 $45,743 $72,104 
Net income allocable to redeemable noncontrolling interests100 532 116 
Distributions declared to redeemable noncontrolling interests(1,533)(3,191)(3,788)
Payment for partial redemption of redeemable noncontrolling interests0 0 (22,461)
Other, net including adjustments to redemption value(7,866)9,490 (228)
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at December 31$43,275 $52,574 $45,743 
Limited partners' interests in Operating Partnership$33,205 $42,504 $35,673 
Other redeemable noncontrolling interests in certain subsidiaries10,070 10,070 10,070 
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at December 31$43,275 $52,574 $45,743 
 
Reclassifications

Certain amounts in the accompanying consolidated financial statements for 2017 and 2018 have been reclassified to conform to the 2019 consolidated financial statement presentation.  The reclassifications had no impact on the net income previously reported.

Effects of Accounting Pronouncements 
 
Adoption of New Standards

Leases

On January 1, 2019. we adopted Accounting Standards Update ("ASU") ASU 2016-02, Leases, using the modified retrospective approach along with electing the package of practical expedients. ASU 2016-02 amends the existing accounting


standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making certain changes to lessor accounting, including the accounting for sales-type and direct financing leases. For leases with a term of one year or less, the Company made an accounting policy election by underlying asset to not recognize lease liabilities and right-of-use (ROU) assets, and expenses for these short-term leases is immaterial for all periods presented.

The practical expedients include the following:

•The Company did not reassess whether any expired or existing contracts are or contain leases;
•The Company did not reassess the lease classification of any expired or existing leases;Reference Rate Reform
•The Company did not reassess initial direct costs for any existing leases; and
The Company elected to not separate non-lease components, such as common area maintenance, of a contract from the leases to which they relate when specific criteria are met.
The new leasing standard also amended ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers. Under ASC 340-40, incremental costs of obtaining a contract are recognized as an asset if the entity expects to recover them. Certain costs that were previously capitalized as a leasing cost no longer meet the requirements for capitalization under the new leasing standard. The Company capitalized $5.4 million less in leasing costs during the year ended December 31, 2019 as compared to the prior year.

Note 9 to the Financial Statements includes a discussion of the lease rental income and expense for the year ended December 31, 2019 and future rental income and expense to be received or paid under non-cancelable operating leases.
Derivatives and Hedging

On January 1, 2019, we adopted ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. ASU 2017-02 better aligns a company’s financial reporting for hedging activities with the economic objectives of those activities. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements.

New Standards Issued but Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses." The ASU sets forth a "current expected credit loss" (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets. Receivables arising from operating leases are not within the scope of this standard, but rather, are accounted for in accordance with the Leases standard. The new standard is effective for the Company beginning with the first quarter of 2020, the Financial Accounting Standards Board issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.

Financial Instruments - Credit Losses
On January 1, 2020, we adopted ASU 2016-13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modified the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. Instruments in scope include loans, held-to-maturity debt securities, and net investments in leases as well as reinsurance and trade receivables. In November 2018, the FASB issued ASU 2018-19, which clarifies that operating lease receivables are outside the scope of the new standard. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.


Leases

In April 2020, the FASB issued a question-and-answer document focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. Under Topic 842, Leases, the Company would have to evaluate, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant or if a lease concession was under the enforceable rights and obligations within the existing lease agreement. The FASB clarified that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 is a lease modification. The Company made this election to evaluate COVID-related lease modifications on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.

The Company entered into rent deferral agreements during the year ended December 31, 2020 that provided for legally due rent to be paid back over a period of time, typically twelve to eighteen months. The Company has deferred the payment by tenants of $6.1 million of contractually due rental income that remains outstanding as of December 31, 2020.

The future impact of such modifications is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions. There was not a material amount of rent abatement provided to tenants as a result of COVID-19 during 2020.
F-24



Note 3. Share-Based Compensation 
 
Overview 
 
The Company's 2013 Equity Incentive Plan (the "Plan"), as amended and restated as of February 28, 2019, authorizes options to acquire common shares and other share-based compensation awards to be granted to employees and trustees for up to an additional 3,000,000 common share equivalents of the Company.  The Company accounts for its share-based compensation in accordance with the fair value recognition provisions provided under Topic 718—“Stock Compensation” in the Accounting Standards Codification. 
 
The total share-based compensation expense, net of amounts capitalized, included in general and administrative expenses for the years ended December 31, 2020, 2019, and 2018 and 2017 was $5.6 million, $5.3 million, $4.9 million, and $5.8$4.9 million, respectively.  For the years ended December 31, 2020, 2019, 2018, and 2017,2018, total share-based compensation cost capitalized for development activities was $1.1$1.2 million, $1.7$1.1 million, and $1.7 million, respectively. The Company recognizes forfeitures as they occur. 
 
As of December 31, 2019,2020, there were 2,665,3831,604,930 shares and units available for grant under the Plan. 
 
Share Options 
 


Pursuant to the Plan, the Company may periodically grant options to purchase common shares at an exercise price equal to the grant date fair value of the Company's common shares.  Granted options typically vest over a five year period and expire 10 years from the grant date.  The Company issues new common shares upon the exercise of options.

A summary of option activity under the Plan as of December 31, 2019,2020, and changes during the year then ended, is presented below: 
($ in thousands, except share and per share data) Aggregate Intrinsic Value 
Weighted-Average Remaining
Contractual Term (in years)
 Options 
Weighted-Average
Exercise Price
Outstanding at January 1, 2019     60,567
 $17.08
Granted     —
 —
Exercised     (33,375) 14.48
Expired     —
 —
Forfeited     (3,125) 17.00
Outstanding at December 31, 2019 $12
 1.13 24,067
 $20.25
Exercisable at December 31, 2019 $12
 1.13 24,067
 $20.25
Exercisable at December 31, 2018     60,567
 $17.08

($ in thousands, except share and per share data)Aggregate Intrinsic ValueWeighted-Average Remaining
Contractual Term (in years)		OptionsWeighted-Average
Exercise Price
Outstanding at January 1, 202024,067 $20.25 
Granted0 0 
Exercised(2,500)16.60 
Expired0 0 
Forfeited0 0 
Outstanding at December 31, 2020$0 0.2521,567 $20.67 
Exercisable at December 31, 2020$0 0.2521,567 $20.67 
Exercisable at December 31, 201924,067 $20.25 
  
There were 0 options granted in 2020, 2019 2018 or 2017.2018. 
 
The aggregate intrinsic value of the 2,500, 33,375 and 3,125 options exercised during the years ended December 31, 2020, 2019, and 2018 was $2,000, $86,000 and $23,000, respectively. There were 0 options exercised in 2017.
 

Restricted Shares 
 
In addition to share option grants, the Plan also authorizes the grant of share-based compensation awards in the form of restricted common shares.  Under the terms of the Plan, these restricted shares, which are considered to be outstanding shares from the date of grant, typically vest over a period ranging from three to five years.  The Company pays dividends on restricted shares and such dividends are charged directly to shareholders’ equity. 
 
The following table summarizes all restricted share activity to employees and non-employee members of the Board of Trustees as of December 31, 20192020 and changes during the year then ended:  
  
Number of Restricted
Shares
 
Weighted Average
Grant Date Fair
Value per share
Restricted shares outstanding at January 1, 2019 313,288
 $18.99
Shares granted 154,440
 15.84
Shares forfeited (8,457) 17.63
Shares vested (138,269) 19.74
Restricted shares outstanding at December 31, 2019 321,002
 $17.19
F-25

 Number of Restricted
Shares		Weighted Average
Grant Date Fair
Value per share
Restricted shares outstanding at January 1, 2020321,006 $17.19 
Shares granted211,476 13.21 
Shares forfeited(16,527)17.46 
Shares vested(194,364)17.42 
Restricted shares outstanding at December 31, 2020321,591 $14.42 

The following table summarizes the restricted share grants and vestings during the years ended December 31, 2020, 2019, 2018, and 2017:2018:  

($ in thousands, except share and per share data) Number of Restricted Shares Granted Weighted Average
Grant Date Fair
Value per share		 Fair Value of Restricted Shares Vested
2019 154,440
 $15.84
 $2,270
2018 202,043
 15.35
 2,038
2017 85,150
 22.15
 2,529

($ in thousands, except share and per share data)Number of Restricted Shares GrantedWeighted Average
Grant Date Fair
Value per share		Fair Value of Restricted Shares Vested
2020211,476 $13.21 $2,727 
2019154,440 15.84 2,270 
2018202,043 15.35 2,038 


As of December 31, 2019,2020, there was $3.9$3.0 million of total unrecognized compensation cost related to restricted shares granted under the Plan, which is expected to be recognized in the consolidated statements of operations over a weighted-average period of 1.260.91 years.  We expect to incur $1.8 million of this expense in 2020, $1.4 million in 2021, $0.6$1.1 million in 2022, and the remainder in 2023.  
 
Performance Awards

In 2016, the Compensation Committee established overall target values for incentive compensation for each executive officer, with 40% of the target value being granted in the form of time-based awards and the remaining 60% being granted in the form of performance awards.

In 2017, the Compensation Committee awarded each of the 4 named executive officers a three-year performance award in the form of PSUs. The PSUs may be earned over a three-year performance period from January 1, 2017 to December 31, 2019. The performance criteria will be based 50% on the absolute TSR achieved by the Company over the three-year measurement period and 50% on the relative TSR achieved by the Company measured against a peer group over the three-year measurement period. The total number of PSUs issued to the executive officers was based on a target value of $2.0 million, but may be earned in a range from 0% to 200% of the target value depending on our absolute TSR over the measurement period and our relative TSR over the measurement period in relation to the peer group.Approximately 73,000 PSU's were earned based upon the Company's performance on the relative TSR measurement.

In 2018, the Compensation Committee awarded each of the 4 named executive officers a three-year performance award in the form of PSUs. The PSUs may be earned over a three-year performance period from January 1, 2018 to December 31, 2020. The performance criteria will be based 60% on the relative TSR achieved by the Company measured against a peer group over the three-year measurement period and 40% on the achievement of a defined funds available for distribution ("FAD"). The total number of PSUs issued to the executive officers was based upon a target value of $2.4 million, but may be earned in a range of 0% to 200% of the target. Additionally, any PSUs earned based on the achievement of the pre-established FAD goals will be subject to adjustment (either up or down 25%) based on the Company's absolute TSR over the three-year measurement period. Approximately 172,000 PSU's were earned based upon the Company's performance on the relative TSR measurement.

The 2018 and 2017 PSUs were valued at an aggregate value of $2.2 million and $2.2 million, respectively, utilizing a Monte Carlo simulation.  We expectThere is no remaining unrecognized compensation cost related to incur $0.7 million of this expense in 2020 and less than $0.1 million in 2021.the 2018 performance awards.

Restricted Units

Time-based restricted unit awards were made on a discretionary basis in 2017, 2018, 2019, and 20192020 based on review of each prior year's performance.

The following table summarizes the activity for time-based restricted unit awards for the year ended December 31, 2019:2020:  
  
Number of Restricted
Units
 
Weighted Average
Grant Date Fair
Value per unit
Restricted units outstanding at January 1, 2019 124,662
 $17.60
Restricted units granted 84,987
 14.11
Restricted units vested (45,633) 18.10
Restricted units outstanding at December 31, 2019 164,016
 $15.65
F-26

 Number of Restricted
Units		Weighted Average
Grant Date Fair
Value per unit
Restricted units outstanding at January 1, 2020164,016 $15.65 
Restricted units granted431,913 13.10 
Restricted units vested(104,733)16.07 
Restricted units outstanding at December 31, 2020491,196 $13.32 

The following table summarizes the time-based restricted unit grants and vestings during the years ended December 31, 2020, 2019, 2018, and 2017:2018:  

($ in thousands, except unit and per unit data) Number of Restricted Units Granted Weighted Average
Grant Date Fair
Value per Unit		 Fair Value of Restricted Units Vested
2019 84,987
 $14.11
 $749
2018 92,019
 13.16
 1,924
2017 44,490
 23.22
 1,516


($ in thousands, except unit and per unit data)Number of Restricted Units GrantedWeighted Average
Grant Date Fair
Value per Unit		Fair Value of Restricted Units Vested
2020431,913 $13.10 $1,784 
201984,987 14.11 749 
201892,019 13.16 1,924 


As of December 31, 2019,2020, there was $1.5$5.4 million of total unrecognized compensation cost related to restricted units granted under the Plan, which is expected to be recognized in the consolidated statements of operations over a weighted-average period of 0.982.15 years.  We expect to incur $1.0$1.7 million of this expense in 2020, $0.52021, $1.4 million in 2021,2022, $0.8 million in 2023, $0.8 million in 2024, and the remainder in 2022.2025.

AO LTIP Units - 2019 Awards

During 2019, in connection with its annual review of executive compensation and as described in the table below, the Compensation Committee of the Company's Board of Trustees approved an aggregate grant of AO LTIP Units (the “awards”“2019 awards”) to the Company’s executive officers under the Plan. 
Executive Number of AO LTIP Units Participation Threshold per AO LTIP Unit
John A. Kite 1,490,683
 $15.79
Thomas A. McGowan 372,671
 $15.79
Heath R. Fear 253,416
 $15.79
Scott E. Murray 186,335
 $15.79

Executive Number of AO LTIP UnitsParticipation Threshold per AO LTIP Unit
John A. Kite 1,490,683 $15.79 
Thomas A. McGowan 372,671 $15.79 
Heath R. Fear 253,416 $15.79 
 
The Company entered into an award agreement with each executive officer with respect to his awards, which provide terms of vesting, conversion, distribution, and other terms. AO LTIP Units are designed to have economics similar to stock options and allow the recipient, subject to vesting requirements, to realize value above a threshold level set as of the grant date of the award (the “Participation Threshold”).  The value of vested AO LTIP Units is realized through conversion into a number of vested LTIP Units in the Operating Partnership determined on the basis of how much the value of a common share of the Company has increased over the Participation Threshold. 

The AO LTIP Units are only exercisable and convertible into vested LTIP Units of the Operating Partnership to the extent that they become vested AO LTIP Units.  The awards of AO LTIP Units are subject to both time-based and stock price performance-based vesting requirements.  Subject to the terms of the award agreement, the AO LTIP Units shall vest and become fully exercisable as of the date that both of the following requirements have been met:  (i) the grantee remains in continuous service from the grant date through the third anniversary of the grant date; and (ii) at any time during the five-year period following the grant date, the reported closing price per common share of the Company appreciates at least 20% over the applicable Participation Threshold per AO LTIP Unit (as set forth in the table above) for a minimum of 20 consecutive trading days.  Any AO LTIP Units that do not become vested will be forfeited and become null and void as of the fifth anniversary of the grant date, but AO LTIP Units may also be forfeited earlier in connection with a corporate transaction or with the holder’s termination of service.

F-27

    The AO LTIP Units were valued using a Monte Carlo simulation, and the resulting compensation expense of is being amortized over three years. We recognized $1.1 million of compensation expense in 2020. We expect to incur $1.1 million of this expense in 2021 and $1.1 million in 2022.

AO LTIP Units - 2020 Awards

During 2020, in connection with its annual review of executive compensation and as described in the table below, the Compensation Committee of the Company's Board of Trustees approved an aggregate grant of AO LTIP Units (the “2020 awards”) to the Company’s executive officers under the Plan. 
Executive Number of AO LTIP UnitsParticipation Threshold per AO LTIP Unit
John A. Kite 1,729,729 $17.76 
Thomas A. McGowan 405,405 $17.76 
Heath R. Fear 275,675 $17.76 
    The Company entered into an award agreement with each executive officer with respect to his awards, which provide terms of vesting, conversion, distribution, and other terms. AO LTIP Units are designed to have economics similar to stock options and allow the recipient, subject to vesting requirements, to realize value above a threshold level set as of the grant date of the award (the “Participation Threshold”).  The value of vested AO LTIP Units is realized through conversion into a number of vested LTIP Units in the Operating Partnership determined on the basis of how much the value of a common share of the Company has increased over the Participation Threshold. 

    The AO LTIP Units are only exercisable and convertible into vested LTIP Units of the Operating Partnership to the extent that they become vested AO LTIP Units.  The awards of AO LTIP Units are subject to both time-based and stock price performance-based vesting requirements.  Subject to the terms of the award agreement, the AO LTIP Units shall vest and become fully exercisable as of the date that both of the following requirements have been met:  (i) the grantee remains in continuous service from the grant date through the third anniversary of the grant date; and (ii) at any time during the period beginning in the second year and ending at the end of the fifth year following the grant date, the reported closing price per common share of the Company appreciates at least 15% over the applicable Participation Threshold per AO LTIP Unit (as set forth in the table above) for a minimum of 20 consecutive trading days.  Any AO LTIP Units that do not become vested will be forfeited and become null and void as of the fifth anniversary of the grant date, but AO LTIP Units may also be forfeited earlier in connection with a corporate transaction or with the holder’s termination of service.

The AO LTIP Units were valued using a Monte Carlo simulation, and the resulting total compensation expense of $3.7$3.6 million is being amortized over threefive years. We recognized $1.0$0.6 million of compensation expense in 2019.2020. We expect to annually incur $1.2 million of this expense in 2020, $1.2$0.7 million of this expense in 2021 through 2024 and the remainder in 2022.2025.

 
Note 4. Deferred Costs and Intangibles, net 
 
Deferred costs consist primarily of acquired lease intangible assets, broker fees and capitalized salaries and related benefits incurred in connection with lease originations.  Deferred leasing costs, lease intangibles and similar costs are amortized on a straight-line basis over the terms of the related leases. At December 31, 20192020 and 2018,2019, deferred costs consisted of the following: 
 
($ in thousands)20202019
Acquired lease intangible assets$55,352 $60,862 
Deferred leasing costs and other57,481 62,109 
 112,833 122,971 
Less—accumulated amortization(49,662)(49,814)
Total$63,171 $73,157 
($ in thousands) 2019 2018
Acquired lease intangible assets $60,862
 $81,852
Deferred leasing costs and other 62,109
 69,870
  122,971
 151,722
Less—accumulated amortization (49,814) (56,307)
Subtotal $73,157
 $95,415
Less - asset held for sale —
 (151)
Total 73,157
 95,264




The estimated net amounts of amortization from acquired lease intangible assets for each of the next five years and thereafter are as follows:
 
($ in thousands)Amortization of above market leases Amortization of acquired lease intangible assets Total
2020$926
 $4,846
 $5,772
2021681
 3,872
 4,553
2022446
 3,184
 3,630
2023424
 2,463
 2,887
2024401
 1,912
 2,313
Thereafter1,343
 15,207
 16,550
Total$4,221
 $31,484
 $35,705
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($ in thousands)Amortization of above market leasesAmortization of acquired lease intangible assetsTotal
2021$978 $4,409 $5,387 
2022728 3,590 4,318 
2023676 2,721 3,397 
2024529 2,136 2,665 
2025506 1,756 2,262 
Thereafter1,105 10,487 11,592 
Total$4,522 $25,099 $29,621 
 
Amortization of deferred leasing costs, leasing intangibles and other is included in depreciation and amortization expense in the accompanying consolidated statements of operations. The amortization of above market lease intangibles is included as a reduction to revenue. The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:
($ in thousands) For the year ended December 31,
  2019 2018 2017
Amortization of deferred leasing costs, lease intangibles and other $14,239
 $18,648
 $22,960
Amortization of above market lease intangibles 1,200
 2,553
 4,025

($ in thousands)For the year ended December 31,
 202020192018
Amortization of deferred leasing costs, lease intangibles and other$13,916 $14,239 $18,648 
Amortization of above market lease intangibles999 1,200 2,553 
 
Note 5. Deferred Revenue, Intangibles, Net and Other Liabilities 
 
Deferred revenue and other liabilities consist of the unamortized fair value of below market lease liabilities recorded in connection with purchase accounting, retainage payables for development and redevelopment projects, tenant rent payments received in advance of the month in which they are due, and lease liabilities recorded upon adoption of ASU 2016-02.  The amortization of below market lease liabilities is recognized as revenue over the remaining life of the leases (including option periods for leases with below market renewal options) through 2046.  Tenant rent payments received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt.
 
At December 31, 20192020 and 2018,2019, deferred revenue, intangibles, net and other liabilities consisted of the following:
 
($ in thousands) 2019 2018
Unamortized in-place lease liabilities $50,072
 $69,501
Retainages payable and other 2,254
 2,489
Tenant rents received in advance 10,839
 11,642
Lease liabilities 27,015
 —
Total $90,180
 $83,632

($ in thousands)20202019
Unamortized in-place lease liabilities$45,479 $50,072 
Retainages payable and other1,943 2,254 
Tenant rents received in advance11,716 10,839 
Lease liabilities26,511 27,015 
Total$85,649 $90,180 
 
The amortization of below market lease intangibles is included as a component of minimum rent in the accompanying consolidated statements and was $4.8 million, $5.0 million $8.9 million and $7.7$8.9 million for the years ended December 31, 2020, 2019 2018 and 2017,2018, respectively.

The estimated net amounts of amortization of in-place lease liabilities and the increasing effect on minimum rent for each of the next five years and thereafter is as follows:  

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($ in thousands)
2021$2,523 
20222,341 
20232,287 
20242,290 
20252,274 
Thereafter33,764 
Total$45,479 
($ in thousands) 
2020$3,192
20212,973
20222,772
20232,584
20242,474
Thereafter36,077
Total$50,072


Note 6. Disposals of Operating Properties and Impairment Charges

In FebruaryThere were 0 operating properties sold during the year ended December 31, 2020. The Company sold 1 redevelopment property during the year ended December 31, 2020 for gross proceeds of $14.0 million and a net gain of $3.1 million.

During the year ended December 31, 2019, the Company announced a plan to market and sell up to $500we sold 23 operating properties for aggregate gross proceeds of $543.8 million in non-core assets as part of a program designed to improve the Company's portfolio quality, reduce its leverage, and focus operations on markets where the Company believes it can gain scale and generate attractive risk-adjusted returns.

During the year ended December 31, 2019, we sold NaN operating properties for aggregate gross proceeds of $543.8 million. The following summarizes our 2019 operating property dispositions:
Property NameMSADisposition Date
Whitehall PikeBloomington, INMarch 2019
Beechwood PromenadeAthens, GAApril 2019
Village at Bay ParkGreen Bay, WIMay 2019
Lakewood PromenadeJacksonville, FLMay 2019
Palm Coast LandingPalm Coast, FLMay 2019
Lowe's - Perimeter WoodsCharlotte, NCMay 2019
Cannery CornerLas Vegas, NVJune 2019
Temple TerraceTampa, FLJune 2019
University Town CenterOklahoma City, OKJune 2019
Gainesville PlazaGainesville, FLJuly 2019
Bolton PlazaJacksonville, FLJuly 2019
Eastgate PlazaLas Vegas, NVJuly 2019
Burnt StorePunta Gorda, FLJuly 2019
Landstown CommonsVirginia Beach, VAAugust 2019
Lima MarketplaceFort Wayne, INSeptember 2019
Hitchcock PlazaAiken, SCSeptember 2019
Merrimack Village CenterManchester, NHSeptember 2019
Publix at AcworthAtlanta, GAOctober 2019
The Centre at PanolaAtlanta, GAOctober 2019
Beacon HillCrown Point, INOctober 2019
Bell Oaks CentreEvansville, INNovember 2019
South Elgin CommonsChicago, ILDecember 2019
Boulevard CrossingKokomo, INDecember 2019


The Company recorded a net gain of $39.0 million as a result of the 2019 disposal activity.

During 2019, in connection with the preparation and review of the financial statements for the applicable periods, we evaluated a total of 7 operating properties for impairment and recorded a cumulative $37.7 million impairment charge due
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to changes in facts and circumstances underlying the Company's expected future hold period of these properties. A shortening of the expected future hold period is considered an impairment indicator under applicable accounting rules, and this indicator caused us to further evaluate the carrying value of these properties. We concluded the estimated undiscounted cash flows over the expected


holding period did not exceed the carrying value of these assets given the new holding period, leading to the charge. We estimated the fair value using the market approach by utilizing recent sales offers without adjustment. We compared the estimate aggregate fair value of $176 million to the carrying values, which resulted in the recording of the non-cash impairment charge of $37.7 million for the year ended December 31, 2019.

During the year ended December 31, 2018, we sold 6 operating properties for aggregate gross proceeds of $122.2 million. The following summarizes our 2018 operating property dispositions:
Property NameMSADisposition Date
Trussville PromenadeBirmingham, ALFebruary 2018
Memorial CommonsGoldsboro, NCMarch 2018
Lake Lofts at DeerwoodJacksonville, FLNovember 2018
Hamilton CrossingKnoxville, TNNovember 2018
Fox Lake CrossingChicago, ILDecember 2018
Lowe's PlazaLas Vegas, NVDecember 2018


In addition, we entered into a joint venture with TH Real Estate by selling an 80% interest in 3 operating assets for an agreed upon value of $99.8 million. The properties sold to the joint venture were the following:

Property NameMSADisposition Date
Livingston Shopping CenterNew York/Northern New JerseyJune 2018
Plaza VolenteAustin, TXJune 2018
Tamiami CrossingNaples, FLJune 2018


The Company recorded a net gain of $3.4 million as a result of the 2018 disposal activity.

During 2018, in connection with the preparation and review of the financial statements for the applicable periods, we evaluated a total of 7 operating properties and land previously held for development for impairment and recorded a cumulative $70.4 million impairment charge due to changes in facts and circumstances underlying the Company's expected future hold period of these properties and decision to not move forward with development of the land. A shortening of an expected future hold period is considered an impairment indicator under applicable accounting rules, and this indicator caused us to further evaluate the carrying value of these properties. We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of these assets given the new holding period, leading to the charge. We estimated the fair value using the market approach by utilizing recent sales offers without adjustment. We compared the estimated aggregate fair value of $130.2 million to the carrying values, which resulted in the recording of the non-cash impairment charges totaling $70.4 million for the year ended December 31, 2018.

As of December 31, 2018, the Company classified its Whitehall Pike operating property as held for sale. This asset was sold in March 2019.

During the year ended December 31, 2017, we sold 4 operating properties for aggregate gross proceeds of $76.1 million and a net gain of $15.2 million. The following summarizes our 2017 operating property dispositions.

Property NameMSADisposition Date
Cove CenterStuart, FLMarch 2017
Clay MarketplaceBirmingham, ALJune 2017
The Shops at Village WalkFort Myers, FLJune 2017
Wheatland Towne CrossingDallas, TXJune 2017


In connection with the preparation and review of the financial statements for the three months ended March 31, 2017, we evaluated an operating property for impairment including shortening of the intended holding period. We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of the asset. The Company estimated the fair value of the property to be $26.0 million using Level 3 inputs within the fair value hierarchy, primarily using the market


approach. We compared the fair value measurement to the carrying value, which resulted in the recording of a non-cash impairment charge of $7.4 million. This property was sold during 2017.

The results of all the operating properties sold in 2020, 2019, 2018, and 20172018 are not included in discontinued operations in the accompanying statements of operations as none of the operating properties individually, nor in the aggregate, represent a strategic shift that has had or will have a material effect on our operations or financial results.

Note 7. Mortgage and Other Indebtedness 
 
Mortgage and other indebtedness consisted of the following as of December 31, 20192020 and 2018: 2019: 
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($ in thousands)As of December 31, 2020
PrincipalUnamortized Net PremiumsUnamortized Debt Issuance CostsTotal
Senior unsecured notes—fixed rate
Maturing at various dates from September 2023 through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2020$550,000 $0 $(3,595)$546,405 
Unsecured revolving credit facility    
Matures April 20221; borrowing level up to $523.2 million available at December 31, 2020; interest at LIBOR + 1.15% or 1.29% at December 31, 2020
25,000 0 (1,672)23,328 
Unsecured term loan    
Matures October 2025; interest at LIBOR + 2.00% or 2.14% at December 31, 2020250,000 0 (1,647)248,353 
Mortgage notes payable—fixed rate    
Generally due in monthly installments of principal and interest; maturing at various dates from April 2022 through June 2030; interest rates ranging from 3.78% to 5.73% at December 31, 2020295,966 1,732 (25)297,673 
Mortgage note payable—variable rate    
Due in monthly installments of principal and interest; maturing in February 2022; interest at LIBOR + 1.60% or 1.74% at December 31, 202055,110 0 (75)55,035 
Total mortgage and other indebtedness$1,176,076 $1,732 $(7,014)$1,170,794 
($ in thousands) As of December 31, 2019
  Principal Unamortized Net Premiums Unamortized Debt Issuance Costs Total
Senior Unsecured Notes—Fixed Rate        
Maturing at various dates from September 2023 through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2019 $550,000
 $—
 $(4,231) $545,769
Unsecured Revolving Credit Facility        
Matures April 20221; borrowing level up to $583.4 million available at December 31, 2019; interest at LIBOR + 1.15% or 2.91% at December 31, 2019
 —
 —
 (2,625) (2,625)
Unsecured Term Loans  
  
  
  
Matures October 2025; interest at LIBOR + 2.00% or 3.76% at December 31, 2019 250,000
 —
 (1,859) 248,141
Mortgage Notes Payable—Fixed Rate  
  
  
  
Generally due in monthly installments of principal and interest; maturing at various dates from April 2022 through June 2030; interest rates ranging from 3.78% to 5.73% at December 31, 2019 297,472
 2,176
 (40) 299,608
Mortgage Notes Payable—Variable Rate  
  
  
  
Due in monthly installments of principal and interest; maturing in February 2022; interest at LIBOR + 1.60% or 3.36% at December 31, 2019 55,830
 —
 (143) 55,687
Total mortgage and other indebtedness $1,153,302
 $2,176
 $(8,898) $1,146,580



($ in thousands)As of December 31, 2019
PrincipalUnamortized Net PremiumsUnamortized Debt Issuance CostsTotal
Senior Unsecured Notes—Fixed Rate
Maturing at various dates from September 2023 through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2019$550,000 $0 $(4,231)$545,769 
Unsecured Revolving Credit Facility    
Matures April 20221; borrowing level up to $583.4 million available at December 31, 2019; interest at LIBOR +1.15%2 or 2.91% at December 31, 2019
0 0 (2,625)(2,625)
Unsecured Term Loans    
Matures October 2025; interest at LIBOR + 2.00% or 3.76% at December 31, 2019250,000 0 (1,859)248,141 
Mortgage Notes Payable—Fixed Rate    
Generally due in monthly installments of principal and interest; maturing at various dates from April 2022 through June 2030; interest rates ranging from 3.78% to 5.73% at December 31, 2019297,472 2,176 (40)299,608 
Mortgage Notes Payable—Variable Rate    
Due in monthly installments of principal and interest; maturing in February 2022; interest at LIBOR + 1.60%, or 3.36% at December 31, 201955,830 0 (143)55,687 
Total mortgage and other indebtedness$1,153,302 $2,176 $(8,898)$1,146,580 



($ in thousands) As of December 31, 2018
  Principal Unamortized Net Premiums Unamortized Debt Issuance Costs Total
Senior Unsecured Notes—Fixed Rate        
Maturing at various dates from September 2023 through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2018 $550,000
 $—
 $(4,864) $545,136
Unsecured Revolving Credit Facility        
Matures April 20221; borrowing level up to $449.5 million available at December 31, 2018; interest at LIBOR + 1.15%2 or 3.65% at December 31, 2018
 45,600
 —
 (3,796) 41,804
Unsecured Term Loans  
  
  
  
$95 million matures July 2021; interest at LIBOR + 1.30%2 or 3.80% at December 31, 2018; $250 million matures October 2025; interest at LIBOR + 2.00% or 4.50% at December 31, 2018
 345,000
 —
 (2,470) 342,530
Mortgage Notes Payable—Fixed Rate  
  
  
  
Generally due in monthly installments of principal and interest; maturing at various dates from September 2020 through June 2030; interest rates ranging from 3.78% to 6.78% at December 31, 2018 534,679
 6,566
 (584) 540,661
Mortgage Notes Payable—Variable Rate  
  
  
  
Due in monthly installments of principal and interest; maturing at various dates February 2022 through June 2025; interest at LIBOR + 1.50%-1.60%, ranging from 4.00% to 4.10% at December 31, 2018 73,491
 —
 (321) 73,170
Total mortgage and other indebtedness $1,548,770
 $6,566
 $(12,035) $1,543,301

____________________
1The Company can extend the maturity date for two2 additional periods of six months each, subject to certain conditions.
2The interest rates on our unsecured revolving credit facility and unsecured term loan varied at certain parts of the year due to provisions in the agreement and the amendment and restatement of the agreement.
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The one month LIBOR interest rate was 1.76%0.14% and 2.50%1.76% as of December 31, 20192020 and 2018,2019, respectively. 
 
Debt Issuance Costs

Debt issuance costs are amortized on a straight-line basis over the terms of the respective loan agreements.

The accompanying consolidated statements of operations include the following amounts of amortization of debt issuance costs as a component of interest expense:
($ in thousands) For the year ended December 31,($ in thousands)For the year ended December 31,
 2019 2018 2017 202020192018
Amortization of debt issuance costs $2,762
 $3,944
 $2,534
Amortization of debt issuance costs$2,135 $2,762 $3,944 
 
 
Unsecured Revolving Credit Facility and Unsecured Term Loans
 
On April 24, 2018, the Company and Operating Partnership entered into the First Amendment (the “Amendment”) to the Fifth Amended and Restated Credit Agreement (the “Existing Credit Agreement,” and as amended by the Amendment, the “Amended Credit Agreement”), dated as of July 28, 2016, by and among the Operating Partnership, as borrower, the Company, as guarantor (pursuant to a springing guaranty, dated as of July 28, 2016), KeyBank National Association, as administrative agent, and the other lenders party thereto. The Amendment increases (i) the aggregate principal amount available under the
unsecured revolving credit facility (the “Credit Facility”) from $500 million to $600 million, (ii) the amount of the letter of credit issuances the Operating Partnership may utilize under the Credit Facility from $50 million to $60 million, and (iii) swingline loan capacity from $50 million to $60 million in same day borrowings.  Under the Amended Credit Agreement, the Operating Partnership has the option to increase the Credit Facility to $1.2 billion (increased from $1 billion under the Existing Credit Agreement) upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Amended Credit Agreement, to provide such increased amounts.




The Amendment extends the scheduled maturity date of the Credit Facility from July 28, 2020 to April 22, 2022 (which maturity date may be extended for up to 2 additional periods of six months at the Operating Partnership’s option subject to certain conditions). Among other things, the Amendment also improves the Operating Partnership’s leverage ratio calculation by changing the definition of capitalization rate to six and one-half percent (6.5%) from six and three-fourths percent (6.75%), which increases the Operating Partnership’s total asset value as calculated under the Amended Credit Agreement

On October 25, 2018, the Operating Partnership entered into a Term Loan Agreement (the “Agreement”) with KeyBank National Association, as Administrative Agent (the “Agent”), and the other lenders party thereto, providing for an unsecured term loan facility of up to $250 million (the “Term Loan”). The Term Loan ranks pari passu with the Operating Partnership’s existing $600 million unsecured revolving credit facility documented in the Operating Partnership’s Fifth Amended and Restated Credit Agreement, dated as of July 28, 2016, as amended (the “Existing Credit Agreement”), and other unsecured indebtedness of the Operating Partnership.
 
The Term Loan has a scheduled maturity date of October 24, 2025, which maturity date may be extended for up to 3 additional periods of one year at the Operating Partnership’s option subject to certain conditions.
 
The Operating Partnership has the option to increase the Term Loan to $300 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Agreement, to provide such increased amounts. The Operating Partnership is permitted to prepay the Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

As of December 31, 2019,2020, there was no balance$25 million outstanding under the Credit Facility.  Additionally, we had letters of credit outstanding which totaled $1.2 million, against which 0 amounts were advanced as of December 31, 2019.

2020.

The amount that we may borrow under our Credit Facility is limited by the value of the assets in our unencumbered asset pool.  As of December 31, 2019,2020, the value of the assets in our unencumbered asset pool, calculated pursuant to the Credit Facility agreement, was $1.4$1.3 billion. Taking into account outstanding borrowings on the line of credit, term loans, unsecured
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notes and letters of credit, we had $583.4$523.2 million available under our Credit Facility for future borrowings as of December 31, 2019.2020.    

Our ability to borrow under the Credit Facility is subject to our compliance with various restrictive and financial covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales.  As of December 31, 2019,2020, we were in compliance with all such covenants.

Senior Unsecured Notes

The Operating Partnership has $550 million of senior unsecured notes maturing at various dates through September 2027 (the "Notes").  The Notes contain a number of customary financial and restrictive covenants. As of December 31, 2019,2020, we were in compliance with all such covenants.

Mortgage Loans 
 
Mortgage loans are secured by certain real estate and in some cases by guarantees from the Operating Partnership, and are generally due in monthly installments of interest and principal and mature over various terms through 2030. 
 
Debt Maturities

The following table presents maturities of mortgage debt and corporate debt as of December 31, 2019:2020: 
 

($ in thousands)Scheduled Principal PaymentsTerm MaturitiesTotal
2021$2,303 $0 $2,303 
20221,043 203,877 204,920 
2023806 256,517 257,323 
2024854 0 854 
2025904 330,000 330,904 
Thereafter4,672 375,100 379,772 
 $10,582 $1,165,494 $1,176,076 
Unamortized net debt premiums and issuance costs, net  (5,282)
Total  $1,170,794 

($ in thousands) Scheduled Principal Payments Term Maturities Total
2020 $2,226
 $—
 $2,226
2021 2,303
 —
 2,303
2022 1,043
 178,877
 179,920
2023 806
 256,517
 257,323
2024 854
 —
 854
Thereafter 5,576
 705,100
 710,676
  $12,808
 $1,140,494
 $1,153,302
Unamortized net debt premiums and issuance costs, net     (6,722)
Total     $1,146,580

Other Debt Activity

For the year ended December 31, 2019,2020, we had total new borrowings of $75.0$325.0 million and total repayments of $470.5$302.2 million.  In addition to the items mentioned above, theThe components of this activity were as follows:  
We retired sixteen fixed-rate secured loans and one variable-rate secured loan for $250.9 million in connection with the sale of operating properties;
We repaid $120.6•In March 2020, we borrowed $300 million on the Credit Facility using proceedsas a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the saleCOVID-19 pandemic. Subsequent to the initial borrowing, we have repaid the $300 million of operating properties;borrowings;
We•In December 2020, we borrowed $30.0$25 million on the Credit Facility to fund the acquisitiona portion of the Pan Am Plaza Garage;purchase price of Eastgate Crossing; and
We borrowed $45.0 million on the Credit Facility to fund development activities, redevelopment activities, tenant improvement costs, and other working capital needs; and
•We made scheduled principal payments on indebtedness during the year totaling $4.1$2.2 million.

The amount of interest capitalized in 2020, 2019, and 2018 and 2017 was $1.5 million, $1.9 million, $1.8 million, and $3.1$1.8 million, respectively.
  
Fair Value of Fixed and Variable Rate Debt 
 
As of December 31, 2019,2020, the estimated fair value of fixed rate debt was $864.0$872.8 million compared to the book value of$847.5of $846.0 million.  The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 3.19%3.37% to 3.78%3.88%.  As of December 31, 2019,2020, the estimated fair value of variable rate
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debt was $307.6$329.1 million compared to the book value of $305.8$330.1 million.  The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 3.39%1.28% to 3.47%3.62%.
 
Note 8.  Derivative Instruments, Hedging Activities and Other Comprehensive Income 
 
In order to manage potential future variable interest rate risk, we enter into interest rate derivative agreements from time to time.  We do not use such agreements for trading or speculative purposes nor do we have any that are not designated as cash flow hedges.  The agreements with each of our derivative counterparties provide that, in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations.  

As of December 31, 2019,2020, we were party to various cash flow derivative agreements with notional amounts totaling $266.2$250.0 million.  These derivative agreements effectively fix the interest rate underlying certain variable rate debt instruments over expiration dates through 2025.  Utilizing a weighted average interest rate spread over LIBOR on all variable rate debt resulted in fixing the weighted average interest rate at 3.68%4.20%.

These interest rate derivative agreements are the only assets or liabilities that we record at fair value on a recurring basis.  The valuation of these assets and liabilities is determined using widely accepted techniques including discounted cash flow analysis.  These techniques consider the contractual terms of the derivatives (including the period to maturity) and use observable market-based inputs such as interest rate curves and implied volatilities.  We also incorporate credit valuation adjustments into the fair value measurements to reflect nonperformance risk on both our part and that of the respective counterparties. 
  


We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.  As of December 31, 20192020 and December 31, 2018,2019, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.  As a result, we determined our derivative valuations were classified within Level 2 of the fair value hierarchy.

As of December 31, 2019,2020, the estimated fair value of our interest rate derivatives represented a liability of $16.8$32.1 million, including accrued interest of $0.1$0.4 million.  As of December 31, 2019,2020, this balance is reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet.  At December 31, 20182019 the estimated fair value of our interest rate derivatives was a net liability of $3.5$16.8 million, including accrued interest receivable of $0.1 million.  As of December 31, 2018, $3.6 million is reflected in prepaid and other assets and $7.1 million is2019, this was reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet. 
 
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings.   Approximately $4.0 million and $0.8 million was reclassified as a reduction to earnings during the years ended December 31, 2020 and 2018, respectively. Approximately $0.6 million was reclassified as an increase to earnings during the year ended December 31, 2019. Approximately $0.8 million and $2.5 million was reclassified as a reduction to earnings during the years ended December 31, 2018 and 2017, respectively. As the interest payments on our derivatives are made over the next 12 months, we estimate the increase to interest expense to be $1.5$6.4 million, assuming the current LIBOR curve. 

Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive loss. 
 
Note 9. Lease Information 
 
Rental Income
  
The Company receives rental income from the leasing of retail and office space. The leases generally provide for certain increases in base rent, reimbursement for certain operating expenses, and may require tenants to pay contingent rent to the extent their sales exceed a defined threshold. Certain tenants have the option in the lease agreement to extend their lease upon the expiration of their contractual term. Variable lease payments are based upon tenant sales information and are recognized once a tenant's sales volume exceeds a defined threshold. Variable lease payments for reimbursement of operating expenses are based upon the operating expense activity for the period.
    
From a lessor perspective, the new accounting guidance adopted in 2019 remained mostly similar to legacy GAAP as the Company elected the practical expedient to not separate non-lease components from lease components. This election resulted in a change on the Company's consolidated statements of operations as the Company no longer presents minimum rents
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and tenant reimbursements as separate amounts because the Company now accounts for these amounts as a single combined lease component, rental income, on the basis of the lease component being the predominant component of the contract. As such, non-lease components, including common area maintenance reimbursements that are of a fixed nature are recognized on a straight-line basis over the term of the lease. Further, bad debt, which has previously been recorded in property operating expenses, has now been classified as a contra-revenue account in rental income in the Company’s consolidated statements of operations and comprehensive income for the yearyears ended December 31, 2020 and 2019. 

The Company recognized the following lease rental income for the yearyears ended December 31, 2019:2020 and 2019, respectively:

($ in thousands) 
 Year Ended December 31, 2019
Fixed Contractual Lease Payments - Operating Leases$244,666
Variable Lease Payments - Operating Leases57,748
Straight-Line Rent Adjustment2,209
Amortization of In-Place Lease Liabilities, net3,776
Total$308,399


($ in thousands)
Year Ended December 31,
20202019
Fixed Contractual Lease Payments - Operating Leases$218,004 $244,666 
Variable Lease Payments - Operating Leases52,128 61,368 
Bad Debt Reserve(13,259)(3,620)
Straight-Line Rent Adjustment1,155 3,362 
Straight-Line Rent Reserve for Uncollectibility(4,177)(1,153)
Amortization of In-Place Lease Liabilities, net3,819 3,776 
Total$257,670 $308,399 



The weighted average remaining term of the lease agreements is approximately 4.5 years.  During the years ended December 31, 2020, 2019, 2018, and 2017,2018, the Company earned overage rent of $0.2 million, $1.3 million, $1.2 million, and $1.1$1.2 million, respectively. 
 
As of December 31, 2019,2020, future minimum rentals to be received under non-cancelable operating leases for each of the next five years and thereafter, excluding variable lease payments, are as follows: 
 
($ in thousands)
2021$217,118 
2022196,856 
2023165,849 
2024137,803 
2025111,157 
Thereafter365,042 
Total$1,193,825 
($ in thousands) 
2020$219,020
2021203,858
2022176,630
2023144,709
2024114,560
Thereafter394,986
Total$1,253,763


Commitments under Ground Leases
  
As of December 31, 2019,2020, we are obligated under 9 ground leases for approximately 47 acres of land. Most of these ground leases require fixed annual rent payments.  The expiration dates of the remaining initial terms of these ground leases range from 2023 to 2092 with a weighted-average remaining term of 52.2 years.  Certain of these leases have five-five- to ten-year extension options ranging in total from 20 to 25 years.

Upon adoption of the Leases standard, the Company did not recognize value during the option period for the right-of-use assets and lease liabilities as it was not probable the extension options will be exercised. Upon adoption, the Company recorded a right of use asset of $27.0 million and corresponding liability of $27.3 million. The right of use asset is included in prepaid and other assets and the lease liability is included in deferred revenue and other liabilities. This value was determined utilizing an estimate of our incremental borrowing rate that was specific to each lease based upon the term and underlying asset. These rates ranged from 3.93% to 6.33% with a weighted-average incremental borrowing rate of 5.86%.

F-36

Ground lease expense incurred by the Company on these operating leases for the years ended December 31, 2020, 2019, and 2018 and 2017 was $1.8$1.9 million, $1.7$1.8 million, and $1.7 million, respectively. The Company made payments of $1.8 million and $1.7 million for the yearyears ended December 31, 2020 and 2019, ofrespectively, which the majority waswere included in operating cash flows.
 
Future minimum lease payments due under ground leases for the next five years ending December 31 and thereafter are as follows: 
 
($ in thousands) 
2020$1,777
20211,789
20221,815
20231,636
20241,600
Thereafter70,554
Total$79,171

($ in thousands)
2021$1,789 
20221,815 
20231,636 
20241,600 
20251,582 
Thereafter68,971 
Total$77,393 
  
Note 10. Shareholders’ Equity 
 
Common Equity 
 
Our Board of Trustees declared a cash distribution of $0.3175$0.1500 per common share and Common Unit for the fourth quarter of 2019.2020. This distribution was paid on December 27, 2019January 15, 2021 to common shareholders and Common Unit holders of record as of December 20, 2019.January 8, 2021.



For the years ended December 31, 2020, 2019 2018 and 2017,2018, we declared cash distributions of $1.270, $1.270,$0.4495, $1.27, and $1.225$1.27 respectively per common share and Common Units.

Accrued but unpaid distributions on common shares and units was $27.3 million as of December 31, 2018 and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.  

Dividend Reinvestment and Share Purchase Plan 
 
We maintain a Dividend Reinvestment and Share Purchase Plan, which offers investors the option to invest all or a portion of their common share dividends in additional common shares.  Participants in this plan are also able to make optional cash investments with certain restrictions.
 
Note 11. Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2019 and 2018. 

($ in thousands, except per share data) 
  Quarter Ended
March 31,
2019
 
  Quarter Ended
June 30,
2019
 
  Quarter Ended
September 30,
2019
 
  Quarter Ended
December 31,
2019
Total revenue $83,515
 $81,480
 $74,943
 $75,265
Gain (loss) on sale of operating properties, net 6,587
 24,092
 (5,714) 14,005
Operating income (loss) 22,976
 17,318
 1,316
 30,186
Consolidated net income (loss) 5,988
 (1,697) (20,117) 15,855
Net income (loss) attributable to Kite Realty Group Trust common shareholders 5,715
 (1,796) (19,735) 15,314
Net income (loss) per common share – basic and diluted 0.07
 (0.02) (0.24) 0.18
Weighted average Common Shares outstanding - basic 83,843,681
 83,938,961
 83,960,841
 83,960,045
Weighted average Common Shares outstanding - diluted 84,034,097
 83,938,961
 83,960,841
 84,478,245

($ in thousands, except per share data) 
  Quarter Ended
March 31,
2018
 
  Quarter Ended
June 30,
2018
 
  Quarter Ended
September 30,
2018
 
  Quarter Ended
December 31,
2018
Total revenue $89,763
 $91,736
 $85,747
 $86,937
Gain (loss) on sale of operating properties, net 500
 7,829
 (177) (4,725)
Operating income (loss) (1,532) 15,771
 20,549
 (13,757)
Consolidated net income (loss) (17,997) (1,062) 4,317
 (31,709)
Net income (loss) attributable to Kite Realty Group Trust common shareholders (17,917) (1,366) 3,938
 (31,221)
Net income (loss) per common share – basic and diluted (0.21) (0.02) 0.05
 (0.37)
Weighted average Common Shares outstanding - basic 83,629,669
 83,672,896
 83,706,704
 83,762,664
Weighted average Common Shares outstanding - diluted 83,629,669
 83,672,896
 83,767,655
 83,762,664

Note 12.11. Commitments and Contingencies 
 
Other Commitments and Contingencies 
 
We are not subject to any material litigation nor, to management’s knowledge, is any material litigation currently threatened against us. We are parties to routine litigation, claims, and administrative proceedings arising in the ordinary course of


business.  Management believes that such matters will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows taken as a whole.  

We are obligated under various completion guarantees with lenders and lease agreements with tenants to complete all or portions of thea development project and redevelopment projects.tenant-specific space currently under construction.  We believe we currently have sufficient financing in place to fund our investment in any existing or future projects through cash from operations and borrowings on our unsecured revolving credit facility.

In 2017, we provided a repayment guaranty on a $33.8 million construction loan associated with the development of the Embassy Suites at the University of Notre Dame consistent with our 35% ownership interest. As of December 31, 2019,2020, the current outstanding loan balance is $33.6 million, of which our share is $11.8 million.

As of December 31, 2019,2020, we had outstanding letters of credit totaling $1.2 million.  At that date, there were 0 amounts advanced against these instruments. 
  


F-37

Note 13.12. Related Parties and Related Party Transactions 
 
Subsidiaries of the Company provide certain management, construction management and other services to certain entities owned by certain members of the Company’s management.  During each of the years ended December 31, 2020, 2019 2018 and 2017,2018, we earned less than $0.1 million, from entities owned by certain members of management. 
 
We reimburse an entity owned by certain members of our management for certain travel and related services.  During the years ended December 31, 2020, 2019 2018 and 2017,2018, we paid $0.5 million, $0.8 million $0.5 million and $0.3$0.5 million, respectively, to this related entity. 
 

Note 14.13. Acquisitions 

In 2020, we acquired 1 retail operating property for $65.3 million. The fair value of the real estate and other assets acquired were primarily determined using the income approach. The income approach required us to make assumptions about market leasing rates, tenant-related costs, discount rates, and disposal rates. The estimates of fair value primarily relied upon Level 2 and Level 3 inputs, as previously defined.    

The following table summarizes the estimation of the fair value of assets acquired and liabilities assumed for the property acquired in 2020:

($ in thousands)
Investment properties, net$63,570 
Lease-related intangible assets, net2,254 
Total acquired assets65,824 
Accounts payable and accrued expenses280 
Deferred revenue and other liabilities246 
Total assumed liabilities526 
Fair value of acquired net assets$65,298 

The leases at the acquired property had a weighted average remaining life at acquisition of approximately 3.2 years.

The range of the most significant Level 3 assumptions utilized in determining the value of the real estate and related assets acquired are as follows:

LowHigh
Net rental rate per square foot - Anchors$22.50 $27.50 
Net rental rate per square foot - Small Shops$15.00 $65.00 
Discount rate9.0 %9.0 %

In 2019, we acquired 1 retail operating property for $29.0 million and 1 parking garage for $29.5 million. The fair value of the real estate and other assets acquired were primarily determined using the income approach. The income approach required us to make assumptions about market leasing rates, tenant-related costs, discount rates, and disposal values. The estimates of fair value primarily relied upon Level 2 and Level 3 inputs, as previously defined.

The results of operations for each of the properties acquired during the year ended December 31, 2019 have been included in operations since their respective dates of acquisition.

The following table summarizes the estimation of the fair value of assets acquired and liabilities assumed for the properties acquired in 2019:

($ in thousands) 
  
Investment properties, net$56,393
Lease-related intangible assets, net2,458
Other assets320
Total acquired assets59,171
  
Accounts payable and accrued expenses595
Deferred revenue and other liabilities371
Total assumed liabilities966
  
Fair value of acquired net assets$58,205

F-38

($ in thousands)
Investment properties, net$56,393 
Lease-related intangible assets, net2,458 
Other assets320 
Total acquired assets59,171 
Accounts payable and accrued expenses595 
Deferred revenue and other liabilities371 
Total assumed liabilities966 
Fair value of acquired net assets$58,205 

The leases at the acquired properties had a weighted average remaining life at acquisition of approximately 5.6 years.



The range of the most significant Level 3 assumptions utilized in determining the value of the real estate and related assets acquired are as follows:

  Low High
Net rental rate per square foot - Anchors $11.00
 $12.96
Net rental rate per square foot - Small Shops $6.33
 $32.00
Discount rate 9.0% 9.0%


LowHigh
Net rental rate per square foot - Anchors$11.00 $12.96 
Net rental rate per square foot - Small Shops$6.33 $32.00 
Discount rate9.0 %9.0 %

    The results of operations for each of the properties acquired during the years ended December 31, 2020 and 2019 have been included in operations since their respective dates of acquisition. We did not0t acquire any properties in 2018 or 2017.2018.

Note 15. Subsequent Events14. Impact of COVID-19

Dividend Declaration

On February 12,Since first being reported in December 2019, the novel strain of coronavirus (COVID-19) has spread globally. In March 2020, our Board of Trusteesthe World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and how it impacts the Company's tenants and business partners. Certain segments of retailers and the Company experienced disruption during 2020, and, going forward, the potential adverse effect of the COVID-19 pandemic, including possible resurgences and mutations, on the financial condition, results of operations, cash distributionflows and performance of $0.3175 per common sharethe Company and Common Unitits tenants, the real estate market, global economy, and financial markets, and the extent of such effects, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

The following operating trends, combined with macroeconomic trends such as a global economic slowdown or recession, reduced consumer spending and increased unemployment, lead us to believe that our operating results for the first quarterrest of 2020. This distribution is expected2020 and potentially beyond will continue to be paidsignificantly affected by COVID-19:

•As of December 31, 2020, over 98% of our tenants have reopened. However, many of these retailers are operating at a lower capacity than normal due to COVID-19. Store closures or the inability to return to full capacity, particularly if for an extended period, increase the risk of business failures and lease defaults.
•As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and 92% of rent billings for the period from April 1, 2020 through December 31, 2020.
•Many of our tenants have taken on additional debt as a result of COVID-19, including loans administered by the Small Business Administration. To the extent this debt is not forgiven, the increased debt load may hamper their ability to continue to operate and to pay rent, which could cause the Company to realize decreased cash flow and increased vacancies at its properties.

F-39

Starting in March and continuing through January 2021, the Company received rent relief requests from a significant proportion of its tenants. Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic; the Company and its legal advisers generally disagree with these legal arguments. The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant's financial strength, the tenant's operating history, potential co-tenancy impacts, the tenant's contribution to the shopping center in which it operates, the Company's assessment of the tenant's long-term viability, the difficulty or about April 3, 2020ease with which the tenant could be replaced, and other factors.

As a result of this evaluation, the Company has agreed to common shareholders and Common Unit holdersdefer rent for approximately 375 of recordits tenants subject to certain conditions. The Company had deferred the collection of $6.1 million of rental income that remains outstanding as of March 27,December 31, 2020. To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company's operating and capital uses.







F-40

Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries
Schedule III
Consolidated Real Estate and Accumulated Depreciation
($ in thousands) Initial CostCost Capitalized
Subsequent to Acquisition/Development		Gross Carrying Amount
Close of Period		    
   Building & Building & Building & AccumulatedYear Built /Year
NameEncumbrancesLandImprovementsLandImprovementsLandImprovementsTotalDepreciationRenovatedAcquired
Operating Properties           
12th Street Plaza *$0 $2,624 $12,892 $0 $755 $2,624 $13,647 $16,271 $4,530 1978/20032012
54th & College *0 2,672 0 0 0 2,672 0 2,672 0 2008NA
Bayonne Crossing42,113 47,809 43,960 0 917 47,809 44,877 92,686 12,397 20112014
Bayport Commons *0 7,005 20,776 0 4,109 7,005 24,886 31,891 8,162 2008NA
Belle Isle *0 9,130 41,167 0 5,968 9,130 47,135 56,265 12,409 20002015
Bridgewater Marketplace *0 3,407 8,602 0 1,244 3,407 9,845 13,252 3,708 2008NA
Burlington Coat Factory *0 0 2,773 0 29 0 2,802 2,802 2,093 1992/20002000
Castleton Crossing *0 9,761 28,052 0 944 9,761 28,996 38,757 8,212 19752013
Chapel Hill Shopping Center18,250 0 35,109 0 1,856 0 36,965 36,965 9,380 20012015
City Center *0 20,565 180,007 0 4,690 20,565 184,697 205,262 46,121 20182014
Centennial Center70,455 58,960 72,676 0 4,720 58,960 77,396 136,356 25,247 20022014
Centennial Gateway23,962 5,305 48,739 0 576 5,305 49,315 54,620 12,364 20052014
Centre Point Commons14,410 2,918 22,310 0 132 2,918 22,441 25,359 5,790 20072014
Cobblestone Plaza *0 11,221 45,028 0 2,849 11,221 47,877 59,098 13,852 2011NA
Colonial Square *0 7,521 18,696 0 2,138 7,521 20,834 28,355 5,009 20102014
Colleyville Downs *0 5,446 38,533 0 2,064 5,446 40,597 46,043 12,875 20142015
Cool Creek Commons *0 6,062 13,428 0 3,802 6,062 17,229 23,291 7,192 2005NA
Cool Springs Market *0 12,644 22,870 40 6,449 12,684 29,319 42,003 10,152 19952013
Crossing at Killingly Commons *0 21,999 34,968 0 (5)21,999 34,963 56,962 10,252 20102014
Delray Marketplace55,110 18,750 88,421 1,284 4,960 20,034 93,381 113,415 24,378 2013NA
DePauw University Bookstore & Café0 64 663 0 45 64 708 772 416 2012NA
Draper Crossing *0 9,054 27,241 0 894 9,054 28,134 37,188 8,171 20122014
Draper Peaks *0 11,498 47,125 522 4,135 12,020 51,260 63,280 11,529 20122014
Eastern Beltway Center34,100 23,221 45,725 0 4,675 23,221 50,400 73,621 11,620 1998/20062014
Eastgate Crossing0 4,244 59,326 0 0 4,244 59,326 63,570 0 1958/20072020
Eastgate Pavilion *0 8,026 18,763 0 904 8,026 19,667 27,693 9,224 19952004
Eddy Street Commons0 1,900 37,051 0 1,154 1,900 38,205 40,105 13,599 2009NA
Estero Town Commons *0 8,973 9,960 0 989 8,973 10,949 19,922 4,077 2006NA
Fishers Station *0 4,008 15,607 0 73 4,008 15,680 19,688 5,215 2018NA

F-41

($ in thousands)   Initial Cost 
Cost Capitalized
Subsequent to Acquisition/Development
 
Gross Carrying Amount
Close of Period
        
      Building &   Building &   Building &   Accumulated Year Built / Year
Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired
Operating Properties                      
12th Street Plaza * $—
 $2,624
 $13,293
 $—
 $749
 $2,624
 $14,042
 $16,666
 $4,224
 1978/2003 2012
54th & College * —
 2,672
 —
 —
 —
 2,672
 —
 2,672
 —
 2008 NA
Bayonne Crossing 42,940
 47,809
 44,246
 —
 916
 47,809
 45,162
 92,971
 10,589
 2011 2014
Bayport Commons * —
 7,005
 20,648
 —
 2,090
 7,005
 22,738
 29,743
 7,438
 2008 NA
Belle Isle * —
 9,130
 41,426
 —
 4,635
 9,130
 46,061
 55,191
 10,085
 2000 2015
Bridgewater Marketplace * —
 3,407
 8,668
 —
 620
 3,407
 9,288
 12,695
 3,387
 2008 NA
Burlington Coat Factory * —
 29
 2,773
 —
 6
 29
 2,779
 2,808
 1,774
 1992/2000 2000
Castleton Crossing * —
 9,761
 29,309
 —
 1,019
 9,761
 30,328
 40,089
 8,288
 1975 2013
Chapel Hill Shopping Center 18,250
 —
 35,072
 —
 1,344
 —
 36,416
 36,416
 7,538
 2001 2015
City Center * —
 20,565
 180,235
 —
 4,472
 20,565
 184,708
 205,273
 38,513
 2018 2014
Centennial Center 70,455
 58,960
 72,704
 —
 1,243
 58,960
 73,947
 132,907
 21,115
 2002 2014
Centennial Gateway 23,962
 5,305
 48,969
 —
 67
 5,305
 49,035
 54,340
 10,425
 2005 2014
Centre Point Commons 14,410
 2,918
 22,372
 —
 113
 2,918
 22,485
 25,403
 4,952
 2007 2014
Cobblestone Plaza * —
 11,221
 45,526
 —
 1,386
 11,221
 46,912
 58,133
 12,508
 2011 NA
Colonial Square * —
 7,521
 18,566
 —
 2,160
 7,521
 20,726
 28,247
 4,211
 2010 2014
Colleyville Downs * —
 5,446
 38,534
 —
 1,755
 5,446
 40,289
 45,735
 10,594
 2014 2015
Cool Creek Commons * —
 6,062
 13,374
 —
 2,704
 6,062
 16,078
 22,140
 6,520
 2005 NA
Cool Springs Market * —
 12,644
 22,870
 40
 6,414
 12,684
 29,285
 41,969
 8,464
 1995 2013
Crossing at Killingly Commons * —
 21,999
 34,806
 —
 191
 21,999
 34,996
 56,995
 8,687
 2010 2014
Delray Marketplace 55,830
 18,750
 87,353
 1,284
 5,801
 20,034
 93,155
 113,189
 21,103
 2013 NA
DePauw University Bookstore & Café —
 64
 663
 —
 45
 64
 708
 772
 369
 2012 NA
Draper Crossing * —
 9,054
 27,156
 —
 663
 9,054
 27,819
 36,873
 6,855
 2012 2014
Draper Peaks * —
 11,498
 47,093
 522
 3,886
 12,020
 50,980
 63,000
 9,570
 2012 2014
Eastern Beltway Center 34,100
 23,221
 45,659
 —
 3,993
 23,221
 49,652
 72,873
 9,644
 1998/2006 2014
Eastgate Pavilion * —
 8,026
 18,067
 —
 1,235
 8,026
 19,302
 27,328
 8,449
 1995 2004
Eddy Street Commons —
 1,900
 36,762
 —
 2,071
 1,900
 38,833
 40,733
 12,771
 2009 NA
Estero Town Commons * —
 8,973
 9,953
 —
 976
 8,973
 10,930
 19,903
 3,701
 2006 NA
Fishers Station * —
 4,008
 15,773
 —
 82
 4,008
 15,854
 19,862
 4,603
 2018 NA
  Initial CostCost Capitalized
Subsequent to Acquisition/Development		Gross Carrying Amount
Close of Period		    
   Building & Building & Building & AccumulatedYear Built /Year
NameEncumbrancesLandImprovementsLandImprovementsLandImprovementsTotalDepreciationRenovatedAcquired
Operating Properties (continued)           
Geist Pavilion *$0 $1,368 $8,280 $0 $2,362 $1,368 $10,642 $12,010 $4,898 2006NA
Greyhound Commons *0 2,629 794 0 863 2,629 1,657 4,286 942 2005NA
Holly Springs Towne Center *0 12,319 45,904 0 4,783 12,319 50,688 63,007 11,499 2013NA
Holly Springs Towne Center - Phase II *0 11,590 49,006 0 1,455 11,590 50,461 62,051 8,159 2016NA
Hunters Creek Promenade *0 8,335 12,681 179 1,151 8,514 13,831 22,345 3,685 19942013
Indian River Square *0 5,100 6,305 1,100 1,924 6,200 8,229 14,429 3,251 1997/20042005
International Speedway Square *0 7,424 12,840 0 6,875 7,424 19,715 27,139 11,267 1999NA
King's Lake Square *0 4,519 15,405 0 1,698 4,519 17,103 21,622 8,698 1986/20142003
Kingwood Commons *0 5,715 30,668 0 249 5,715 30,916 36,631 11,185 19992013
Lake City Commons0 3,415 10,242 0 365 3,415 10,608 14,023 3,415 20082014
Lake City Commons - Phase II *0 1,277 2,225 0 (124)1,277 2,102 3,379 486 20112014
Lake Mary Plaza0 1,413 8,706 0 160 1,413 8,866 10,279 2,071 20092014
Lithia Crossing *0 3,065 7,611 0 6,248 3,065 13,859 16,924 5,443 1994/20032011
Market Street Village *0 9,764 16,360 0 3,052 9,764 19,412 29,176 8,557 1970/20042005
Miramar Square31,625 26,492 30,847 389 11,331 26,880 42,178 69,058 9,986 20082014
Mullins Crossing *0 10,582 42,140 0 6,233 10,582 48,373 58,955 14,063 20052014
Naperville Marketplace0 5,364 11,475 0 160 5,364 11,634 16,998 4,328 2008NA
Nora Plaza03,790 21,310 0 2,150 3,790 23,460 27,249 2,077 20042019
Northcrest Shopping Center0 4,044 33,684 0 1,284 4,044 34,968 39,012 8,101 20082014
Northdale Promenade *0 1,718 27,292 0 161 1,718 27,453 29,171 12,891 2017NA
Oleander Place *0 863 5,935 0 285 863 6,220 7,083 2,522 20122011
Parkside Town Commons - Phase I *0 3,108 42,194 (60)711 3,047 42,905 45,952 11,279 2015N/A
Parkside Town Commons - Phase II *0 20,722 66,524 0 9,828 20,722 76,352 97,074 15,245 2017N/A
Perimeter Woods *0 8,993 27,277 0 1,937 8,993 29,213 38,206 6,857 20082014
Pine Ridge Crossing *— 5,640 16,885 0 3,981 5,640 20,866 26,506 8,278 19942006
Plaza at Cedar Hill *0 5,782 36,649 0 11,784 5,782 48,433 54,215 22,537 20002004
Pleasant Hill Commons0 3,350 10,116 0 356 3,350 10,472 13,822 3,292 20082014
Portofino Shopping Center *0 4,754 75,221 0 19,144 4,754 94,366 99,120 30,615 19992013
Publix at Woodruff *0 1,783 6,361 0 869 1,783 7,230 9,013 3,697 19972012
Rampart Commons8,816 1,136 42,726 0 592 1,136 43,318 44,454 11,926 20182014
Rangeline Crossing *0 2,006 18,020 0 619 2,006 18,639 20,645 7,580 1986/2013NA


F-42

    Initial Cost 
Cost Capitalized
Subsequent to Acquisition/Development
 
Gross Carrying Amount
Close of Period
        
      Building &   Building &   Building &   Accumulated Year Built / Year
Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired
Operating Properties (continued)                      
Geist Pavilion * $—
 $1,368
 $8,449
 $—
 $2,355
 $1,368
 $10,804
 $12,172
 $4,594
 2006 NA
Greyhound Commons * —
 2,629
 794
 —
 861
 2,629
 1,655
 4,284
 860
 2005 NA
Holly Springs Towne Center * —
 12,319
 46,589
 —
 3,964
 12,319
 50,553
 62,872
 10,524
 2013 NA
Holly Springs Towne Center - Phase II * —
 11,910
 49,212
 —
 1,345
 11,910
 50,557
 62,467
 6,185
 2016 NA
Hunters Creek Promenade * —
 8,335
 12,674
 179
 1,137
 8,514
 13,810
 22,324
 3,211
 1994 2013
Indian River Square * —
 5,100
 6,304
 1,100
 1,566
 6,200
 7,870
 14,070
 2,974
 1997/2004 2005
International Speedway Square * —
 7,769
 15,362
 —
 9,424
 7,769
 24,786
 32,555
 15,352
 1999 NA
King's Lake Square * —
 4,519
 15,630
 —
 1,696
 4,519
 17,326
 21,845
 8,309
 1986/2014 2003
Kingwood Commons * —
 5,715
 30,894
 —
 253
 5,715
 31,148
 36,863
 10,083
 1999 2013
Lake City Commons —
 3,415
 10,242
 —
 365
 3,415
 10,608
 14,023
 2,941
 2008 2014
Lake City Commons - Phase II * —
 1,277
 2,086
 —
 16
 1,277
 2,102
 3,379
 411
 2011 2014
Lake Mary Plaza —
 1,413
 8,719
 —
 89
 1,413
 8,808
 10,221
 1,781
 2009 2014
Lithia Crossing * —
 3,065
 9,983
 —
 6,061
 3,065
 16,044
 19,109
 5,846
 1994/2003 2011
Market Street Village * —
 9,764
 16,323
 —
 2,947
 9,764
 19,270
 29,034
 7,871
 1970/2004 2005
Miramar Square 31,625
 26,492
 30,820
 389
 6,728
 26,880
 37,548
 64,428
 8,205
 2008 2014
Mullins Crossing * —
 10,582
 42,150
 —
 6,260
 10,582
 48,410
 58,992
 12,175
 2005 2014
Naperville Marketplace —
 5,364
 11,396
 —
 233
 5,364
 11,629
 16,993
 3,973
 2008 NA
Nora Plaza



3,790

21,329

—

1,750

3,790

23,079

26,868

526

2004
2019
Northcrest Shopping Center —
 4,044
 33,704
 —
 1,109
 4,044
 34,812
 38,856
 6,913
 2008 2014
Northdale Promenade * —
 1,718
 27,242
 —
 135
 1,718
 27,377
 29,095
 11,180
 2017 NA
Oleander Place * —
 863
 5,935
 —
 285
 863
 6,220
 7,083
 2,157
 2012 2011
Parkside Town Commons - Phase I * —
 3,108
 42,194
 (60) 788
 3,047
 42,982
 46,029
 9,496
 2015 N/A
Parkside Town Commons - Phase II * —
 20,722
 66,766
 —
 7,476
 20,722
 74,242
 94,964
 12,211
 2017 N/A
Perimeter Woods * —
 8,993
 26,879
 —
 821
 8,993
 27,700
 36,693
 5,729
 2008 2014
Pine Ridge Crossing * —
 5,640
 17,024
 —
 3,963
 5,640
 20,988
 26,628
 7,659
 1994 2006
Plaza at Cedar Hill * —
 5,782
 36,781
 —
 11,308
 5,782
 48,089
 53,871
 20,688
 2000 2004
Pleasant Hill Commons —
 3,350
 10,094
 —
 375
 3,350
 10,469
 13,819
 2,850
 2008 2014
Portofino Shopping Center * —
 4,754
 75,254
 —
 18,066
 4,754
 93,319
 98,073
 26,149
 1999 2013
Publix at Woodruff * —
 1,783
 6,352
 —
 878
 1,783
 7,230
 9,013
 3,205
 1997 2012
Rampart Commons 9,495
 1,136
 42,808
 —
 554
 1,136
 43,362
 44,498
 9,591
 2018 2014
Rangeline Crossing * —
 2,006
 18,367
 —
 663
 2,006
 19,030
 21,036
 7,125
 1986/2013 NA
  Initial CostCost Capitalized
Subsequent to Acquisition/Development		Gross Carrying Amount
Close of Period		    
   Building & Building & Building & AccumulatedYear Built /Year
NameEncumbrancesLandImprovementsLandImprovementsLandImprovementsTotalDepreciationRenovatedAcquired
Operating Properties (continued)           
Riverchase Plaza *$0 $3,889 $11,389 $0 $1,136 $3,889 $12,525 $16,414 $5,351 1991/20012006
Rivers Edge *0 5,647 31,347 0 1,938 5,647 33,285 38,932 11,614 20112008
Saxon Crossing11,400 3,764 16,762 0 578 3,764 17,340 21,104 5,069 20092014
Shoppes at Plaza Green *0 3,749 23,011 0 2,184 3,749 25,195 28,944 9,554 20002012
Shoppes of Eastwood *0 1,688 8,949 0 504 1,688 9,454 11,142 3,691 19972013
Shops at Eagle Creek *0 3,668 8,760 0 5,234 3,668 13,994 17,662 6,123 19982003
Shops at Julington Creek4,785 2,372 7,300 0 260 2,372 7,561 9,933 1,537 20112014
Shops at Moore21,300 6,284 23,348 0 1,200 6,284 24,548 30,832 5,451 20102014
Silver Springs Pointe0 7,580 4,992 0 321 7,580 5,313 12,893 1,605 20012014
Stoney Creek Commons *0 628 3,700 0 5,913 628 9,614 10,242 4,107 2000NA
Sunland Towne Centre *0 14,774 22,528 0 3,540 14,774 26,068 40,842 12,047 19962004
Tarpon Bay Plaza *0 4,273 23,001 0 4,452 4,273 27,454 31,727 8,350 2007NA
The Corner14,750 3,772 24,642 0 28 3,772 24,669 28,441 5,970 20082014
The Landing at Tradition *0 18,505 46,210 0 2,980 18,505 49,191 67,696 10,922 20072014
Toringdon Market *0 5,448 8,703 0 622 5,448 9,325 14,773 2,734 20042013
Traders Point *0 9,443 34,697 0 3,403 9,443 38,100 47,543 20,127 2005NA
Traders Point II *0 2,376 6,363 0 914 2,376 7,277 9,653 3,281 2005NA
Tradition Village Center *0 3,140 14,826 0 632 3,140 15,458 18,598 3,943 20062014
Waterford Lakes Village *0 2,317 6,347 0 602 2,317 6,949 9,266 3,138 19972004
Waxahachie Crossing0 1,411 15,552 0 100 1,411 15,652 17,063 3,429 20102014
Westside Market *0 4,194 17,723 0 427 4,194 18,150 22,344 3,707 20132014
Total Operating Properties351,076 621,773 2,142,304 3,452 200,519 625,225 2,342,823 2,968,048 688,558   


F-43

    Initial Cost 
Cost Capitalized
Subsequent to Acquisition/Development
 
Gross Carrying Amount
Close of Period
        
      Building &   Building &   Building &   Accumulated Year Built / Year
Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired
Operating Properties (continued)                      
Riverchase Plaza * $—
 $3,889
 $11,404
 $—
 $1,123
 $3,889
 $12,527
 $16,416
 $4,956
 1991/2001 2006
Rivers Edge * —
 5,647
 31,358
 —
 1,938
 5,647
 33,295
 38,942
 10,285
 2011 2008
Saxon Crossing 11,400
 3,764
 16,782
 —
 597
 3,764
 17,380
 21,144
 4,393
 2009 2014
Shoppes at Plaza Green * —
 3,749
 23,853
 —
 1,844
 3,749
 25,697
 29,446
 8,837
 2000 2012
Shoppes of Eastwood * —
 1,688
 8,969
 —
 502
 1,688
 9,471
 11,159
 3,221
 1997 2013
Shops at Eagle Creek * —
 4,550
 8,844
 —
 5,197
 4,550
 14,041
 18,591
 5,630
 1998 2003
Shops at Julington Creek 4,785
 2,372
 7,189
 —
 347
 2,372
 7,536
 9,908
 1,289
 2011 2014
Shops at Moore 21,300
 6,284
 23,375
 —
 1,606
 6,284
 24,981
 31,265
 4,743
 2010 2014
Silver Springs Pointe —
 7,580
 3,602
 —
 1,712
 7,580
 5,313
 12,893
 1,352
 2001 2014
Stoney Creek Commons * —
 628
 3,700
 —
 5,913
 628
 9,613
 10,241
 3,617
 2000 NA
Sunland Towne Centre * —
 14,774
 21,026
 —
 5,039
 14,774
 26,066
 40,840
 11,097
 1996 2004
Tarpon Bay Plaza * —
 4,273
 23,096
 —
 5,056
 4,273
 28,152
 32,425
 8,259
 2007 NA
The Corner 14,750
 3,772
 24,642
 —
 22
 3,772
 24,663
 28,435
 5,206
 2008 2014
The Landing at Tradition * —
 18,505
 46,226
 —
 536
 18,505
 46,762
 65,267
 9,080
 2007 2014
Toringdon Market * —
 5,448
 9,523
 —
 542
 5,448
 10,065
 15,513
 3,019
 2004 2013
Traders Point * —
 9,443
 36,433
 —
 2,838
 9,443
 39,271
 48,714
 16,843
 2005 NA
Traders Point II * —
 2,376
 6,107
 —
 1,164
 2,376
 7,271
 9,647
 3,086
 2005 NA
Tradition Village Center * —
 3,140
 14,842
 —
 566
 3,140
 15,408
 18,548
 3,273
 2006 2014
Waterford Lakes Village * —
 2,317
 6,388
 —
 571
 2,317
 6,960
 9,277
 2,956
 1997 2004
Waxahachie Crossing —
 1,411
 15,644
 —
 155
 1,411
 15,798
 17,209
 3,051
 2010 2014
Westside Market * —
 4,194
 17,606
 —
 536
 4,194
 18,142
 22,336
 3,104
 2013 2014
                       
Total Operating Properties 353,302
 619,105
 2,090,834
 3,452
 181,911
 622,557
 2,272,745
 2,895,302
 604,449
    
  Initial Cost
Cost Capitalized
Subsequent to Acquisition/Development
Gross Carrying Amount
Close of Period		    
   Building & Building & Building & AccumulatedYear Built /Year
NameEncumbrancesLandImprovementsLandImprovementsLandImprovementsTotalDepreciationRenovatedAcquired
Office Properties           
Thirty South *$0 $1,643 $9,536 $0 $21,922 $1,643 $31,457 $33,100 $14,246 1905/20022001
Pan Am Plaza Garage *0 0 29,536 0 276 0 29,813 29,813 7,761 19862019
Union Station Parking Garage *0 904 2,650 0 1,857 904 4,506 5,410 2,057 19862001
Total Office Properties0 2,547 41,722 0 24,055 2,547 65,777 68,324 24,064   
Development and Redevelopment Properties          
Eddy Street Commons - Phase II04,188 5,642 0 0 4,188 5,642 9,830 267 NANA
Glendale Town Center*0 1,307 43,221 0 4,148 1,307 47,369 48,676 32,685 NANA
Hamilton Crossing Centre*0 5,531 10,339 0 63 5,531 10,403 15,934 4,471 NANA
The Corner *0 304 4,145 0 0 304 4,145 4,449 0 NANA
Total Development and Redevelopment Properties0 11,329 63,347 0 4,211 11,329 67,558 78,888 37,423   
Other **           
Bridgewater Marketplace *0 1,722 0 0 0 1,722 0 1,722 0 NANA
KRG Development0 0 716 0 0 0 716 716 74 NANA
KRG New Hill *0 1,812 0 0 0 1,812 0 1,812 0 NANA
KRG Peakway0 5,777 0 0 0 5,777 0 5,777 0 NANA
Pan Am Plaza0 11,694 0 0 0 11,694 0 11,694 0 NANA
Total Other0 21,006 716 0 0 21,006 716 21,722 74   
Line of credit/Term Loan/Unsecured notes825,000 0 0 0 0 0 0 0 0 NANA
Grand Total$1,176,076 $656,655 $2,248,089 $3,452 $228,785 $660,107 $2,476,874 $3,136,982 $750,119   


    Initial Cost 
Cost Capitalized
Subsequent to Acquisition/Development
 
Gross Carrying Amount
Close of Period
        
      Building &   Building &   Building &   Accumulated Year Built / Year
Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired
Office Properties                      
Thirty South * $—
 $1,643
 $9,600
 $—
 $21,860
 $1,643
 $31,461
 $33,104
 $12,752
 1905/2002 2001
Pan Am Plaza Garage *
—

—

29,536

—

276

—

29,813

29,813

3,551

1986
2019
Union Station Parking Garage * —
 904
 2,650
 —
 1,832
 904
 4,482
 5,386
 1,903
 1986 2001
                       
Total Office Properties —
 2,547
 41,787
 —
 23,969
 2,547
 65,756
 68,303
 18,205
    
                       
Development and Redevelopment Properties  
  
  
  
  
  
  
  
    
                       
Courthouse Shadows * —
 4,999
 8,182
 —
 —
 4,999
 8,182
 13,181
 2,339
 NA NA
Eddy Street Commons - Phase II



2,209

4,394

—

—

2,209

4,394

6,603

40

NA
NA
Glendale Town Center*
—

1,494

43,832

—

3,011

1,494

46,843

48,337

32,221

NA
NA
Hamilton Crossing Centre* —
 5,549
 10,326
 —
 —
 5,549
 10,326
 15,875
 4,226
 NA NA
The Corner * —
 304
 3,681
 —
 155
 304
 3,836
 4,140
 —
 NA NA
                       
Total Development and Redevelopment Properties —
 14,556
 70,414
 —
 3,166
 14,556
 73,580
 88,136
 38,826
    
                       
Other **  
  
  
  
  
  
  
  
  
    
                       
Bridgewater Marketplace * —
 2,139
 —
 —
 —
 2,139
 —
 2,139
 —
 NA NA
Landstown - Fulton Bank Pad —
 930
 —
 —
 —
 930
 —
 930
 —
 2007 2014
KRG Development —
 —
 885
 —
 —
 —
 885
 885
 66
 NA NA
KRG New Hill * —
 5,957
 —
 —
 —
 5,957
 —
 5,957
 —
 NA NA
KRG Peakway —
 7,444
 —
 —
 —
 7,444
 —
 7,444
 —
 NA NA
Pan Am Plaza —
 10,521
 —
 —
 —
 10,521
 —
 10,521
 —
 NA NA
                       
Total Other —
 26,990
 885
 —
 —
 26,990
 885
 27,875
 66
    
                       
Line of credit/Term Loan/Unsecured notes 800,000
 —
 —
 —
 —
 —
 —
 —
 —
 NA NA
                       
Grand Total $1,153,302
 $663,198
 $2,203,919
 $3,452
 $209,046
 $666,650
 $2,412,966
 $3,079,616
 $661,546
    
____________________
*This property or a portion of the property is included as an unencumbered asset used in calculating our line of credit borrowing base.
**This category generally includes land held for development.  We also have certain additional land parcels at our development and operating properties, which amounts are included elsewhere in this table.
F-44



Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries
Notes to Schedule III
Consolidated Real Estate and Accumulated Depreciation
($ in thousands)
 

Note 1. Reconciliation of Investment Properties 
 
The changes in investment properties of the Company for the years ended December 31, 2020, 2019, 2018, and 20172018 are as follows: 
 2019 2018 2017202020192018
Balance, beginning of year $3,633,376
 $3,949,431
 $3,988,819
Balance, beginning of year$3,079,616 $3,633,376 $3,949,431 
Acquisitions 57,494
 —
 —
Acquisitions63,570 57,494 0 
Improvements 52,713
 68,349
 78,947
Improvements39,544 52,713 68,349 
Impairment (56,948) (73,198) (10,897)Impairment0 (56,948)(73,198)
Disposals (607,019) (311,206) (107,438)Disposals(45,748)(607,019)(311,206)
Balance, end of year $3,079,616
 $3,633,376
 $3,949,431
Balance, end of year$3,136,982 $3,079,616 $3,633,376 
 
 
The unaudited aggregate cost of investment properties for U.S. federal tax purposes as of December 31, 20192020 was $2.3 billion. 
 

Note 2. Reconciliation of Accumulated Depreciation 
 
The changes in accumulated depreciation of the Company for the years ended December 31, 2020, 2019, 2018, and 20172018 are as follows: 
 2019 2018 2017202020192018
Balance, beginning of year $695,012
 $660,276
 $556,851
Balance, beginning of year$661,546 $695,012 $660,276 
Depreciation expense 117,216
 132,662
 148,346
Depreciation expense113,973 117,216 132,662 
Impairment (19,226) (2,838) (3,494)Impairment0 (19,226)(2,838)
Disposals (131,456) (95,088) (41,427)Disposals(25,400)(131,456)(95,088)
Balance, end of year $661,546
 $695,012
 $660,276
Balance, end of year$750,119 $661,546 $695,012 
 
 
Depreciation of investment properties reflected in the statements of operations is calculated over the estimated original lives of the assets as follows: 
Buildings20-35 years
Building improvements10-35 years
Tenant improvementsTerm of related lease
Furniture and Fixtures5-10 years
 
All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.

F-41F-45