SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2004
OR
[ ] | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period fromto
Commission File Number: 001-32268
Kite Realty Group Trust
Maryland | 11-3715772 | |||||
State of Organization: | IRS Employer Identification Number: | |||||
30 S. Meridian Street, Suite 1100 Indianapolis, Indiana 46204 Telephone: (317) 577-5600 (Address, including zip code and telephone number, including area code, of principal executive offices) |
Title of each class | Name of each exchange on which registered | |||||
---|---|---|---|---|---|---|
Common Shares, $0.01 par value | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Documents Incorporated by Reference
KITE REALTY GROUP TRUST
Annual Report on Form 10-K
For the Fiscal Year Ended
December 31, 2004
TABLE OF CONTENTS
Item No. | Page | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Part I | ||||||||||||
1. | Business | 1 | ||||||||||
2. | Properties | 23 | ||||||||||
3. | Legal Proceeding | 32 | ||||||||||
4. | Submission of Matters to a Vote of Security Holders | 32 | ||||||||||
Part II | ||||||||||||
5. | Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 33 | ||||||||||
6. | Selected Financial Data | 35 | ||||||||||
7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36 | ||||||||||
7A. | Quantitative and Qualitative Disclosures About Market Risk | 48 | ||||||||||
8. | Financial Statements and Supplementary Data | 49 | ||||||||||
9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 49 | ||||||||||
9A. | Controls and Procedures | 49 | ||||||||||
9B. | Other Information | 49 | ||||||||||
Part III | ||||||||||||
10. | Directors and Executive Officers of the Registrant | 50 | ||||||||||
11. | Executive Compensation | 50 | ||||||||||
12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 50 | ||||||||||
13. | Certain Relationships and Related Transactions | 50 | ||||||||||
14. | Principal Accountant Fees and Services | 50 | ||||||||||
Part IV | ||||||||||||
15. | Exhibits and Financial Statement Schedule | 51 | ||||||||||
Signatures | 52 |
PART I
FORWARD-LOOKING STATEMENTS
• | national and local economic, business, real estate and other market conditions; |
• | the ability of tenants to pay rent; |
• | the competitive environment in which the Company operates; |
• | financing risks; |
• | property management risks; |
• | the level and volatility of interest rates; |
• | the financial stability of tenants; |
• | the Company’s ability to maintain its status as a real estate investment trust (“REIT”) for federal income tax purposes; |
• | acquisition, disposition, development and joint venture risks; |
• | potential environmental and other liabilities; |
• | other factors affecting the real estate industry generally; and |
• | other risks identified in this Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate. |
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”) and their predecessor companies. References to “Kite Property Group” or the “Predecessor” mean our predecessor businesses.
Overview
development properties that are expected to contain approximately 1.2 million square feet of gross leasable area (including non-owned anchor space). Our retail operating portfolio was 95.3% leased as of December 31, 2004 to a diversified tenant base, with no single retail tenant accounting for more than 3.2% of our total annualized base rent. We also own interests in five commercial operating properties totaling approximately 663,000 square feet of net rentable area and a related parking garage. Occupancy of our commercial operating portfolio was 97.7% as of December 31, 2004, with no single commercial tenant accounting for more than 3.6% of our annualized base rent. See “Item 2. Properties” for a list of our top 20 tenants by annualized base rent. Our operating portfolio consists of properties in Indiana, Texas, Florida, Georgia, Illinois, New Jersey, Ohio, Oregon and Washington. In addition, we own interests in land parcels comprising approximately 50 acres that may be used for future development of retail or commercial properties or for expansion of existing properties.
Recent Developments
• | Hamilton Crossing. On August 19, we acquired the Hamilton Crossing community shopping center in Carmel, Indiana (a suburb of Indianapolis, Indiana) for a total purchase price of approximately $15.5 million; |
• | Waterford Lakes. On August 20, we acquired the Waterford Lakes neighborhood shopping center in Orlando, Florida for a total purchase price of approximately $9.1 million; |
• | Publix at Acworth. On August 20, we acquired the Publix at Acworth neighborhood shopping center in Acworth, Georgia (a suburb of Atlanta, Georgia) for a total purchase price of approximately $9.2 million; |
• | Plaza at Cedar Hill. On August 31, we acquired the Plaza at Cedar Hill community shopping center in Dallas, Texas for a total purchase price of approximately $38.6 million, inclusive of $27.4 million in assumed debt; |
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• | Sunland Towne Centre. On September 16, we acquired the Sunland Towne Centre community shopping center in El Paso, Texas for a total purchase price of approximately $32.1 million, inclusive of $17.8 million in assumed debt; and |
• | Centre at Panola. On September 30, we acquired the Centre at Panola neighborhood shopping center in Lithonia, Georgia (a suburb of Atlanta, Georgia) for a total purchase price of approximately $9.4 million, inclusive of $4.5 million in assumed debt. |
• | Eastgate Pavilion. On December 1, we acquired the Eastgate Pavilion community shopping center in Cincinnati, Ohio for a total cash purchase price of approximately $27.6 million; and |
• | Four Corner Square. On December 20, we acquired the Four Corner Square neighborhood shopping center in Maple Valley, Washington (Seattle area) for a total cash purchase price of approximately $10.5 million. |
• | 176th & Meridian, a 14,560 square foot build-to-suit Walgreens located in Puyallup, Washington (Seattle MSA) (opened August 2004); |
• | 82nd & Otty, a 10,000 square foot retail property in Clackamas, Oregon, (Portland MSA) (opened November 2004); and |
• | Indiana State Motor Pool, a 115,000 square foot commercial property in Indianapolis, Indiana (opened November 2004). |
• | Traders Point, a projected 366,377 square foot (including 81,377 square feet of non-owned anchor and outlot space) upscale community shopping center located in Indianapolis, Indiana; and |
• | Cool Creek Commons, a projected 138,000 square foot (including 12,200 square feet of non-owned outlot space) upscale neighborhood shopping center located in a northern suburb of Indianapolis, Indiana. |
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• | a pro-rated quarterly cash distribution of $0.09375 per Common Share (based on a distribution of $0.1875 per share for a full quarter) for the period commencing upon completion of our IPO and related formation transactions on August 16, 2004 and ending September 30, 2004, which was paid on October 15, 2004; and |
• | a quarterly cash distribution of $0.1875 per Common Share (which is equivalent to $0.75 per Common Share on an annualized basis) for the quarterly period ending December 31, 2004, which was paid on January 18, 2005. |
Subsequent Events in 2005
• | Plaza Volente, a 156,308 square foot shopping center in Austin, Texas, for an estimated cash purchase price of $36.1 million; |
• | Indian River Square, a 144,134 square foot shopping center in Vero Beach, Florida, for an estimated cash purchase price of $16.4 million; and |
• | Fountain Oaks, a 160,598 square foot shopping center in Atlanta, Georgia, for an estimated cash purchase price of $26.0 million inclusive of $13.7 million of assumed indebtedness. |
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option to terminate its agreement with the Company if any of the other acquisitions do not simultaneously close. There can be no assurance that the conditions to completion of the acquisitions will be met or that these acquisitions will in fact be consummated.
Hedging Transactions
Development Property Acquisition
Business Strategy
• | successfully completing the construction and lease-up of our development portfolio; |
• | continuing to pursue well-located land which can support development; |
• | acquiring well-located, high quality retail properties through our investment and market selection process; |
• | maintaining a focused property management and leasing strategy; |
• | selling assets and recycling capital; and |
• | leveraging our construction and advisory services businesses. |
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560,000 square feet will be owned by us with the remainder to be owned by anchor tenants upon completion of the development. The total estimated cost for these properties is approximately $102 million, of which approximately $79 million had been incurred as of December 31, 2004.
Market and Trade Area: In order to take advantage of our current resources and create economies of scale, our development and acquisition activities are focused primarily in or near the markets in which we currently operate or in which we have had previous experience. By having a presence in a market and developing relationships in that market, we have a greater awareness of market trends and opportunities. |
• | average household income in a three- and five-mile radius; |
• | historical and projected population growth; |
• | density of population within a one, three or five mile radius of the center depending on the characteristics of the property; |
• | transportation patterns and infrastructure; |
• | barriers to the development of competing centers; and |
• | diverse employment base. |
Property Characteristics: We focus on neighborhood and community shopping centers anchored by market-leading retailers or smaller operators with dominant niche positions. In addition, we focus on the presence of one or more additional anchors for these centers, including off-price retailers, office superstores, grocers and fabric and clothing retailers, all of whom we believe increase traffic at the centers and are generally beneficial to the value of the center. We also seek properties with a diverse tenant mix that includes service retailers, such as banks, florists, video stores, restaurants, apparel and specialty shops. We target dominant shopping centers that generate a steady, repetitive flow of traffic by providing staple goods to the community and offering a high level of convenience with ease of access and abundant parking. |
We plan to focus our new investments in the shopping center sector, but also may selectively pursue commercial development opportunities in markets where we currently operate and where we believe we can leverage our |
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existing infrastructure and relationships to generate attractive risk adjusted returns. In evaluating future investments in properties other than neighborhood and community shopping centers, we seek properties or transactions that have unique characteristics that present a compelling case for investment. Examples might include properties having high entry yields, properties that are outside of our target markets but are being sold as part of a portfolio package, properties that are debt-free, a transaction in which we might issue units in our operating partnership or properties that provide substantial growth potential through redevelopment. |
Retailer Relationships: We seek to partner with key tenants and retailers, such as Lowe’s, Walgreen’s, Old Navy, Bed Bath & Beyond, Staples, Publix, Kohl’s, Target and Wal-Mart, to identify attractive investments in new and existing markets. We seek to maintain strong tenant and retailer relationships in order to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-tenanting space. |
We believe that we will continue to source a significant volume of growth opportunities through the extensive network of tenant, corporate and institutional relationships that we have established (through our Predecessor) over the last four decades. Additionally, we believe our status as a publicly traded umbrella partnership REIT will enhance our ability to acquire properties from tax-motivated sellers through the use of Operating Partnership units as consideration, thereby providing sellers with liquidity and diversification while providing the opportunity for substantial deferral of income taxes that otherwise would be due as a result of a cash sale. |
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Financing Strategy
Business Segments
Competition
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varies depending upon the characteristics of each local market in which we own and manage property. We believe that the principal competitive factors in attracting tenants in our market areas are location, price, the presence of anchor tenants and maintenance of properties.
Government Regulation
Insurance
Offices
Employees
Available Information
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Risk Factors
• | risks related to our operations; |
• | risks related to our organization and structure; and |
• | tax risks. |
RISKS RELATED TO OUR OPERATIONS
We expect to continue to experience rapid growth and may not be able to adapt our management and operational systems to respond to the integration of additional properties without significant disruption or expense.
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Our future developments, acquisitions and investment opportunities may not yield the returns we expect or may result in shareholder dilution.
Our results of operations will be significantly influenced by the economies of the markets in which we operate, and the market for retail space generally.
We had approximately $283 million of consolidated indebtedness outstanding as of December 31, 2004, which may impede our operating performance and reduce our ability to incur additional indebtedness to fund our growth.
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of our annual REIT taxable income or otherwise as is necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes or otherwise avoid paying taxes that can be eliminated through distributions to our shareholders.
• | requiring us to use a substantial portion of our funds from operations to pay interest, which reduces the amount available for distributions; |
• | 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 acquisitions in the future. |
Our financial covenants may restrict our operating and acquisition activities.
Failure by any major tenant with leases in multiple locations to make rental payments to us, because of a deterioration of its financial condition or otherwise, could seriously harm our performance.
We may be unable to collect balances due from any tenants in bankruptcy.
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permitting us to do so from the bankruptcy court. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. 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. 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, and there are restrictions under bankruptcy laws that limit the amount of the claim we can make if a lease is rejected. As a result, it is likely that we will recover substantially less than the full value of any unsecured claims we hold.
We may experience reduced revenue with respect to our Glendale Mall property while we evaluate strategic alternatives with respect to this property.
Our current and future joint venture 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 us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.
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• | we may share decision-making authority with our joint venture partners regarding major decisions affecting 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 transfer to a third party of our interests in the joint venture, which restricts our ability to dispose 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 interests 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 effort 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. |
Adverse market conditions may impede our ability to renew leases or re-let space as leases expire and require us to undertake unbudgeted capital improvements, which could harm our business.
We face significant competition, which may impede our ability to renew leases or re-let space as leases expire, require us to undertake unbudgeted capital improvements, or impede our ability to make future developments or acquisitions or increase the cost of these developments or acquisitions.
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We may not be successful in identifying suitable development projects or acquisitions that meet our criteria, which may impede our growth.
Redevelopment activities may be delayed or otherwise may not perform as expected.
We may not be able to sell properties when appropriate.
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Our performance and value are subject to risks associated with real estate assets and with the real estate industry.
• | local oversupply, increased competition or reduction in demand for space; |
• | inability to collect rent from tenants; |
• | vacancies or our inability to rent space on favorable terms; |
• | inability to finance property development, tenant improvements and acquisitions on favorable terms; |
• | increased operating costs, including insurance premiums, utilities and real estate taxes; |
• | costs of complying with changes in governmental regulations; |
• | the relative illiquidity of real estate investments; |
• | changing demographics; and |
• | changing traffic patterns. |
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investigation and clean up costs incurred by such parties in connection with contamination. 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.
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.
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from related parties if such income would cause us to fail to comply with the REIT gross income requirements. The various ownership restrictions may:
• | discourage a tender offer or other transactions or a change in management or control that might involve a premium price for our shares or otherwise be in the best interests of our shareholders; or |
• | 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 voidab 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. |
Certain provisions of Maryland law could inhibit changes in control.
• | “business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations between us and 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; and |
• | “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) 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. |
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Our management has limited experience operating a REIT or a public company.
Certain officers and trustees may have interests that conflict with the interests of shareholders.
Certain members of our management team have outside business interests that could require time and attention.
We depend on external capital.
Our rights and the rights of our shareholders to take action against our trustees and officers are limited.
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We may have assumed liabilities in connection with our formation transactions.
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 share price could be volatile and could decline, resulting in a substantial or complete loss on our shareholders’ investment.
• | our operating performance and the performance of other similar companies; |
• | actual or anticipated differences in our quarterly operating results; |
• | changes in our revenues or earnings estimates or recommendations by securities analysts; |
• | publication of research reports about us or our industry by securities analysts; |
• | 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 passage of legislation or other regulatory developments that adversely affect us or our industry; |
• | speculation in the press or investment community; |
• | actions by institutional shareholders; |
• | changes in accounting principles; |
• | terrorist acts; and |
• | general market conditions, including factors unrelated to our performance. |
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A substantial number of our Common Shares will be eligible for sale in the near future, which could cause our Common Share price to decline significantly.
TAX RISKS
Failure of our company to qualify as a REIT would have serious adverse consequences to us and our shareholders.
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investment or distribution to our shareholders. 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. If we fail to qualify as a REIT for federal income tax purposes and are able to avail ourselves of one or more of the statutory savings provisions in order to maintain our REIT status, we would nevertheless be required to pay penalty taxes of $50,000 or more for such failure.
We will pay some taxes even if we qualify as a REIT.
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ITEM 2. PROPERTIES
Retail Operating Properties
Operating Retail Properties — Table I
Property(1)(2) | State | MSA | Year Built/ Renovated | Year Added to Operating Portfolio | Acquired, Redeveloped, or Developed | Total GLA(3) | Owned GLA(3) | Percentage of Owned GLA Leased(4) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Int’l Speedway Square(5) | FL | Daytona Beach | 1999 | 1999 | Developed | 233,901 | 220,901 | 100.0 | % | |||||||||||||||||||||||||
King’s Lake Square | FL | Naples | 1986 | 2003 | Acquired | 85,497 | 85,497 | 97.5 | % | |||||||||||||||||||||||||
Wal-Mart Plaza(6) | FL | Gainesville | 1970 | 2004 | Acquired | 177,766 | 177,766 | 99.1 | % | |||||||||||||||||||||||||
Waterford Lakes | FL | Orlando | 1997 | 2004 | Acquired | 77,948 | 77,948 | 100.0 | % | |||||||||||||||||||||||||
Shops at Eagle Creek | FL | Naples | 1998 | 2003 | Acquired | 75,944 | 75,944 | 93.6 | % | |||||||||||||||||||||||||
Circuit City Plaza | FL | Fort Lauderdale | 2004 | 2004 | Developed | 435,906 | 45,906 | 91.5 | % | |||||||||||||||||||||||||
Centre at Panola | GA | Atlanta | 2001 | 2004 | Acquired | 73,079 | 73,079 | 100.0 | % | |||||||||||||||||||||||||
Publix at Acworth | GA | Atlanta | 1996 | 2004 | Acquired | 69,628 | 69,628 | 100.0 | % | |||||||||||||||||||||||||
Silver Glen Crossings | IL | Chicago | 2002 | 2004 | Acquired | 138,274 | 132,725 | 88.4 | % | |||||||||||||||||||||||||
Glendale Mall(5) | IN | Indianapolis | 1958/ 2000 | 1999 | Redeveloped | 724,026 | 579,189 | 86.7 | % | |||||||||||||||||||||||||
Boulevard Crossing | IN | Kokomo | 2004 | 2004 | Developed | 214,696 | 112,696 | 90.3 | % | |||||||||||||||||||||||||
Hamilton Crossing | IN | Indianapolis | 1999 | 2004 | Acquired | 87,374 | 82,374 | 92.7 | % | |||||||||||||||||||||||||
Fishers Station(7) | IN | Indianapolis | 1989 | 2004 | Acquired | 114,457 | 114,457 | 86.2 | % | |||||||||||||||||||||||||
Whitehall Pike | IN | Bloomington | 1999 | 1999 | Developed | 128,997 | 128,997 | 100.0 | % | |||||||||||||||||||||||||
The Centre(8) | IN | Indianapolis | 1986 | 1986 | Developed | 80,689 | 80,689 | 100.0 | % | |||||||||||||||||||||||||
The Corner | IN | Indianapolis | 1984/ 2003 | 1984 | Developed | 42,545 | 42,545 | 100.0 | % | |||||||||||||||||||||||||
Stoney Creek Commons | IN | Indianapolis | 2000 | 2000 | Developed | 154,282 | (*) | (*) | ||||||||||||||||||||||||||
50 S. Morton | IN | Indianapolis | 1999 | 1999 | Developed | 2,000 | 2,000 | 100.0 | % | |||||||||||||||||||||||||
Ridge Plaza | NJ | Oak Ridge | 2002 | 2003 | Acquired | 114,928 | 114,928 | 94.4 | % | |||||||||||||||||||||||||
Eastgate Pavilion | OH | Cincinnati | 1995 | 2004 | Acquired | 231,730 | 231,730 | 100.0 | % | |||||||||||||||||||||||||
82nd & Otty(9) | OR | Portland | 2004 | 2004 | Developed | 154,845 | 9,845 | 100.0 | % | |||||||||||||||||||||||||
Plaza at Cedar Hill | TX | Dallas | 2000 | 2004 | Acquired | 299,783 | 299,783 | 100.0 | % | |||||||||||||||||||||||||
Sunland Towne Centre | TX | El Paso | 1996 | 2004 | Acquired | 312,571 | 307,595 | 98.9 | % | |||||||||||||||||||||||||
Galleria Plaza(10) | TX | Dallas | 2002 | 2004 | Acquired | 44,306 | 44,306 | 100.0 | % | |||||||||||||||||||||||||
Cedar Hill Village | TX | Dallas | 2002 | 2004 | Acquired | 139,092 | 44,262 | 100.0 | % | |||||||||||||||||||||||||
Preston Commons | TX | Dallas | 2002 | 2002 | Developed | 142,564 | 27,564 | 85.6 | % | |||||||||||||||||||||||||
Burlington Coat(11) | TX | San Antonio | 1992/ 2000 | 2000 | Redeveloped | 107,400 | 107,400 | 100.0 | % | |||||||||||||||||||||||||
50th & 12th | WA | Seattle | 2004 | 2004 | Developed | 14,500 | 14,500 | 100.0 | % | |||||||||||||||||||||||||
176th & Meridian | WA | Seattle | 2004 | 2004 | Developed | 14,560 | 14,560 | 100.0 | % | |||||||||||||||||||||||||
Four Corner Square | WA | Seattle | 1985 | 2004 | Acquired | 73,086 | 73,086 | 89.1 | % | |||||||||||||||||||||||||
Total | 4,566,374 | 3,391,900 | 95.3 | % |
Note: An (*) indicates that this property consists of parcels which are ground leased to tenants.
(1) | All properties are wholly-owned, except as indicated. |
(2) | Unless otherwise noted, each property is owned in fee by the Company. |
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(3) | Owned GLA represents gross leaseable area at the property that is owned by us. Total GLA includes Owned GLA, plus square footage attributable to non-owned outlot structures and non-owned anchor space. |
(4) | Percentage of Owned GLA Leased (includes square footage of non-owned structures on outlots that we ground lease to tenants). |
(5) | A third party manages this property. |
(6) | We acquired a 99.9% interest in this property through a joint venture with a third party that manages the property. At the current time, we receive 85% of the cash flow from the property, which percentage may decrease under certain circumstances. |
(7) | This property is divided into two parcels: a grocery store and small shops. We acquired a 25% interest in the small shops on July 23, 2004 in a joint venture and a 100% interest in the grocery store on November 24, 2004. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is distributed to the Company. |
(8) | We own a 60% interest in this property through a joint venture with the third party that manages the property. |
(9) | We do not own the land at this property. We have leased the land pursuant to two ground leases that expire in 2017. We have six five-year options to renew this lease. |
(10) | We do not own the land at this property. We lease the land pursuant to a ground lease that expires in 2027. We have five five-year renewal options. |
(11) | We do not own the land at this property. We have leased the land pursuant to a ground lease that expires in 2012. We have six five-year renewal options and a right of first refusal to purchase the land. |
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Operating Retail Properties — Table II
Property | State | MSA | Encumbrances | Annualized Base Rent Revenue | Annualized Ground Lease Revenue | Annualized Total Retail Revenue | Percentage of Annualized Total Retail Revenue | Base Rent Per Leased Owned GLA(1) | Major Tenants and Non-Owned Anchors(2) | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Int’l Speedway Square | FL | Daytona Beach | $ | 19,923,058 | $2,454,026 | $216,400 | $2,670,426 | 7.6% | $11.11 | SteinMart, Bed Bath, Circuit City | ||||||||||||||||||||||||||||
King’s Lake Square(3) | FL | Naples | 1,019,809 | 0 | 1,019,809 | 2.9% | 12.24 | Publix, Walgreens | ||||||||||||||||||||||||||||||
Wal-Mart Plaza | FL | Gainesville | 869,336 | 0 | 869,336 | 2.5% | 4.94 | Wal-Mart, Books A Million, Save A Lot | ||||||||||||||||||||||||||||||
Waterford Lakes(3) | FL | Orlando | 890,942 | 0 | 890,942 | 2.5% | 11.43 | Winn-Dixie(4) | ||||||||||||||||||||||||||||||
Shops at Eagle Creek(3) | FL | Naples | 771,936 | 0 | 771,936 | 2.2% | 10.86 | Winn-Dixie(4) | ||||||||||||||||||||||||||||||
Circuit City Plaza | FL | Fort Lauderdale | 6,651,191 | 817,204 | 0 | 817,204 | 2.3% | 19.46 | Circuit City, Wal-Mart (non-owned), Lowe’s (non-owned) | |||||||||||||||||||||||||||||
Centre at Panola | GA | Atlanta | 4,576,012 | 824,148 | 0 | 824,148 | 2.3% | 11.28 | Publix | |||||||||||||||||||||||||||||
Publix at Acworth(3) | GA | Atlanta | 799,265 | 0 | 799,265 | 2.3% | 11.48 | Publix, CVS | ||||||||||||||||||||||||||||||
Silver Glen Crossings(3) | IL | Chicago | 1,627,756 | 85,000 | 1,712,756 | 4.9% | 13.88 | Dominick’s, MC Sports | ||||||||||||||||||||||||||||||
Glendale Mall(3) | IN | Indianapolis | 2,792,029 | 140,000 | 2,932,029 | 8.4% | 5.56 | L.S. Ayres, Kerasotes Theatre, Lowe’s (non-owned) | ||||||||||||||||||||||||||||||
Boulevard Crossing | IN | Kokomo | 12,660,000 | 1,271,605 | 75,000 | 1,346,605 | 3.8% | 12.50 | TJ Maxx, Petco, Shoe Carnival, Kohl’s (non-owned) | |||||||||||||||||||||||||||||
Hamilton Crossing(3) | IN | Indianapolis | 1,187,999 | 65,000 | 1,252,999 | 3.6% | 15.56 | Office Depot | ||||||||||||||||||||||||||||||
Fishers Station(5) | IN | Indianapolis | 5,465,766 | 1,156,319 | 0 | 1,156,319 | 3.3% | 11.73 | Marsh Supermarket | |||||||||||||||||||||||||||||
Whitehall Pike | IN | Bloomington | 9,960,453 | 1,014,000 | 0 | 1,014,000 | 2.9% | 7.86 | Lowe’s | |||||||||||||||||||||||||||||
The Centre | IN | Indianapolis | 2,604,354 | 996,562 | 0 | 996,562 | 2.8% | 12.35 | Osco | |||||||||||||||||||||||||||||
The Corner | IN | Indianapolis | 1,926,175 | 477,364 | 0 | 477,364 | 1.4% | 11.22 | Hancock Fabrics | |||||||||||||||||||||||||||||
Stoney Creek Commons(3) | IN | Indianapolis | (*) | 223,000 | 223,000 | 0.6% | (*) | Lowe’s (non-owned) | ||||||||||||||||||||||||||||||
50 S. Morton | IN | Indianapolis | 114,000 | 0 | 114,000 | 0.3% | 57.00 | |||||||||||||||||||||||||||||||
Ridge Plaza | NJ | Oak Ridge | 16,962,625 | 1,732,090 | 0 | 1,732,090 | 4.9% | 15.96 | A&P, CVS | |||||||||||||||||||||||||||||
Eastgate Pavilion | OH | Cincinnati | 2,209,767 | 0 | 2,209,767 | 6.3% | 9.54 | Dick’s Sporting Goods, Value City Furniture, Best Buy | ||||||||||||||||||||||||||||||
82nd & Otty | OR | Portland | 1,586,756 | 273,156 | 122,500 | 395,656 | 1.1% | 27.75 | ||||||||||||||||||||||||||||||
Plaza at Cedar Hill | TX | Dallas | 30,258,758 | 3,501,144 | 0 | 3,501,144 | 10.0% | 11.68 | Hobby Lobby, Linens ‘N Things, Marshall’s | |||||||||||||||||||||||||||||
Sunland Towne Centre | TX | El Paso | 18,725,958 | 2,901,099 | 95,280 | 2,996,379 | 8.5% | 9.53 | Kmart, Circuit City, Roomstore | |||||||||||||||||||||||||||||
Galleria Plaza(3) | TX | Dallas | 1,193,750 | 0 | 1,193,750 | 3.4% | 26.94 | Ultimate Electronics(4) | ||||||||||||||||||||||||||||||
Cedar Hill Village(3) | TX | Dallas | 643,508 | 0 | 643,508 | 1.8% | 14.54 | Ultimate Electronics(4), JC Penney (non-owned) | ||||||||||||||||||||||||||||||
Preston Commons | TX | Dallas | 4,652,591 | 552,652 | 0 | 552,652 | 1.6% | 23.42 | Lowe’s (non-owned) | |||||||||||||||||||||||||||||
Burlington Coat(3) | TX | San Antonio | 483,300 | 0 | 483,300 | 1.4% | 4.50 | Burlington Coat Factory | ||||||||||||||||||||||||||||||
50th & 12th | WA | Seattle | 4,695,018 | 475,000 | 0 | 475,000 | 1.3% | 32.76 | Walgreens | |||||||||||||||||||||||||||||
176th & Meridian | WA | Seattle | 4,265,474 | 433,000 | 0 | 433,000 | 1.2% | 29.74 | Walgreens | |||||||||||||||||||||||||||||
Four Corner Square | WA | Seattle | 2,500,000 | 682,234 | 0 | 682,234 | 1.9% | 10.47 | Johnson Hardware Store | |||||||||||||||||||||||||||||
Total | $ | 147,414,189 | $34,165,000 | $1,022,180 | $35,187,180 | 100.0% | $10.57 |
Note: An (*) indicates that this property consists of parcels which are ground leased to tenants.
(1) | Owned GLA represents gross leaseable area at the property that is owned by us. |
(2) | Represents the three largest tenants that occupy at least 10,000 square feet of GLA at the property, including non-owned anchors. |
(3) | This property is encumbered under the Company’s line of credit. |
(4) | In January 2005, Ultimate Electronics filed a petition for Chapter 11 bankruptcy to reorganize its business operations. In February 2005, Winn-Dixie Stores, Inc. filed a petition for Chapter 11 bankruptcy to reorganize its business operations. Winn-Dixie has not advised us of its intentions with respect to their leases with us; however, on March 24, 2005, Ultimate Electronics filed with the United States Bankruptcy Court its intent to close the two stores for which it has leases with us. This filing indicates that the store closings are scheduled to occur on or about June 30, 2005. |
(5) | This property is divided into two parcels: a grocery store and small shops. We acquired a 25% interest in the small shops on July 23, 2004 and a 100% interest in the grocery store on November 24, 2004. |
25
Commercial Properties
Operating Commercial Properties
Property(1) | MSA | Year Built/ Renovated | Acquired, Redeveloped or Developed | Encumbrances | Owned NRA(2) | Percentage of Owned NRA Leased | Annualized Base Rent | Percentage of Annualized Commercial Base Rent | Base Rent Per Leased Sq. Ft. | Major Tenants(3) | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Indiana | ||||||||||||||||||||||||||||||||||||||||||
Thirty South | Indianapolis | 1905/2002 | Redeveloped | $ | 23,240,515 | 298,346 | 94.8 | % | $ | 4,930,221 | 50.9 | % | $ | 17.43 | Eli Lilly, City Securities, Kite Realty Group | |||||||||||||||||||||||||||
Mid-America Clinical Labs(4) | Indianapolis | 1995/2002 | Redeveloped | 100,000 | 100.0 | % | 1,721,000 | 17.8 | % | 17.21 | Mid-America Clinical Laboratories | |||||||||||||||||||||||||||||||
PEN Products(4)(5) | Indianapolis | 2003 | Developed | 85,875 | 100.0 | % | 813,236 | 8.4 | % | 9.47 | Indiana Department of Administration | |||||||||||||||||||||||||||||||
Spring Mill Medical(6) | Indianapolis | 1998/2002 | Redeveloped | 6,134,543 | 63,431 | 100.0 | % | 1,523,479 | 15.7 | % | 24.02 | University Medical Diagnostic Associates; Indiana University Health Care Associates | ||||||||||||||||||||||||||||||
Union Station Parking Garage(4)(7) | Indianapolis | 1986 | Acquired | N/A | �� | N/A | N/A | Denison Parking | ||||||||||||||||||||||||||||||||||
Indiana State Motor Pool(5) | Indianapolis | 2004 | Developed | 3,819,516 | 115,000 | 100.0 | % | 693,450 | 7.2 | % | 6.03 | Indiana Dept. of Administration | ||||||||||||||||||||||||||||||
Total | $ | 33,194,574 | 662,652 | 97.7 | % | $ | 9,681,386 | 100.0 | % | $ | 14.96 |
(1) | Unless otherwise noted, each property is wholly-owned in fee by the Company. |
(2) | “NRA” means Net Rentable Area. |
(3) | We define major commercial tenants as single tenants that occupy at least 10% of the NRA at this property. |
(4) | This property is encumbered under the Company’s line of credit. |
(5) | We do not own the land at this property. We have leased the land from the State of Indiana pursuant to a ground lease that expires in 2013 and have constructed improvements that we have leased back to the Indiana Department of Administration. Both the ground lease and the building lease have ten-year terms with two ten-year renewal options that require the approval of both parties. The State has the option to purchase the improvements and our interest as tenant under each of the ground leases at the end of the initial ten-year terms or first renewal term based on negotiated purchase prices set forth in the leases. If the building lease is not renewed at the end of the initial term or first renewal term, we may terminate the ground lease and the State must purchase the improvements at the end of the term at a previously negotiated purchase price. |
(6) | We own a 50% interest in this property through a joint venture with one of the tenants of the property. |
(7) | 2004 annualized minimum rent for Union Station Parking Garage is approximately $500,000. |
26
Retail Development Properties
Property | MSA | Type of Property | Opening Date(1) | Encumbrances(4) | Projected Owned GLA/NRA(2) | Projected Total GLA/NRA(3) | Total Estimated Project Cost(4) | Cost Incurred as of 12/31/04(4) | Percentage of Owned GLA/NRA Pre-Leased(5) | Major Tenants and Non-owned Anchors | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Florida | ||||||||||||||||||||||||||||||||||||||||||
Eagle Creek, Phase II(6) | Naples | Retail | Jan. 2005 | $ | 850 | n/a | 165,000 | $ | 9,080 | $ | 8,520 | n/a | ||||||||||||||||||||||||||||||
Indiana | ||||||||||||||||||||||||||||||||||||||||||
Traders Point | Indianapolis | Retail | Oct. 2004 | 32,530 | 285,000 | 366,377 | 43,227 | 35,395 | 73.7 | % | Dick’s Sporting Goods, Marsh Supermarkets, Bed Bath & Beyond, Kerasotes Theatres, Michaels, Old Navy | |||||||||||||||||||||||||||||||
Cool Creek Commons | Indianapolis | Retail | Oct. 2004 | 14,951 | 126,000 | 138,529 | 20,013 | 17,954 | 75.8 | % | SteinMart, Fresh Market | |||||||||||||||||||||||||||||||
Traders Point II | Indianapolis | Retail | Apr. 2005 | 2,000 | 41,000 | 48,600 | 8,288 | 4,379 | 0.0 | % | (see Traders Point) | |||||||||||||||||||||||||||||||
Weston Park, Phase I(6) | Indianapolis | Retail | Nov. 2004 | 4,214 | n/a | 12,200 | 1,963 | 1,734 | n/a | |||||||||||||||||||||||||||||||||
Greyhound Commons(6) | Indianapolis | Retail | Feb. 2005 | — | n/a | 201,325 | 4,397 | 3,199 | n/a | Lowe’s (non-owned) | ||||||||||||||||||||||||||||||||
Red Bank Commons | Evansville | Retail | Feb. 2005 | — | 34,500 | 246,500 | 6,400 | 4,252 | 39.4 | % | Wal-Mart (non-owned); Home Depot (non-owned) | |||||||||||||||||||||||||||||||
Martinsville Shops | Martinsville | Retail | Mar. 2005 | — | 11,000 | 11,000 | 1,197 | 737 | 0.0 | % | Walgreens (non-owned) | |||||||||||||||||||||||||||||||
Geist Pavilion | Indianapolis | Retail | Mar. 2005 | 864 | 62,800 | 62,800 | 7,747 | 3,256 | 25.8 | % | ||||||||||||||||||||||||||||||||
Total | $ | 55,409 | 560,300 | 1,252,331 | $ | 102,312 | $ | 79,426 | 59.9 | % |
(1) | Opening Date is defined as the first date a tenant is open for business or a ground lease or similar payment is made. |
(2) | Projected Owned GLA/NRA represents gross leasable area/net rentable area that is owned by the Company. It excludes square footage attributable to non-owned outlot structures on land that is owned by the Company and ground leased to tenants. |
(3) | Projected Total GLA/NRA includes Projected Owned GLA, plus projected square footage attributable to non-owned outlot structures on land that is owned by the Company, plus non-owned anchor space that is currently existing or under construction. |
(4) | Dollars in thousands. |
(5) | Excludes outlots and parcels owned by the Company and ground leased to tenants. Traders Point has seven such parcels, four of which were pre-leased as of December 31, 2004. |
(6) | All of the land at Eagle Creek Phase II, Weston Park Phase I, and Greyhound Commons is intended to be ground leased to tenants. We have entered into an agreement to enter into a ground lease for the entire Eagle Creek, Phase II property with a big box retailer. The tenant is obligated to pay and is paying a portion of its rent until the ground lease is executed. Weston Park, Phase I consists of three outlots, two of which were ground leased as of December 31, 2004. Greyhound Commons consists of four outlots, two of which were ground leased as of December 31, 2004. |
27
Land Held For Future Development
Option Properties and Rights of First Refusal
• | Erskine Village. A joint venture among Kite South Bend, LLC, Kimco Realty Corporation and Schottenstein Management purchased this 800,000 square foot Scottsdale Mall location in South Bend, Indiana in August 2003 in order to redevelop it. The 58-acre parcel of land is located at the intersection of Miami Street and Ireland Road in South Bend, Indiana. Our Operating Partnership has the right to purchase Kite South Bend, LLC’s 25% interest in this joint venture, subject to approval of the other joint venture partners and the lender. |
• | Tarpon Springs Plaza. Tarpon Springs Plaza is a planned development to be located on a 32.7-acre site in Naples, Florida on the southeast corner of Immokalee Road and Interstate 75. Target has committed to construct a 173,800 square foot Super Target on approximately 18 acres. In addition, the center will contain approximately 95,000 square feet of junior boxes, small shop spaces and three outparcels. Our Operating Partnership has the right to acquire the 100% interest in this property held by an entity owned by Messrs. Al Kite, John Kite, Paul Kite and Thomas McGowan. On March 31, 2005, the Company acquired this property at a price equal to Messrs. Al Kite, John Kite, Paul Kite and Tom McGowan’s net equity in the property, at cost plus the assumption of certain liabilities and the obligation to repay certain indebtedness. The equity portion of the purchase price was paid through the issuance of 214,049 units of the Operating Partnership. |
• | 126th Street & Meridian Medical Complex. The proposed medical complex is located at the northeast corner of 126th Street and Meridian in the heart of Carmel, Indiana’s medical corridor. The approximately 16-acre tract will be divided into two parcels, with each expected to be improved with a 95,000 square foot medical office building. The two parcels will be owned by separate joint venture entities. An entity controlled by Messrs. Al Kite, John Kite, Paul Kite and Thomas McGowan will own 50% of each joint venture entity pursuant to separate option agreements and the remainder will be owned by the tenants of the respective parcels. Our operating partnership has the right to acquire the 50% interest in each joint venture entity, subject to approval of the respective joint venture partners and our lender. The Company has been advised that this project will not be pursued. |
• | the annualized net operating income for the property (based on net operating income over a three-month period which includes the month of exercise) divided by 8.5% multiplied by the contributors’ interest in the property; or |
• | the then fair market value of the property based on the average of two appraisals (or the average of the two closest of three appraisals in certain circumstances) multiplied by the contributors’ interest in the property. |
28
Tenant Diversification
Top 20 Tenants by Annualized Base Rent(1)
Tenant | Type of Property | Number of Locations | Leased GLA | % of Owned GLA/NRA of the Portfolio | Annualized Base Rent | Annualized Base Rent per Sq. Ft. | % of Total Portfolio Annualized Base Rent | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mid-America Clinical Laboratories | Commercial | 1 | 100,000 | 2.3 | % | $ | 1,721,000 | $ | 17.21 | 3.6 | % | |||||||||||||||||||
State of Indiana | Commercial | 3 | 210,393 | 4.9 | % | 1,663,733 | 7.91 | 3.4 | % | |||||||||||||||||||||
Eli Lilly | Commercial | 1 | 99,542 | 2.3 | % | 1,642,443 | 16.50 | 3.4 | % | |||||||||||||||||||||
Marsh Supermarkets | Retail | 2 | 122,000 | 2.9 | % | 1,547,847 | 12.69 | 3.2 | % | |||||||||||||||||||||
Circuit City | Retail | 3 | 98,485 | 2.3 | % | 1,370,993 | 13.92 | 2.8 | % | |||||||||||||||||||||
Ultimate Electronics(2) | Retail | 2 | 63,627 | 1.5 | % | 1,242,732 | 19.53 | 2.6 | % | |||||||||||||||||||||
Dick’s Sporting Goods | Retail | 2 | 126,672 | 3.0 | % | 1,220,000 | 9.63 | 2.5 | % | |||||||||||||||||||||
Walgreen’s | Retail | 3 | 39,070 | 0.9 | % | 1,031,023 | 26.39 | 2.1 | % | |||||||||||||||||||||
Bed Bath & Beyond | Retail | 3 | 85,895 | 2.0 | % | 1,021,921 | 11.90 | 2.1 | % | |||||||||||||||||||||
Lowe’s Home Center | Retail | 1 | 128,997 | 3.0 | % | 1,014,000 | 7.86 | 2.1 | % | |||||||||||||||||||||
Publix | Retail | 3 | 129,357 | 3.0 | % | 989,355 | 7.65 | 2.1 | % | |||||||||||||||||||||
Kmart | Retail | 1 | 110,875 | 2.6 | % | 850,379 | 7.67 | 1.8 | % | |||||||||||||||||||||
UMDA | Commercial | 1 | 32,256 | 0.8 | % | 844,402 | 26.18 | 1.8 | % | |||||||||||||||||||||
Winn-Dixie(2) | Retail | 2 | 103,406 | 2.4 | % | 806,266 | 7.80 | 1.7 | % | |||||||||||||||||||||
A & P | Retail | 1 | 58,732 | 1.4 | % | 763,516 | 13.00 | 1.6 | % | |||||||||||||||||||||
Kerasotes Theatres | Retail | 2 | 43,050 | 1.0 | % | 739,500 | 17.18 | 1.5 | % | |||||||||||||||||||||
City Securities | Commercial | 1 | 34,949 | 0.8 | % | 694,900 | 19.88 | 1.4 | % | |||||||||||||||||||||
Indiana University Healthcare Associates | Commercial | 1 | 31,175 | 0.7 | % | 679,077 | 21.78 | 1.4 | % | |||||||||||||||||||||
Dominick’s | Retail | 1 | 65,636 | 1.5 | % | 669,487 | 10.20 | 1.4 | % | |||||||||||||||||||||
Old Navy | Retail | 3 | 70,620 | 1.7 | % | 587,958 | 8.33 | 1.2 | % | |||||||||||||||||||||
Total | 1,754,737 | 41.0 | % | $ | 21,100,532 | $ | 12.03 | 43.7 | % |
(1) | Information includes operating retail and commercial properties and development property tenants open for business as of December 31, 2004. |
(2) | In January 2005, Ultimate Electronics filed a petition for Chapter 11 bankruptcy to reorganize its business operations. In February 2005, Winn-Dixie Stores, Inc. filed a filed a petition for Chapter 11 bankruptcy to reorganize its business operations. Winn-Dixie has not advised us of its intentions with respect to their leases with us; however, on March 24, 2005, Ultimate Electronics filed with the United States Bankruptcy Court its intent to close the two stores for which it has leases with us. This filing indicates that the store closings are scheduled to occur on or about June 30, 2005. |
29
Geographic Information
Number of Operating Properties | Owned GLA/NRA(1) | Percentage of Owned GLA/NRA | Total Number of Leases | Annualized Base Rent Revenue(2) | % of Annualized Base Rent Revenue | Annualized Base Rent per Leased Square Foot | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Indiana | 15 | 1,805,599 | 44.5 | % | 178 | $ | 18,691,263 | 42.6 | % | $ | 11.12 | |||||||||||||||||||
• Retail — Mall | 1 | 579,189 | 14.3 | % | 48 | 2,792,028 | 6.3 | % | 5.56 | |||||||||||||||||||||
• Retail | 8 | 563,758 | 13.9 | % | 106 | 6,217,849 | 14.2 | % | 11.71 | |||||||||||||||||||||
• Commercial | 6 | 662,652 | 16.3 | % | 24 | 9,681,386 | 22.1 | % | 14.96 | |||||||||||||||||||||
Texas | 6 | 830,910 | 20.5 | % | 59 | 9,275,453 | 21.2 | % | 11.26 | |||||||||||||||||||||
Florida | 6 | 683,962 | 16.9 | % | 88 | 6,823,254 | 15.6 | % | 10.16 | |||||||||||||||||||||
Illinois | 1 | 132,725 | 3.3 | % | 19 | 1,627,756 | 3.7 | % | 13.88 | |||||||||||||||||||||
New Jersey | 1 | 114,928 | 2.8 | % | 17 | 1,732,090 | 4.0 | % | 15.96 | |||||||||||||||||||||
Georgia | 2 | 142,707 | 3.5 | % | 29 | 1,623,413 | 3.7 | % | 11.38 | |||||||||||||||||||||
Washington | 3 | 102,146 | 2.5 | % | 24 | 1,590,234 | 3.6 | % | 16.88 | |||||||||||||||||||||
Ohio | 1 | 231,730 | 5.7 | % | 6 | 2,209,767 | 5.0 | % | 9.54 | |||||||||||||||||||||
Oregon | 1 | 9,845 | 0.3 | % | 7 | 273,156 | 0.6 | % | 27.75 | |||||||||||||||||||||
Total | 36 | 4,054,552 | 100.0 | % | 427 | $ | 43,846,386 | 100.0 | % | $ | 11.30 |
(1) | Owned GLA/NRA represents gross leaseable area or net leaseable area owned by the Company. It does not include 12 parcels or outlots owned by the Company and ground leased to tenants, which contain non-owned structures totaling approximately 64,447 square feet. It also excludes the square footage of Union Station Parking Garage. |
(2) | Annualized Base Rent Revenue excludes $1,022,180 in annualized ground lease revenue attributable to parcels and outlots owned by the Company and ground leased to tenants. It also excludes approximately $500,000 in 2004 annualized minimum rent attributable to Union Station Parking Garage as well as the leases on properties classified as development properties. |
30
Lease Expirations
Lease Expiration Table — Operating Portfolio
Number of Expiring Leases(1) | Expiring GLA/NRA(2) | % of Total GLA/NRA Expiring | Expiring Annualized Base Rent(3) | % of Total Annualized Base Rent | Expiring Annualized Base Rent per Sq. Ft. | Expiring Ground Lease Revenue | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 69 | 218,156 | 5.3 | % | $ | 2,409,956 | 5.2 | % | $ | 11.05 | $ | 0 | ||||||||||||||||||
2006 | 62 | 184,944 | 4.5 | % | 2,254,720 | 4.8 | % | 12.19 | 0 | |||||||||||||||||||||
2007 | 60 | 191,311 | 4.7 | % | 2,412,280 | 5.2 | % | 12.61 | 0 | |||||||||||||||||||||
2008 | 37 | 294,849 | 7.2 | % | 2,372,677 | 5.1 | % | 8.05 | 0 | |||||||||||||||||||||
2009 | 42 | 168,841 | 4.1 | % | 2,350,442 | 5.0 | % | 13.92 | 0 | |||||||||||||||||||||
2010 | 24 | 301,946 | 7.4 | % | 2,912,161 | 6.2 | % | 9.64 | 0 | |||||||||||||||||||||
2011 | 25 | 513,157 | 12.5 | % | 4,389,374 | 9.4 | % | 8.55 | 0 | |||||||||||||||||||||
2012 | 27 | 213,443 | 5.2 | % | 2,966,309 | 6.4 | % | 13.90 | 85,000 | |||||||||||||||||||||
2013 | 13 | 162,888 | 4.0 | % | 1,950,509 | 4.2 | % | 11.97 | 240,000 | |||||||||||||||||||||
2014 | 24 | 309,032 | 7.5 | % | 3,284,367 | 7.1 | % | 10.63 | 411,400 | |||||||||||||||||||||
2015 & Beyond | 61 | 1,537,926 | 37.6 | % | 19,308,708 | 41.4 | % | 12.56 | 891,280 | |||||||||||||||||||||
Total | 444 | 4,096,493 | 100.0 | % | $ | 46,611,503 | 100.0 | % | $ | 11.38 | $ | 1,627,680 |
(1) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(2) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(3) | Excludes ground lease revenue. |
Lease Expiration Table — Retail Anchor Tenants(1)
Number of Expiring Leases(2) | Expiring GLA/NRA(3) | % of Total GLA/NRA Expiring | Expiring Annualized Base Rent(4) | % of Total Annualized Base Rent | Expiring Annualized Base Rent per Sq. Ft. | Expiring Ground Lease Revenue | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 3 | 65,117 | 1.6 | % | $ | 487,491 | 1.0 | % | $ | 7.49 | $ | 0 | ||||||||||||||||||
2006 | 3 | 60,034 | 1.5 | % | 388,266 | 0.8 | % | 6.47 | 0 | |||||||||||||||||||||
2007 | 5 | 76,926 | 1.9 | % | 609,076 | 1.3 | % | 7.92 | 0 | |||||||||||||||||||||
2008 | 2 | 210,561 | 5.1 | % | 792,783 | 1.7 | % | 3.77 | 0 | |||||||||||||||||||||
2009 | 3 | 65,656 | 1.6 | % | 598,240 | 1.3 | % | 9.11 | 0 | |||||||||||||||||||||
2010 | 9 | 248,324 | 6.1 | % | 2,140,944 | 4.6 | % | 8.62 | 0 | |||||||||||||||||||||
2011 | 5 | 360,651 | 8.8 | % | 1,635,905 | 3.5 | % | 4.54 | 0 | |||||||||||||||||||||
2012 | �� | 3 | 94,890 | 2.3 | % | 716,757 | 1.5 | % | 7.55 | 0 | ||||||||||||||||||||
2013 | 1 | 11,960 | 0.3 | % | 161,460 | 0.3 | % | 13.50 | 0 | |||||||||||||||||||||
2014 | 6 | 125,602 | 3.1 | % | 1,187,243 | 2.6 | % | 9.45 | 0 | |||||||||||||||||||||
2015 & Beyond | 31 | 1,303,950 | 31.8 | % | 14,390,767 | 30.9 | % | 11.04 | 240,000 | |||||||||||||||||||||
Total | 71 | 2,623,671 | 64.1 | % | $ | 23,108,932 | 49.5 | % | $ | 8.81 | $ | 240,000 |
(1) | Retail anchor tenants are defined as tenants of operating retail properties which occupy 10,000 square feet or more. |
(2) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(3) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(4) | Excludes ground lease revenue. |
31
Lease Expiration Table — Retail Shops
Number of Expiring Leases(1) | Expiring GLA/NRA(2) | % of Total GLA/NRA Expiring | Expiring Base Rent(3) | % of Total Base Rent | Expiring Base Rent per Sq. Ft. | Expiring Ground Lease Revenue | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 66 | 153,039 | 3.7 | % | $ | 1,922,464 | 4.1 | % | $ | 12.56 | $ | 0 | ||||||||||||||||||
2006 | 57 | 117,807 | 2.9 | % | 1,752,806 | 3.8 | % | 14.88 | 0 | |||||||||||||||||||||
2007 | 53 | 110,430 | 2.7 | % | 1,727,711 | 3.7 | % | 15.65 | 0 | |||||||||||||||||||||
2008 | 34 | 76,323 | 1.9 | % | 1,419,956 | 3.0 | % | 18.60 | 0 | |||||||||||||||||||||
2009 | 39 | 103,185 | 2.5 | % | 1,752,202 | 3.8 | % | 16.98 | 0 | |||||||||||||||||||||
2010 | 14 | 44,744 | 1.1 | % | 591,437 | 1.3 | % | 13.22 | 0 | |||||||||||||||||||||
2011 | 17 | 52,964 | 1.3 | % | 1,111,026 | 2.4 | % | 20.98 | 0 | |||||||||||||||||||||
2012 | 21 | 81,501 | 2.0 | % | 1,658,844 | 3.6 | % | 20.35 | 85,000 | |||||||||||||||||||||
2013 | 8 | 22,574 | 0.6 | % | 443,530 | 1.0 | % | 19.65 | 0 | |||||||||||||||||||||
2014 | 12 | 33,481 | 0.8 | % | 708,774 | 1.5 | % | 21.17 | 411,400 | |||||||||||||||||||||
2015 & Beyond | 11 | 29,574 | 0.7 | % | 732,432 | 1.6 | % | 24.77 | 891,280 | |||||||||||||||||||||
Total | 332 | 825,622 | 20.2 | % | $ | 13,821,182 | 29.8 | % | $ | 16.74 | $ | 1,387,680 |
(1) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(2) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(3) | Excludes ground lease revenue. |
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
32
PART II
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High | Low | Closing | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August 11, 2004 to September 30, 2004 | $ | 13.56 | $ | 12.50 | $ | 13.15 | ||||||||
Quarter Ended December 31, 2004 | $ | 15.61 | $ | 12.70 | $ | 15.28 |
33
at least 90% of our taxable income. 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, 2004, approximately 99.05% of our distributions to shareholders constituted a return of capital and approximately 0.95% constituted taxable ordinary income dividends.
Measurement Period | % of Funds From Operations | |||||
---|---|---|---|---|---|---|
For the period of two fiscal quarters ending March 31, 2005 | 105 | % | ||||
For the period of three fiscal quarters ending June 30, 2005 | 100 | % | ||||
For the period of four fiscal quarters ending September 30, 2005 | 100 | % | ||||
For the period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending thereafter | 95 | % |
34
ITEM 6. SELECTED FINANCIAL DATA
The Company | The Predecessor | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, | |||||||||||||||||||||||||||
Period August 16, 2004 through December 31, 2004 | Period January 1, 2004 through August 15, 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||||
($ in thousands, except share and per share data) | |||||||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Rental related revenue | $ | 20,284 | $ | 14,083 | $ | 12,756 | $ | 6,152 | $ | 2,179 | $ | 1,324 | |||||||||||||||
Construction, service fees and other | 9,364 | 5,368 | 15,002 | 22,445 | 8,585 | 1,180 | |||||||||||||||||||||
Total revenue | 29,648 | 19,451 | 27,758 | 28,597 | 10,764 | 2,504 | |||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Property operating | 3,735 | 4,131 | 3,772 | 2,134 | 190 | 266 | |||||||||||||||||||||
Real estate taxes | 1,836 | 1,596 | 1,207 | 623 | 57 | — | |||||||||||||||||||||
General and administrative | 1,781 | 1,477 | 2,745 | 1,905 | 1,081 | 247 | |||||||||||||||||||||
Cost of construction and services | 8,787 | 4,405 | 11,537 | 19,509 | 6,437 | 74 | |||||||||||||||||||||
Depreciation and amortization | 7,865 | 3,584 | 2,893 | 1,306 | 360 | 287 | |||||||||||||||||||||
Interest expense | 4,460 | 4,829 | 4,207 | 2,285 | 1,249 | 759 | |||||||||||||||||||||
Loan prepayment penalties and expenses | 1,671 | — | — | — | — | — | |||||||||||||||||||||
Total expenses | 30,135 | 20,022 | 26,361 | 27,762 | 9,374 | 1,633 | |||||||||||||||||||||
Minority interest (income) loss | (126 | ) | 215 | (233 | ) | 85 | (74 | ) | (7 | ) | |||||||||||||||||
Equity in earnings (loss) of unconsolidated entities and other, net | 134 | 164 | 273 | 1,318 | 195 | (419 | ) | ||||||||||||||||||||
Income (loss) of the operating partnership | (479 | ) | (192 | ) | 1,437 | 2,238 | 1,511 | 445 | |||||||||||||||||||
Limited partners’ interests in operating partnership | 147 | — | — | — | — | — | |||||||||||||||||||||
Net income (loss) | $ | (332 | ) | $ | (192 | ) | $ | 1,437 | $ | 2,238 | $ | 1,511 | $ | 445 | |||||||||||||
Net loss per share (basic and diluted) | $ | (0.02 | ) | ||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 18,727,977 | ||||||||||||||||||||||||||
Distributions paid per Common Share | $ | 0.09375 |
The Company | The Predecessor | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, | ||||||||||||||||||||||||||||
Year Ended December 31, 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||||||
Investment properties, net | $ | 525,242 | $ | 149,346 | $ | 54,022 | $ | 36,673 | $ | 10,537 | ||||||||||||||||||
Cash and cash equivalents | 10,103 | 2,189 | 3,493 | 1,200 | 254 | |||||||||||||||||||||||
Total assets | 569,755 | 171,336 | 71,388 | 49,091 | 18,501 | |||||||||||||||||||||||
Mortgage and other indebtedness | 283,479 | 141,498 | 58,711 | 40,540 | 14,174 | |||||||||||||||||||||||
Total liabilities | 343,133 | 165,778 | 70,954 | 49,626 | 20,525 | |||||||||||||||||||||||
Limited partners’ interests in the operating partnership | 68,423 | — | — | — | — | |||||||||||||||||||||||
Shareholders’ equity (deficit) | 158,199 | 5,558 | 434 | (535 | ) | (2,024 | ) | |||||||||||||||||||||
Total liabilities and shareholders’ equity (deficit) | 569,755 | 171,336 | 71,388 | 49,091 | 18,501 |
35
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Overview
Summary of Critical Accounting Policies
Purchase Price Allocation
36
Investment Properties
Revenue Recognition
37
Recent Accounting Pronouncements
Results of Operations
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
Acquisition and Development Activities
Property Name | MSA | Acquisition Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Silver Glen Crossings | Chicago, IL | April 1 | ||||||||
Cedar Hill Village | Dallas, TX | June 28 | ||||||||
Galleria Plaza | Dallas, TX | June 29 | ||||||||
Wal-Mart Plaza(1) | Gainesville, FL | July 1 | ||||||||
Eagle Creek Pad 2 | Naples, FL | July 7 | ||||||||
Fishers Station(2) | Indianapolis, IN | July 23 | ||||||||
Hamilton Crossing | Indianapolis, IN | August 19 |
38
Property Name | MSA | Acquisition Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Waterford Lakes | Orlando, FL | August 20 | ||||||||
Publix at Acworth | Atlanta, GA | August 20 | ||||||||
Plaza at Cedar Hill | Dallas, TX | August 31 | ||||||||
Sunland Towne Centre | El Paso, TX | September 16 | ||||||||
Centre at Panola | Atlanta, GA | September 30 | ||||||||
Marsh Supermarket | Indianapolis, IN | November 24 | ||||||||
Eastgate Pavilion | Cincinnati, OH | December 1 | ||||||||
Four Corner Square | Seattle, WA | December 20 |
(1) | This property is owned through a joint venture with a third party. The company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances. |
(2) | This property is owned through a joint venture with a third party. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is allocated to the Company. |
Property Name | MSA | Operational Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Boulevard Crossing | Kokomo, IN | February | ||||||||
Circuit City Plaza | Ft. Lauderdale, FL | March | ||||||||
50th & 12th | Seattle, WA | August | ||||||||
176th & Meridian | Seattle, WA | August | ||||||||
Traders Point(1) | Indianapolis, IN | October | ||||||||
Cool Creek Commons(2) | Indianapolis, IN | October | ||||||||
82nd & Otty | Portland, OR | November | ||||||||
Indiana State Motor Pool | Indianapolis, IN | November |
(1) | Approximately 74% of the space at this property was leased at December 31, 2004. |
(2) | Approximately 76% of the space at this property was leased at December 31, 2004. |
Comparison of Operating Results for the Years Ended December 31, 2004 and 2003
39
40
acquired. These interests recognized a loss of $0.2 million in 2004 prior to the date of our IPO. These interests are consolidated from the date of their acquisition.
Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002
Acquisition and Development Activities
Comparison of Operating Results for the Years Ended December 31, 2003 and 2002
41
on joint venture properties that became operational in 2002 and a decline of $6.1 million in costs of construction for third parties. Construction activity in 2003 was focused primarily on consolidated properties.
Liquidity and Capital Resources
42
• | our amount of leverage; |
• | a minimum interest coverage ratio; |
• | our minimum tangible net worth; |
• | a minimum fixed charge coverage ratio; |
• | the collateral pool properties generating sufficient net operating income to maintain a certain fixed charge ratio; and |
• | the collateral pool properties maintaining a minimum aggregate occupancy rate. |
Measurement Period | % of Funds From Operations | |||||
---|---|---|---|---|---|---|
For the period of two fiscal quarters ending March 31, 2005 | 105 | % | ||||
For the period of three fiscal quarters ending June 30, 2005 | 100 | % | ||||
For the period of four fiscal quarters ending September 30, 2005 | 100 | % | ||||
For the period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending thereafter | 95 | % |
43
by other tenants in the same shopping centers under the terms of some leases, the impact of which could also affect our short-term liquidity.
Cash Flows
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
44
in 2003 to $212.3 million in 2004. These proceeds were primarily used to finance acquisition and development activity. We made net distributions (including minority interest partners) in 2004 of $8.2 million compared to net contributions of $4.7 million in 2003.
Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002
Off-Balance Sheet Arrangements
Contractual Obligations
Construction Contracts | Operating Leases | Consolidated Long Term Debt | Our Share of Debt of Unconsolidated Joint Venture Entities | Employment Agreements(1) | Total | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | $ | 8,414,664 | $ | 856,800 | $ | 21,139,541 | $ | 168,965 | $ | 1,440,000 | $ | 32,019,970 | ||||||||||||||
2006 | — | 856,800 | 70,998,588 | 190,836 | 1,440,000 | 73,486,224 | ||||||||||||||||||||
2007 | — | 906,300 | 58,610,344 | 204,250 | 1,440,000 | 61,160,894 | ||||||||||||||||||||
2008 | — | 918,300 | 6,769,384 | 217,491 | — | 7,905,175 | ||||||||||||||||||||
2009 | — | 920,800 | 29,751,433 | 2,223,456 | — | 32,895,689 | ||||||||||||||||||||
Thereafter | — | 14,129,170 | 92,071,326 | 5,733,899 | — | 111,934,395 | ||||||||||||||||||||
Unamortized Debt Premium | — | — | 4,138,747 | — | — | 4,138,747 | ||||||||||||||||||||
Total | $ | 8,414,664 | $ | 18,588,170 | $ | 283,479,363 | $ | 8,738,897 | $ | 4,320,000 | $ | 323,541,094 |
(1)In connection with the Company’s IPO and related formation transactions, it entered into employment agreements with seven members of senior management. Under the agreements, each employee receives a stipulated annual salary through December 31, 2007. Each agreement has an automatic one-year renewal unless the Company or the employee elects not to renew the agreement.
We intend to satisfy the approximately $32 million of contractual obligations that are due in 2005 primarily with cash generated from operations, draws on our line of credit and, where appropriate, refinancing of indebtedness coming due.
45
Outstanding Indebtedness
Property | Balance Outstanding | Interest Rate | Maturity | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fixed Rate Mortgages: | ||||||||||||||||||
Preston Commons | $ | 4,652,591 | 5.90 | % | 3/11/2013 | |||||||||||||
Whitehall Pike | 9,960,453 | 6.71 | % | 7/5/2018 | ||||||||||||||
Thirty South | 23,240,515 | 6.09 | % | 1/11/2014 | ||||||||||||||
Boulevard Crossing | 12,660,000 | 5.11 | % | 12/11/2009 | ||||||||||||||
Four Corner Square | 2,500,000 | 4.00 | % | 1/3/2005 | ||||||||||||||
Ridge Plaza Shopping Center | 16,962,625 | 5.15 | % | 10/11/2009 | ||||||||||||||
Plaza at Cedar Hill | 27,264,160 | 7.38 | % | 2/1/2012 | ||||||||||||||
Sunland Towne Center | 17,719,271 | 8.85 | % | 1/11/2006 | ||||||||||||||
Centre at Panola Phase I | 4,438,551 | 6.78 | % | 1/1/2022 | ||||||||||||||
50th & 12th | 4,695,018 | 5.67 | % | 11/11/2014 | ||||||||||||||
The Corner | 1,926,175 | 7.65 | % | 7/1/2011 | ||||||||||||||
International Speedway Square | 19,923,058 | 7.17 | % | 3/11/2011 | ||||||||||||||
176th & Meridian | 4,265,474 | 5.67 | % | 11/11/2014 | ||||||||||||||
Traders Point | 2,625,000 | 14.00 | % | 9/30/2006 | ||||||||||||||
152,832,891 | ||||||||||||||||||
Net unamortized premium on assumed debt of acquired properties | 4,138,747 | |||||||||||||||||
Subtotal Fixed Rate Mortgages | 156,971,638 |
46
Variable Rate Mortgages: Mortgage Notes — Variable | Interest Rate at 12/31/04 | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fishers Station | 5,465,766 | LIBOR + 2.75% | 9/1/2008 | 5.15 | % | |||||||||||||
Cool Creek Commons | 1,135,000 | Prime + 2.00% | 4/30/2006 | 7.15 | % | |||||||||||||
Geist Pavillion | 863,991 | Prime + 0.25% | 4/5/2005 | 5.40 | % | |||||||||||||
Eagle Creek Phase II | 850,000 | LIBOR + 2.50% | 4/21/2005 | 4.90 | % | |||||||||||||
Traders Point II | 2,000,000 | Prime + 1.00% | 3/4/2005 | 6.15 | % | |||||||||||||
Traders Point III | 471,000 | Prime | 10/5/2006 | 5.15 | % | |||||||||||||
Subtotal Mortgage Notes | 10,785,757 | |||||||||||||||||
Mortgage Notes — Construction | ||||||||||||||||||
82nd & Otty | 1,586,756 | Prime | 9/12/2005 | 5.15 | % | |||||||||||||
Weston Park Phase I | 4,213,845 | LIBOR + 2.15% | 7/9/2005 | 4.55 | % | |||||||||||||
Traders Point | 29,434,000 | LIBOR + 2.35% | 10/5/2006 | 4.75 | % | |||||||||||||
Indiana State Motor Pool | 3,819,516 | LIBOR + 2.25% | 4/19/2006 | 4.65 | % | |||||||||||||
Cool Creek Commons | 13,816,660 | LIBOR + 2.25% | 4/30/2006 | 4.65 | % | |||||||||||||
Circuit City Plaza | 6,651,191 | LIBOR + 1.85% | 6/30/2005 | 4.25 | % | |||||||||||||
Subtotal Construction Notes | 59,521,968 | |||||||||||||||||
Line of Credit | 56,200,000 | LIBOR + 1.35% | 8/31/2007 | 3.75 | % | |||||||||||||
Subtotal Variable Rate Debt | 126,507,725 | |||||||||||||||||
Total Indebtedness | $ | 283,479,363 |
Funds From Operations
47
The Company | The Predecessor | The Predecessor | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August 16, 2004 through December 31, 2004 | Period January 1, 2004 through August 15, 2004 | Combined Year Ended December 31, 2004 | Year Ended December 31, 2003 | |||||||||||||||
Funds From Operations: | ||||||||||||||||||
Net income (loss) | $ | (332,322 | ) | $ | (192,380 | ) | $ | (524,702 | ) | $ | 1,436,968 | |||||||
Add: Limited Partners’ interests | (146,968 | ) | — | (146,968 | ) | — | ||||||||||||
Add: depreciation and amortization of consolidated entities | 7,816,339 | 3,563,176 | 11,379,515 | 2,887,199 | ||||||||||||||
Add: depreciation and amortization of unconsolidated entities | 103,518 | 493,571 | 597,089 | 1,174,979 | ||||||||||||||
Add (deduct): minority interest* | (24,106 | ) | (214,887 | ) | (238,993 | ) | 232,819 | |||||||||||
Add: joint venture partners’ interests in net income (loss) of unconsolidated entities* | — | 288,675 | 288,675 | 458,835 | ||||||||||||||
Add: joint venture partners’ interests in depreciation and amortization of unconsolidated entities* | — | 519,277 | 519,277 | 1,672,003 | ||||||||||||||
Funds From Operations of the Portfolio** | 7,416,461 | 4,457,432 | 11,873,893 | 7,862,803 | ||||||||||||||
Plus: minority interest deficit | — | 214,887 | 214,887 | (232,819 | ) | |||||||||||||
Less: minority interest share of depreciation and amortization | — | (1,014,248 | ) | (1,014,248 | ) | (754,301 | ) | |||||||||||
Less: joint venture partners’ interests in net (income) loss of unconsolidated entities | — | (288,675 | ) | (288,675 | ) | (458,835 | ) | |||||||||||
Less: joint venture partners’ interests in depreciation and amortization of unconsolidated entities | — | (519,277 | ) | (519,277 | ) | (1,672,003 | ) | |||||||||||
Less: Limited Partners’ interests | (2,276,853 | ) | — | (2,276,853 | ) | — | ||||||||||||
Funds From Operations allocable to the Company | $ | 5,139,608 | $ | 2,850,119 | $ | 7,989,727 | $ | 4,744,845 |
__________________
* | Amounts for the period prior to August 16, 2004 represent the minority and joint venture partners’ interests acquired in connection with the Company’s IPO and related formation transactions. |
** | Includes bridge loan exit fee of $1,671,449 related to the Company’s IPO and related formation transactions, as well as $0.6 million of additional expense related to the IPO. |
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Related to Fixed Rate Debt
48
value of our fixed rate debt of approximately $7.1 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed rate debt of approximately $7.6 million. A 100 basis point increase or decrease in interest rates on our variable rate debt as of December 31, 2004 would increase or decrease annual cash flows by approximately $1.3 million.
Inflation
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Changes in Internal Control Over Financial Reporting
ITEM 9B. OTHER INFORMATION
49
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
50
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) | Documents filed as part of this report: |
(1) | Financial Statements: |
Consolidated and combined financial statements for the Company and its Predecessor listed on the index immediately preceeding the financial statements at the end of this report. |
(2) | Financial Statement Schedule: |
Financial statement schedule for the Company and its Predecessor listed on the index immediately preceeding 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: |
(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. |
51
SIGNATURES
KITE REALTY GROUP TRUST (Registrant) | ||||||||||
March 28, 2005 (Date) | /s/ JOHN A. KITE John A. Kite Chief Executive Officer and President (Principal Executive Officer) | |||||||||
March 28, 2005 (Date) | /s/ DANIEL R. SINK Daniel R. Sink Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Signature | Title | Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ ALVIN E. KITE, JR. (Alvin E. Kite, Jr.) | Chairman of the Board and Trustee | March 28, 2005 | ||||||||
/s/ JOHN A. KITE (John A. Kite) | Chief Executive Officer, President and Trustee (Principal Executive Officer) | March 28, 2005 | ||||||||
/s/ WILLIAM E. BINDLEY (William E. Bindley) | Trustee | March 28, 2005 | ||||||||
/s/ RICHARD A. COSIER (Richard A. Cosier) | Trustee | March 27, 2005 | ||||||||
/s/ EUGENE GOLUB (Eugene Golub) | Trustee | March 28, 2005 | ||||||||
/s/ GERALD L. MOSS (Gerald L. Moss) | Trustee | March 28, 2005 | ||||||||
/s/ MICHAEL L. SMITH (Michael L. Smith) | Trustee | March 27, 2005 | ||||||||
/s/ DANIEL R. SINK (Daniel R. Sink) | Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | March 28, 2005 |
52
Kite Realty Group Trust
Index to Financial Statements
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Consolidated and Combined Financial Statements: | ||||||||||
Report of Independent Registered Public Accounting Firm | F-2 | |||||||||
Balance Sheets for the Company as of December 31, 2004 and for the Predecessor as of December 31, 2003 | F-3 | |||||||||
Statements of Operations for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 | F-4 | |||||||||
Statements of Owners’ Equity for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 | F-5 | |||||||||
Statements of Cash Flows for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 | F-6 | |||||||||
Notes to Consolidated and Combined Financial Statements | F-8 | |||||||||
Financial Statement Schedule: | ||||||||||
Schedule III — Real Estate and Accumulated Depreciation | F-31 | |||||||||
Notes to Schedule III | F-33 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of Kite Realty Group Trust:
Indianapolis, Indiana
March 24, 2005
F-2
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE PREDECESSOR)
CONSOLIDATED AND COMBINED BALANCE SHEETS
The Company | The Predecessor | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
December 31, 2004 | December 31, 2003 | |||||||||
Assets: | ||||||||||
Investment properties, at cost: | ||||||||||
Land | $ | 115,806,345 | $ | 19,319,563 | ||||||
Land held for development | 10,454,246 | 7,137,095 | ||||||||
Buildings and improvements | 365,043,023 | 77,076,703 | ||||||||
Furniture, equipment and other | 5,587,052 | 1,596,820 | ||||||||
Construction in progress | 52,485,321 | 48,681,767 | ||||||||
549,375,987 | 153,811,948 | |||||||||
Less: accumulated depreciation | (24,133,716 | ) | (4,465,775 | ) | ||||||
525,242,271 | 149,346,173 | |||||||||
Cash and cash equivalents | 10,103,176 | 2,189,478 | ||||||||
Tenant receivables, including accrued straight-line rent | 5,763,831 | 1,520,487 | ||||||||
Other receivables | 7,635,276 | 5,139,118 | ||||||||
Due from affiliates | — | 3,905,605 | ||||||||
Investments in unconsolidated entities, at equity | 155,495 | 2,136,158 | ||||||||
Escrow deposits | 4,497,337 | 595,459 | ||||||||
Deferred costs, net | 15,264,271 | 6,053,515 | ||||||||
Prepaid and other assets | 1,093,176 | 449,713 | ||||||||
Total Assets | $ | 569,754,833 | $ | 171,335,706 | ||||||
Liabilities and Owners’ Equity: | ||||||||||
Mortgage and other indebtedness | $ | 283,479,363 | $ | 141,498,289 | ||||||
Cash distributions and losses in excess of net investment in unconsolidated entities, at equity | 837,083 | 2,864,690 | ||||||||
Accounts payable and accrued expenses | 23,919,949 | 9,541,494 | ||||||||
Deferred revenue and other liabilities | 34,836,430 | 9,266,250 | ||||||||
Due to affiliates | — | 1,469,560 | ||||||||
Minority interest | 59,735 | 1,137,914 | ||||||||
Total liabilities | 343,132,560 | 165,778,197 | ||||||||
Commitments and Contingencies | ||||||||||
Limited Partners’ interests in operating partnership | 68,423,213 | — | ||||||||
Owners’ Equity: | ||||||||||
Common Shares, $.01 par value, 200,000,000 shares authorized, 19,148,267 shares issued and outstanding | 191,483 | — | ||||||||
Additional paid in capital and other | 166,861,507 | — | ||||||||
Unearned compensation | (806,879 | ) | — | |||||||
Accumulated deficit | (8,047,051 | ) | — | |||||||
Owners’ equity | — | 5,557,509 | ||||||||
Total owners’ equity | 158,199,060 | 5,557,509 | ||||||||
Total Liabilities and Owners’ Equity | $ | 569,754,833 | $ | 171,335,706 |
See accompanying notes.
F-3
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
The Company | The Predecessor | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Year Ended December 31, | |||||||||||||||||||
Period August 16, 2004 through December 31, 2004 | Period January 1, 2004 through August 15, 2004 | 2003 | 2002 | ||||||||||||||||
Revenue: | |||||||||||||||||||
Minimum rent | $ | 15,558,827 | $ | 11,046,605 | $ | 10,043,847 | $ | 4,031,279 | |||||||||||
Tenant reimbursements | 2,637,230 | 1,662,576 | 1,199,885 | 90,618 | |||||||||||||||
Other property related revenue | 2,087,256 | 1,373,503 | 1,511,914 | 2,030,336 | |||||||||||||||
Construction and service fee revenue | 9,333,868 | 5,257,201 | 14,851,925 | 22,299,937 | |||||||||||||||
Other income | 30,446 | 110,819 | 149,930 | 144,432 | |||||||||||||||
Total revenue | 29,647,627 | 19,450,704 | 27,757,501 | 28,596,602 | |||||||||||||||
Expenses: | |||||||||||||||||||
Property operating | 3,735,195 | 4,130,747 | 3,772,147 | 2,134,523 | |||||||||||||||
Real estate taxes | 1,835,837 | 1,595,578 | 1,206,773 | 622,539 | |||||||||||||||
Cost of construction and services | 8,786,999 | 4,405,160 | 11,536,538 | 19,509,066 | |||||||||||||||
General, administrative, and other | 1,780,579 | 1,477,112 | 2,745,657 | 1,904,800 | |||||||||||||||
Depreciation and amortization | 7,864,679 | 3,584,290 | 2,892,506 | 1,305,596 | |||||||||||||||
Total expenses | 24,003,289 | 15,192,887 | 22,153,621 | 25,476,524 | |||||||||||||||
Operating income | 5,644,338 | 4,257,817 | 5,603,880 | 3,120,078 | |||||||||||||||
Interest expense | 4,460,476 | 4,828,888 | 4,207,213 | 2,284,637 | |||||||||||||||
Loan prepayment penalties and expenses | 1,671,449 | — | — | — | |||||||||||||||
Loss on disposal of fixed assets | — | — | — | 250,382 | |||||||||||||||
Minority interest (income) loss | (125,800 | ) | 214,887 | (232,819 | ) | 84,969 | |||||||||||||
Equity in earnings of unconsolidated entities | 134,097 | 163,804 | 273,118 | 1,568,154 | |||||||||||||||
Limited partners’ interest in operating partnership | 146,968 | — | — | — | |||||||||||||||
Net income (loss) | $ | (332,322 | ) | $ | (192,380 | ) | $ | 1,436,966 | $ | 2,238,182 | |||||||||
Basic and diluted loss per share | $ | (0.02 | ) | ||||||||||||||||
Basic and diluted weighted average Common Shares outstanding | 18,727,977 |
See accompanying notes.
F-4
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN OWNERS’ EQUITY
The Company | The Predecessor | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Shares | ||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit and Dividends | Unearned Compensation | Owners’ Deficit | Total | ||||||||||||||||||||||||
Kite Property Group: | ||||||||||||||||||||||||||||||
Owners’ Deficit, December 31, 2001 | $ | (534,762 | ) | $ | (534,762 | ) | ||||||||||||||||||||||||
Contributions | 219,799 | 219,799 | ||||||||||||||||||||||||||||
Distributions | (1,488,570 | ) | (1,488,570 | ) | ||||||||||||||||||||||||||
Net income | 2,238,182 | 2,238,182 | ||||||||||||||||||||||||||||
Owners’ Equity, December 31, 2002 | 434,649 | 434,649 | ||||||||||||||||||||||||||||
Contributions | 11,731,177 | 11,731,177 | ||||||||||||||||||||||||||||
Distributions | (8,045,283 | ) | (8,045,283 | ) | ||||||||||||||||||||||||||
Net income | 1,436,966 | 1,436,966 | ||||||||||||||||||||||||||||
Owners’ Equity, December 31, 2003 | 5,557,509 | 5,557,509 | ||||||||||||||||||||||||||||
Contributions | 2,332,873 | 2,332,873 | ||||||||||||||||||||||||||||
Distributions | (8,992,939 | ) | (8,992,939 | ) | ||||||||||||||||||||||||||
Net loss | (192,380 | ) | (192,380 | ) | ||||||||||||||||||||||||||
Owners’ Deficit, August 15, 2004 | (1,294,937 | ) | (1,294,937 | ) | ||||||||||||||||||||||||||
Kite Realty Group Trust: | ||||||||||||||||||||||||||||||
Reclassify Predecessor owners’ deficit | (1,294,937 | ) | 1,294,937 | — | ||||||||||||||||||||||||||
Gross proceeds from sale of Common Shares | 18,300,000 | 183,000 | 237,717,000 | 237,900,000 | ||||||||||||||||||||||||||
Issuance of shares to Principals in exchange for contributed interests | 833,267 | 8,333 | (8,333 | ) | — | |||||||||||||||||||||||||
Offering costs | (22,427,988 | ) | (22,427,988 | ) | ||||||||||||||||||||||||||
Stock option activity | 15,000 | 150 | 1,066,800 | (806,879 | ) | 260,071 | ||||||||||||||||||||||||
Distributions declared | (7,714,729 | ) | (7,714,729 | ) | ||||||||||||||||||||||||||
Net loss | (332,322 | ) | (332,322 | ) | ||||||||||||||||||||||||||
Adjustment to Limited Partners’ interests | (48,191,035 | ) | (48,191,035 | ) | ||||||||||||||||||||||||||
Balances, December 31, 2004 | 19,148,267 | $ | 191,483 | $ | 166,861,507 | $ | (8,047,051 | ) | $ | (806,879 | ) | $ | — | $ | 158,199,060 |
See accompanying notes.
F-5
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
The Company | The Predecessor | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Years Ended December 31, | |||||||||||||||||||
Period August 16, 2004 through December 31, 2004 | Period January 1, 2004 through August 15, 2004 | 2003 | 2002 | ||||||||||||||||
Cash flow from operating activities: | |||||||||||||||||||
Net income (loss) | $ | (332,322 | ) | $ | (192,380 | ) | $ | 1,436,966 | $ | 2,238,182 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||
Minority interest | 125,800 | (214,887 | ) | 232,819 | (84,969 | ) | |||||||||||||
Equity in earnings of unconsolidated entities | (134,097 | ) | (163,804 | ) | (273,118 | ) | (1,568,154 | ) | |||||||||||
Limited partners’ interest in Operating Partnership | (146,968 | ) | — | — | — | ||||||||||||||
Straight-line rent | (373,944 | ) | (311,899 | ) | (324,383 | ) | (243,030 | ) | |||||||||||
Depreciation and amortization | 8,345,829 | 3,987,945 | 3,017,579 | 1,327,925 | |||||||||||||||
Provision for credit losses | (214,053 | ) | 658,052 | 30,000 | — | ||||||||||||||
Compensation expense for equity awards | 65,071 | — | — | — | |||||||||||||||
Amortization of in-place lease liabilities | (1,093,620 | ) | (452,564 | ) | (260,899 | ) | — | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Tenant receivables | (1,641,334 | ) | (1,046,616 | ) | (786,814 | ) | (16,049 | ) | |||||||||||
Deferred costs and other assets | 2,748,311 | (908,837 | ) | (4,599,074 | ) | (1,260,117 | ) | ||||||||||||
Accounts payable and accrued expenses | 3,102,015 | 737,697 | 5,976,650 | 1,257,260 | |||||||||||||||
Net cash provided by operating activities | 10,450,688 | 2,092,707 | 4,449,726 | 1,651,048 | |||||||||||||||
Cash flow from investing activities: | |||||||||||||||||||
Acquisitions of properties | (108,287,834 | ) | (46,770,356 | ) | (45,616,460 | ) | — | ||||||||||||
Acquisitions of joint venture and outside minority interests | (12,451,155 | ) | — | — | — | ||||||||||||||
Capital and construction expenditures, net | (32,242,552 | ) | (34,999,943 | ) | (48,550,943 | ) | (18,378,543 | ) | |||||||||||
Change in construction payables | 2,824,764 | 3,170,506 | 532,379 | 1,847,423 | |||||||||||||||
Distributions received from unconsolidated entities | 80,710 | 517,233 | 1,375,500 | 551,500 | |||||||||||||||
Contributions to unconsolidated entities | — | — | (242,506 | ) | — | ||||||||||||||
Consolidation of Glendale Mall’s Cash as of March 31, 2004 | — | 108,822 | — | — | |||||||||||||||
Consolidation of acquisitions, acquired joint venture and outside minority interests’ cash | 665,604 | 82,778 | — | — | |||||||||||||||
Net cash used in investing activities | (149,410,463 | ) | (77,890,960 | ) | (92,502,030 | ) | (15,979,620 | ) |
(Continued)
See accompanying notes.
F-6
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
The Company | The Predecessor | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Years Ended December 31, | |||||||||||||||||||
Period August 16, 2004 through December 31, 2004 | Period January 1, 2004 through August 15, 2004 | 2003 | 2002 | ||||||||||||||||
Cash flow from financing activities: | |||||||||||||||||||
Offering proceeds, net of issuance costs | 215,472,012 | — | — | — | |||||||||||||||
Loan proceeds | 123,162,602 | 89,185,669 | 112,708,871 | 23,446,740 | |||||||||||||||
Loan transaction costs | (5,373,864 | ) | (655,263 | ) | (709,043 | ) | — | ||||||||||||
Loan payments | (176,113,029 | ) | (10,105,596 | ) | (29,921,150 | ) | (5,275,980 | ) | |||||||||||
Payments and advances to/from Principals | (9,000,000 | ) | 6,902,818 | — | — | ||||||||||||||
Distributions paid | (2,571,576 | ) | — | — | — | ||||||||||||||
Contributions (including minority interest share) | — | 2,681,036 | 14,579,103 | 249,748 | |||||||||||||||
Distributions (including minority interest share) | (143,864 | ) | (10,769,219 | ) | (9,908,843 | ) | (1,799,474 | ) | |||||||||||
Net cash provided by financing activities | 145,432,281 | 77,239,445 | 86,748,938 | 16,621,034 | |||||||||||||||
Increase (decrease) in cash | 6,472,506 | 1,441,192 | (1,303,366 | ) | 2,292,462 | ||||||||||||||
Cash, beginning of period | 3,630,670 | 2,189,478 | 3,492,844 | 1,200,382 | |||||||||||||||
Cash, end of period | $ | 10,103,176 | $ | 3,630,670 | $ | 2,189,478 | $ | 3,492,844 |
See accompanying notes.
F-7
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation
Organization
Basis of Presentation
F-8
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation (Continued)
adjustment is reflected in the Company’s shareholders’ equity. For the period from August 16, 2004 through December 31, 2004, the limited partners’ weighted average interest in the Operating Partnership was 30.7% and as of December 31, 2004, their interest was 30.2%.
Investment in Portfolio Properties
Operating Properties — Consolidated
Shops at Eagle Creek (80%) | ||||||
King’s Lake Square (80%) | ||||||
Ridge Plaza Shopping Center (80%) | ||||||
PEN Products Warehouse (80%) | ||||||
Mid-America Clinical Labs (80%) | ||||||
Thirty South (80%) | ||||||
Preston Commons (80%) | �� | |||||
Whitehall Pike (89%) | ||||||
Stoney Creek Commons (80%) | ||||||
Union Station Parking Garage (80%) | ||||||
F-9
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation (Continued)
Development Properties — Consolidated
Indiana State Motor Pool (80%) | ||||||
Circuit City Plaza (80%) | ||||||
50th & 12th (64%) | ||||||
82nd & Otty (80%) | ||||||
Boulevard Crossing (80%) | ||||||
Geist Pavilion (80%) | ||||||
Cool Creek Commons (80%) | ||||||
Traders Point (80%) | ||||||
Weston Park (80%) | ||||||
Greyhound Commons (80%) | ||||||
Eagle Creek Phase II (80%) |
Operating Properties — Equity Method
The Centre (30%) | ||||||
Spring Mill Medical (40%) | ||||||
Glendale Mall (43%) | ||||||
50 S. Morton (44%) | ||||||
The Corner (50%) | ||||||
International Speedway Square (35%) | ||||||
Burlington Coat (27%) |
Development Properties — Equity Method
Martinsville Shops (58%) | ||||||
Red Bank Commons (44%) |
Glendale Mall was consolidated as of March 31, 2004 pursuant to FIN No. 46 — see Note 15.
Note 2. Summary of Significant Accounting Policies
Use of Estimates
Purchase Accounting
F-10
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies (Continued)
as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of tangible and intangible assets acquired.
• | the fair value of the building on an as-if-vacant basis and to land determined either by real estate tax assessments, independent appraisals or other relevant data. |
• | above-market and below-market in-place lease values for acquired properties 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. The capitalized above-market and below-market lease values are amortized as a reduction of or addition to rental income over the remaining non-cancelable terms of the respective leases. Should a tenant terminate its lease, the unamortized portion of the lease intangibles would be charged or credited to income. |
• | the value of leases acquired. We utilize independent 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. |
Investment Properties
F-11
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies (Continued)
in circumstances indicate that the carrying value of investment properties may not be recoverable. Impairment losses for investment properties are recorded when the undiscounted cash flows estimated to be generated by the investment properties during the expected hold period are less than the carrying amounts of those assets. Impairment losses are measured as the difference between the carrying value and the fair value of the asset.
Escrow Deposits
Cash and Cash Equivalents
Fair Value of Financial Instruments
Revenue Recognition
F-12
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies (Continued)
Tenant Receivables and Allowance for Doubtful Accounts
2004 | 2003 | 2002 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance, beginning of year | $ | 30,000 | $ | — | $ | — | ||||||||
Consolidation of joint venture interests | 1,210,942 | — | — | |||||||||||
Provision for credit losses | 443,999 | 30,000 | — | |||||||||||
Accounts written off | (1,172,967 | ) | — | — | ||||||||||
Balance, end of year | $ | 511,974 | $ | 30,000 | $ | — |
Concentration of Credit Risk
Earnings Per Share
F-13
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies (Continued)
Income Taxes
Reclassifications
Note 3. Deferred Costs
F-14
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 3. Deferred Costs (Continued)
The Company | The Predecessor | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 | 2003 | |||||||||
Deferred financing costs | $ | 4,958,167 | $ | 1,155,629 | ||||||
Deferred leasing costs and other | 13,249,752 | 5,835,120 | ||||||||
18,207,919 | 6,990,749 | |||||||||
Less — accumulated amortization | (2,943,648 | ) | (937,234 | ) | ||||||
$ | 15,264,271 | $ | 6,053,515 |
2005 | $ | 3,172,845 | ||||
2006 | 2,409,641 | |||||
2007 | 2,094,410 | |||||
2008 | 1,695,813 | |||||
2009 | 1,518,270 |
The Company | The Predecessor | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the year ended December 31, | |||||||||||||||||||
For the period from August 16, 2004 through December 31, 2004 | For the period from January 1, 2004 through August 15, 2004 | 2003 | 2002 | ||||||||||||||||
Amortization of deferred financing costs | $ | 481,150 | $ | 403,655 | $ | 125,073 | $ | 22,329 | |||||||||||
Amortization of deferred leasing costs | 1,522,110 | 577,335 | 567,655 | 192,853 |
Note 4. Deferred Revenue and Other Liabilities
F-15
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 4. Deferred Revenue and Other Liabilities (Continued)
The Company | The Predecessor | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 | 2003 | |||||||||
Unamortized in-place lease liabilities | $ | 23,185,751 | $ | 4,017,978 | ||||||
Construction billings in excess of cost | 6,586,506 | 3,681,357 | ||||||||
Construction retainages payable | 4,083,741 | 1,458,412 | ||||||||
Tenant rents received in advance | 921,390 | 47,299 | ||||||||
Deferred income taxes | 59,042 | 14,000 | ||||||||
Other | — | 47,204 | ||||||||
$ | 34,836,430 | $ | 9,266,250 |
2005 | $ | 3,328,326 | ||||
2006 | 2,935,860 | |||||
2007 | 2,627,501 | |||||
2008 | 2,021,707 | |||||
2009 | 1,780,468 |
Note 5. Investments in Unconsolidated Entities
F-16
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 5. Investments in Unconsolidated Entities (Continued)
The Company | The Predecessor | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 | 2003 | |||||||||
Assets: | ||||||||||
Investment properties, at cost | $ | 14,707,045 | $ | 75,636,988 | ||||||
Cash and cash equivalents | 601,423 | 3,769,066 | ||||||||
Tenant receivables, net | 254,883 | 2,259,996 | ||||||||
Deferred costs and other assets | 779,356 | 2,819,285 | ||||||||
Total Assets | $ | 16,342,707 | $ | 84,485,335 | ||||||
Liabilities and Partners’ Equity | ||||||||||
Mortgage and other indebtedness | $ | 16,609,675 | $ | 70,717,291 | ||||||
Accounts payable and accrued expenses | 458,289 | 3,865,203 | ||||||||
Deferred revenue and other liabilities | — | 256,820 | ||||||||
Due to affiliates | — | 83,886 | ||||||||
Total liabilities | 17,067,964 | 74,923,200 | ||||||||
Partners’ equity (deficit) | (725,257 | ) | 9,562,135 | |||||||
Total Liabilities and Partners’ Equity | $ | 16,342,707 | $ | 84,485,335 | ||||||
Company (Predecessor) share of total assets | $ | 8,518,002 | $ | 29,874,772 | ||||||
Company (Predecessor) share of Partners’ equity (deficit) | $ | (681,588 | ) | $ | (728,532 | ) | ||||
Company (Predecessor) share of mortgage and other indebtedness | $ | 8,738,897 | $ | 28,846,580 |
Total | Company Share | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
2005 | $ | 305,051 | $ | 168,965 | ||||||
2006 | 343,082 | 190,836 | ||||||||
2007 | 367,122 | 204,250 | ||||||||
2008 | 390,619 | 217,491 | ||||||||
2009 | 3,736,961 | 2,223,456 | ||||||||
Thereafter | 11,466,840 | 5,733,899 | ||||||||
Total | $ | 16,609,675 | $ | 8,738,897 |
F-17
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 5. Investments in Unconsolidated Entities (Continued)
The Company | The Predecessor | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August 16, 2004 Through December 31, 2004 | Period January 1, 2004 Through August 15, 2004 | 2003 | 2002 | ||||||||||||||||
Revenue: | |||||||||||||||||||
Minimum rent | $ | 1,013,283 | $ | 4,782,846 | $ | 9,594,584 | $ | 8,529,423 | |||||||||||
Tenant reimbursements | 257,064 | 1,030,909 | 2,025,221 | 2,382,710 | |||||||||||||||
Other property related revenue | (7,257 | ) | 149,909 | 899,148 | 4,123,366 | ||||||||||||||
Total revenue | 1,263,090 | 5,963,664 | 12,518,953 | 15,035,499 | |||||||||||||||
Expenses: | |||||||||||||||||||
Property operating | 377,556 | 1,597,348 | 3,849,982 | 3,400,189 | |||||||||||||||
Real estate taxes | 79,258 | 470,470 | 1,087,605 | 1,081,005 | |||||||||||||||
Depreciation and amortization | 198,407 | 1,171,243 | 4,283,981 | 2,546,833 | |||||||||||||||
Total expenses | 655,221 | 3,239,061 | 9,221,568 | 7,028,027 | |||||||||||||||
Operating income | 607,869 | 2,724,603 | 3,297,385 | 8,007,472 | |||||||||||||||
Interest expense | 436,173 | 2,244,113 | 4,107,454 | 3,766,454 | |||||||||||||||
Gain (loss) on sale of assets | — | — | 1,610,000 | (44,392 | ) | ||||||||||||||
Net income | 171,696 | 480,490 | 799,931 | 4,196,626 | |||||||||||||||
Third-party investors’ share of net income | 37,599 | 316,686 | 526,813 | 2,628,472 | |||||||||||||||
Company (Predecessor) share of net income | $ | 134,097 | $ | 163,804 | $ | 273,118 | $ | 1,568,154 |
Note 6. Property Acquisitions and Pro Forma Information
Property Name | Location | Acquisition Date | Acquisition Cost (Millions) | Financing Method | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Silver Glen Crossings | South Elgin, IL | April 1 | $23.4 | Debt(8) | ||||||||||||||
Cedar Hill Village | Cedar Hill, TX | June 28 | 6.8 | Debt(8) | ||||||||||||||
Galleria Plaza | Dallas, TX | June 29 | 6.2 | Debt(8) | ||||||||||||||
Wal-Mart Plaza(1) | Gainesville, FL | July 1 | 8.5 | Debt(8) | ||||||||||||||
Eagle Creek Pad 2 | Naples, FL | July 7 | 1.1 | Debt(8) | ||||||||||||||
Fishers Station(2) | Fishers, IN | July 23 | 2.1(3) | Debt(8) | ||||||||||||||
Hamilton Crossing | Carmel, IN | August 19 | 15.5 | IPO Proceeds | ||||||||||||||
Waterford Lakes | Orlando, FL | August 20 | 9.1 | IPO Proceeds | ||||||||||||||
Publix at Acworth | Acworth, GA | August 20 | 9.2 | IPO Proceeds | ||||||||||||||
Plaza at Cedar Hill | Cedar Hill, TX | August 31 | 38.6(4) | IPO Proceeds | ||||||||||||||
Sunland Towne Centre | El Paso, TX | September 16 | 32.1(5) | Debt | ||||||||||||||
Centre at Panola | Lithonia, GA | September 30 | 9.4(6) | Debt |
F-18
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information (Continued)
Property Name | Location | Acquisition Date | Acquisition Cost (Millions) | Financing Method | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Marsh Supermarket(7) | Fishers, IN | November 24 | 5.0 | Debt | ||||||||||||||
Eastgate Pavilion | Cincinnati, OH | December 1 | 27.6 | Debt | ||||||||||||||
Four Corner Square | Seattle, WA | December 20 | 10.5 | Debt |
________________
(1) | This property is owned through a joint venture with a third party. The Company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances. |
(2) | This property is owned through a joint venture with a third party. The Company is the primary beneficiary and, therefore, this property is consolidated in the accompanying statement of operations. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is distributed to the Company. |
(3) | Inclusive of debt assumed of $1.4 million. |
(4) | Inclusive of debt assumed of $27.4 million. |
(5) | Inclusive of debt assumed of $17.8 million. |
(6) | Inclusive of debt assumed of $4.5 million. |
(7) | Part of the Fishers Station property. |
(8) | This acquisition was initially financed with debt, which was repaid with proceeds from the Company’s IPO. |
Assets: | ||||||
Investment properties, at cost | $ | 228,937,093 | ||||
Cash and cash equivalents | 82,778 | |||||
Accounts receivable | 23,188 | |||||
Other assets | 6,502,758 | |||||
Total Assets | $ | 235,545,817 | ||||
Liabilities: | ||||||
Loans payable | $ | 57,695,064 | ||||
Deferred revenue | 19,303,602 | |||||
Other Liabilities | 6,339,888 | |||||
Total Liabilities | $ | 83,338,554 |
F-19
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information (Continued)
Assets: | ||||||
Investment properties, at cost | $ | 55,217,774 | ||||
Cash and cash equivalents | 665,604 | |||||
Accounts receivable | 416,545 | |||||
Other assets | 1,134,337 | |||||
Total Assets | $ | 57,434,260 | ||||
Liabilities: | ||||||
Loans payable | $ | 24,172,783 | ||||
Deferred revenue | 2,178,310 | |||||
Other Liabilities | 1,328,857 | |||||
Total Liabilities | $ | 27,679,950 |
Property Name | Location | Acquisition Date | Acquisition Cost (Millions) | Financing Method | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ridge Plaza Shopping Center | Oak Ridge, NJ | March 13 | $19.7 | Debt | ||||||||||||||
Kings Lake Square | Naples, FL | June 10 | 11.4 | Debt | ||||||||||||||
Shops at Eagle Creek | Naples, FL | July 8 | 14.5 | Debt |
F-20
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information (Continued)
Year ended December 31 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2004 | 2003 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||
Pro forma revenues | $ | 70,732,218 | $ | 65,667,182 | ||||||||||
Pro forma net income(1) | $ | 4,286,558 | $ | 4,831,767 | ||||||||||
Pro forma net income per share — basic and diluted(1) | $ | 0.22 | $ | 0.25 | ||||||||||
Pro forma weighted average number of shares outstanding: | ||||||||||||||
— basic | 19,148,267 | 19,148,267 | ||||||||||||
— diluted | 19,277,703 | 19,277,703 |
(1) | Pro Forma net income for year ended December 31, 2004 excludes our share of direct costs of approximately $1.5 million incurred in connection with the IPO and related formation transactions. |
Note 7. Mortgage Loans and Line of Credit
Principal Balance at December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Description | 2004 | 2003 | |||||||||
Lines of credit | |||||||||||
Maximum borrowing level of $150 million available through August 30, 2007; interest at the LIBOR + 1.35% to 1.50% (3.75% to 3.90% at December 31, 2004) | $ | 56,200,000 | $ | — | |||||||
Maximum borrowing level of $4 million available through December 16, 2005; interest at the greater of Prime +0.50% or 4.50% | — | 2,218,020 | |||||||||
Construction Notes Payable — Variable Rate | |||||||||||
Generally due in monthly installments of principal and interest and mature at various dates through 2006; interest rates at LIBOR+1.85%-2.35%, ranging from 4.25% to 5.15% | 59,521,968 | 36,711,972 | |||||||||
Mortgage Notes Payable — Fixed Rate | |||||||||||
Generally due in monthly installments of principal and interest and mature at various dates through 2022; interest rates ranging from 4.00% to 14.00% | 152,832,891 | 49,882,309 | |||||||||
Mortgage Notes Payable — Variable Rate | |||||||||||
Generally due in monthly installments of principal and interest and mature at various dates through 2008; interest rates at Prime to Prime+ 2.00% and LIBOR +2.50% to 2.75%, ranging from 4.90% to 7.15% | 10,785,757 | 52,685,988 | |||||||||
Net premium on acquired indebtedness | 4,138,747 | — | |||||||||
Total Mortgage and Other Indebtedness | $ | 283,479,363 | $ | 141,498,289 |
F-21
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 7. Mortgage Loans and Line of Credit (Continued)
Line of Credit
• | the Company’s amount of leverage; |
• | the collateral pool properties generating sufficient net operating income to maintain a certain fixed charge ratio; and |
• | the collateral pool properties maintaining a minimum aggregate occupancy rate. |
F-22
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 7. Mortgage Loans and Line of Credit (Continued)
Measurement Period | % of Funds From Operations | |||||
---|---|---|---|---|---|---|
For the period of two fiscal quarters ending March 31, 2005 | 105 | % | ||||
For the period of three fiscal quarters ending June 30, 2005 | 100 | % | ||||
For the period of four fiscal quarters ending September 30, 2005 | 100 | % | ||||
For the period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending thereafter | 95 | % |
2005 | $ | 21,139,541 | ||||
2006 | 70,998,588 | |||||
2007 | 58,610,344 | |||||
2008 | 6,769,384 | |||||
2009 | 29,751,433 | |||||
Thereafter | 92,071,326 | |||||
279,340,616 | ||||||
Unamortized premiums | 4,138,747 | |||||
Total | $ | 283,479,363 |
IPO and Related Formation Transactions
Note 8. Tenant Leases
F-23
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 8. Tenant Leases (Continued)
and may require tenants to pay contingent rentals to the extent their sales exceed a defined threshold. The weighted average initial term of the lease agreements is approximately 16 years. Future minimum rentals to be received under noncancellable operating leases for each of the next five years and thereafter, excluding tenant reimbursements of operating expenses, as of December 31, 2004, are as follows:
2005 | $ | 46,172,855 | ||||
2006 | 44,539,007 | |||||
2007 | 42,458,857 | |||||
2008 | 40,115,018 | |||||
2009 | 38,732,253 | |||||
Thereafter | 290,604,911 | |||||
Total | $ | 502,622,901 |
2005 | $ | 856,800 | ||||
2006 | 856,800 | |||||
2007 | 906,300 | |||||
2008 | 918,300 | |||||
2009 | 920,800 | |||||
Thereafter | 14,129,170 | |||||
Total | $ | 18,588,170 |
Note 9. Shareholders’ Equity and Limited Partner Interests
Common Shares
F-24
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 9. Shareholders’ Equity and Limited Partner Interests (Continued)
Dividend Yield | 5.77 | % | ||||
Expected life of option | 5 years | |||||
Risk-free interest rate | 3.0 | % | ||||
Expected stock price volatility | 15.0 | % |
Limited Partner Interests
Note 10. Segment Information
Year Ended December 31, 2004 | Real Estate Operation and Development | Construction and Advisory Services | Subtotal | Intersegment Eliminations | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues | $ | 34,900,078 | $ | 68,327,960 | $ | 103,228,038 | $ | (54,129,707 | ) | $ | 49,098,331 | |||||||||||
Operating expenses, cost of construction and services, general, administrative and other | 12,301,909 | 68,538,731 | 80,840,640 | (53,093,433 | ) | 27,747,207 | ||||||||||||||||
Depreciation and amortization | 11,395,277 | 53,692 | 11,448,969 | — | 11,448,969 | |||||||||||||||||
Operating income (loss) | 11,202,892 | (264,463 | ) | 10,938,429 | (1,036,274 | ) | 9,902,155 | |||||||||||||||
Interest expense | 9,228,281 | 61,083 | 9,289,364 | — | 9,289,364 | |||||||||||||||||
Loan prepayment penalty and expenses | 1,671,449 | — | 1,671,449 | — | 1,671,449 | |||||||||||||||||
Minority interest | 89,087 | — | 89,087 | — | 89,087 |
F-25
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 10. Segment Information (Continued)
Year Ended December 31, 2004 | Real Estate Operation and Development | Construction and Advisory Services | Subtotal | Intersegment Eliminations | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity in earnings of unconsolidated entities | 297,901 | — | 297,901 | — | 297,901 | |||||||||||||||||
Limited partners’ interests in Operating Partnership | 146,968 | — | 146,968 | — | 146,968 | |||||||||||||||||
Net income (loss) | $ | 837,118 | $ | (325,546 | ) | $ | 511,572 | $ | (1,036,274 | ) | $ | (524,702 | ) | |||||||||
Total assets | $ | 563,317,630 | $ | 17,447,341 | $ | 580,764,971 | $ | (11,010,138 | ) | $ | 569,754,833 |
Year Ended December 31, 2003 | Real Estate Operation and Development | Construction and Advisory Services | Subtotal | Intersegment Eliminations | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues | $ | 12,756,126 | $ | 30,563,597 | $ | 43,319,723 | $ | (15,562,222 | ) | $ | 27,757,501 | |||||||||||
Operating expenses, cost of construction and services, general, administrative and other | 4,895,690 | 29,417,647 | 34,313,337 | (15,052,222 | ) | 19,261,115 | ||||||||||||||||
Depreciation and amortization | 2,888,077 | 4,429 | 2,892,506 | — | 2,892,506 | |||||||||||||||||
Operating income (loss) | 4,972,359 | 1,141,521 | 6,113,880 | (510,000 | ) | 5,603,880 | ||||||||||||||||
Interest expense | 4,144,645 | 62,568 | 4,207,213 | 4,207,213 | ||||||||||||||||||
Minority interest | (232,819 | ) | — | (232,819 | ) | — | (232,819 | ) | ||||||||||||||
Equity in loss of unconsolidated entities | 273,118 | — | 273,118 | — | 273,118 | |||||||||||||||||
Net income (loss) | $ | 868,013 | $ | 1,078,953 | $ | 1,946,966 | $ | (510,000 | ) | $ | 1,436,966 | |||||||||||
Total assets | $ | 160,279,464 | $ | 13,029,371 | $ | 173,308,835 | $ | (1,973,129 | ) | $ | 171,335,706 |
Year Ended December 31, 2002 | Real Estate Operation and Development | Construction and Advisory Services | Subtotal | Intersegment Eliminations | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues | $ | 6,152,233 | $ 26,214,727 | $ 32,366,960 | $ (3,770,358) | $ 28,596,602 | ||||||||||||||||
Operating expenses, cost of construction and services, general, administrative and other | 3,204,949 | 24,695,337 | 27,900,286 | (3,729,358) | 24,170,928 | |||||||||||||||||
Depreciation and amortization | 1,303,164 | 2,432 | 1,305,596 | — | 1,305,596 | |||||||||||||||||
Operating income (loss) | 1,644,120 | 1,516,958 | 3,161,078 | (41,000) | 3,120,078 | |||||||||||||||||
Interest expense | 2,067,248 | 217,389 | 2,284,637 | — | 2,284,637 | |||||||||||||||||
Loss on disposal of fixed assets | — | 250,382 | 250,382 | — | 250,382 | |||||||||||||||||
Minority interest | 84,969 | — | 84,969 | — | 84,969 | |||||||||||||||||
Equity in loss of unconsolidated entities | 1,568,154 | — | 1,568,154 | — | 1,568,154 | |||||||||||||||||
Net income (loss) | $ | 1,229,995 | $ 1,049,187 | $ 2,279,182 | $ (41,000) | $ 2,238,182 | ||||||||||||||||
Total assets | $ | 63,635,298 | $ 9,259,648 | $ 72,894,946 | $ (1,506,520) | $ 71,388,426 |
F-26
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 11. Quarterly Financial Data (Unaudited) (Continued)
The Predecessor | The Company | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended March 31, 2004 | Quarter Ended June 30, 2004 | Period July 1, 2004 through August 15, 2004 | Period August 16, 2004 through September 30, 2004 | Quarter Ended December 31, 2004 | ||||||||||||||||||||
Total revenue | $ | 6,779,327 | $ | 7,851,871 | $ | 4,819,507 | $ | 7,123,917 | $ | 22,523,709 | ||||||||||||||
Operating income | 1,693,858 | 1,771,183 | 792,777 | 1,263,169 | 4,381,168 | |||||||||||||||||||
Net income (loss) | 331,076 | (381,462 | ) | (141,994 | ) | (1,153,797 | ) | 821,475 | ||||||||||||||||
Basic and diluted income (loss) per share | N/A | N/A | N/A | $ | (0.06 | ) | $ | 0.04 | ||||||||||||||||
Weighted average Common Shares outstanding — basic | N/A | N/A | N/A | 17,800,441 | 19,148,267 | |||||||||||||||||||
— diluted | N/A | N/A | N/A | 17,800,441 | 19,277,703 |
The Predecessor | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended March 31, 2003 | Quarter Ended June 30, 2003 | Quarter Ended September 30, 2003 | Quarter Ended December 31, 2003 | ||||||||||||||||
Total revenue | $ | 4,229,290 | $ | 6,870,157 | $ | 7,372,289 | $ | 9,285,765 | |||||||||||
Operating income | 1,145,526 | 653,884 | 1,551,558 | 2,252,912 | |||||||||||||||
Net income (loss) | 149,946 | (552,854 | ) | 1,529,766 | 310,108 | ||||||||||||||
Basic and diluted income (loss) per share | N/A | N/A | N/A | N/A | |||||||||||||||
Weighted average Common Shares outstanding — basic | N/A | N/A | N/A | N/A | |||||||||||||||
— diluted | N/A | N/A | N/A | N/A |
Note 12. Commitments and Contingencies
F-27
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 13. Employee 401(k) Plan
Note 14. Transactions With Related Parties
Note 15. Adoption of FASB Interpretation No. 46R
F-28
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 16. Subsequent Events
• | Plaza Volente, a 156,308 square foot shopping center in Austin, Texas for an estimated cash purchase price of $36.1 million. |
• | Indian River Square, a 144,134 square foot shopping center in Vero Beach, Florida for an estimated cash purchase price of $16.4 million. |
• | Fountain Oaks a 160,598 square foot shopping center in Atlanta, Georgia for an estimated cash purchase price of $26.0 million inclusive of $13.7 million of assumed indebtedness. |
F-29
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes to Consolidated and Combined Financial Statements
December 31, 2004
Note 16. Subsequent Events (Continued)
F-30
KITE REALTY GROUP TRUST
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost | Cost Capitalized Subsequent to Acquisition/Development | Gross Carry Amount Close of Period | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Property Name | Encumbrances | Land | Building & Improvements | Land | Building & Improvements | Land | Building & Improvements | Total | Accumulated Depreciation | Year Built/ Renovated | Year Acquired | |||||||||||||||||||||||||||||||||||
Shopping Centers | ||||||||||||||||||||||||||||||||||||||||||||||
50th & 12th | $ | 4,695,018 | $ | 2,988,158 | $ | 2,791,140 | $ | – | $ | – | $ | 2,988,158 | $ | 2,791,140 | $ | 5,779,298 | $ | 32,543 | 2004 | NA | ||||||||||||||||||||||||||
176th & Meridian | 4,265,474 | 1,900,000 | 3,067,584 | – | – | 1,900,000 | 3,067,584 | 4,967,584 | 31,300 | 2004 | NA | |||||||||||||||||||||||||||||||||||
82nd & Otty | 1,586,756 | – | 1,933,970 | – | – | – | 1,933,970 | 1,933,970 | 697 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Burlington Coat * | – | – | 2,218,311 | – | – | – | 2,218,311 | 2,218,311 | 146,736 | 1992/2000 | 2000 | |||||||||||||||||||||||||||||||||||
Cedar Hill Village * | – | 1,331,645 | 5,409,237 | – | – | 1,331,645 | 5,409,237 | 6,740,882 | 94,840 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Circuit City Plaza | 6,651,191 | 1,900,000 | 5,366,882 | – | – | 1,900,000 | 5,366,882 | 7,266,882 | 122,502 | 2004 | NA | |||||||||||||||||||||||||||||||||||
The Corner | 1,926,175 | 311,217 | 4,161,910 | – | 67,032 | 311,217 | 4,228,942 | 4,540,159 | 1,834,268 | 1984/2003 | 1984 | |||||||||||||||||||||||||||||||||||
Eastgate Pavilion | – | 8,921,449 | 20,785,880 | – | – | 8,921,449 | 20,785,880 | 29,707,329 | 80,709 | 1995 | 2004 | |||||||||||||||||||||||||||||||||||
Glendale Mall * | – | 2,137,550 | 29,115,064 | – | – | 2,137,550 | 29,115,064 | 31,252,614 | 5,834,227 | 1958/2000 | 1999 | |||||||||||||||||||||||||||||||||||
Publix at Acworth * | – | 1,391,379 | 8,436,946 | – | – | 1,391,379 | 8,436,946 | 9,828,325 | 101,349 | 1997 | 2004 | |||||||||||||||||||||||||||||||||||
Shops at Eagle Creek * | – | 8,257,760 | 6,933,825 | 200,087 | 144,778 | 8,457,847 | 7,078,603 | 15,536,450 | 432,380 | 1998 | 2003 | |||||||||||||||||||||||||||||||||||
King’s Lake Square * | – | 4,492,000 | 7,791,052 | – | 132,805 | 4,492,000 | 7,923,857 | 12,415,857 | 485,055 | 1986 | 2003 | |||||||||||||||||||||||||||||||||||
Boulevard Crossing | 12,660,000 | 4,162,525 | 8,326,765 | – | – | 4,162,525 | 8,326,765 | 12,489,290 | 178,485 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Ridge Plaza | 16,962,625 | 4,565,000 | 17,509,760 | – | 863,022 | 4,565,000 | 18,372,782 | 22,937,782 | 1,115,103 | 2002 | 2003 | |||||||||||||||||||||||||||||||||||
Silver Glen Crossings * | – | 10,747,172 | 13,989,872 | – | – | 10,747,172 | 13,989,872 | 24,737,044 | 472,825 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Fishers Station | 5,465,766 | 3,692,807 | 9,660,380 | – | (64,000 | ) | 3,692,807 | 9,596,380 | 13,289,187 | 2,031,166 | 1990 | 2004 | ||||||||||||||||||||||||||||||||||
Cedar Hill Plaza | 27,264,160 | 5,734,304 | 40,008,878 | – | – | 5,734,304 | 40,008,878 | 45,743,182 | 592,785 | 2000 | 2004 | |||||||||||||||||||||||||||||||||||
Four Corner Square | 2,500,000 | 4,756,990 | 6,300,029 | – | – | 4,756,990 | 6,300,029 | 11,057,019 | – | 1995 | 2004 | |||||||||||||||||||||||||||||||||||
Wal-Mart Plaza | – | 4,880,373 | 5,050,648 | – | (12,637 | ) | 4,880,373 | 5,038,011 | 9,918,384 | 187,994 | 1970/1998 | 2004 | ||||||||||||||||||||||||||||||||||
Galleria Plaza * | – | – | 7,972,990 | – | – | – | 7,972,990 | 7,972,990 | 136,633 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Hamilton Crossing * | – | 5,655,189 | 10,403,797 | – | – | 5,655,189 | 10,403,797 | 16,058,986 | 199,415 | 1999 | 2004 | |||||||||||||||||||||||||||||||||||
Centre at Panola | 4,438,551 | 1,985,864 | 8,365,228 | – | – | 1,985,864 | 8,365,228 | 10,351,092 | 80,151 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Sunland Towne Centre | 17,719,271 | 14,612,536 | 21,174,792 | – | – | 14,612,536 | 21,174,792 | 35,787,328 | 318,487 | 1996 | 2004 | |||||||||||||||||||||||||||||||||||
Waterford Lakes * | – | 2,248,674 | 7,394,789 | – | – | 2,248,674 | 7,394,789 | 9,643,463 | 113,236 | 1997 | 2004 | |||||||||||||||||||||||||||||||||||
International Speedway Square | 19,923,058 | 6,560,000 | 20,925,793 | – | – | 6,560,000 | 20,925,793 | 27,485,793 | 3,019,258 | 1999 | 2000 | |||||||||||||||||||||||||||||||||||
50 S. Morton | – | 100,212 | 878,705 | – | – | 100,212 | 878,705 | 978,917 | 253,507 | 2000 | NA | |||||||||||||||||||||||||||||||||||
Preston Commons | 4,652,591 | 936,000 | 2,695,739 | – | 399,449 | 936,000 | 3,095,188 | 4,031,188 | 439,956 | 2002 | NA | |||||||||||||||||||||||||||||||||||
Whitehall Pike | 9,960,453 | 3,597,857 | 6,041,940 | – | 60,427 | 3,597,857 | 6,102,367 | 9,700,224 | 1,765,513 | 1998 | NA | |||||||||||||||||||||||||||||||||||
Stoney Creek Commons * | – | 826,881 | (3,820 | ) | – | 823,061 | – | 823,061 | – | 2000 | NA | |||||||||||||||||||||||||||||||||||
Other | – | 4,013,557 | 16,054,227 | – | – | 4,013,557 | 16,054,227 | 20,067,784 | 154,047 | |||||||||||||||||||||||||||||||||||||
Total Shopping Centers | 140,671,089 | 112,707,099 | 300,766,133 | 196,267 | 1,590,876 | 112,903,366 | 302,357,009 | 415,260,375 | 20,255,167 | |||||||||||||||||||||||||||||||||||||
Commercial Properties | ||||||||||||||||||||||||||||||||||||||||||||||
IN State Motor Pool | 3,819,516 | – | 4,268,882 | – | – | NA | 4,268,882 | 4,268,882 | 19,231 | 2004 | NA | |||||||||||||||||||||||||||||||||||
PEN Products * | – | NA | 5,369,382 | NA | 201,812 | NA | 5,571,194 | 5,571,194 | 246,343 | 2003 | NA | |||||||||||||||||||||||||||||||||||
Mid America Clinical Labs * | – | 1,100,000 | 11,695,705 | – | 82,503 | 1,100,000 | 11,778,208 | 12,878,208 | 1,016,832 | 1995/2002-2003 | NA | |||||||||||||||||||||||||||||||||||
Thirty South | 23,240,515 | 899,446 | 15,771,390 | – | 64,999 | 899,446 | 15,836,389 | 16,735,835 | 1,532,182 | 1905/1929/2001 | 2001 | |||||||||||||||||||||||||||||||||||
Union Station Parking Garage * | – | 783,627 | 2,163,598 | – | 153,258 | 783,627 | 2,316,856 | 3,100,483 | 200,966 | 1986 | 2001 | |||||||||||||||||||||||||||||||||||
Total Commercial Properties | 27,060,031 | 2,783,073 | 39,268,957 | – | 502,572 | 2,783,073 | 39,771,529 | 42,554,602 | 3,015,554 |
(Continued)
F-31
KITE REALTY GROUP TRUST
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
Initial Cost | Cost Capitalized Subsequent to Acquisition/Development | Gross Carry Amount Close of Period | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Property Name | Encumbrances | Land | Building & Improvements | Land | Building & Improvements | Land | Building & Improvements | Total | Accumulated Depreciation | Year Built/ Renovated | Year Acquired | |||||||||||||||||||||||||||||||||||
Development Properties | ||||||||||||||||||||||||||||||||||||||||||||||
Geist Pavilion | 863,991 | 1,300,000 | 2,063,083 | (136,009 | ) | – | 1,163,991 | 2,063,083 | 3,227,074 | |||||||||||||||||||||||||||||||||||||
Red Bank Commons | – | 1,407,119 | 2,571,389 | – | – | 1,407,119 | 2,571,389 | 3,978,508 | ||||||||||||||||||||||||||||||||||||||
Greyhound Commons | – | 1,861,277 | 1,101,249 | – | – | 1,861,277 | 1,101,249 | 2,962,526 | ||||||||||||||||||||||||||||||||||||||
Eagle Creek II | 850,000 | 1,965,731 | 154,826 | – | – | 1,965,731 | 154,826 | 2,120,557 | ||||||||||||||||||||||||||||||||||||||
Eagle Creek III | – | 942,967 | – | – | – | 942,967 | – | 942,967 | ||||||||||||||||||||||||||||||||||||||
Weston Park | 4,213,845 | 874,594 | 760,789 | – | – | 874,594 | 760,789 | 1,635,383 | ||||||||||||||||||||||||||||||||||||||
Traders Point ** | 32,059,000 | 11,081,458 | 24,348,063 | – | – | 11,081,458 | 24,348,063 | 35,429,521 | 91,497 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Traders Point II | 2,000,000 | 1,900,000 | 2,494,192 | – | – | 1,900,000 | 2,494,192 | 4,394,192 | ||||||||||||||||||||||||||||||||||||||
Traders Point III | 471,000 | – | 39,573 | – | – | – | 39,573 | 39,573 | ||||||||||||||||||||||||||||||||||||||
Martinsville Shops | – | – | 970,763 | – | – | – | 970,763 | 970,763 | ||||||||||||||||||||||||||||||||||||||
Cool Creek Commons ** | 14,951,660 | 6,205,921 | 12,058,303 | – | – | 6,205,921 | 12,058,303 | 18,264,224 | 13,074 | 2004 | NA | |||||||||||||||||||||||||||||||||||
KRG Development | – | 1,330,100 | 224,234 | – | – | 1,330,100 | 224,234 | 1,554,334 | ||||||||||||||||||||||||||||||||||||||
Total Development Properties | 55,409,496 | 28,869,167 | 46,786,464 | (136,009 | ) | – | 28,733,158 | 46,786,464 | 75,519,622 | 104,571 | ||||||||||||||||||||||||||||||||||||
Land Held for Development | ||||||||||||||||||||||||||||||||||||||||||||||
Frisco Bridges | – | 3,502,635 | – | (266,709 | ) | – | 3,235,926 | – | 3,235,926 | |||||||||||||||||||||||||||||||||||||
Huntington Ave. | – | 1,100,790 | – | – | – | 1,100,790 | – | 1,100,790 | ||||||||||||||||||||||||||||||||||||||
Greyhound III | – | 187,507 | – | – | – | 187,507 | – | 187,507 | ||||||||||||||||||||||||||||||||||||||
Spring Mill II | – | 100,000 | – | – | – | 100,000 | – | 100,000 | ||||||||||||||||||||||||||||||||||||||
Zionsville | – | 1,600,790 | 90 | – | – | 1,600,790 | 90 | 1,600,880 | ||||||||||||||||||||||||||||||||||||||
Stoney Creek Commons | – | 798,000 | – | – | – | 798,000 | – | 798,000 | ||||||||||||||||||||||||||||||||||||||
Jefferson Morton | – | 186,000 | – | – | – | 186,000 | – | 186,000 | ||||||||||||||||||||||||||||||||||||||
Weston Park | – | 2,556,450 | – | – | – | 2,556,450 | – | 2,556,450 | ||||||||||||||||||||||||||||||||||||||
Martinsville Shops | – | 688,783 | – | – | – | 688,783 | – | 688,783 | ||||||||||||||||||||||||||||||||||||||
Total Land Held for Development | – | 10,720,955 | 90 | (266,709 | ) | – | 10,454,246 | 90 | 10,454,336 | – | ||||||||||||||||||||||||||||||||||||
Line of credit - - see * | 56,200,000 | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||
Grand Total | $ | 279,340,616 | $ | 155,080,294 | $ | 386,821,644 | $ | (206,451 | ) | $ | 2,093,448 | $ | 154,873,843 | $ | 388,915,092 | $ | 543,788,935 | $ | 23,375,292 |
* | This property is encumbered under the Company’s line of credit with Wachovia Capital Markets, LLC and Lehman Commercial Paper, Inc. Approximately $56.2 million was outstanding under this line of credit as of December 31, 2004. |
** | This property partially opened during 2004. |
F-32
NOTES TO SCHEDULE III
Real Estate and Accumulated Depreciation
Note 1. Reconciliation of Investment Properties
2004 | 2003 | 2002 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance, beginning of year | $ | 152,215,128 | $ | 54,745,885 | $ | 36,460,132 | ||||||||||||
Aquisitions | 325,705,031 | 49,247,383 | — | |||||||||||||||
Improvements | 67,832,176 | 48,332,045 | 19,357,865 | |||||||||||||||
Disposals | (1,963,400 | ) | (110,185 | ) | (1,072,112 | ) | ||||||||||||
Balance, end of year | $ | 543,788,935 | $ | 152,215,128 | $ | 54,745,885 |
Note 2. Reconciliation of Accumulated Depreciation
2004 | 2003 | 2002 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance, beginning of year | $ | 4,146,121 | $ | 2,022,087 | $ | 999,076 | ||||||||||||
Aquisitions | 11,362,675 | — | — | |||||||||||||||
Depreciation and amortization expense | 8,936,159 | 2,145,696 | 1,023,011 | |||||||||||||||
Disposals | (1,069,663 | ) | (21,662 | ) | — | |||||||||||||
Balance, end of year | $ | 23,375,292 | $ | 4,146,121 | $ | 2,022,087 |
Buildings | 35 years | |||||
Building improvements | 10–35 years | |||||
Tenant improvements | Term of related lease |
F-33
(b) Exhibit Index:
Exhibit No. | Description | Location | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
2.1 | Contract of Sale, dated April 17, 2004, between Parklane/Cedar Hill, Ltd. and Kite Capital, LLC. | 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 September 7, 2004 | ||||||||
2.2 | Amendment to Contract of Sale, dated April 7, 2004, between Parklane/Cedar Hill, Ltd. and Kite Capital, LLC. | Incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 | ||||||||
2.3 | Second Amendment to Contract of Sale, dated June 30, 2004, between Parklane/Cedar Hill, Ltd. and KRG Cedar Hill Plaza, LP. | Incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 | ||||||||
2.4 | Third Amendment to Contract of Sale, dated August 2004, between Parklane/Cedar Hill, Ltd. and KRG Cedar Hill Plaza, LP. | Incorporated by reference to Exhibit 2.4 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 | ||||||||
2.5 | Real Estate Purchase Agreement, dated as of June 23, 2004, between Sunland Towne Centre Associates, Ltd., Del Sol Joint Venture No. 1 and KRG Capital, LLC. | 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 September 21, 2004 | ||||||||
3.1 | Articles of Amendment and Restatement of Declaration of Trust of the Company | 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 August 20, 2004 | ||||||||
3.2 | Amended and Restated Bylaws of the Company, as amended | Filed herewith | ||||||||
4.1 | Form of common share certificate | Incorporated by reference to Exhibit 4.1 to the Kite Realty Group Trust’s registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10, 2004. | ||||||||
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 | Agreement and Plan of Merger, dated as of April 5, 2004, by and between the Company, KRG Construction, LLC and Kite Construction, Inc. | 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 August 20, 2004 | ||||||||
10.3 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Construction, LLC and Kite Construction, Inc. | 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 August 20, 2004 | ||||||||
10.4 | Agreement and Plan of Merger, dated as of April 5, 2004, by and between the Company, KRG Development, LLC and Kite Development Corporation | Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.5 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Development, LLC and Kite Development Corporation | 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 August 20, 2004 | ||||||||
10.6 | Agreement and Plan of Merger dated as of April 5, 2004 by and between the Company, KRG Realty Advisors, LLC and KMI Realty Advisors, Inc. | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
Exhibit No. | Description | Location | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.7 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Realty Advisors, LLC and KMI Realty Advisors, Inc. | Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.8 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Alvin E. Kite, Jr. * | Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.9 | Employment Agreement, dated as of August 16, 2004, by and between the Company and John A. Kite * | Incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.10 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Thomas K. McGowan * | Incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.11 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Daniel R. Sink * | Incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.12 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Alvin E. Kite, Jr. * | Incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.13 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and John A. Kite * | Incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.14 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Thomas K. McGowan * | Incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.15 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Daniel R. Sink * | Incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.16 | 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 | ||||||||
10.17 | 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 | ||||||||
10.18 | 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 | ||||||||
10.19 | 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 | ||||||||
10.20 | 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 | ||||||||
10.21 | 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 | ||||||||
10.22 | 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 | ||||||||
10.23 | 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 | ||||||||
10.24 | 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 |
Exhibit No. | Description | Location | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.25 | Contributor Indemnity Agreement, dated August 16, 2004, by and among Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas K. McGowan, Daniel R. Sink, George F. McMannis, IV, and Mark Jenkins * | Incorporated by reference to Exhibit 10.25 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.26 | Kite Realty Group Trust 2004 Equity Incentive Plan * | Incorporated by reference to Exhibit 10.26 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.27 | Kite Realty Group Trust Executive Bonus Plan * | Incorporated by reference to Exhibit 10.27 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.28 | Option Agreement (Tarpon Spring Plaza), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Brentwood Land Partners, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan | Incorporated by reference to Exhibit 10.28 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.29 | Option Agreement (Erskine Village), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Kite South Bend, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan | Incorporated by reference to Exhibit 10.29 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.30 | Option Agreement (126th Street & Meridian Medical Complex), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Kite 126th Street Medical, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan | Incorporated by reference to Exhibit 10.30 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.31 | Option Agreement (126th Street & Meridian II Medical Complex), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Kite 126th Street Medical II, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan | Incorporated by reference to Exhibit 10.31 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 | ||||||||
10.32 | 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, Ken 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 | ||||||||
10.33 | 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 | Consulting Agreement, dated August 16, 2004, by and between Kite Realty Group, L.P and Paul W. Kite | Incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
Exhibit No. | Description | Location | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.35 | Credit Agreement, dated as of August 31, 2004, by and among Kite Realty Group, L.P., as Borrower, Kite Realty Group Trust, Wachovia Capital Markets, LLC and Lehman Brothers Inc., as Joint Lead Arrangers and Joint Book Runners, Wachovia Bank, National Association, as Agent, Lehman Commercial Paper Inc., as Syndication Agent, and the Financial Institutions signatory thereto, as 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 September 7, 2004 | ||||||||
10.36 | First Amendment to Credit Agreement, dated as of December 15, 2004, by and among Kite Realty Group, L.P., Kite Realty Group Trust, the financial institutions signatory thereto and Wachovia Bank, National Association, as Agent. | 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 December 20, 2004 | ||||||||
10.37 | Contribution Agreement dated as of April 5, 2004 by and among Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas K. McGowan, Daniel R. Sink, George F. McMannis and Mark Jenkins | Incorporated by reference to Exhibit 10.2 to the Trust’s registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10, 2004 | ||||||||
10.38 | Schedule of 2005 Bonus Benchmarks for Executive Officers * | Filed herewith | ||||||||
10.39 | Form of Share Option Agreement under 2004 Equity Incentive Plan * | Filed herewith | ||||||||
10.40 | Form of Restricted Share Agreement under 2004 Equity Incentive Plan * | Filed herewith | ||||||||
10.41 | Schedule of Non-Employee Trustee Fees and Other Compensation* | Filed herewith | ||||||||
21.1 | List of Subsidiaries | Filed herewith | ||||||||
23.1 | Consent of Ernst & Young LLP | Filed herewith | ||||||||
31.1 | Certification of principal executive officer 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 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 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Filed herewith |
* | Denotes a management contract or compensatory plan, contract or arrangement. |