2009 Citi Global Property CEO Conference
March 2-4, 2009
DISCLAIMER
This presentation may include certain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These forward-
looking statements include, but are not limited to, our plans, objectives,
expectations and intentions and other statements contained in this document
that are not historical facts and statements identified by words such as
“expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates” or
words of similar meaning. These statements are based on our current beliefs or
expectations and are inherently subject to significant uncertainties and changes
in circumstances, many of which are beyond our control. Actual results may
differ materially from these expectations due to changes in global political,
economic, business, competitive, market and regulatory risk factors. Information
concerning risk factors that could affect Kite Realty Group Trust’s actual results
is contained in the Company’s reports filed from time to time with the Securities
and Exchange Commission, including its 2007 Annual Report on Form 10-K and
its quarterly reports on Form 10-Q. Kite Realty Group Trust does not undertake
any obligation to update any forward-looking statements contained in this
document, as a result of new information, future events or otherwise.
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COMPANY OVERVIEW
Balance Sheet Management
Continue to Manage Debt Maturities
Execute Capital Plan
Measured Development Spending
Complete Current Development Pipeline – 3 projects
$91 million total cost with approximately $48
million spent or incurred
73% Pre-leased or Committed
Delay significant work on Visible Shadow Pipeline
until appropriate pre-leasing is accomplished and
third party construction financing is in place
Internal Focus
Operational Efficiencies
Leasing and Tenant Retention
PRIMARY OBJECTIVES FOR THE COMPANY
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Consumer Behavior
Nationwide consumption levels have dropped, but a portion of the consumer’s behavior is derived from
necessity. Grocery-anchored centers and value-oriented retailers such as Target and Wal-Mart will
continue to create shopping center traffic.
COMPANY OVERVIEW
(1) Includes Projected Total GLA for properties in the Current Development/Redevelopment Pipeline. Total GLA includes owned GLA, square
footage attributable to non-owned outlot structures on land that the Company owns, and non-owned anchor space that currently exists or is
under construction.
Property Type Allocation by Projected Total GLA 1
Information as of December 31, 2008
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(1) Total GLA includes owned GLA, square footage attributable to non-owned outlot structures on land that the Company owns and
non-owned anchor space that currently exists or is under construction.
(2) Includes Projected Total GLA for properties in the Current Development Pipeline and Redevelopment Pipeline.
Projected Total GLA Including Pipelines 1,2
GEOGRAPHIC DIVERSIFICATION
COMPANY OVERVIEW
Information as of December 31, 2008
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6
Information as of December 31, 2008 except as noted
(1)
As of February 25, 2009.
(2)
In November 2008, Circuit City filed a petition for Chapter 11 bankruptcy protection. In January 2009, it announced that it was
liquidating its operations. The tenant continues to occupy the space at three of our retail centers until it rejects our leases.
COMPANY OVERVIEW
STRONG TENANT DIVERSITY
% of Portfolio
S&P
Annualized Base Rent
Credit Rating
1
1
Lowe's Home Improvement
3.6%
A+
2
Publix
3.3%
n/a
3
PetSmart
2.8%
BB
4
Marsh Supermarkets
2.3%
n/a
5
Bed Bath & Beyond
2.2%
BBB
6
Circuit City
2
2.2%
n/a
7
Office Depot
1.9%
BB-
8
Staples
1.7%
BBB
9
Dick's Sporting Goods
1.7%
n/a
10
Ross Dress for Less
1.7%
BBB
Total
23.4%
Top 10 Retail Tenants by Base Rent
MANAGEMENT STRATEGY
Existing Vacancy
Operating retail portfolio is 91.2% leased
Less than 5% lease rollover in 2009
Operational Efficiencies
Leveraging bargaining power with national providers
Maintain class-A properties while managing to the CAM
caps
Controlling variable costs – insurance and real estate taxes
EMPHASIZING INTERNAL GROWTH
Information as of December 31, 2008
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MANAGEMENT STRATEGY
CURRENT DEVELOPMENT PIPELINE
3 projects totaling $91M of total estimated cost
53% funded
Growth source for late 2009 and throughout 2010
Low current occupancy but 73% leased or committed
VISIBLE SHADOW PIPELINE
Two tests help determine when these projects move beyond
the pre-development stage:
Pre-leasing goals are met
Third-party construction financing is secured
Even if these conditions are met, we project a relatively small
amount of capital to be spent on this pipeline in 2009
HOW WE VIEW DEVELOPMENT
Information as of December 31, 2008
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Approximately $90 million of availability/liquidity at December 31, 2008
Extended or refinanced $131 million of 2008 and 2009 debt maturities
Closed $29 million construction loan on Eddy Street Commons at Notre
Dame
Disposition of unencumbered Silver Glen Crossing at 7.5% cap rate
Disposition of non-core Spring Mill Medical at 8.1% cap rate
Equity Issuance netting $47.8 million
SUCCESSFUL Q4 2008 TRANSACTION EXECUTION
ENHANCES CAPITAL AVAILABILITY
CAPITAL PLAN
Information as of December 31, 2008
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MANAGING DEBT MATURITIES
AGGRESSIVE REFINANCING, SOLID EXECUTION
Only $48 million of CMBS debt maturing through 2011
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Information as of December 31, 2008
(1)
Amount due in 2009 consists of 8 loans with an average balance of $13.8 million.
(2)
Amount due in 2011 includes the outstanding balance of $105 million on our unsecured revolving credit facility, which has a one-year extension option.
As of
% of
As of
% of
9/30/08
Total
12/31/08
Total
2008
$18,740
3%
$0
0%
2009
1
$214,508
28%
$110,641
16%
2010
$13,470
2%
$66,132
9%
2011
2
$229,901
30%
$248,444
35%
2012
$39,014
5%
$38,905
6%
Thereafter
$241,695
32%
$236,263
34%
Total Maturities
$757,328
100%
$700,385
100%
DEVELOPMENT & REDEVELOPMENT PIPELINE
(1)
Includes owned GLA, plus square footage attributable to non-owned outlot structures and non-owned outlot anchor space.
(2)
Held in a joint venture entity
(3)
Percent Committed includes leases under negotiation for which the Company has signed non-binding letter of intent
(4)
The Company is the mater developer for this project and its share of Phase I estimated project costs is approximately $35 million.
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Information as of December 31, 2008
Project
MSA
Projected
Total GLA
1
% Leased /
Committed
3
Total Est. Cost
(000s)
Anchor Tenants
Cobblestone Plaza
2
Ft. Lauderdale, FL
163,600
80.3%
$47,000
Whole Foods Market, Staples,
Party City
South Elgin Commons I
Chicago, IL
45,000
100.0%
$9,200
LA Fitness
Eddy Street Commons I
4
South Bend, IN
465,000
58.4%
$35,000
Follette Bookstore, retail, office
673,600
72.9%
$91,200
Redevelopments
Shops at Eagle Creek
Naples, FL
72,271
$3,500
Staples
Rivers Edge Shopping Ctr
Indianapolis, IN
110,875
$2,500
Pending
Bolton Plaza
Jacksonville, FL
172,938
$2,000
Pending
Courthouse Shadows
Naples, FL
134,867
$2,500
Publix, Office Max
Four Corner Square
Seattle, WA
29,177
$500
Johnson Hardware, Walgreens
520,128
$11,000
Total Current Development Pipeline
Total Redevelopment Pipeline
VISIBLE SHADOW PIPELINE
(1)
Total Estimated Cost and Estimated Total GLA based on preliminary siteplans.
(2)
Acquired in a joint venture with Prudential Real Estate Investors. KRG’s ownership interest will change to 20% upon commencement of construction
(3)
Held in a joint venture entity.
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Information as of December 31, 2008
Project
KRG %
Owned
MSA
Est. Total
GLA
1
Est. Total
Cost (000s)
1
Potential Tenancy
Unconsolidated:
Parkside Town Commons
2
40%
Raleigh, NC
1,500,000
$148,000
Frank Theatres, Discount Dept.
Stores, Jr. Boxes, Restaurants
KRG Current Share
$59,200
Consolidated:
Delray Marketplace
3
50%
Delray Beach, FL
318,000
$100,000
Publix, Frank Theatres, Jr. Boxes,
Shops, Restaurants
Maple Valley
100%
Seattle, WA
126,823
$32,000
Hardware Store, Shops, Drug Store
Broadstone Station (Apex)
100%
Raleigh, NC
345,000
$25,600
Super Wal-Mart (non-owned), Jr.
Boxes, Shops, Pad sales
South Elgin Commons II
100%
Chicago, IL
263,000
$17,000
Jr. Boxes, SuperTarget (non-
owned)
New Hill Place I
100%
Raleigh, NC
364,000
$60,000
Target, Frank Theaters
1,416,823
$234,600
Total Consolidated Visible Shadow Pipeline
DEVELOPMENT PIPELINE
A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS
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DEVELOPMENT PIPELINE
A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS
$200 million mixed-use development next to the University of Notre Dame in South Bend, IN will be
completed in phases
$35 million Phase I, which will include retail and office, is in the Current Development Pipeline.
Phase I will also include a $35 million multi-family component that will be developed and operated
by a third party.
Three goals were set and accomplished before significant capital was spent:
The land was fully entitled with a planned unit development designation
Tax Increment Financing (TIF) and other municipal incentives totaling $35 million were
funded
Final deal structure with the University of Notre Dame was completed and Kite acquired and
ground leased separate parcels
Joint venture arrangements for multi-family and hotel components will be utilized to mitigate risk
and maximize expertise of the partners
Additional land for residential units can be acquired from the University at our discretion and will be
based solely on residential market demand
Information as of December 31, 2008
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DEVELOPMENT PIPELINE
A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS
Phase I – Retail, Office, Multi-family, Parking Garage
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STRONG DEMOGRAPHICS
OUR MARKETS ARE NOT DEPENDENT ON POPULATION GROWTH
Source: Applied Geographic Solutions
$83,663
$83,010
Average HH Income
$77,213
$78,061
Average HH Income
2.2%
2.3%
Projected Annual Growth
1.8%
2.0%
Projected Annual Growth
126,226
49,193
2012 Est. Population
140,420
55,845
2012 Est. Population
113,673
44,097
2007 Est. Population
128,583
50,846
2007 Est. Population
5 Mile
3 Mile
Development Pipeline
5 Mile
3 Mile
Operating Portfolio
Radius
Radius
Operating Portfolio vs. Development Pipeline
Portfolio Demographic Comparison
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COMMITTED MANAGEMENT
Senior management and Chairman Emeritus own approximately 20
percent of the Company and have acquired over 400,000 shares and
800,000 units since the IPO at a cost of approximately $21 million
0.2%
9 years
EVP & CFO
Dan Sink
19.6%
6.3%
18 years
Chairman & CEO
John Kite
3.6%
14 years
President & COO
Tom McGowan
9.5%
48 years
Chairman Emeritus
Al Kite 2
Ownership 1
Tenure with
Company
(1)
As of February 18, 2009, and includes units of Operating Partnership.
(2)
As Chairman Emeritus, Mr. Kite does not have day-to-day management responsibilities at the Company.
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OPERATING METRICS
For the Twelve Months Ended December 31, 2008
2.7x
2.5x
Fixed Charge Coverage 2
10.8%
5.7%
G&A / Revenue from Rental
Properties
93.4%
91.7%
Portfolio % Leased
70.4%
70.3%
FFO Payout %
68.9%
70.6%
NOI / Revenue
Selected
Peer Group
Average 1
KRG
(1)
Peer Group consists of KIM, DDR, AKR, REG and RPT.
(2)
Defined as EBITDA divided by Interest Expense plus Preferred Dividends.
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CORPORATE PROFILE
Kite Realty Group Trust is a full-service, vertically integrated real estate investment
trust engaged primarily in the ownership, operation, management, leasing,
acquisition, construction, expansion, and development of high quality neighborhood
and community shopping centers in selected growth markets in the United States.
The Company owns interests in a portfolio of operating retail properties, retail
properties under development, operating commercial properties, a related parking
garage, commercial property under development and parcels of land that may be
used for future development of retail or commercial properties.
Our strategy is to maximize the cash flow of its operating properties, successfully
complete the construction and lease-up of the development portfolio and identify
additional growth opportunities in the form of new developments and acquisitions. A
significant volume of growth opportunity is sourced through the extensive network of
tenant, corporate and institutional relationships that have been established over the
last four decades. Current investments are focused in the development and
acquisition of high quality, well located shopping centers.
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