Kite Realty Group Trust
Quarterly Financial Supplement as of March 31, 2022
T A B L E O F C O N T E N T S
| | | | | |
| Earnings Press Release | |
| Contact Information | |
| Results Overview | |
| Consolidated Balance Sheets | |
| Consolidated Statements of Operations | |
| Same Property Net Operating Income | |
| Net Operating Income and EBITDA by Quarter | |
| Funds From Operations | |
| Joint Venture Summary | |
| Key Debt Metrics | |
| Summary of Outstanding Debt | |
| Maturity Schedule of Outstanding Debt | |
| Acquisitions and Dispositions | |
| Development and Redevelopment Projects | |
| Geographic Diversification – ABR by Region and State | |
| Top 25 Tenants by ABR | |
| Retail Leasing Spreads | |
| Lease Expirations | |
| Components of Net Asset Value | |
| Non-GAAP Financial Measures | |
Kite Realty Group Trust | 30 South Meridian Street, Suite 1100 | Indianapolis, Indiana 46204 | 888.577.5600 | www.kiterealty.com
PRESS RELEASE
Contact Information: Kite Realty Group Trust
Jason Colton
SVP, Capital Markets & Investor Relations
317.713.2762
jcolton@kiterealty.com
Kite Realty Group Trust Reports First Quarter 2022 Operating Results
Raises 2022 guidance
Leased over 1 million square feet at 16.1% comparable blended cash leasing spreads
Acquired $66 million of high-quality Sun Belt assets
Share repurchase program upsized to $300 million from $150 million
Indianapolis, Indiana, April 28, 2022 – Kite Realty Group Trust (NYSE: KRG), a premier owner and operator of high-quality, open-air grocery-anchored neighborhood and community centers, along with vibrant mixed-use assets, reported today its operating results for the first quarter ended March 31, 2022.
“KRG had an exceptional first quarter of 2022 and our team is executing on all fronts,” said John A. Kite, Chairman and CEO. “KRG continues to capitalize on robust demand for open-air retail shopping destinations, as evidenced by our sustained leasing volume and over 16% cash leasing spreads. Based on the first quarter’s outperformance and our improved outlook for the balance of 2022, we are increasing our FFO, as adjusted guidance by $0.05 per share at the midpoint and increasing same-property NOI growth by 75 basis points at the midpoint. KRG’s results continue to validate our ability to scale KRG’s operating platform across our high-quality portfolio of open-air shopping destinations to drive long-term value creation.”
First Quarter 2022 Financial Results
▪Net loss attributable to common shareholders of $16.8 million, or $0.08 per diluted share, compared to net income of $24.6 million, or $0.29 per diluted share, for the quarters ended March 31, 2022 and 2021, respectively.
▪Generated NAREIT Funds From Operations of the Operating Partnership (FFO) of $101.7 million, or $0.46 per diluted share.
▪Generated FFO, as adjusted, of the Operating Partnership of $101.5 million, or $0.46 per diluted share, which is a 35% per share increase over the comparable period in 2021.
▪Excludes a positive impact of $1.1 million of prior period collection impact related to the recovery of cash and non-cash bad debt and accounts receivable in 2022.
▪Excludes the impact of $0.9 million of merger and acquisition costs.
▪Same Property Net Operating Income (NOI) increased by 5.9% (including legacy RPAI properties).
First Quarter 2022 Portfolio Operations
▪Executed 182 new and renewal leases representing approximately 1.1 million square feet.
▪Cash leasing spreads of 58.7% on 26 comparable new leases, 8.9% on 79 comparable renewals, and 16.1% on a blended basis.
▪Operating retail portfolio annualized base rent (ABR) per square foot of $19.57 at March 31, 2022, a 5.6% increase year-over-year.
▪Retail portfolio percent leased of 93.6% at March 31, 2022, a sequential increase of 20 basis points.
▪Portfolio leased-to-occupied spread of 320 basis points, which equates to $37.0 million of signed-not-open NOI.
First Quarter 2022 Capital Allocation Activity
▪As previously disclosed, sold a portion of Hamilton Crossing Centre (Carmel, IN) and entered into a fee development agreement to build an approximately $200 million mixed-use corporate campus for Republic Airways. In addition to the $6.9 million KRG received for the land, KRG will earn significant development fees and development profits, while contributing no incremental capital.
▪Acquired Pebble Marketplace (Las Vegas, NV), an 85,800 square foot grocery-anchored center, for a purchase price of $44.1 million.
Subsequent Capital Allocation Activity
▪Acquired the Sprouts and Total Wine building at KRG-owned MacArthur Crossing (Dallas / Fort Worth, TX) for a purchase price of $21.9 million.
▪Used the $125.0 million short-term deposit that matured on April 7, 2022 to repay borrowings on the Company’s revolving line of credit.
▪The Company’s Board of Trustees authorized a $150.0 million increase to the size of its existing share repurchase program, authorizing share repurchases up to an aggregate $300.0 million.
Balance Sheet Overview
▪As of March 31, 2022, KRG’s net debt to Adjusted EBITDA was 5.7x.
▪Pro forma for $37.0 million of signed-not-open NOI (represents expected revenue associated with leases that have been executed as of March 31, 2022, but have yet to commence rent payments), net debt to adjusted EBITDA would be 5.4x.
2022 Earnings Guidance
KRG is updating its 2022 guidance for FFO, as adjusted, to $1.74 to $1.80 per diluted share from $1.69 to $1.75 per diluted share, based, in part, on the following key assumptions:
▪Increased same property NOI range to 2.25% to 3.25%, which represents a 75-basis point increase at the midpoint.
▪Decreased bad debt by 25 basis points to 1.25% of total revenues at the midpoint.
▪Any transaction activity is expected to be earnings neutral.
The following table reconciles the Company’s 2022 net income guidance range to the Company’s updated 2022 FFO, as adjusted, guidance range:
| | | | | | | | | | | |
| Low | | High |
| | | |
| Net loss | $ | (0.30) | | | $ | (0.24) | |
| Depreciation and amortization | 2.02 | | | 2.02 | |
| NAREIT FFO | $ | 1.72 | | | $ | 1.78 | |
| Non-recurring merger and acquisition costs | 0.02 | | | 0.02 | |
| FFO, as adjusted | $ | 1.74 | | | $ | 1.80 | |
Earnings Conference Call
Kite Realty Group Trust will conduct a conference call to discuss its financial results on Friday, April 29, 2022, at 11:00 a.m. Eastern Time. A live webcast of the conference call will be available on KRG’s website at www.kiterealty.com. The dial-in numbers are (844) 309-0605 for domestic callers and (574) 990-9933 for international callers (Conference ID: 9268086). In addition, a webcast replay link will be available on KRG’s website.
About Kite Realty Group Trust
Kite Realty Group Trust (NYSE: KRG) is a real estate investment trust (REIT) headquartered in Indianapolis, IN that is one of the largest publicly traded owners and operators of open-air shopping centers and mixed-use assets. The company’s primarily grocery-anchored portfolio is located in high-growth Sun Belt and select strategic gateway markets. The combination of necessity-based grocery-anchored neighborhood and community centers, along with vibrant mixed-use assets makes the KRG portfolio an ideal mix for both retailers and consumers. Publicly listed since 2004, KRG has nearly 60 years of experience in developing, constructing and operating real estate. Using operational, investment, development, and redevelopment expertise, KRG continuously optimizes its portfolio to maximize value and return to shareholders. As of March 31, 2022, the Company owned interests in 181 U.S. open-air shopping centers and mixed-use assets,
comprising approximately 28.8 million square feet of gross leasable space. For more information, please visit kiterealty.com.
Connect with KRG: LinkedIn | Twitter | Instagram | Facebook
Safe Harbor
This release, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed or implied by the forward-looking statements.
Currently, one of the most significant factors that could cause actual outcomes to differ significantly from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, including possible resurgences, variants and mutations, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. Moreover, investors are cautioned to interpret many of the risks identified under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in the Company’s quarterly reports on Form 10-Q as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.
Additional risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: the risks associated with the merger with RPAI, including the integration of the businesses of the combined company, the ability to achieve expected synergies or costs savings and potential disruptions to the Company’s plans and operations; national and local economic, business, real estate and other market conditions, particularly in connection with low or negative growth in the U.S. economy as well as economic uncertainty (including the potential effects of inflation); the risk that our actual NOI for leases that have signed but not yet opened will not be consistent with expected NOI for leases that have signed but not yet opened; financing risks, including the availability of, and costs associated with, sources of liquidity; the Company’s ability to refinance, or extend the maturity dates of, the Company’s indebtedness; the level and volatility of interest rates; the financial stability of tenants; the competitive environment in which the Company operates, including potential oversupplies of and reduction in demand for rental space; acquisition, disposition, development and joint venture risks; property ownership and management risks, including the relative illiquidity of real estate investments, and expenses, vacancies or the inability to rent space on favorable terms or at all; the Company’s ability to maintain the Company’s status as a real estate investment trust for U.S. federal income tax purposes; potential environmental and other liabilities; impairment in the value of real estate property the Company owns; the attractiveness of our properties to tenants, the actual and perceived impact of e-commerce on the value of shopping center assets and changing demographics and customer traffic patterns; business continuity disruptions and a deterioration in our tenant’s ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed to operate efficiently, causing costs to rise sharply and inventory to fall; risks related to our current geographical concentration of the Company’s properties in Texas, Florida, New York, Maryland, and North Carolina; civil unrest, acts of terrorism or war, acts of God, climate change, epidemics, pandemics (including COVID-19), natural disasters and severe weather conditions, including such events that may result in underinsured or uninsured losses or other increased costs and expenses; changes in laws and government regulations including governmental orders affecting the use of the Company’s properties or the ability of its tenants to operate, and the costs of complying with such changed laws and government regulations; possible short-term or long-term changes in consumer behavior due to COVID-19 and the fear of future pandemics; our ability to satisfy environmental, social or governance standards set by various constituencies; insurance costs and coverage; risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; other factors affecting the real estate industry generally; and other risks identified in reports the Company files with the Securities and Exchange Commission (“the SEC”) or in other documents that it publicly disseminates, including, in particular, the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and in the Company’s quarterly reports on Form 10-Q. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
This Earnings Release also includes certain forward-looking non-GAAP information. Due to high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these estimates, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts.
Kite Realty Group Trust
Contact Information
Corporate Office
30 South Meridian Street, Suite 1100
Indianapolis, IN 46204
(888) 577-5600
(317) 577-5600
www.kiterealty.com
| | | | | | | | | | | | | | |
| Investor Relations Contact | | Analyst Coverage | | Analyst Coverage |
| Jason Colton | | Robert W. Baird & Co. | | Green Street Advisors, Inc. |
| Senior Vice President, Capital Markets and IR | | Mr. Wes Golladay | | Mr. Vince Tibone |
| (317) 713-2762 | (216) 737-7510 | (949) 640-8780 |
| jcolton@kiterealty.com | | wgolladay@rwbaird.com | | vtibone@greenstreet.com |
| | | | |
| Matt Hunt | | Bank of America/Merrill Lynch | | Jefferies LLC |
| Director, Capital Markets and IR | | Mr. Jeffrey Spector/Mr. Craig Schmidt | | Ms. Linda Tsai |
| (317) 713-7646 | | (646) 855-1363/(646) 855-3640 | | (212) 778-8011 |
| mhunt@kiterealty.com | | jeff.spector@bofa.com | | ltsai@jefferies.com |
| | craig.schmidt@bofa.com | | |
| Kite Realty Group Trust | | | | KeyBanc Capital Markets |
| 30 South Meridian Street, Suite 1100 | | Barclays | | Mr. Todd Thomas |
| Indianapolis, IN 46204 | | Mr. Anthony F. Powell | | (917) 368-2286 |
| | (212) 526-8768 | | tthomas@keybanccm.com |
| | anthony.powell@barclays.com | | |
| Transfer Agent | | | | |
| Broadridge Financial Solutions | | BTIG | | Raymond James |
| Ms. Kristen Tartaglione | | Mr. Michael Gorman | | Mr. RJ Milligan |
2 Journal Square, 7th Floor | | (212) 738-6138 | | (727) 567-2585 |
| Jersey City, NJ 07306 | | mgorman@btig.com | | rjmilligann@raymondjames.com |
| (201) 714-8094 | | | | |
| | Capital One Securities, Inc. | | Piper Sandler |
| | Mr. Christopher Lucas | | Mr. Alexander Goldfarb |
| Stock Specialist | | (571) 633-8151 | | (212) 466-7937 |
| GTS | | christopher.lucas@capitalone.com | | alexander.goldfarb@psc.com |
| 545 Madison Avenue | | | | |
| 15th Floor | | Citigroup Global Markets | | Wells Fargo Securities, LLC |
| New York, NY 10022 | | Mr. Michael Bilerman | | Ms. Tamara Fique |
| (212) 715-2830 | | (212) 816-1383 | | (617) 603-4262/(443) 263-6568 |
| | michael.bilerman@citi.com | | tamara.fique@wellsfargo.com |
| | | | |
| | Compass Point Research & Trading, LLC | | |
| | Mr. Floris van Dijkum | | |
| | (646) 757-2621 | | |
| | fvandijkum@compasspointllc.com | | |
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 1 |
Kite Realty Group Trust
Results Overview
(dollars in thousands, except per share and per square foot amounts)
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| Summary Financial Results | 2022 | | 2021 | | | | |
| | | | | | | |
| Total revenue (page 4) | $ | 194,391 | | | $ | 69,375 | | | | | |
| Net (loss) income attributable to common shareholders (page 4) | $ | (16,804) | | | $ | 24,577 | | | | | |
| Net (loss) income per diluted share (page 4) | $ | (0.08) | | | $ | 0.29 | | | | | |
| Net operating income (NOI) (page 6) | $ | 139,295 | | | $ | 49,272 | | | | | |
| Adjusted EBITDA (page 6) | $ | 128,295 | | | $ | 42,430 | | | | | |
| NAREIT Funds From Operations (FFO) (page 7) | $ | 101,709 | | | $ | 29,987 | | | | | |
| NAREIT FFO per diluted share (page 7) | $ | 0.46 | | | $ | 0.34 | | | | | |
| FFO, as adjusted (page 7) | $ | 101,538 | | | $ | 29,778 | | | | | |
| FFO, as adjusted per diluted share (page 7) | $ | 0.46 | | | $ | 0.34 | | | | | |
| Dividends declared per share (page 4) | $ | 0.19 | | | $ | 0.15 | | | | | |
| Dividend payout ratio (as % of NAREIT FFO, as adjusted) | 41 | % | | 44 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| Summary Operating and Financial Ratios | March 31,
2022 | | December 31,
2021 | | September 30,
2021 | | June 30,
2021 | | March 31,
2021 |
| | | | | | | | | |
| NOI margin (page 6) | 72.7 | % | | 71.0 | % | | 73.7 | % | | 73.4 | % | | 72.0 | % |
| NOI margin – retail (page 6) | 73.1 | % | | 71.6 | % | | 74.3 | % | | 74.0 | % | | 72.7 | % |
Same property NOI performance(1) (page 5) | 5.9 | % | | 7.2 | % | | 10.8 | % | | 10.1 | % | | (2.9) | % |
| Total property NOI performance (page 5) | 182.7 | % | | 138.2 | % | | 15.2 | % | | 11.0 | % | | (1.6) | % |
| Net debt to Adjusted EBITDA, current quarter (page 9) | 5.7x | | 6.0x | | 6.1x | | 6.4x | | 6.5x |
| Recovery ratio of retail operating properties (page 6) | 85.9 | % | | 84.7 | % | | 89.4 | % | | 88.1 | % | | 90.6 | % |
| Recovery ratio of consolidated portfolio (page 6) | 81.3 | % | | 79.2 | % | | 86.1 | % | | 84.1 | % | | 87.3 | % |
| | | | | | | | | |
| Outstanding Classes of Stock | | | | | | | | | |
| Common shares and units outstanding (page 18) | 221,559,185 | | | 221,327,346 | | | 87,004,756 | | | 87,002,502 | | | 86,967,035 | |
| | | | | | | | | |
| Summary Portfolio Statistics | | | | | | | | | |
| Number of properties | | | | | | | | | |
| Operating retail (page 14) | 181 | | | 180 | | | 83 | | | 83 | | | 83 | |
| Office and other components | 12 | | | 12 | | | 4 | | | 4 | | | 4 | |
| Development and redevelopment projects (page 13) | 7 | | | 8 | | | 5 | | | 3 | | | 3 | |
Owned retail operating gross leasable area (GLA)(2) (page 14) | 28.8 | M | | 28.7 | M | | 11.7 | M | | 11.7 | M | | 11.7 | M |
| Owned office GLA (page 14) | 1.6 | M | | 1.6 | M | | 0.4 | M | | 0.4 | M | | 0.4 | M |
Number of multifamily units(3) | 1,690 | | | 1,690 | | | 1,294 | | | 1,009 | | | 1,009 | |
| Percent leased – total | 93.5 | % | | 93.3 | % | | 93.0 | % | | 91.7 | % | | 90.8 | % |
| Percent leased – retail | 93.6 | % | | 93.4 | % | | 92.8 | % | | 91.5 | % | | 90.5 | % |
| Anchor | 96.1 | % | | 95.9 | % | | 94.8 | % | | 93.2 | % | | 92.0 | % |
| Small shop | 88.5 | % | | 88.3 | % | | 88.7 | % | | 87.8 | % | | 87.5 | % |
| | | | | | | | | |
| Annualized base rent (ABR) per square foot | $ | 19.57 | | | $ | 19.36 | | | $ | 18.54 | | | $ | 18.48 | | | $ | 18.53 | |
| | | | | | | | | |
| Total new and renewal lease GLA (page 16) | 1,053,963 | | | 927,065 | | | 584,820 | | | 637,995 | | | 426,937 | |
| New lease cash rent spread (page 16) | 58.7 | % | | 27.4 | % | | 20.6 | % | | 19.7 | % | | 25.3 | % |
| Renewal lease cash rent spread (page 16) | 8.9 | % | | 8.3 | % | | 10.4 | % | | 7.5 | % | | 2.0 | % |
| Total new and renewal lease cash rent spread (page 16) | 16.1 | % | | 12.9 | % | | 13.4 | % | | 9.2 | % | | 6.4 | % |
| | | | | | | | | | | |
| 2022 Guidance | Current
(as of 4/28/22) | | Previous
(as of 2/14/22) |
| | | |
| NAREIT FFO per diluted share | $1.72 to $1.78 | | $1.67 to $1.73 |
| FFO, as adjusted per diluted share | $1.74 to $1.80 | | $1.69 to $1.75 |
| | | |
| Credit Ratings and Outlook | | | |
| Moody's Investors Services | Baa3 / Stable | | |
| Standard & Poor's Rating Services | BBB- / Stable | | |
| Fitch Ratings | BBB / Stable | | |
(1)Same property NOI excludes properties that have not been owned for the full period presented. However, due to the size of the RPAI portfolio acquired in the merger, the legacy RPAI properties have been deemed to qualify for the same property pool beginning in 2022 if they had a full first quarter of operations in 2021 within the legacy RPAI portfolio prior to the merger.
(2)Owned GLA represents gross leasable area owned by the Company and excludes the square footage of non-retail property components and development and redevelopment projects.
(3)Represents the number of multifamily units that the Company has an economic interest in.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 2 |
Kite Realty Group Trust
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
| | | | | | | | | | | |
| March 31,
2022 | | December 31,
2021 |
| Assets: | | | |
| Investment properties at cost | $ | 7,627,581 | | | $ | 7,592,348 | |
| Less: accumulated depreciation | (950,737) | | | (884,809) | |
| Net investment properties | 6,676,844 | | | 6,707,539 | |
| | | |
| Cash and cash equivalents | 74,345 | | | 93,241 | |
Tenant and other receivables, including accrued straight-line rent of $32,125 and $28,071, respectively | 69,135 | | | 68,444 | |
| Restricted cash and escrow deposits | 7,845 | | | 7,122 | |
| Deferred costs, net | 512,411 | | | 541,518 | |
| Short-term deposits | 125,000 | | | 125,000 | |
| Prepaid and other assets | 96,281 | | | 84,826 | |
| Investments in unconsolidated subsidiaries | 11,833 | | | 11,885 | |
| | | |
| Total assets | $ | 7,573,694 | | | $ | 7,639,575 | |
| | | |
| Liabilities and Shareholders’ Equity: | | | |
| Mortgage and other indebtedness, net | $ | 3,179,118 | | | $ | 3,150,808 | |
| Accounts payable and accrued expenses | 124,193 | | | 184,982 | |
| Deferred revenue and other liabilities | 306,268 | | | 321,419 | |
| Total liabilities | 3,609,579 | | | 3,657,209 | |
| | | |
| Commitments and contingencies | | | |
Limited Partners’ interests in the Operating Partnership and other redeemable noncontrolling interests | 60,376 | | | 55,173 | |
| | | |
| Shareholders’ Equity: | | | |
Common shares, $0.01 par value, 490,000,000 shares authorized, 219,042,903 and 218,949,569 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 2,190 | | | 2,189 | |
| Additional paid-in capital | 4,894,897 | | | 4,898,673 | |
| Accumulated other comprehensive income (loss) | 22,811 | | | (15,902) | |
| Accumulated deficit | (1,021,317) | | | (962,913) | |
| Total shareholders’ equity | 3,898,581 | | | 3,922,047 | |
| Noncontrolling interests | 5,158 | | | 5,146 | |
| Total equity | 3,903,739 | | | 3,927,193 | |
| Total liabilities and shareholders’ equity | $ | 7,573,694 | | | $ | 7,639,575 | |
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 3 |
Kite Realty Group Trust
Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| Revenue: | | | | | | | |
| Rental income | $ | 189,858 | | | $ | 67,890 | | | | | |
| Other property-related revenue | 2,224 | | | 1,051 | | | | | |
| Fee income | 2,309 | | | 434 | | | | | |
| Total revenue | 194,391 | | | 69,375 | | | | | |
| | | | | | | |
| Expenses: | | | | | | | |
| Property operating | 25,928 | | | 10,269 | | | | | |
| Real estate taxes | 26,859 | | | 9,400 | | | | | |
| General, administrative and other | 13,309 | | | 7,276 | | | | | |
| Merger and acquisition costs | 925 | | | — | | | | | |
| Depreciation and amortization | 121,504 | | | 30,634 | | | | | |
| | | | | | | |
| Total expenses | 188,525 | | | 57,579 | | | | | |
| | | | | | | |
| Gain on sales of operating properties, net | 3,168 | | | 26,207 | | | | | |
| | | | | | | |
| Operating income | 9,034 | | | 38,003 | | | | | |
| Other (expense) income: | | | | | | | |
| Interest expense | (25,514) | | | (12,242) | | | | | |
| Income tax benefit of taxable REIT subsidiary | 71 | | | 118 | | | | | |
| | | | | | | |
| Equity in loss of unconsolidated subsidiaries | (314) | | | (318) | | | | | |
| Other expense, net | (103) | | | (206) | | | | | |
| Net (loss) income | (16,826) | | | 25,355 | | | | | |
| Net loss (income) attributable to noncontrolling interests | 22 | | | (778) | | | | | |
| Net (loss) income attributable to common shareholders | $ | (16,804) | | | $ | 24,577 | | | | | |
| | | | | | | |
| Net (loss) income per common share – basic and diluted | $ | (0.08) | | | $ | 0.29 | | | | | |
| | | | | | | |
| | | | | | | |
| Weighted average common shares outstanding – basic | 218,981,168 | | | 84,336,577 | | | | | |
| Weighted average common shares outstanding – diluted | 218,981,168 | | | 84,446,989 | | | | | |
| | | | | | | |
| Dividends declared per common share | $ | 0.19 | | | $ | 0.15 | | | | | |
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 4 |
Kite Realty Group Trust
Same Property Net Operating Income (“NOI”)(1)
(dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | Change | | | | | | |
| | | | | | | | | | | |
Number of properties in same property pool for the period(2) | 178 | | | 178 | | | | | | | | | |
| | | | | | | | | | | |
| Leased percentage at period end | 93.6 | % | | 91.3 | % | | | | | | | | |
Economic occupancy percentage(3) | 90.4 | % | | 89.7 | % | | | | | | | | |
| | | | | | | | | | | |
| Minimum rent | $ | 140,234 | | | $ | 134,772 | | | | | | | | | |
| Tenant recoveries | 39,526 | | | 39,173 | | | | | | | | | |
| Bad debt provision | (1,669) | | | (3,534) | | | | | | | | | |
| Other income, net | 2,526 | | | 1,741 | | | | | | | | | |
| Total revenue | 180,617 | | | 172,152 | | | | | | | | | |
| | | | | | | | | | | |
| Property operating expenses | (23,552) | | | (22,143) | | | | | | | | | |
| Real estate taxes | (27,542) | | | (27,757) | | | | | | | | | |
| Total expenses | (51,094) | | | (49,900) | | | | | | | | | |
| | | | | | | | | | | |
| Same Property NOI | $ | 129,523 | | | $ | 122,252 | | | 5.9 | % | | | | | | |
| | | | | | | | | | | |
Reconciliation of Same Property NOI to most directly comparable GAAP measure: | | | | | | | | | | | |
| Net operating income – same properties | $ | 129,523 | | | $ | 122,252 | | | | | | | | | |
| Prior period collection impact – same properties | 1,964 | | | 5,658 | | | | | | | | | |
Net operating income – non-same activity(4) | 7,808 | | | (78,638) | | | | | | | | | |
| Total property NOI | 139,295 | | | 49,272 | | | 182.7 | % | | | | | | |
| Other income, net | 1,963 | | | 28 | | | | | | | | | |
| General, administrative and other | (13,309) | | | (7,276) | | | | | | | | | |
| Merger and acquisition costs | (925) | | | — | | | | | | | | | |
| | | | | | | | | | | |
| Depreciation and amortization | (121,504) | | | (30,634) | | | | | | | | | |
| Interest expense | (25,514) | | | (12,242) | | | | | | | | | |
| | | | | | | | | | | |
| Gain on sales of operating properties, net | 3,168 | | | 26,207 | | | | | | | | | |
| Net loss (income) attributable to noncontrolling interests | 22 | | | (778) | | | | | | | | | |
| Net (loss) income attributable to common shareholders | $ | (16,804) | | | $ | 24,577 | | | | | | | | | |
(1)Same Property NOI excludes properties that have not been owned for the full periods presented. However, due to the size of the RPAI portfolio acquired in the merger, the legacy RPAI properties have been deemed to qualify for the same property pool beginning in 2022 if they had a full first quarter of operations in 2021 within the legacy RPAI portfolio prior to the merger.
(2)Same Property NOI excludes (i) Glendale Town Center, which was reclassified from active redevelopment into our operating portfolio in December 2021, (ii) seven active development and redevelopment projects noted on page 13, (iii) Arcadia Village and Pebble Marketplace, which were acquired subsequent to January 1, 2021, and (iv) office properties and includes the legacy RPAI same property pool.
(3)Excludes leases that are signed but for which tenants have not yet commenced the payment of cash rent. Calculated as a weighted average based on the timing of cash rent commencement and expiration during the period.
(4)Includes non-cash activity across the portfolio as well as NOI from properties not included in the same property pool, including properties sold during both periods.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 5 |
Kite Realty Group Trust
Net Operating Income and EBITDA by Quarter
(dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 31,
2022 | | December 31,
2021 | | September 30,
2021 | | June 30,
2021 | | March 31,
2021 |
| Revenue: | | | | | | | | | |
Minimum rent(1) | $ | 139,137 | | | $ | 121,615 | | | $ | 49,497 | | | $ | 49,097 | | | $ | 49,801 | |
| Minimum rent – ground leases | 10,634 | | | 7,129 | | | 3,663 | | | 3,656 | | | 4,038 | |
| Tenant reimbursements | 39,836 | | | 33,870 | | | 15,186 | | | 14,308 | | | 15,389 | |
| Bad debt (expense) recovery | (571) | | | (1,636) | | | 1,709 | | | 597 | | | (1,420) | |
| Other property-related revenue | 1,124 | | | 450 | | | 258 | | | 336 | | | 549 | |
| Overage rent | 822 | | | 324 | | | 161 | | | 332 | | | 82 | |
Parking revenue, net(2) | 534 | | | 552 | | | 320 | | | 152 | | | (1) | |
| Total revenue | 191,516 | | | 162,304 | | | 70,794 | | | 68,478 | | | 68,438 | |
| | | | | | | | | |
| Expenses: | | | | | | | | | |
Property operating – recoverable(3) | 22,321 | | | 19,991 | | | 9,185 | | | 8,666 | | | 8,407 | |
Property operating – non-recoverable(3) | 3,237 | | | 4,237 | | | 1,001 | | | 1,229 | | | 1,547 | |
| Real estate taxes | 26,663 | | | 22,764 | | | 8,444 | | | 8,343 | | | 9,212 | |
| Total expenses | 52,221 | | | 46,992 | | | 18,630 | | | 18,238 | | | 19,166 | |
| | | | | | | | | |
| NOI | 139,295 | | | 115,312 | | | 52,164 | | | 50,240 | | | 49,272 | |
| | | | | | | | | |
| Other (expense) income: | | | | | | | | | |
| General, administrative and other | (13,309) | | | (10,307) | | | (8,241) | | | (8,159) | | | (7,276) | |
| | | | | | | | | |
| Fee income | 2,309 | | | 98 | | | 195 | | | 515 | | | 434 | |
| | | | | | | | | |
| Total other (expense) income | (11,000) | | | (10,209) | | | (8,046) | | | (7,644) | | | (6,842) | |
| | | | | | | | | |
| Adjusted EBITDA | 128,295 | | | 105,103 | | | 44,118 | | | 42,596 | | | 42,430 | |
| | | | | | | | | |
| | | | | | | | | |
| Depreciation and amortization | (121,504) | | | (109,835) | | | (30,193) | | | (29,798) | | | (30,634) | |
| Merger and acquisition costs | (925) | | | (76,564) | | | (9,198) | | | (760) | | | — | |
| Interest expense | (25,514) | | | (23,061) | | | (12,878) | | | (12,266) | | | (12,242) | |
| Equity in (loss) earnings of unconsolidated subsidiaries | (314) | | | 342 | | | (196) | | | (244) | | | (318) | |
| Income tax benefit of taxable REIT subsidiary | 71 | | | 2 | | | 91 | | | 100 | | | 118 | |
| | | | | | | | | |
| Other (expense) income, net | (103) | | | 166 | | | 168 | | | 227 | | | (206) | |
| Gain on sales of operating properties, net | 3,168 | | | 3,692 | | | 1,260 | | | 50 | | | 26,207 | |
| Net (loss) income | (16,826) | | | (100,155) | | | (6,828) | | | (95) | | | 25,355 | |
Less: net loss (income) attributable to noncontrolling interests | 22 | | | 1,974 | | | (132) | | | (147) | | | (778) | |
| Net (loss) income attributable to common shareholders | $ | (16,804) | | | $ | (98,181) | | | $ | (6,960) | | | $ | (242) | | | $ | 24,577 | |
| | | | | | | | | |
| NOI/Revenue – Retail properties | 73.1 | % | | 71.6 | % | | 74.3 | % | | 74.0 | % | | 72.7 | % |
| NOI/Revenue | 72.7 | % | | 71.0 | % | | 73.7 | % | | 73.4 | % | | 72.0 | % |
Recovery Ratios(4) | | | | | | | | | |
| – Retail properties | 85.9 | % | | 84.7 | % | | 89.4 | % | | 88.1 | % | | 90.6 | % |
| – Consolidated | 81.3 | % | | 79.2 | % | | 86.1 | % | | 84.1 | % | | 87.3 | % |
(1)Minimum rent includes $0.8 million, $0.5 million, $33,000, $0.3 million, and $1.2 million of lease termination income for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.
(2)Parking revenue, net represents the net operating results of the Eddy Street Parking Garage, the Union Station Parking Garage, and the Pan Am Plaza Parking Garage.
(3)Recoverable expenses include recurring G&A expense of $3.7 million allocable to the property operations in the three months ended March 31, 2022, a portion of which is recoverable. Non-recoverable expenses primarily include ground rent, professional fees, and marketing costs.
(4)“Recovery Ratios” are computed by dividing tenant reimbursements by the sum of recoverable property operating expense and real estate tax expense.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 6 |
Kite Realty Group Trust
Funds From Operations (“FFO”)(1)(2)
(dollars in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
| | | | | | | |
| Net (loss) income | $ | (16,826) | | | $ | 25,355 | | | | | |
| Less: net income attributable to noncontrolling interests in properties | (144) | | | (132) | | | | | |
| Less: gain on sales of operating properties, net | (3,168) | | | (26,207) | | | | | |
| | | | | | | |
Add: depreciation and amortization of consolidated and unconsolidated entities, net of noncontrolling interests | 121,847 | | | 30,971 | | | | | |
FFO of the Operating Partnership(1) | 101,709 | | | 29,987 | | | | | |
Less: Limited Partners’ interests in FFO | (1,118) | | | (870) | | | | | |
FFO attributable to common shareholders(1) | $ | 100,591 | | | $ | 29,117 | | | | | |
| FFO, as defined by NAREIT, per share of the Operating Partnership – basic | $ | 0.46 | | | $ | 0.35 | | | | | |
| FFO, as defined by NAREIT, per share of the Operating Partnership – diluted | $ | 0.46 | | | $ | 0.34 | | | | | |
| | | | | | | |
FFO of the Operating Partnership(1) | $ | 101,709 | | | $ | 29,987 | | | | | |
| | | | | | | |
| Add: merger and acquisition costs | 925 | | | — | | | | | |
| | | | | | | |
| | | | | | | |
| Less: prior period collection impact | (1,096) | | | (209) | | | | | |
| FFO, as adjusted, of the Operating Partnership | $ | 101,538 | | | $ | 29,778 | | | | | |
| FFO, as adjusted, per share of the Operating Partnership – basic | $ | 0.46 | | | $ | 0.34 | | | | | |
| FFO, as adjusted, per share of the Operating Partnership – diluted | $ | 0.46 | | | $ | 0.34 | | | | | |
| | | | | | | |
| Weighted average common shares outstanding – basic | 218,981,168 | | | 84,336,577 | | | | | |
| Weighted average common shares outstanding – diluted | 220,202,896 | | | 84,446,989 | | | | | |
| | | | | | | |
| Weighted average common shares and units outstanding – basic | 221,428,198 | | | 86,862,153 | | | | | |
| Weighted average common shares and units outstanding – diluted | 222,649,925 | | | 86,972,566 | | | | | |
| | | | | | | |
| FFO, as defined by NAREIT, per diluted share/unit | | | | | | | |
| Net (loss) income | $ | (0.08) | | | $ | 0.29 | | | | | |
| Less: net income attributable to noncontrolling interests in properties | — | | | — | | | | | |
| Less: gain on sales of operating properties, net | (0.01) | | | (0.30) | | | | | |
| | | | | | | |
Add: depreciation and amortization of consolidated and unconsolidated entities, net of noncontrolling interests | 0.55 | | | 0.36 | | | | | |
FFO, as defined by NAREIT, of the Operating Partnership per diluted share/unit(1)(2) | $ | 0.46 | | | $ | 0.34 | | | | | |
| | | | | | | |
| Add: merger and acquisition costs | — | | | — | | | | | |
| | | | | | | |
| Less: prior period collection impact | — | | | — | | | | | |
| | | | | | | |
FFO, as adjusted, of the Operating Partnership per diluted share/unit(2) | $ | 0.46 | | | $ | 0.34 | | | | | |
| | | | | | | |
| Reconciliation of FFO, as adjusted, to Adjusted Funds from Operations (AFFO) | | | | | | | |
| FFO, as adjusted, of the Operating Partnership | $ | 101,538 | | | $ | 29,778 | | | | | |
| Less (add): non-cash income adjustments | 6,329 | | | (1,778) | | | | | |
| Less: maintenance capital expenditures | 3,719 | | | 167 | | | | | |
Less: tenant-related capital expenditures(3) | 13,010 | | | 2,061 | | | | | |
| Total Recurring AFFO of the Operating Partnership | $ | 78,480 | | | $ | 29,328 | | | | | |
(1)“FFO of the Operating Partnership” measures 100% of the operating performance of the Operating Partnership’s real estate properties. “FFO attributable to common shareholders” reflects a reduction for the redeemable noncontrolling weighted average diluted interest in the Operating Partnership.
(2)Per share/unit amounts of components will not necessarily sum to the total due to rounding to the nearest cent.
(3)Excludes landlord work, tenant improvements and leasing commissions related to development and redevelopment projects.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 7 |
Kite Realty Group Trust
Joint Venture Summary as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Investments | | | | | | | | | | |
| Investments | | | | | | Total Debt | | Partner Economic Ownership Interest(1) | | Partner
Share of Debt | | Partner Share
of Annual Income |
| | | | | | | | | | | | |
| Delray Marketplace | | | | | | $ | 28,893 | | | 2 | % | | $ | 578 | | | $ | — | |
| Crossing at Killingly Commons | | | | | | — | | | 10 | % | | — | | | 528 | |
| One Loudoun – Pads G&H Residential | | | | | | — | | | 10 | % | | — | | | 48 | |
| Total | | | | | | $ | 28,893 | | | | | $ | 578 | | | $ | 576 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unconsolidated Investments | | | | | | | | | | | | |
| Investments | | Retail GLA | | Multifamily Units | | | | Total Debt | | KRG Economic
Ownership Interest | | KRG Share
of Debt | | KRG Investment | | KRG Share
of Quarterly EBITDA | | KRG Share
of Quarterly EBITDA
Annualized |
| | | | | | | | | | | | | | | | | | |
Three Property Retail Portfolio | | 416,576 | | | — | | | | | $ | 51,890 | | | 20 | % | | $ | 10,378 | | | $ | 7,899 | | | $ | 302 | | | $ | 1,208 | |
Glendale Center Apartments | | — | | | 267 | | | | | 22,372 | | | 11.5 | % | | 2,573 | | | 1,434 | | | 40 | | | 160 | |
Embassy Suites at Eddy Street Commons | | — | | | — | | | | | 33,634 | | | 35 | % | | 11,772 | | | — | | | 78 | | | 312 | |
| The Corner (development) | | 24,000 | | | 285 | | | | | 15,487 | | | 50 | % | | 7,744 | | | — | | | — | | | — | |
| Other investments | | — | | | — | | | | | — | | | — | % | | — | | | 2,500 | | | 34 | | | 136 | |
| Total | | 440,576 | | | 552 | | | | | $ | 123,383 | | | | | $ | 32,467 | | | $ | 11,833 | | | $ | 454 | | | $ | 1,816 | |
(1)Economic ownership % represents the partner’s share of cash flow.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 8 |
Kite Realty Group Trust
Key Debt Metrics as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | |
| Senior Unsecured Notes Covenants | | | |
| March 31,
2022 | | Debt Covenant Threshold(1) |
| | | |
| Total debt to undepreciated assets | 38% | | <60% |
| | | |
| Secured debt to undepreciated assets | 4% | | <40% |
| | | |
| Undepreciated unencumbered assets to unsecured debt | 272% | | >150% |
| | | |
| Debt service coverage | 4.2x | | >1.5x |
| | | |
| Unsecured Credit Facility Covenants | | | |
| March 31,
2022 | | Debt Covenant Threshold(1) |
| | | |
| Maximum leverage | 39% | | <60% |
| | | |
| Minimum fixed charge coverage | 3.9x | | >1.50x |
| | | |
| Secured indebtedness | 4.5% | | <45% |
| | | |
| Unsecured debt interest coverage | 4.2x | | >1.75x |
| | | |
| Unsecured leverage | 37.2% | | <60% |
| | | |
| Senior Unsecured Debt Ratings | | | |
| | | |
| Moody's Investors Service | Baa3/Stable | | |
| Standard & Poor's Rating Services | BBB-/Stable | | |
| Fitch Ratings | BBB/Stable | | |
| | | |
| | | |
| Liquidity | | | |
| | | |
| Cash, cash equivalents and short-term deposits | $ | 199,345 | | | |
| Availability under unsecured credit facility | 713,500 | | | |
| $ | 912,845 | | | |
| | | |
| | | |
| Unencumbered NOI as a % of Total NOI | 89 | % | | |
| | | |
(1)For a complete listing of all debt covenants related to the Company’s Senior Unsecured Notes and Unsecured Credit Facility, as well as definitions of the terms, refer to the Company’s filing with the SEC.
| | | | | | | | | | | |
| Net Debt to EBITDA | | | |
| Company's consolidated debt and share of unconsolidated debt | | | $ | 3,161,907 | |
| Less: cash, cash equivalents, restricted cash, and short-term deposits | | | (207,190) | |
| | | | $ | 2,954,717 | |
| Q1 2022 EBITDA, Annualized: | | | |
| – Consolidated EBITDA | $ | 513,180 | | | |
– Unconsolidated EBITDA(1) | 1,816 | | | |
– Minority interest EBITDA(1) | (576) | | | 514,420 | |
| Ratio of Company share of Net Debt to EBITDA | | | 5.7x |
(1)See page 8 for details.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 9 |
Kite Realty Group Trust
Summary of Outstanding Debt as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Outstanding Debt | Amount
Outstanding | | Ratio | | Weighted Average
Interest Rate | | Weighted
Average Years to Maturity |
| | | | | | | |
Fixed rate debt(1) | $ | 2,811,125 | | | 89 | % | | 4.00 | % | | 4.4 | |
Variable rate debt(2) | 318,893 | | | 10 | % | | 3.11 | % | | 4.3 | |
| Debt discounts, premiums and issuance costs, net | 49,100 | | | N/A | | N/A | | N/A |
| Total consolidated debt | 3,179,118 | | | 99 | % | | 3.90 | % | | 4.4 | |
| KRG share of unconsolidated debt | 32,467 | | | 1 | % | | 4.49 | % | | 7.3 | |
| Total | $ | 3,211,585 | | | 100 | % | | 3.91 | % | | 4.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Schedule of Maturities by Year |
| Secured Debt | | | | | | | | |
Scheduled Principal
Payments | | Term
Maturities | | Unsecured Debt(3) | | Total
Consolidated Debt | | Total
Unconsolidated Debt | | Total Debt
Outstanding |
| | | | | | | | | | | |
| 2022 | $ | 2,553 | | | $ | 83,520 | | | $ | — | | | $ | 86,073 | | | $ | 44 | | | $ | 86,117 | |
| 2023 | 2,600 | | | 220,499 | | | 295,000 | | | 518,099 | | | 270 | | | 518,369 | |
| 2024 | 2,721 | | | — | | | 269,635 | | | 272,356 | | | 2,855 | | | 275,211 | |
| 2025 | 2,848 | | | — | | | 430,000 | | | 432,848 | | | 11,176 | | | 444,024 | |
| 2026 | 2,981 | | | — | | | 550,000 | | | 552,981 | | | | | 552,981 | |
| 2027 and beyond | 30,181 | | | 2,480 | | | 1,235,000 | | | 1,267,661 | | | 18,122 | | | 1,285,783 | |
| Debt discounts, premiums and issuance costs, net | — | | | 1,600 | | | 47,500 | | | 49,100 | | | — | | | 49,100 | |
| Total | $ | 43,884 | | | $ | 308,099 | | | $ | 2,827,135 | | | $ | 3,179,118 | | | $ | 32,467 | | | $ | 3,211,585 | |
(1)Fixed rate debt includes the portion of variable rate debt that has been hedged by interest rate swaps. As of March 31, 2022, $720.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 3.0 years.
(2)Variable rate debt includes the portion of fixed rate debt that has been hedged by interest rate swaps. As of March 31, 2022, $155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 3.4 years.
(3)This presentation reflects the Company’s exercise of its option to extend the maturity date of its unsecured credit facility by one year to January 8, 2027. The ability to exercise this option is subject to certain customary conditions, which the Company does not unilaterally control.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 10 |
Kite Realty Group Trust
Maturity Schedule of Outstanding Debt as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Description | | Interest Rate(1) | | Maturity Date | | Balance as of
March 31, 2022 | | % of Total
Outstanding |
| | | | | | | | |
| Saxon Crossing | | 4.65% | | 7/1/2022 | | $ | 11,400 | | | |
| Shops at Moore | | 4.29% | | 9/1/2022 | | 21,300 | | | |
| Shops at Julington Creek | | 4.60% | | 9/1/2022 | | 4,785 | | | |
| Centre Point Commons | | 4.34% | | 10/1/2022 | | 14,410 | | | |
| Miramar Square | | 4.16% | | 12/1/2022 | | 31,625 | | | |
| 2022 Debt Maturities | | | | | | 83,520 | | | 3 | % |
| | | | | | | | |
| Centennial Gateway | | 3.81% | | 1/1/2023 | | 23,962 | | | |
| Gateway Village | | 4.14% | | 1/1/2023 | | 30,768 | | | |
| Centennial Center | | 3.83% | | 1/6/2023 | | 70,455 | | | |
| Eastern Beltway | | 3.83% | | 1/6/2023 | | 34,100 | | | |
| The Corner (AZ) | | 4.10% | | 3/1/2023 | | 14,750 | | | |
| Chapel Hill | | 3.78% | | 4/1/2023 | | 18,250 | | | |
Delray Marketplace(2) | | LIBOR + 160 | | 8/4/2023 | | 28,893 | | | |
| Senior Unsecured Note | | 4.23% | | 9/10/2023 | | 95,000 | | | |
Unsecured Term Loan(3) | | 4.10% | | 11/22/2023 | | 200,000 | | | |
| 2023 Debt Maturities | | | | | | 516,178 | | | 16 | % |
| | | | | | | | |
| Senior Unsecured Note | | 4.58% | | 6/30/2024 | | 149,635 | | | |
Unsecured Term Loan(4) | | 2.88% | | 7/17/2024 | | 120,000 | | | |
| 2024 Debt Maturities | | | | | | 269,635 | | | 8 | % |
| | | | | | | | |
| Senior Unsecured Note | | 4.00% | | 3/15/2025 | | 350,000 | | | |
Senior Unsecured Note(5) | | LIBOR + 365 | | 9/10/2025 | | 80,000 | | | |
| 2025 Debt Maturities | | | | | | 430,000 | | | 13 | % |
| | | | | | | | |
Unsecured Term Loan(6) | | 2.97% | | 7/17/2026 | | 150,000 | | | |
| Senior Unsecured Note | | 4.08% | | 9/30/2026 | | 100,000 | | | |
| Senior Unsecured Note | | 4.00% | | 10/1/2026 | | 300,000 | | | |
| 2026 Debt Maturities | | | | | | 550,000 | | | 17 | % |
| | | | | | | | |
Unsecured Credit Facility(7) | | LIBOR + 110 | | 1/8/2027 | | 135,000 | | | |
| Senior Unsecured Exchangeable Notes | | 0.75% | | 4/1/2027 | | 175,000 | | | |
| Northgate North | | 4.50% | | 6/1/2027 | | 23,479 | | | |
Senior Unsecured Note(5) | | LIBOR + 375 | | 9/10/2027 | | 75,000 | | | |
Unsecured Term Loan(8) | | 5.09% | | 10/24/2028 | | 250,000 | | | |
| Senior Unsecured Note | | 4.24% | | 12/28/2028 | | 100,000 | | | |
| Senior Unsecured Note | | 4.82% | | 6/28/2029 | | 100,000 | | | |
| Rampart Commons | | 5.73% | | 6/10/2030 | | 7,911 | | | |
| Senior Unsecured Note | | 4.75% | | 9/15/2030 | | 400,000 | | | |
| The Shoppes at Union Hill | | 3.75% | | 6/1/2031 | | 10,746 | | | |
| Nora Plaza Shops | | 3.80% | | 2/1/2032 | | 3,549 | | | |
| 2027 and beyond Debt Maturities | | | | | | 1,280,685 | | | 40 | % |
| Debt discounts, premiums and issuance costs, net | | | | | | 49,100 | | | |
| Total debt per consolidated balance sheet | | | | | | $ | 3,179,118 | | | 99 | % |
| | | | | | | | |
| KRG share of unconsolidated debt | | | | | | | | |
| Embassy Suites at Eddy Street Commons | | LIBOR + 250 | | 7/1/2025 | | $ | 11,772 | | | |
| Glendale Center Apartments | | LIBOR + 280 | | 5/31/2024 | | 2,573 | | | |
| Three Property Retail Portfolio | | 4.09% | | 7/1/2028 | | 10,378 | | | |
| The Corner (development) | | 4.61% | | 8/15/2038 | | 7,744 | | | |
| Total KRG share of unconsolidated debt | | | | | | 32,467 | | | 1 | % |
| Total consolidated and KRG share of unconsolidated debt | | | | $ | 3,211,585 | | | |
(1)At March 31, 2022, one-month LIBOR was 0.45% and three-month LIBOR was 0.96%.
(2)Property is held in a joint venture. The loan is guaranteed by Kite Realty Group, LP.
(3)Term loan is hedged to a fixed rate of 2.85% plus a credit spread of 1.25%.
(4)Term loan is hedged to a fixed rate of 1.68% plus a credit spread of 1.20%.
(5)Notes due 2025 are hedged to a floating rate until September 10, 2025. Notes due 2027 are hedged to a floating rate until September 10, 2025 and revert back to a fixed rate of 4.57% until maturity in 2027.
(6)Term loan is hedged to a fixed rate of 1.77% plus a credit spread of 1.20%.
(7)Assumes the Company exercises its option to extend the maturity date by one year to 2027.
(8)Assumes the Company exercises three one-year options to extend the maturity date to 2028. Term loan is hedged to a fixed rate of 5.09% until the initial maturity of October 24, 2025. Term loan interest rate reverts back to a floating rate of LIBOR plus 2.00% beyond the initial maturity date.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 11 |
Kite Realty Group Trust
Acquisitions and Dispositions
(dollars in thousands)
Acquisitions
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Name | | Acquisition Date | | Metropolitan
Statistical Area (MSA) | | Property Type | | GLA | | Acquisition Price |
| | | | | | | | | | |
| Pebble Marketplace | | February 16, 2022 | | Las Vegas, NV | | Multi-tenant retail | | 85,796 | | | $ | 44,100 | |
| MacArthur Crossing | | April 13, 2022 | | Dallas/Fort Worth | | Two-tenant building | | 56,077 | | | 21,920 | |
| | | | | | | | | | |
| | | | | | Total acquisitions | | 141,873 | | | $ | 66,020 | |
Dispositions
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Name | | Disposition Date | | MSA | | Property Type | | GLA | | Sales Price |
| | | | | | | | | | |
| Hamilton Crossing Centre | | January 26, 2022 | | Indianapolis | | Redevelopment | | — | | | $ | 6,900 | |
| | | | | | | | | | |
| | | | | | Total dispositions | | — | | | $ | 6,900 | |
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 12 |
Kite Realty Group Trust
Development and Redevelopment Projects
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Project | | MSA | | KRG Ownership % | | Projected Completion Date(1) | | Total
Commercial GLA | | Total
Multifamily Units | | Total Project Costs(2) | | KRG Equity Requirement(2) | | KRG
Remaining Spend | | Estimated
Stabilized NOI
to KRG | | Estimated Remaining NOI to Come Online(3) |
| | | | | | | | | | | | | | | | | | | | |
| Active Projects | | | | | | | | | | | | | | | | | | | | |
| Shoppes at Quarterfield | | Washington, D.C./Baltimore | | 100% | | Q2 2022 | | 58,000 | | | — | | | $ | 4,800 | | | $ | 4,800 | | | $ | 3,200 | | | $1.0M–$1.1M | | $0.0M–$0.1M |
| | | | | | | | | | | | | | | | | | | | |
| One Loudoun – Residential | | Washington, D.C./Baltimore | | 90% | | Q2 2022 | | — | | | 378 | | | 11,500 | | | 11,500 | | | 2,200 | | | $6.3M–$6.5M | | $3.8M–$4.0M |
| | | | | | | | | | | | | | | | | | | | |
| Circle East | | Washington, D.C./Baltimore | | 100% | | Q3 2022 | | 82,000 | | | 370 | | | 15,100 | | | 15,100 | | | 14,300 | | | $1.9M–$2.2M | | $1.1M–$1.4M |
| | | | | | | | | | | | | | | | | | | | |
| One Loudoun – Pads G&H Commercial | | Washington, D.C./Baltimore | | 100% | | Q2 2023 | | 67,000 | | | — | | | 10,200 | | | 10,200 | | | 8,600 | | | $1.7M–$2.1M | | $0.1M–$0.5M |
| | | | | | | | | | | | | | | | | | | | |
| The Landing at Tradition – Phase II | | Port St. Lucie, FL | | 100% | | Q2 2023 | | 39,900 | | | — | | | 10,900 | | | 10,900 | | | 10,500 | | | $1.1M–$1.2M | | $0.6M–$0.7M |
| | | | | | | | | | | | | | | | | | | | |
| Carillon MOB | | Washington, D.C./Baltimore | | 100% | | Q4 2024 | | 126,000 | | | — | | | 59,700 | | | 59,700 | | | 52,400 | | | $3.5M–$4.0M | | $3.1M–$3.6M |
| | | | | | | | | | | | | | | | | | | | |
The Corner – IN(4) | | Indianapolis, IN | | 50% | | Q4 2024 | | 24,000 | | | 285 | | | 63,900 | | | — | | | — | | | $1.7M–$1.9M | | $1.7M–$1.9M |
| Total | | | | | | | | 396,900 | | | 1,033 | | | $ | 176,100 | | | $ | 112,200 | | | $ | 91,200 | | | $17.2M–$19.0M | | $10.4M–$12.2M |
| | | | | | | | |
Future Opportunities(5) | | |
| Hamilton Crossing Centre – Phase II | Indianapolis, IN | Addition of mixed-use (multifamily, office and retail) components adjacent to the Republic Airways headquarters. |
| Carillon | Washington, D.C./Baltimore | Potential of 1.2 million square feet of commercial GLA and 3,000 multifamily units for additional expansion. |
| One Loudoun | Washington, D.C./Baltimore | Potential of 2.9 million square feet of commercial GLA for additional expansion. |
| Main Street Promenade | Chicago, IL | Potential of 10,000 square feet of commercial GLA and 47 multifamily units for additional expansion. |
| Downtown Crown | Washington, D.C./Baltimore | Potential of 42,000 square feet of commercial GLA for additional expansion. |
(1)Completion date represents the earlier of one year after completion of project construction or substantial occupancy of the property.
(2)Total project costs and KRG equity requirement represent costs to KRG post-merger and exclude any costs spent to date prior to the merger.
(3)Estimated remaining NOI to come online excludes in-place NOI and NOI related to tenants that have signed leases but have not yet commenced paying rent.
(4)KRG does not have any equity requirements related to this development. Total project costs are at 100% and are net of a $13.5 million TIF.
(5)These opportunities are deemed potential at this time and are subject to various contingencies, many of which could be beyond the Company’s control.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 13 |
Kite Realty Group Trust
Geographic Diversification – ABR by Region and State as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Total Retail Operating Portfolio | | Total Office Components |
| Region/State | | Number of Properties(1) | | Owned
GLA/NRA(2) | | Total Weighted ABR(3) | | % of Weighted ABR(3) | | Owned
GLA/NRA(2) | | Total Weighted ABR(3) | | % of Weighted ABR(3) |
| South | | | | | | | | | | | | | | |
| Texas | | 45 | | | 7,732 | | | $ | 143,165 | | | 23.9 | % | | 432 | | | $ | 10,948 | | | 1.8 | % |
| Florida | | 29 | | | 3,514 | | | 59,666 | | | 10.0 | % | | 38 | | | 1,071 | | | 0.2 | % |
| Maryland | | 7 | | | 1,620 | | | 33,798 | | | 5.6 | % | | 224 | | | 3,314 | | | 0.6 | % |
| North Carolina | | 8 | | | 1,537 | | | 30,783 | | | 5.1 | % | | — | | | — | | | — | % |
| Virginia | | 7 | | | 1,115 | | | 28,358 | | | 4.7 | % | | 158 | | | 5,012 | | | 0.9 | % |
| Georgia | | 10 | | | 1,707�� | | | 25,759 | | | 4.3 | % | | — | | | — | | | — | % |
| Tennessee | | 3 | | | 580 | | | 8,228 | | | 1.4 | % | | — | | | — | | | — | % |
| Oklahoma | | 3 | | | 505 | | | 7,504 | | | 1.3 | % | | — | | | — | | | — | % |
| South Carolina | | 2 | | | 258 | | | 3,076 | | | 0.5 | % | | — | | | — | | | — | % |
| Total South | | 114 | | | 18,568 | | | 340,337 | | | 56.8 | % | | 852 | | | 20,345 | | | 3.5 | % |
| | | | | | | | | | | | | | |
| West | | | | | | | | | | | | | | |
| Washington | | 10 | | | 1,683 | | | 30,368 | | | 5.1 | % | | — | | | — | | | — | % |
| Nevada | | 5 | | | 850 | | | 26,501 | | | 4.4 | % | | — | | | — | | | — | % |
| California | | 3 | | | 655 | | | 15,716 | | | 2.6 | % | | — | | | — | | | — | % |
| Arizona | | 5 | | | 726 | | | 14,565 | | | 2.4 | % | | — | | | — | | | — | % |
| Utah | | 2 | | | 392 | | | 7,767 | | | 1.3 | % | | — | | | — | | | — | % |
| Total West | | 25 | | | 4,306 | | | 94,917 | | | 15.8 | % | | — | | | — | | | — | % |
| | | | | | | | | | | | | | |
| Midwest | | | | | | | | | | | | | | |
| Indiana | | 16 | | | 1,633 | | | 28,944 | | | 4.8 | % | | 369 | | | 7,135 | | | 1.2 | % |
| Illinois | | 9 | | | 1,266 | | | 26,319 | | | 4.4 | % | | 163 | | | 4,208 | | | 0.7 | % |
| Michigan | | 1 | | | 308 | | | 6,753 | | | 1.1 | % | | — | | | — | | | — | % |
| Missouri | | 1 | | | 453 | | | 4,145 | | | 0.7 | % | | — | | | — | | | — | % |
| Ohio | | 1 | | | 236 | | | 1,912 | | | 0.3 | % | | — | | | — | | | — | % |
| Total Midwest | | 28 | | | 3,896 | | | 68,073 | | | 11.3 | % | | 532 | | | 11,343 | | | 1.9 | % |
| | | | | | | | | | | | | | |
| Northeast | | | | | | | | | | | | | | |
| New York | | 8 | | | 1,083 | | | 34,412 | | | 5.7 | % | | 174 | | | 7,527 | | | 1.3 | % |
| New Jersey | | 4 | | | 343 | | | 11,149 | | | 1.9 | % | | — | | | — | | | — | % |
| Massachusetts | | 1 | | | 272 | | | 5,522 | | | 0.9 | % | | — | | | — | | | — | % |
| Connecticut | | 1 | | | 206 | | | 3,625 | | | 0.6 | % | | — | | | — | | | — | % |
| Pennsylvania | | 1 | | | 136 | | | 1,982 | | | 0.3 | % | | — | | | — | | | — | % |
| Total Northeast | | 15 | | | 2,040 | | | 56,690 | | | 9.4 | % | | 174 | | | 7,527 | | | 1.3 | % |
| | | | | | | | | | | | | | |
| Total | | 182 | | | 28,810 | | | $ | 560,017 | | | 93.3 | % | | 1,558 | | | $ | 39,215 | | | 6.7 | % |
(1)Number of properties represents consolidated and unconsolidated retail properties and the Company’s single standalone office property in Indianapolis, IN.
(2)Owned GLA/NRA represents gross leasable area owned by the Company and excludes the square footage of development and redevelopment projects.
(3)Weighted ABR and percent of weighted ABR includes ground lease rent and represents the Company’s share of the ABR at consolidated and unconsolidated properties.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 14 |
Kite Realty Group Trust
Top 25 Tenants by ABR as of March 31, 2022
(dollars in thousands, except per square foot data)
This table includes the Company’s retail operating properties.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tenant | | Primary DBA/
Number of Stores | | Number of Stores(1) | | Total Leased GLA/NRA(2) | | ABR(3) | | % of Weighted ABR(4) |
| | | | | | | | | | | |
| 1 | The TJX Companies, Inc. | | T.J. Maxx (18), Marshalls (12), HomeGoods (10), Homesense (2), T.J. Maxx & HomeGoods combined (2) | | 44 | | | 1,296 | | | $ | 14,065 | | | 2.5 | % |
| | | | | | | | | | | |
| 2 | Best Buy Co., Inc. | | Best Buy (15), Pacific Sales (1) | | 16 | | | 633 | | | 11,145 | | | 2.0 | % |
| | | | | | | | | | | |
| 3 | PetSmart, Inc. | | | | 32 | | | 657 | | | 10,486 | | | 1.9 | % |
| | | | | | | | | | | |
| 4 | Ross Stores, Inc. | | Ross Dress for Less | | 31 | | | 885 | | | 10,330 | | | 1.8 | % |
| | | | | | | | | | | |
| 5 | Michaels Stores, Inc. | | Michaels | | 29 | | | 651 | | | 8,736 | | | 1.6 | % |
| | | | | | | | | | | |
| 6 | Bed Bath & Beyond Inc. | | Bed Bath & Beyond (14), buybuy BABY (9) | | 23 | | | 613 | | | 8,382 | | | 1.5 | % |
| | | | | | | | | | | |
| 7 | Gap Inc. | | Old Navy (25), The Gap (3), Banana Republic (3), Athleta (2) | | 33 | | | 451 | | | 8,113 | | | 1.4 | % |
| | | | | | | | | | | |
| 8 | Dick’s Sporting Goods, Inc. | | Dick’s Sporting Goods (11), Golf Galaxy (1) | | 12 | | | 591 | | | 7,236 | | | 1.3 | % |
| | | | | | | | | | | |
| 9 | Publix Super Markets, Inc. | | | | 14 | | | 669 | | | 6,884 | | | 1.2 | % |
| | | | | | | | | | | |
| 10 | Lowe’s Companies, Inc. | | | | 7 | | | 168 | | | 6,488 | | | 1.2 | % |
| | | | | | | | | | | |
| 11 | Albertsons Companies, Inc. | | Safeway (4), Jewel-Osco (3), Tom Thumb (2) | | 9 | | | 481 | | | 6,437 | | | 1.1 | % |
| | | | | | | | | | | |
| 12 | The Kroger Co. | | Kroger (6), Harris Teeter (2),
QFC (1), Smith’s (1) | | 10 | | | 355 | | | 5,753 | | | 1.0 | % |
| | | | | | | | | | | |
| 13 | Petco Health And Wellness Company, Inc. | | | | 22 | | | 299 | | | 5,346 | | | 1.0 | % |
| | | | | | | | | | | |
| 14 | Ulta Beauty, Inc. | | | | 24 | | | 248 | | | 5,154 | | | 0.9 | % |
| | | | | | | | | | | |
| 15 | Total Wine & More | | | | 13 | | | 305 | | | 5,069 | | | 0.9 | % |
| | | | | | | | | | | |
| 16 | BJ’s Wholesale Club, Inc. | | | | 2 | | | 115 | | | 4,939 | | | 0.9 | % |
| | | | | | | | | | | |
| 17 | Five Below, Inc. | | | | 29 | | | 258 | | | 4,901 | | | 0.9 | % |
| | | | | | | | | | | |
| 18 | Kohl’s Corporation | | | | 7 | | | 361 | | | 4,865 | | | 0.9 | % |
| | | | | | | | | | | |
| 19 | Burlington Stores, Inc. | | | | 8 | | | 445 | | | 4,496 | | | 0.8 | % |
| | | | | | | | | | | |
| 20 | Ahold U.S.A. Inc. | | Stop & Shop (3), Giant Foods (1) | | 4 | | | 239 | | | 4,464 | | | 0.8 | % |
| | | | | | | | | | | |
| 21 | DSW Designer Shoe Warehouse | | | | 16 | | | 314 | | | 4,452 | | | 0.8 | % |
| | | | | | | | | | | |
| 22 | Office Depot, Inc. | | Office Depot (11), OfficeMax (3) | | 14 | | | 308 | | | 4,376 | | | 0.8 | % |
| | | | | | | | | | | |
| 23 | Mattress Firm Group Inc. | | Mattress Firm (26), Sleepy’s (5) | | 31 | | | 153 | | | 4,319 | | | 0.8 | % |
| | | | | | | | | | | |
| 24 | Party City Holdings Inc. | | | | 18 | | | 263 | | | 4,093 | | | 0.7 | % |
| | | | | | | | | | | |
| 25 | Fitness International, LLC | | | | 5 | | | 205 | | | 4,092 | | | 0.7 | % |
| Total Top Tenants | | | | 453 | | | 10,963 | | | $ | 164,621 | | | 29.4 | % |
(1)Number of stores represents stores at consolidated and unconsolidated properties.
(2)Total leased GLA/NRA excludes the square footage of structures located on land owned by the Company and ground-leased to tenants.
(3)ABR represents the monthly contractual rent for March 31, 2022, for each applicable tenant multiplied by 12 and does not include tenant reimbursements. ABR represents 100% of the ABR at consolidated properties and the Company’s share of the ABR at unconsolidated properties excluding ground lease rent.
(4)Percent of weighted ABR includes ground lease rent and represents the Company’s share of the ABR at consolidated and unconsolidated properties.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 15 |
Kite Realty Group Trust
Retail Leasing Spreads
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Comparable Space(1)(2) |
Category | | Total Leases(1) | | Total Sq. Ft.(1) | | Leases | | Sq. Ft. | | Prior Rent PSF(3) | | New Rent PSF(4) | | Cash Rent Spread | | TI, LL Work, Lease Commissions PSF(5) |
| | | | | | | | | | | | | | | | |
| New Leases – Q1 2022 | | 72 | | | 326,957 | | | 26 | | | 91,064 | | | $ | 19.95 | | | $ | 31.66 | | | 58.7 | % | | |
| New Leases – Q4 2021 | | 47 | | | 236,615 | | | 23 | | | 134,201 | | | 19.76 | | | 25.18 | | | 27.4 | % | | |
| New Leases – Q3 2021 | | 38 | | | 239,157 | | | 17 | | | 124,864 | | | 13.47 | | | 16.23 | | | 20.6 | % | | |
| New Leases – Q2 2021 | | 27 | | | 159,497 | | | 11 | | | 35,612 | | | 25.86 | | | 30.95 | | | 19.7 | % | | |
| Total | | 184 | | | 962,226 | | | 77 | | | 385,741 | | | $ | 18.33 | | | $ | 24.35 | | | 32.8 | % | | $ | 72.58 | |
| | | | | | | | | | | | | | | | |
| Renewals – Q1 2022 | | 110 | | | 727,006 | | | 79 | | | 588,368 | | | $ | 18.16 | | | $ | 19.77 | | | 8.9 | % | | |
| Renewals – Q4 2021 | | 85 | | | 690,450 | | | 60 | | | 515,802 | | | 16.08 | | | 17.41 | | | 8.3 | % | | |
| Renewals – Q3 2021 | | 44 | | | 345,663 | | | 33 | | | 220,843 | | | 18.68 | | | 20.63 | | | 10.4 | % | | |
| Renewals – Q2 2021 | | 46 | | | 478,498 | | | 39 | | | 395,202 | | | 14.93 | | | 16.05 | | | 7.5 | % | | |
| Total | | 285 | | | 2,241,617 | | | 211 | | | 1,720,215 | | | $ | 16.86 | | | $ | 18.32 | | | 8.7 | % | | $ | 0.77 | |
| | | | | | | | | | | | | | | | |
| Total – Q1 2022 | | 182 | | | 1,053,963 | | | 105 | | | 679,432 | | | $ | 18.40 | | | $ | 21.36 | | | 16.1 | % | | |
| Total – Q4 2021 | | 132 | | | 927,065 | | | 83 | | | 650,003 | | | 16.84 | | | 19.02 | | | 12.9 | % | | |
| Total – Q3 2021 | | 82 | | | 584,820 | | | 50 | | | 345,707 | | | 16.79 | | | 19.04 | | | 13.4 | % | | |
| Total – Q2 2021 | | 73 | | | 637,995 | | | 50 | | | 430,814 | | | 15.83 | | | 17.28 | | | 9.2 | % | | |
| Total | | 469 | | | 3,203,843 | | | 288 | | | 2,105,956 | | | $ | 17.13 | | | $ | 19.42 | | | 13.4 | % | | $ | 13.92 | |
(1)Excludes office and ground leases. Comparable space leases on this table are included for second generation retail spaces. Comparable leases represent those leases for which there was a former tenant within the last 12 months.
(2)Comparable renewals exclude leases with terms 24 months or shorter.
(3)Prior rent represents minimum rent, if any, paid by the prior tenant in the final 12 months of the term. All amounts reported at lease execution.
(4)Contractual rent represents contractual minimum rent per square foot for the first 12 months of the lease.
(5)Includes redevelopment costs for tenant-specific landlord work and tenant allowances provided to tenants.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 16 |
Kite Realty Group Trust
Lease Expirations as of March 31, 2022
(dollars in thousands, except per square foot data)
These tables include the following:
▪Operating retail properties;
▪Operating office properties; and
▪Development/redevelopment property tenants open for business who have commenced paying rent as of March 31, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Retail Portfolio | | | | | | | | | | | | | | | | | | |
| | | | Expiring GLA – Retail(2) | | | | | | Expiring ABR per Sq. Ft.(3) |
| | Number of Expiring Leases(1) | | Shop Tenants | | Anchor Tenants | | | | Expiring ABR
(Pro-rata) | | % of
Total ABR
(Pro-rata) | | Shop Tenants | | Anchor Tenants | | | | Total |
| | | | | | | | | | | | | | | | | | | | |
| 2022 | | 402 | | | 892,337 | | | 795,106 | | | | | $ | 33,531 | | | 6.4 | % | | $ | 28.56 | | | $ | 10.22 | | | | | $ | 19.90 | |
| 2023 | | 591 | | | 1,387,264 | | | 2,557,662 | | | | | 78,005 | | | 14.9 | % | | 30.40 | | | 14.04 | | | | | 19.79 | |
| 2024 | | 595 | | | 1,380,744 | | | 2,575,566 | | | | | 76,604 | | | 14.6 | % | | 32.11 | | | 13.36 | | | | | 20.14 | |
| 2025 | | 452 | | | 1,072,978 | | | 2,541,030 | | | | | 64,991 | | | 12.4 | % | | 30.56 | | | 12.97 | | | | | 18.23 | |
| 2026 | | 438 | | | 989,332 | | | 2,359,691 | | | | | 63,512 | | | 12.1 | % | | 30.74 | | | 14.36 | | | | | 19.27 | |
| 2027 | | 378 | | | 897,842 | | | 2,156,859 | | | | | 56,391 | | | 10.8 | % | | 30.01 | | | 13.82 | | | | | 18.60 | |
| 2028 | | 182 | | | 447,736 | | | 1,047,933 | | | | | 30,451 | | | 5.8 | % | | 33.81 | | | 14.66 | | | | | 20.38 | |
| 2029 | | 161 | | | 387,430 | | | 1,111,043 | | | | | 31,130 | | | 5.9 | % | | 32.57 | | | 16.78 | | | | | 20.83 | |
| 2030 | | 126 | | | 382,710 | | | 539,346 | | | | | 19,163 | | | 3.7 | % | | 28.69 | | | 15.54 | | | | | 20.94 | |
| 2031 | | 129 | | | 339,693 | | | 655,504 | | | | | 20,991 | | | 4.0 | % | | 31.69 | | | 15.76 | | | | | 21.16 | |
| Beyond | | 193 | | | 449,250 | | | 2,093,253 | | | | | 49,439 | | | 9.4 | % | | 31.89 | | | 17.11 | | | | | 19.67 | |
| | 3,647 | | | 8,627,316 | | | 18,432,993 | | | | | $ | 524,208 | | | 100.0 | % | | $ | 30.83 | | | $ | 14.31 | | | | | $ | 19.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Office Portfolio | | | | | | | | | | | | | | | | | | | |
| | | | Expiring GLA(2) | | | | | | | | | | | | | | | | |
| | Number of Expiring Office Leases(1) | | Office
Tenants | | | | | | Expiring
Office ABR | | % of Total
Office ABR | | | | Expiring Office ABR per Sq. Ft.(3) | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 2022 | | 35 | | | 329,935 | | | | | | | $ | 7,825 | | | 20.0 | % | | | | $ | 23.72 | | | | | |
| 2023 | | 35 | | | 126,396 | | | | | | | 3,903 | | | 10.0 | % | | | | 30.88 | | | | | |
| 2024 | | 40 | | | 227,209 | | | | | | | 6,124 | | | 15.6 | % | | | | 26.95 | | | | | |
| 2025 | | 13 | | | 164,133 | | | | | | | 3,492 | | | 8.9 | % | | | | 21.28 | | | | | |
| 2026 | | 13 | | | 66,843 | | | | | | | 2,044 | | | 5.2 | % | | | | 30.58 | | | | | |
| 2027 | | 14 | | | 79,394 | | | | | | | 2,426 | | | 6.2 | % | | | | 30.55 | | | | | |
| 2028 | | 5 | | | 112,519 | | | | | | | 2,951 | | | 7.5 | % | | | | 26.23 | | | | | |
| 2029 | | 5 | | | 75,943 | | | | | | | 2,813 | | | 7.2 | % | | | | 37.04 | | | | | |
| 2030 | | 4 | | | 41,061 | | | | | | | 910 | | | 2.3 | % | | | | 22.17 | | | | | |
| 2031 | | 4 | | | 121,003 | | | | | | | 3,357 | | | 8.5 | % | | | | 27.74 | | | | | |
| Beyond | | 4 | | | 90,599 | | | | | | | 3,369 | | | 8.6 | % | | | | 37.19 | | | | | |
| | 172 | | | 1,435,035 | | | | | | | $ | 39,214 | | | 100.0 | % | | | | $ | 27.33 | | | | | |
(1)Lease expiration table reflects rents in place as of March 31, 2022 and does not include option periods; 2022 expirations include 68 month-to-month retail tenants and five month-to-month office tenants. This column also excludes ground leases.
(2)Expiring GLA excludes estimated square footage attributable to non-owned structures on land owned by the Company and ground-leased to tenants.
(3)ABR represents the monthly contractual rent as of March 31, 2022 for each applicable tenant multiplied by 12. Excludes tenant reimbursements and ground lease revenue.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 17 |
Kite Realty Group Trust
Components of Net Asset Value as of March 31, 2022
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | |
| Cash Net Operating Income (NOI) | | Page | | Other Assets(3) | | Page |
| | | | | | |
| GAAP property NOI (incl. ground lease revenue) | $ | 139,295 | | 6 | | Cash, cash equivalents and restricted cash | $ | 82,190 | | 3 |
| Below-market lease intangibles, net | (584) | | | | Short-term deposits | 125,000 | | 3 |
| Straight-line rent | (4,045) | | | | Tenant and other receivables (net of SLR) | 37,010 | | 3 |
| Other property-related revenue | (1,124) | | 6 | | Prepaid and other assets | 96,281 | | 3 |
| Ground lease (“GL”) revenue | (10,634) | | 6 | | | | |
| Consolidated Cash Property NOI (excl. GL) | $ | 122,908 | | | | | | |
| | | | | | |
Annualized Consolidated Cash Property NOI (excl. ground leases) | $ | 491,632 | | | | | | |
| | | | | | |
| Adjustments To Normalize Annualized Cash NOI | | | | Liabilities | | |
| | | | | | |
Remaining NOI to come online from development and redevelopment projects(1) | $ | 11,334 | | 13 | | Mortgage and other indebtedness, net | $ | (3,130,018) | | 3 |
| Unconsolidated EBITDA | 1,816 | | 8 | | Pro rata adjustment for joint venture debt | (31,889) | | 8 |
| General and administrative expense allocable to property management activities included in property expenses ($3.7 million in Q1) | 14,800 | | 6, note 3 | | Accounts payable and accrued expenses | (124,193) | | 3 |
| Total Adjustments | 27,950 | | | | Other liabilities | (306,268) | | 3 |
| | | | Noncontrolling redeemable joint venture interest | (10,070) | | |
| | | | Projected remaining under construction development/redevelopment(2) | (91,200) | | 13 |
Annualized Normalized Portfolio Cash NOI (excl. ground leases) | $ | 519,582 | | | | | | |
| Annualized ground lease NOI | 42,536 | | | | | | |
| Total Annualized Portfolio Cash NOI | $ | 562,118 | | | | Common shares and Units outstanding | 221,559,185 | | |
(1)Excludes the projected cash NOI and related cost from the future opportunities outlined on page 13.
(2)Remaining costs on page 13 for development projects.
(3)Excludes construction in progress and entitled land held for development.
| | | | | |
| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 18 |
Kite Realty Group Trust
Non-GAAP Financial Measures
Funds from Operations
Funds from Operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The Company calculates FFO, a non-GAAP financial measure, in accordance with the best practices described in the April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (“NAREIT”), as restated in 2018. The NAREIT white paper defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.
Considering the nature of our business as a real estate owner and operator, the Company believes that FFO is helpful to investors in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains or losses from sales of depreciated property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO excludes the 2021 gain on sale of the ground lease portfolios as these sales were part of our capital strategy distinct from our ongoing operating strategy of selling individual land parcels from time to time. FFO (a) should not be considered as an alternative to net income (calculated in accordance with GAAP) for the purpose of measuring our financial performance, (b) is not an alternative to cash flow from operating activities (calculated in accordance with GAAP) as a measure of our liquidity, and (c) is not indicative of funds available to satisfy our cash needs, including our ability to make distributions. The Company’s computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. A reconciliation of net income (calculated in accordance with GAAP) to FFO is included elsewhere in this Financial Supplement.
From time to time, the Company may report or provide guidance with respect to “FFO as adjusted” which starts with FFO, as defined by NAREIT, and then removes the impact of certain non-recurring and non-operating transactions or other items the Company does not consider to be representative of its core operating results including, without limitation, gains or losses associated with the early extinguishment of debt, gains or losses associated with litigation involving the Company that is not in the normal course of business, merger and acquisition costs, the impact on earnings from employee severance, the excess of redemption value over carrying value of preferred stock redemption, and the impact of prior period bad debt or the collection of accounts receivable previously written off (“prior period collection impact”), which are not otherwise adjusted in the Company’s calculation of FFO.
Adjusted Funds from Operations
Adjusted Funds from Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the real estate industry. AFFO modifies FFO for certain cash and non-cash transactions that are not included in FFO. AFFO should not be considered an alternative to net income as an indicator of the Company’s performance or as an alternative to cash flow as a measure of liquidity or the Company’s ability to make distributions. Management considers AFFO a useful supplemental measure of the Company’s performance. The Company’s computation of AFFO may differ from the methodology for calculating AFFO used by other REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net income (calculated in accordance with GAAP) to AFFO is included elsewhere in this Financial Supplement.
Net Operating Income and Same Property Net Operating Income
The Company uses property net operating income (“NOI”), a non-GAAP financial measure, to evaluate the performance of our properties. The Company defines NOI as income from our real estate, including lease termination fees received from tenants, less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and certain corporate level expenses, including merger and acquisition costs. The Company believes that NOI is helpful to investors as a measure of our operating performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as depreciation and amortization, interest expense, and impairment, if any.
The Company also uses same property NOI (“Same Property NOI”), a non-GAAP financial measure, to evaluate the performance of our properties. Same Property NOI is net income excluding properties that have not been owned for the full periods presented. However, due to the size of the Retail Properties of America, Inc. (“RPAI”) portfolio acquired in the merger with RPAI, which closed in October 2021, (the “Merger”), the legacy RPAI properties have been deemed to qualify for the same property pool beginning in 2022 if they had a full quarter of operations in 2021 within the legacy RPAI portfolio prior to the Merger. Same Property NOI also excludes (i) net gains from outlot sales, (ii) straight-line rent revenue, (iii) lease termination income in excess of lost rent, (iv) amortization of lease intangibles, and (v) significant prior period expense recoveries and adjustments, if any. When the Company receives payments in excess of any accounts receivable for terminating a lease, Same Property NOI will include such excess payments as monthly rent until the earlier of the expiration of 12 months or the start date of a replacement tenant.
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| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 19 |
Kite Realty Group Trust
Non-GAAP Financial Measures (continued)
Net Operating Income and Same Property Net Operating Income (continued)
The Company believes that Same Property NOI is helpful to investors as a measure of our operating performance because it includes only the NOI of properties that have been owned for the full periods presented. The Company believes such presentation eliminates disparities in net income due to the acquisition or disposition of properties during the particular periods presented and thus provides a more consistent metric for the comparison of our properties. Same Property NOI includes the results of properties that have been owned for the entire current and prior year reporting periods.
In order to provide meaningful comparative information across periods that, in some cases, predate the Merger, all information regarding the performance of the same property pool is presented as though the Merger was consummated on January 1, 2021 (i.e., as though the properties owned by RPAI prior to the Merger that are included in our same property pool had been owned by the Company for the entirety of all comparison periods for which same property pool information is presented). NOI and Same Property NOI should not, however, be considered as alternatives to net income (calculated in accordance with GAAP) as indicators of our financial performance. The Company’s computation of NOI and Same Property NOI may differ from the methodology used by other REITs and, therefore, may not be comparable to such other REITs.
When evaluating the properties that are included in the same property pool, we have established specific criteria for determining the inclusion of properties acquired or those recently under development. An acquired property is included in the same property pool when there is a full quarter of operations in both years subsequent to the acquisition date. The properties acquired in the Merger with RPAI qualify for the same property pool beginning in 2022 if they had a full first quarter of operations in 2021 within the legacy RPAI portfolio prior to the Merger. Development and redevelopment properties are included in the same property pool four full quarters after the properties have been transferred to the operating portfolio. A redevelopment property is first excluded from the same property pool when the execution of a redevelopment plan is likely and we (a) begin recapturing space from tenants or (b) the contemplated plan significantly impacts the operations of the property. For the three months ended March 31, 2022, the same property pool excludes (i) Glendale Town Center, which was reclassified from active redevelopment into our operating portfolio in December 2021, (ii) seven active development and redevelopment projects, (iii) Arcadia Village and Pebble Marketplace, which were acquired subsequent to January 1, 2021, and (iv) office properties.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Net Debt to EBITDA
The Company defines EBITDA, a non-GAAP financial measure, as net income before interest expense, income tax expense of the taxable REIT subsidiary, and depreciation and amortization. For informational purposes, the Company also provides Adjusted EBITDA, which it defines as EBITDA less (i) EBITDA from unconsolidated entities, (ii) gains on sales of operating properties or impairment charges, (iii) merger and acquisition costs, (iv) other income and expense, (v) noncontrolling interest EBITDA, and (vi) other non-recurring activity or items impacting comparability from period to period. Annualized Adjusted EBITDA is Adjusted EBITDA for the most recent quarter multiplied by four. Net Debt to Adjusted EBITDA is the Company’s share of net debt divided by Annualized Adjusted EBITDA. EBITDA, Adjusted EBITDA, Annualized Adjusted EBITDA and Net Debt to Adjusted EBITDA, as calculated by the Company, are not comparable to EBITDA and EBITDA-related measures reported by other REITs that do not define EBITDA and EBITDA-related measures exactly as we do. EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA do not represent cash generated from operating activities in accordance with GAAP and should not be considered alternatives to net income as an indicator of performance or as alternatives to cash flows from operating activities as an indicator of liquidity.
Considering the nature of our business as a real estate owner and operator, the Company believes that EBITDA, Adjusted EBITDA and the ratio of Net Debt to Adjusted EBITDA are helpful to investors in measuring our operational performance because they exclude various items included in net income that do not relate to or are not indicative of the Company’s operating performance, such as gains or losses from sales of depreciated property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. For informational purposes, the Company also provides Annualized Adjusted EBITDA, adjusted as described above. The Company believes this supplemental information provides a meaningful measure of its operating performance. The Company believes presenting EBITDA and the related measures in this manner allows investors and other interested parties to form a more meaningful assessment of the Company’s operating results.
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| 1st Quarter 2022 Supplemental Financial and Operating Statistics | 20 |
