Kite Realty Group Trust (KRG) 2 Aug 182018 Q2 Earnings call transcript

Company Profile

Participants

Bryan McCarthy	SVP-Marketing & Communications
John Kite	Chief Executive Officer
Tom McGowan	Chief Operating Officer
Christy McElroy	Citi Group
Todd Thomas	KeyBanc Capital Markets
Collin Mings	Raymond James
Alexander Goldfarb	Sandler O’Neill
Craig Schmidt	Bank of America
Jeff Donnelly	Wells Fargo
Linda Tsai	Barclays

Call transcript

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Operator

Good day, ladies and gentlemen, and thank you for your patience.

You have joined the Q2 2018 at Kite Reality Group Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference maybe recorded. to Marketing call and like host, to now of SVP Communications would turn over the your I Mr. Bryan McCarthy, begin. sir you may

Bryan McCarthy

and Welcome everyone. Quarter good Realty you Second Earnings to Group's Call. Thank Kite afternoon

of Actual comments today's statements. to that on are forward-looking Some differ future and materially of and uncertainties. contain events risks may are statements based assumptions results inherent these subject from

XX-K. including results the remarks recent For can company’s release press our that website our these certain of about include to financial Today’s a performance our for the factors Please please more our GAAP measures SEC non-GAAP filings, information affect adversely see to available refer results. on financial non-GAAP reconciliation most earnings also measures. yesterday’s

Group On Tom the Accounting I Treasurer President, to are turn Operating Kite; Officer, Senior Officer, McGowan; Wade Vice the Buell. call call Markets Officer, Chief John Achenbach, with Executive me and Realty Chief President, David Kite Chief Capital Vice Senior Corporate John. now and today will over from

John Kite

Bryan. Good afternoon Thanks everyone.

had we I’m on our performance. quarter another executing and our with pleased stated objectives, strong While

in previous forth increased compared million million, share, to was FFO year. $XX.X was from AFFO set $X.XX NOI per As earnings diluted press or while X% up which quarter. was our Same-store the release, $XX.X last X.X%

per our comparable $X debt $XX.XX times and Our significant to X.X improvements made and to leases liquidity to blended quarter and and improving EBITDA rents level nearly several spreads ABR key milestones new lowering we to in cash foot, on renewals hit raising our billion. ratio was XX.X% by square the net

which months contributed discussions the used new interest to down in partnership for three about $XX XX% net products difficulty] debt. pay working [technical of TH with also proceeds We in our Real million are and exchange we ownership properties together. Estate, of several We

and Livingston were operations continue traded market The Center and New properties management Crossing high Texas substantial Florida. The fees. Volente in the at properties highlights private private a valuations. we demonstrates us to of times our the debt properties helps contributed goal the forward the take and will between EBITDA X lowering Plaza the realizing well-positioned Transaction in Livingston which a We net Austin, three and receive open-air range. manage day-to-day cap, it step of Tamiami to public Naples, Shopping leasing and value in Jersey, current also X of centers, disconnect to low our

end EBITDA times - of from As quarter June to our of X.X the debt at net of the down was X.X the QX. end XX, at

preferred end we a do importance, XXXX have debt X.X As years. maturing of have not $XX of through any reminder we average weighted the maturity is our stock. only and Of equal million

on market to We the advantage private approximately order assets look balance opportunities investment-grade to committed in environment reach will our another for to take attractive in I continue we’ll million near of $XXX goal. sell We our anticipate further as we metrics. to quarter quarter leases initiative. of June additional the anchor Box anchor making all Big regard In sheet of our to XX. end to and XX% progress was two leasing, working are our Surge continued term to leverage this remain look additional executed lease strengthen We valuations. of our this and worth of this

spreads two higher bill combined Carrier year. replace foot last lease square for peer Supreme XX,XXX strong we cash lease XX%. renewals additional in and [technical points the Court highest the the level in new maintained period Indiana majority this with a rent executed Corporation by vacated of executed our Indianapolis. stabilize We of space to difficulty] [technical here our We small to the basis group we and difficulty] lease office shop building also able were XXX addition In XX.X% our in

percentage least possible the the with respect stabilized now We're of to person. is the the committed process under currently position, of [technical external just finding remain to interviewing best we With difficulty]. internal property candidates. in FFO XX Our and

However, and teams of shape strong Buell. great to Wade in finance as Achenbach and accounting not into under the we our are anything, have do Dave leadership rush

Finally we to This and been else to we contribution was forward venture Thanks three us to of today for to guidance plan. questions. revised due solely earnings TH properties the contribution. joint reflect Everything to the joint venture. the joining everyone has adjustment look the according

Operator

of question of McElroy first Group. line Our from [Operator Citi Instructions] Christy comes the

Your line is open.

Christy McElroy

Hi, good afternoon.

on doesn't down? year-end just range the is the regarding that guidance, the forecast talk how timing up average XXXX are positives guidance following projection? commencements that much the a Just other the or is rate to Is there occupancy being offsetting where occupancy about but into but are occupancy unchanged, same-store can growth lower the the issue you are least the change pushed

John Kite

did the combination in guidance intact it’s I into We the both little of hold the Christy. whole are year year when debt Well, we guidance where at a first factored of think the at we same-store X.X%. same-store of actually the you for had mean it, bad obviously look half in I course.

used kind conservative. the of million half the just under over another of left pretty [technical been difficulty] year. in XXX,XXX debt same-store are in although we bad $X.X guidance, So We've the little reserve first only remaining we've

few there. conservative things early leaving you at very the of But of when first kind if go and to debt, Toys what’s to adjust made relates half any we way. intact really with in year to upward as a the that it shape things we're it felt sense, pretty-pretty So, it's similar other look happened essentially it’s bad

So, I that's feel reasonable. like

Christy McElroy

Okay.

we is year? we thinking into just into XXXX should an to issue heading how timing lease clear, think and just about commencement be growth and the as delays rate any here be about So, next

John Kite

Okay.

different relates than So, a as it ‘XX, right. question ‘XX, to little it’s

is So, lease this exactly we've ‘XX projecting how it. point at been commencement for

leasing months get Big I things they recall you producing XX XX the even and maybe generally last the mean, talking income. Box If patterns, in that, these before to take one about call earnings the to

since beginning the was the we filed intact [technical of difficulty] in was year and Toys So, back and then Toys thereafter.

going at all those right to of six obviously is once now back time. getting boxes take So,

yes, and - last these get said I back you this one-year quickly. a So, boxes when thing this not will that call, is there

So, there. of than sure other boxes, that as we as lease a we will ‘XX Toys seen into have this in past. the boxes push release these of some activity talking with activity the faster but that about we're frankly pretty some since the good with I'd we've say specifically

Christy McElroy

debt impact there that a you structure talked a things? with to might on how impact maybe that that would then and drag? down. timing the had of Okay And, the fee and doing regarding relatively pay this cause Is on talk differential about about the deal neutral guidance basis that the you just FFO can JV related FFO

John Kite

joint Well, the as of the relates assets product into a XX% XX%. us to and it and FFO That question. impact the selling selling simply retaining I if understand venture your

So, fees. a obviously straightforward that are this up the very deal you is make through fees we’ve lost that would NOI property where And, that leasing. not management

about down million the think $XXX all So, paydown, I think midpoint into, and did a going million, it was guidance of $XX almost is, that debt went actually of our we a penny. if you

the perspective year the and from you you’ve was next a second part, So, because year, on And, again you out about a deleveraging whole our right? of that frankly impact year I’m good then on at pretty think the sorry, cutting so and got transaction way And that’s earnings. that, when look through what Christy question? half you’re

Christy McElroy

Sure.

part how offset the the the some of the was calculating factor fees that normal structure maybe sounds just into the fee debt like structure, you answered that of it I it. It but high and delusion, paydown think around X? talked rate I the and about And, fee not is cap other the entirely. did deal, on guess the a question

John Kite

fees off the there rate into cap the of Yes, rate. no is cap that factor NOI, purely was

when all where figure sold of deals we currently And, the the of there cap NOI three that was of associated the say blend in, in that valuation, So, out we perspective cap so look the had. with people But X at - are to it’s trying off kind that etcetera. fees from high no that rate. you we

Christy McElroy

Thank you. Okay.

John Kite

Thank you.

Operator

you. Thank

line comes question of the KeyBanc Thomas of next Markets. Capital Todd from Our

open. Your line is

Todd Thomas

quarter? afternoon. would a consider you you order $XXX be to mentioned your of new these million something dispositions your did target, similar it transaction John, in leverage additional during venture Hi, joint that would doing is and to reach partner in thanks, outright the consider good venture joint you sells or would format

John Kite

point is at there I potential. specific now, this nothing Todd, would are just looking what to you we is that Well is right

when thought we at after So, that for But nice that stay quite things in low clear years are to we to of would and we’ve of where capital us all just simply at having are we frankly, the We involved the right? to that, want that us. about So, open just this sell gets outright was pretty asset options, to which the turn bucket us where would in really million, asset kind of range is look that’s us. of asset would there was to available few saying we wanted not and both terms probably been be, one leverage in determined, or due me either that valuations looking another ago scenarios. factors, X.Xx. that assumed on in of And, but we’re amount Xx no to to is was to one various an depend a we another just whether different that’s JV - on the $XXX about that whether options kind timing

that’s sense get making that’s But do associated So, that. are there we what not a and timing there the to need close intend we progress, is we excellent of we would are do. with and to all, to what

Todd Thomas

you as in third-party how like the venture what maybe from this your partner Are acquisitions equation acquisitions, And, well? is considering appetite partner terms the joint of the format, I Okay. of other and on from your owners guess there? about within side

John Kite

with I things first of great billion the of largest a this is of investment or I the managers a we’ve mentioned $XXX talked all, Yes, directly assets. mean, are is real-estate I of over look, one the mean, group, one there with about they and community out them asset

definitely - good sheet, it’s ourselves get in very very into opportunities, there And, with are position very, I relationship think worked strong working anything would a having we partner balance and - that to that we of hard to so we we this would jeopardize a We not fortunate have them. anyway.

expertise, good So, we various sure a But since of and in are think we have move they about think are opportunities cost I will the be to for going talking - to and capital have that’s going marriage. we attractive a we about them some forward. be and as something it’s we good to future very

Todd Thomas

anything Okay, of it’s status? Us, great. vacancy us can you and can operating rent update leased and those to there’s the then of give Toys an occupancy I still the around give us X on your mark-to-market also boxes those a the or for you all open guess And, "R" relates boxes? And, it at on or on expectations stats paying point? as potential in update backfilling and boxes the this sort quarter current there, an

John Kite

out Okay. will the the fact lease part of in it’s in The been XX. the completely that percentage that the three be, - in occupancy June end be of QX is to yet three same-store. impacted of economic impacted, Well, parter, part second to so has

of be about so going that taken think just that’s [technical to as XX the But it’s points And, economic. thing. least so I percentage out we’ve and to as under our everything, account gone. frankly, they’re into difficulty] impact just far basis all guidance, it’s good a and of

the lot is, it reality difficulty] let But in back there, you NOI’s, other turn other kind going that’s about all are of and tremendous of things past the interest there good the some the [technical retailers probably of doing. - difficulty] the got a this tell is activity, of already sports relates amount hounds As deals boxes deals, there negotiation, of to unleash a we’ve to follow authority after action we’ve [technical bankruptcy the property is I some others, couple kind can and I through the of around gotten I happening, can directly. of mean, we’re relative lease the process, you them as Tom X the the in

I Todd, it, So, feel takes these take time. about we things good but time, it mean, just

it. this So, we reality out of - and are a all with doing, I thought the of that’s everything are associated behind, wanted with numbers there the to timeline putting there are is the we

to it’s relates actually the and you leases, those $XX.XX nice something. is overall those it I one $X.XX. one with $X.XX, take thing of - it’s like the $XX average As of And, rent think out about under it’s leases Toys,

good specifically because obviously relates pretty rents rents the leases, will thankfully those will gave in are own to where leases, so to by relating come we building we they shape those leases the of mark the be Couple So, in. replaced it are ground now when building, and it Toys as us. low very as those higher to are

So, add? good about want retailers, one of that’s feel particular feel we case that, mean, to we out feel but Tom, that you Todd, about in good good. that other we all Tom? retailer these I

Tom McGowan

backfill. that really really a how to more we in to we has these I are square The are too to forward. find suitors as are authority, bankruptcies the us only been but range, thing big such about we without for And, we has in challenging, I’ll good are talked past but four think in for of potential those feel add footage positioned which sports the locations, as boxes and moving XX,XXX helped much help Todd a a foot saying us the square little is where is other the that which XXs, nice that that try about

Todd Thomas

you. great. Okay, Thank

John Kite

Thank you.

Operator

you. Thank

Collin question Mings of James. comes next from Raymond Our

line Your open. is

Collin Mings

afternoon, guys. Good Thanks.

John Kite

Hey Collin.

Collin Mings

value tradeoff you First bigger adding new structure and the opportunities. JV about delevering John feature you question evaluated complexity there as contemplated how recognizing kind some talk some company? the versus additional you think just of of as the picture, Maybe have

John Kite

Sure.

venture of joint First this kind of our is all, of only this magnitude.

we the we are this do to past out obligated It’s wise, we - this So, as they think and view pointed are current a or And, at we That them at guys I - of where don’t more I complexity complex very in said, attractive. not capital straightforward anything in that stage. very venture. not our cost pretty this have want than our respect done highly we we we what initial these and joint can. with work to is this current arrangement

So and from perspective, are quite where that. and when was And, also NAV look it’s from this at what to perspective pretty we - a accelerated we accretive and transparent you we get wanted we it an deleveraging about did. frankly, pretty

make and complex. to not are for we’ll where us, bottom-line smart smart be pretty for So, But things a is, it very I We things deal streamlined. think, goes. it’s deal see we them like looking to

goal the we our that time from gives that a there So, debt we we at sold, sense what looking close opportunity assets very leverage-neutral a to at it net the to achieving low very are made way. in and to And, terms of as our pivot mentioned Xx want to in EBITDA grow to do. in us we smart and better that be point I

Collin Mings

else Was that JV there that just something driver there can just contributed contemplating the of is the Okay. impairment a was to quarter. maybe as you’re that some property the And, that to assets, then you discuss - tied charge? future during or impairment on to tied

John Kite

latter, would is V the there that contribution be - Joint JV to tied It there. nothing

really quarterly just So, process whole where and review to comes our what our of we you’re generally part all normal is. properties of assuming down it period the it’s

time. that difficulty] case, the these of simple. this and will impairment, looking do we the where things couple creates yes holding that or shortening little And, period they’re period actually be at in potentially go, So, shortening able holding assets, a hopefully in it’s of to [technical so we

Collin Mings

to is right response $XXX no Okay. John now, about you of that is million think kind fair? But I as in that question, prior timeline there asked formal

John Kite

looking we we a and get actively to are not it at I’ve But is it’s But obviously done. something like fair about that formal value. on said focused what always we very No, timeline. are

that so fair we opportunity, it’s it. do, find won’t, value the So, if we to right something we want we the right have. below will don’t will mix not assets If sell don’t and we we but I and do

Collin Mings

you’re but projects John some behind And, still are talk you’re as just backup maybe of delevering, on of spent cost, well? X-R there, on pipeline, the you obviously maybe just already this kind then the the Okay. front approaching just that dollar focused lot just about a as ramping that how

John Kite

exact in complete mean, also done the delivered return. and terms averaging is have almost we $XX out far, of [technical in over same were a what million I the of we There last Sure. years most that and so return. little probably another couple there that’s X.X% difficulty]

So, mean, that’s Tom forward, it. good, about talk it all I I we and time. are going the reviewing constantly

potential. some think at has creation We’re looking that other value we assets

obviously, not very stride be that the look are exactly of deploy know free want retain objective first think cash I’m are at to And, in to couple but good never where the know balance a about very a the suggesting could that, we we we years heading flow our there. that’s to what we sense So, leasing. what know. our Box want which into you times and healthy to in different stops, flow we we and when doing, and going cash we we expense sheet now that that over to next continue have We be process right lot where free do Big we’re

it be we finish we’ll to which are XX whatever deploy assess where next the months very relates obviously from redevelopment it then positioned our to which and regardless So, the close into and we there. have very the I over we capital is well these objective activities, primary goes. what then as overall macro But have boxes think

Collin Mings

over. John. the color, Appreciate I’ll it turn

John Kite

Sure.

Operator

Thank you.

O’Neill. Sandler of comes Our from Goldfarb next question Alexander

please. question Your

Alexander Goldfarb

everyone Hey, good out afternoon, there.

the it or you pick it to up, is the but of JV because going basis XX Christy’s Just assets went questions for points, driving a occupancy, why drop why question you, same-store, what’s few the that? expect that didn’t to is do on to I back that into quick

John Kite

of lease about talking Are you percentage? the our midpoint

Alexander Goldfarb

Yes.

John Kite

time, because guidance simply the previous in at our there. that’s Yes, Toys was

that, number probably and things. the Toys of that mean, So, I is Office of small that got, in think then we couple like other and I have XX of ratio majority a of Max there percent plus you’ve an

And, to that’s Economic no as be is accounted lease bps. same-store, QX the remember, that’s Toys numbers, fact about in already occupancy FFO, pool will same-store But So, economic Toys. in that’s hit Alex it by that’s really our NOI, relates all that’s percentage. just for. that XX a and all of occupancy,

ahead. go Sorry

Alexander Goldfarb

Okay. No, no, that’s cool, sorry.

John Kite

trying I that guidance the NOI still QX in and bad was to out QX. reserve same-store point debt has significant

Alexander Goldfarb

Got it as sounds it. anticipated? using And, are like much nearly you you not as

John Kite

half Well, the we first half of year, goes. didn’t in second the

Alexander Goldfarb

Okay. are the that, land third you when that quarter that in million $X then And, gains in is numbers, fourth the have or you quarter? expecting

John Kite

occurred this what that’s Now quarter.

had sale, in we then at an nothing lease actual a now we we So, can had anything really guidance land we’ve what achieved point would a which ground else there. this lease sale - for there’s there’s budgeted happen, and and ground had year thought we the small and of but assumed our we

Alexander Goldfarb

like positives the Xs that type missing going some similar just then and we FFO if if correctly are $XXX finally, I to together rate, sort million it you’re going And, high a is dispositions assume sales? going will to everything Okay. offset those sounds or be increasing XXXX we’re I’m to think be of by going forward, your impacted it negatively cap that like heard sounds

John Kite

is there going turn debt, when we paying look doubt mean, I selling impact assets that’s FFO. are no Well, to down and

the close sustainable very debt objective clearly the that doing. what we think long-term where are that’s saying to to its our are lower point and So, EBITDA we is we

of But what be, impact that will mean, ‘XX is, So, of we don’t if there’s there that, that we’ll could be yet with know significant going deal we I possible will at leasing clearly rates I it’s on. do don’t reality that. the so the yes, some in know when what other and I cap it the process, I impact we will already occur, we’re that from box amount thing looking offset mean XXXX. is can get since have financing positives

NOI, NOI million $X from of X-R, we’ve X-R. to got yes, So, and remember, there’s there’s another coming

very, you haven’t put we everyone sure look we so how I’m we, out of at want kind numbers a do We perspective and how it that. a that with So, strong we there to haven’t, has, look of ‘XX stuff. and at what how able to in new are from very that’s else we’re being redevelopments, pivot that position to growing, being doing all at point but

Alexander Goldfarb

Okay. Thank John. you,

John Kite

Thank you.

Operator

you. Thank

Schmidt Bank comes Our question next from of of America. Craig

Your question please.

Craig Schmidt

Thank that and open in mean, closings maybe we’ve percent wondering Tom. the end this high just noticed year may store terms to all I’m of of you. the increase you nationally. expansion slowed cadence you hit and has is Are for of buy overall an lease? seeing or I the end help

John Kite

quarter, Tom Well, the add. mean, on to continue out I’ll look, terms I in store start when still we of, past, and look over we can positive five I openings. think net be

net company. I So, think this one our quarters in were five just for had us we’ve the negative quarter positive, we last in

So, as are to guidance generally this positive lease we because know relates long etcetera, takes. there, generally conservative it all with how to as percentage, it that’s a relates pretty our we thing, it

So, that’s you to…? point Tom view, want my of

Tom McGowan

have buckets with, the diversify then it the that portfolio. got are ones us perspective have the the really that boxes, sizes different larger, throughout of helps interest, are think is that junior various our I dealing from we which the the size boxes, we we key boxes and midrange

about tools I income moving try speed quickly as But it’s of to believe, as I as possible art the be to we from the have, perspective, in to So, deals quickly our think successful attempt that with that. these place to as in possible. bring

Craig Schmidt

operators? small from the your of occupancy been is XX, Obviously have And, able shop you hold them? are what of what north is here hearing sentiment, to you the sentiment the

John Kite

we on for strong battle, what team, is that's shops this all as supply I we're we're highs right to to a very, bode is they over they’re Look The which like business. XX% we feel relates team. a over fighters, of plus like the we We is and portfolio and and that I in feel have mean this side that small aggressive at demand well we're very continues want. fact time XX think in the business. it that leasing this environment reality our equation our why

hurt economic kind So, we're you the mission continues. getting we of get doesn't difficulty] that's a that right good That's when thing that and obviously now. [technical hope it so

Tom McGowan

Yes, I will mean, been the keep the doing. seen base to small that like healthy in if again pace diversification got medical, lease once the past. we we've these difficulty] us continue can a closures with we shops to different that the we've and shop at health and [technical in I service mean we haven't it feel opportunities restaurants, runway brings and

We positive outlook have on shops. a

John Kite

us interesting We're creative looking I clear. just to right? it players. really everyone don't of because objectives, a from difficulty] small great is at important we're think XX [technical shop in it extremely our bring shop add of thinking at at that the retailers whatever how XX, at today That, comes look is from difficulty] we're perspective small We for at shop lot that I’ll retail about so offerings, to XX, are as Craig. we're a small that's that a way [technical we're our Yes, not to we

to some stuff retailers, cool side it as our much these the merchandising about that. mean and some going marketing I that it bottom this in energy we're innovating working you’ve that's good if really as in it's more doing that's having directly with at become mix get and I occupancy to or doing about to want feel right? you about business, around to least line and to And, percentage. we're So, of that. So, important, business, is in more area got succeed we're because going keep innovate, is

Craig Schmidt

Thank for the color. you

John Kite

Thank you.

Operator

you. Thank

Our Wells Donnelly next of question Fargo. comes from Jeff

question please. Your

Jeff Donnelly

more you private think see in a conditions going do conditions getting but John, the is, lead we're business? trading will yet and if afternoon pretty asset, you you signs market. and in the or that NAV to around conditions capital that about those just it? to I privatization you folks to significant guess more getting bit my are seeing space put how even question Maybe think other portfolio single If to hold and hold are some small you're thinking in work Good guys. this I those there guys deals guess little and discounts hold? and do jump think on the I are guess out some Do those convergence you the I dynamics to of in

John Kite

Jeff Well, think I job. mean, feel I - that's pretty controlling on we're do a like the good focused controllable we we and

metrics trade outside significant our people like feel and day, as we think certainly of good other of to lot I as this things as operating think business generally there's in from. a That's world do. I of world who I our we equal - and what premiums in every statistics who choose the Do is. Probably, little that for mean, this whatever are people think any good most to that these investing companies I at there's conditions it to remain? do reason

tax I cuts. what's the with going you've interesting things got on occurred with think

as see drives that to we'll stock valuations. So, where relates it

capital that real-estate, I it's acquisitions no that there's there. of wouldn't in with doubt that surprised corporate private it's be think there's specifically I whether parlays terms individual mean, no level. at But we've I acquisitions, interested seen which the doubt into in now whatever think next stocks directions, period right bit you'd say. pretty maintains, the I it's fast but if of in different but clear this I mean a obviously can over that it's move of if a disconnect. - hard there's to time

Jeff Donnelly

know where I'm costs, guys accelerating of the this but back low the in market? debt And, in your flows longer a seeing costs movement what just are switch terms relatively I'm development labor maybe curious and seen it been - has to starts on just to supply you pricing gears, is curious land no new point and Are the have construction a cycle, bit. creep pencils? little I we

John Kite

cost There's can there's in an that the this costs. going been to rent. doing probably it's and we construction in of But has labor, construction of I way. concerns it view history construction mean, impact deal. that temporary with standing but from of that might [technical doing increasing of a talk the difficulty] cost. particular there's our about to talk, Right but the really business, while, - yield, now environment doubt to the continue they're impact might obviously pay to way Look, a mode going tariffs, be it's issue that versus that want been as there's that, it But something, you people we stopped do rarely in no is for long-term,

So the people - that’s there less develop XX answer issue lot and people the years was than ago. are a that centers shopping there's to

of spreads. end by think good is ironically a thing. it's I events to continuing combination all in which the how So, This we're is way rent just drive a these the

new in of turn like me going it's be imagine any disagree, that mean, So, a Other that and thinking all we're we to near feel now. time but going hard it. sectors it okay, is of for see future construction, that I you are Tom construction new there's the to around turn a going we sudden lot of significant to to a lot to, hard may see you

construction, in spec not sector. see this You

Jeff Donnelly

leasing pay costs rents decisions get some Does I'm material what I on Big and and spaces, you're mean things that Box of the the thus you that redevelopment if redevelopment and labor you're just the spending of retailers to and like particularly affecting guess, enough I even now just that about you guess the do even construction in it's is rise wondering and packages change I with dynamic? TI that? thinking TI's seeing the right know that have

John Kite

it would depend go end mean, I prices, from obviously that and on if and right? you the up possible, things higher Tom. possible with oil how how prices far it's mean, mean, again increase and is low long would one I I we've significantly it’s of reasonably So, benefited steel

Tom McGowan

don't see crippling Yes. percentage it at Jeff, this I point. as

steel, construction you’ve that's year-over-year square if stop numbers, at or aren't numbers, lot cost, total up lumber a number that foot and on but whatever box back industry. going a concrete, split look impactful [technical and crippling to ultimately you a you that material to If X%. about something not $XX push X.X% etcetera. saying got difficulty] think But we’re the But ties of you're aluminum, like asphalt, mix a these about

Jeff Donnelly

Okay, great you. Thank guys.

John Kite

Thank you.

Operator

comes Barclays. Our the you. of Instructions] [Operator Tsai of from question Linda Thank line next

question Your please.

Linda Tsai

you required Hi, different scale about then acquired you how years by center outright four considerations, extension interplay assets inland between that the better scale vis-a-via with shopping the the mainly company? selling are ago. public priority or deleveraging thinking And to deal and be a then that's JV, the

John Kite

of the good we question is It's Look allocation. a things important one most allocation and do think I that capital asset Linda.

capital, about have currently So, of growth of it I of cost think whatever in potential we the think in things together our they terms those -- in and work our we where strength separately. sometimes picture our sheet, of and work by are total we offset all balance sometimes

to relates very this in strong as obviously we relates its couple clear it been position and difficulty]. So, it available have as to years, we to to want of [technical last [technical difficulty] pretty be that

think become of longer in strengths capital. We the be complacent want why to you word? long was there that position. normal, expansions want in we're this are the of be that get of of So, any the is much probably a in when than [technical that's people and condition. what's difficulty] with that People normal. a have generally right? little They albeit expansion of position front under become like I lot don't supreme that half end just to a availability We

So, growth that ability business our way that look very slightly operate ratios. at top the efficiency of balance our in impacts when But has, earnings we means terms the of put in and scale to a definitely company, that we're maybe you the the of in in hasn't efficient the front of the some of sheet of spectrum terms this at

- very, say trying confidently that's that of able whatever works then that going we're anyone's of that But I to and indicate that opportunity we opportunities to then the close a have hurt venture our continues changes our to balance that sheet think it's just So, cost there. be and advantage game. with strong partnership to going If but joint of be at cost can opportunity, take of more manageable very can people not difficulty] today very do we point to us. where pivot not is we're put being [technical we and capital, difficulty] diminished, [technical to we we've out recognized player. if And, have got capital a that

the earnings, I benefit and guess we that So, very thoughtful what it of long-term a for game. but around has I'm very we as say trying impacted realize been that view to we've short-term this is

Linda Tsai

Thanks.

John Kite

Thank you.

Operator

to remarks, call At to like John over Kite closing for the CEO sir? any you. time this turn Thank I back

John Kite

for to everyone soon. lot appreciate We and talking to us today. forward it look a Thanks joining you

Operator

your Thank a gentlemen, you, you concludes wonderful have today's Thank sir. Ladies this for participation conference. and day. and

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