Kite Realty Group Trust (KRG) 1 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Bryan McCarthy	Senior Vice President, Corporate Marketing and Communications
John Kite	Chairman and CEO
Tom McGowan	President and COO
Heath Fear	Executive Vice President and CFO
Dave Buell	Senior Vice President and CAO
Tyler Henshaw	Senior Vice President, Capital Markets and Investor Relations
Todd Thomas	KeyBanc Capital Markets
Craig Mailman	Citi
Floris Van Dijkum	Compass Point
Alexander Goldfarb	Piper Sandler
Anthony Powell	Barclays
Lizzy Doykan	Bank of America
Michael Mueller	JPMorgan
Linda Tsai	Jefferies
Dori Kesten	Wells Fargo
Wesley Golladay	Baird
Paulina Rojas Schmidt	Green Street

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Q2 2023 Kite Realty Group Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]

conference recorded. today’s advised be is being Please I to your like to conference over hand the speaker would now today, Bryan McCarthy. ahead. go Please

Bryan McCarthy

Thank Welcome everyone. quarter good Realty and second earnings to Group’s call. you, 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

Form including results, the recent For can company’s our that about XX-K. the factors please more our SEC filings, information affect adversely see most

include for also measures. measures refer these remarks results. financial Today’s certain available Please financial performance to non-GAAP release press on non-GAAP to GAAP yesterday’s reconciliation earnings our our website of

On Chief and Chief and Vice and Tom Fear; Operating call Group, Officer, President, President me Officer; Financial Realty Senior Executive Markets Tyler Vice and Kite our Chief Henshaw. President Vice and Officer, Chief the McGowan; Chairman Buell; Senior Capital Heath Relations, and today John with Accounting from Executive Kite; Dave Officer, Investor President

call I will now turn over to John. the

John Kite

All a lot, right. Bryan. Thanks morning, Good everybody.

prime drive quarter, balance overall tenancy KRG best-in-class while to growth to we results, continuing delivered strong high further in operational and to our our profile, space outstanding our and are a second cash grow for continue flow. remains The fortify quality pricing, demand sheet. and improve the our enhance position long-term During revenue

FFO generated beating $X.XX, of results. consensus $X.XX share our per per by to share. We Turning estimates

was growth X.X%, XXXX. the quarter compared for period NOI the Our same-property in as same to

midpoint. is FFO by increase NAREIT in Our guidance allowing the half the us at the outperformance to year first of $X.XX our

Heath quarterly provide from assumption updated by results X.XX% more NOI details We are to basis XX growth our also points increasing and guidance. around same-property moving will X.X%. our

on million new XXX square signed feet spread renewal leading sector producing over XX.X% and leases. blended cash X.X a comparable representing We leases,

were Excluding our cash of XX%. the option renewals, spreads blended impact

XX% a capital earned for return leases. KRG on importantly, More new

invested our best provides have for adjusted As risk existing return capital. leasing emphasized space previously, the I

While we growth on opportunity initial rents and adjustments. at open and pricing strong, implementing our leasing our long-term Recognizing retail, ability focused rent trajectory. favorable in remain of we this supply taking bumps fixed air on redefine higher CPI efforts outset dynamic the are the to the year, drive our to demand

that am of first pleased have XX% or extremely equal I and leases rent to our been and initiative, of the non-option those we greater with are have have bumps renewal XX% signed half report X% this leases through new XXXX, adjustments. successful that of fixed to CPI than

rate of and fixed the increases tenants, non-option X.X%, and XX first new is anchor our including small in -- rent average. The fixed for higher than shop average our which portfolio points renewals half annual XXXX basis was both

demand, better are the Based tenant KRG our mix a laying centers. at a to for improve growth profile. current We can’t our of upgrade on to time think embedded solid long-term foundation I merchandising the

about maximizing a best different liquidation of by to I have solution over was Bath of best the this opportunities providing In the the real opportunity Instead, we been a solution. adamant one be it’s been to Bed jolt could have leasing the sector. afforded. the fastest prioritizing environment,

tenants boxes That is backfilling sized progress higher tenants. and report great at are rents said, am attractively boxes pool with The well located we I and to that those making of better backfill pleased deep to diverse. the

grocery, and and look current different Heath detail wine status will big XX brands sporting with spectrum, spirits, box updates off-price the the negotiating are we including provide on goods, we furnishings apparel. and home to progress. across providing as forward retail more far, we Thus

opened not basis. an two limited and in we grocery sign, additional in the have to merchandising Year-to-date, Bath Our enhancing stores have four the the the success not in stores mix grocery is Bed open portfolio pipeline.

portfolio, apartment the with currently we and nearly properties returns to to X,XXX to to addition to an further in have units. portfolio. our have lifestyle several best-in-class and also appropriate. We interest multifamily adjusted grocers healthy opportunities our units additional at densifying mixed-use ownership operators risk have look forward In units entitlements and add adding an when We X,XXX for partnering

retail team continues KRG demand for open to upon the The capitalize our the cash resiliency of air and flows.

embedded enhance will profile of air pricing our increase mix, open value Our drive to and efforts merchandising increase growth the our power undoubtedly our centers. long-term

estate. sheet owners of unparalleled often with by have same when optionality the a exponentially best-in-class about acumen liquidity. We real balance substantial That is optionality high talked to supported operational afforded quality increased and

well lie really to extremely for want to outperformance positioned commitment. their and team that take We the to dedication, ahead. thank our minute I opportunities seize are a continued

the turn to now over will I call Heath.

Heath Fear

afternoon. on thanking good start share Quarter a operational allowing by for once to want to considerable to report your Good me news. our team it’s again quarter I privilege after accomplishments. the been

quarter and driven $X.XX primarily which was exceeded FFO the same-property quarterly during The $X.XX quarter generating KRG year-to-date. of expectations X.X% by X.X% by year-to-date. second and per NAREIT NOI, grew the by outperformance during share higher-than-anticipated second

and growth other increase quarter, minimum rent and in increase second a driver were of recoveries, net with and debt revenue. a XX-basis-point increased in to occupancy overage the increase bad our XXX-basis-point rent primary the lower XXX-basis-point escalators During and same-property due NOI

rent. $X, higher bad earlier, per midpoint. $X.XX $X.XX the to at we result to representing assumption in a share Bath attributable $X.XX lower of from alluded a our property payment are FFO post-petition of same increase raising guidance growth the NAREIT increase as corresponding NOI range a Beyond debt, Bed are to rent John overage As and to &

to an The other related unbudgeted $X.XX termination fee. is

following back Our half the assumptions the guidance regarding XXXX. of incorporates updated

rent during no locations the the Bed expect to will Bath rent from $X.XX assuming be Specifically, additional gross we & from year. Bath than are the Bed of Beyond, half We less first be collected

half basis revenues in be the XXXX assuming of to XXXX, of debt are of first with full points for to bad XXX balance year. revenues the of XX combined We which, prudently actual for basis the bad debt equates when the experience points

of phase deceleration a the as completion. first anticipating are Hamilton income fee project of Crossing nears We

of the two as we anticipate the on not rate quarter, blended fees the well and modeling will the are cap earnings in transactions income we We interest essentially offset. additional below impact transactional to any be is while activity neutral termination the assets sold

minimal an billion of multiple continues a Our enviable with debt-to-EBITDA net times be rate to balance -- well-staggered an over unencumbered, times. $X.X NOI of ratio maturity sheet undrawn X in schedule position, of XX% is debt, capital coverage of service X.X X times, sources. liquidity, and revolver, floating Debt our

pivot arise. intently a for with capitalize opportunity us and These excellence focused operational metrics the compelling to our allow provide on remain to team immediately flexibility and

$XX in hand with which our of and remaining maturities million only will have debt from We satisfy proceeds XXXX, cash line. on

remain materially continue which we unsecured verifies As million coming our for spreads tightened to debt the further patient good news The indicative the opportunistic in relates it due approach. recently, our as $XXX have is markets. XXXX, to that

LOI signed I progress representing the were are far, XX Before of leased a GLA. we under Bed making, units an LOI Thus call to spaces. feet over moment a are XX Bath and auction, take turning backfill in the & elaborate first whether want Beyond bankruptcy are of into on units Q&A, XXX,XXX square negotiation. either units ABR to six acquired three to or We units X.X% and the quarter with the to further ended

brands bolstering returns capital mix As merchandising enhancing is with generating further different flows and John cash of opportunity durability strong spreads and on a for XX mentioned, the tremendous KRG. our our

joining the questions. line for Operator, you prepared for Thank remarks. the call concludes this our today. Please open

Operator

Thomas with from [Operator Todd Instructions] comes first KeyBanc question Our you. Thank Markets. Capital

Your line open. is

Todd Thomas

the the are you growth year. Yeah. that that and some realized rate might full commenting you am maybe there growth at Hi. portfolio, you Good think are And the increase is that? I you of to of this terms terms afternoon. stabilized maybe long-term in the XX the having think you the occupancy, otherwise an when years and curious escalators question, do you about first John, to what achieve that compares that today, ago? just in how it working target portfolio then talked achieve or up way about you of initiatives a growth those opened think some impact drive portfolio of the in of that the success have you by of for and long-term to years of working or are that five either if on

John Kite

XXXX, as know, it mean as average there’s we achieving I very you that for where work takes through the Todd, basis are points. portfolio mean, growth I to was But in think, the portfolio. mentioned specifically, significantly above I time embedded that rent that no XXX almost Well, I the is question

space, it year, both but going shop we we have talking quickly that really the those to to when I about to it the and the drive of in and better small reality anchor you annual shop achieved caught And turns that quicker terms space, have of because was including come bumps. X% ability were this and the X% is fruition growth get hope the more of ability be to and what the I that in is

used CPI And that about when years, wasn’t part an said over the was insurance lot talk there time policy got fairly a that and a to the adjustment of we added also then -- have typical last be it to and is candidly, the I to of ago, used business that that. that be, very long XX a

of the beginning mean and And absolutely year. of set the out in goals the the we team beginning we one I and of in the goals year delivered that it. was it set our

getting no mean, modeling there’s without extremely help so, question. going specific I information, giving to And us and it’s

spreads, a our now function open you look the a X% it’s it’s different of down you right? annual in and CPI this the break a The the importantly, business particular, adjustment, bumps business renewal we healthy business lot at tells in about, retail, but that and how are health is very these the us, more I part So at that And in you of our there of non-option things, the X% when there’s able strong. And now extremely business. -- talk you health is can function for of is pull with all know out of to strong, or look interest of lot okay? air very the

Todd Thomas

on changes having escalators? tenants back credits Okay. maybe with historically certain escalators annual pushed have success driving seeing anchors categories with and or Are Are certain those in realize… you that with you

John Kite

I Yeah. mean…

Todd Thomas

…there?

John Kite

I will that mean, success are That side being get of absolutely, jump will done. is from my Tom mean, anchor the and I having conversations. those said, more have in. I business we to perspective, I difficult having comment the

would an would historically, after in typical. increase we a be anchor pretty So, five years be deal. That happy XX% with

Now little trying further. we are to that a push

comment to of turnover readily want because not turnover less But, too? So have available way as do just the Tom, the it’s We happens. there. you

Tom McGowan

Yeah.

look take in I a we steps five, the and instead stages of three of with work early box bumps. and have bumps start of then and trying think a we in to maybe and take we are this at no tenants shorter we larger a term the educate at look in to

tools to well. so to place, us we get different as this the longer, have team we advances. to as expect will And small are to as focus, the as go, ready but it very nice not take long is focused the are long make same only but anchors we And on as we using but shops, the much

Todd Thomas

provide Can a portfolio’s in of XX.X%. last you quarter, rates leased the moving into Bath recaptured rate expected that unchanged detail little trends that year? the Bed question decreased then, and around for Heath, boxes build the of occupancy the maybe was and And a during second points XX the portfolio’s economic also versus light quarter the you, to speak the you but basis at of leased Okay. occupancy half bit for

Heath Fear

Sure.

the know of Todd, a time is of the quarter. So, end as lease you basically rate the at point

that day represents during how is saying and whereas this the is your quarter. So are average at leased, economic your occupancy you you are occupancy looking much

on your rate, your So also economic lease your through it’s the compression spread not saw full occupancy. you impact your That’s lease running running why through occupancy. between but is Bed but Bath of the and a

the move year, the see back of Bed track half occupancy Bath. start terms as So the will least from the the to into we fallout in of you its

a why are but explains happened. delta explains occupancy, the having why rate. in that are decline flat the That So that we leased in more we

occupancy Todd, as were the only half, first of eight had of our that trajectory, terms numbers. we of bats In lease the out and

that We are add to to XX going third into the coming an quarter. additional

So and going you see are of to the sort occupancy leased trough our rates third into quarter.

just points around alone. numbers basis XXX some it’s about putting Bed So it, Bath

then and and leases, sign spread & will drop, grow to occupied you Beyond Bed you the SNO grow, we see will those going one, are again, as So, to our as and over between see also start course that that see number of Bath time, lease you up well.

of So to the the balance how that’s year. about of kind think

Todd Thomas

All Okay. Thank That’s right. you. helpful.

John Kite

Thanks.

Operator

One question. moment for our next

next question Craig with from comes Our Mailman Citi.

Your line open. is

Craig Mailman

a on Hey, follow-up last on Todd’s maybe just Heath, guys. occupancy. question

kind commencement I the much about but think pipeline. offset of half? Bath, the XXX Bed second you from drag kind the basis we of this As would did how of Bed points, of in mean kind then the of factoring SNO which that the hitting isolating numbers in Bath

Heath Fear

Yeah.

don’t occupancy that’s so at Craig, to So, you going guide kind with this. year-end, we are where the of

not going because don’t you to tell those move, already would signed. are I So that, I the obviously, rate lease think is

XXX don’t Bath. full basis I going occupancy, In catch the think from it’s terms the up Bed points to the of economic

we ending much you, probably started But that’s points, quarter. the think year XXX because, year. happening lower movement to a again, lot than be give as we I is be So really in as a at single of I a where basis that’s the will can spot direction obviously,

Craig Mailman

Yeah.

you of is are those here, negotiations? XX I the to running time revenue run you then, traction. have LOI splitting through tenant of the and commencement What two that That’s you do sounds have frame like over past ago, mean, than versus rather speed is you you given in than about the good other quarters quarters maximizing John, do kind where to lease think of guys also rate updated you back single are the said more know on It a much I relative that it’s get thought Okay. And to maybe backfills boxes? up think helpful. Bath. from up timing perspective, how maybe maybe kind what really and under Bed the how just much then

John Kite

in overall Yeah. what, the done, XX the changed over what last I mean boxes I have Craig, much, trajectory that mean, I don’t years. has experienced have years. several that the we think few something sense last the over we

to XX Generally you going speaking, when it’s work it’s a take lease, space. months how XX that going depend for commencement doing and are to months rent you sign on to in much

and to terms of So I than It some faster lot an as-is say not on know happens a but people rare. be that, going has it those in deal are work.

signed. are that we XX-month of So the approximately period. I trajectory It’s think get in that as still leases on

the terms the And then importantly. take I right entire would more splits, they say in as take been us say, conversations tenants of now, of for or the them space space entire are the four requiring two to the -- to have last quarters majority wanting

by of may Now subdivide and a to couple of meant merchandising want instances and kind not that’s we for game. mix what I speed this where is

which deals of split we kind one, strong. is splits And a air are goes we the so, in whatever unbelievable XX and theme, open last, it the back of is couple the the I but have to pretty years, rare, mean, done of

Craig Mailman

guys I down much Okay. of potential dry management? got thoughts times. mean, leverage balance do kind a long-term opportunities, you sheet on of you here, what’s kind And the here kind perspective, keep X capital of to how from for goal then

John Kite

that little I good, and Yeah. materially. it’s about we bit, if times quarter-to-quarter are ebb my is flow X talk from personal this mean, too not Heath perspective, but to Yeah. to wants a going but

that So pretty have end our fabulous. the set goal, of out we as a which at are low range we is

benefit the basically merger. delevered X.X another fabulous was have that beautiful of done. the since deal That’s We turns

that a opportunity the to sector make that entire at level, affords ability that the of if issues this few upon so material And to top wanted but is us high point in very sheet of our with any an balance one operate then that balance our the also probably and arises, sheet. we two one act are without can to continue the we

a position low the of been optionality. lots to we us where want continue we to be to you that love we affords in it’s So sheet again, very want is, and Heath, balance saying, the to... mid-Xs like and strong do have

Heath Fear

Yeah.

Okay. Good answers.

Craig Mailman

Did or? add you to want anything

Heath Fear

Thanks. Nothing No. else.

John Kite

the words is took mouth. out I

Heath Fear

correct. out Word mouth, my of

John Kite

It liquidity [ph]. helps to increase of part a

Craig Mailman

there legacy running the numbers and long through Heath, does until quick related amortization of that, is, One there is that’s on one. what’s on off? that RPAI the anything swaps how burns kind if tail that

Heath Fear

to have of look and have how run I I’d RPAI our schedule. at swapped they one maturity debt instruments through. forgot are which long the

nothing run it’s P&L, through that’s running I it. the to a one continuing say, will I’d the that’s So swap. thing tell through material you

$XXX out about every As in that was benefit to took expense. that million That’s forward, year you recall, we our XXXX, resulting interest $X million. a in

thing it, it’s about One a lumpy. little

sequential second and have of may it realized there’s $X to in increase first that we from it you quarter. realized of quarter noticed So the in half we expense quarter because in when the of quarter, third sort the first the a interest million, half

those nothing gets call Craig. exactly if those again, a a when mature, for take at that are to that you look little further. you offline thinking And it lumpy, but quantify can with want things you So a about, me we

Craig Mailman

QX anything No. That’s there call expense in sequentially helpful. interest Is to for XQ? out to

Heath Fear

SOFR other then $X.X that based a recent the million benefit and Again, by to on you of obviously, going in moves again, slight XQ, the are see there’s increase than in Fed.

debt, we that extent a small we floating see the will quarter-over-quarter. but material uptick, to rate a have So nothing

Craig Mailman

everyone. Thanks Great.

Operator

One question. our for next moment

Dijkum next Floris with Our Compass from Van Point. question comes

Your open. line is

Floris Van Dijkum

forward? the is could Simon the or it, particularly through of raising disclosing, mall John, of because I part earliest as followed And -- GGP are were in in years part space, that you on where for escalators one center give think anchor an CAM bumps how that, you CAM of a the of to other play also one getting in move Thanks the and out shopping us the fixed of probably going of the that comments seen that of, the rent your Maybe and ago Hey, fixed long-term what growth little years of see has obviously, and bumps, guess, some this space margins in one was overlooked higher in is, how mentioned the we shortly you ago -- of this space fixed shop kind of thereafter mean, sort so taking to terms business. Simon and do the going, me forward? on with XX XX terms portfolio. portfolio changed you fixed what start of CAM Simon as you going was fact, I let guys. your bit sort oftentimes is are and is, well, my is the that the stopped rate on in but question. of and things your you I of bumps I update large GGP to how first profit the going enhancing your think, percentage growth have

John Kite

guess, initiative I brought GGP. from CAM the fixed he And Sure.

So we are thankful. But there. doing well the reality is we very are

gotten for at We quicker all. almost back total are no we When XX% had and already have did And the thought. were the RPAI of fixed we CAM portfolio was fixed around we the know, at CAM XX% back you portfolio. than as much merger, we

gotten range. quickly we is that have conversion you our So amazing XX% shows back, in the how quite which it’s ratio

I We thing There at margin, -- ratios, our probably is up, rent is I thing, it really obviously, initiative been you it’s -- reality everybody. escalators, look shows smart do. disclose look NOI competitive you things is the at for us, our the But it’s when us because escalators. guess to has think, a and are but great. for not look, for So like than that’s base they escalators. higher that, those don’t those has it where a that’s

are and the look, better and is in right? said This coming done think, this associated I almost this my you we online. and with way remarks, we deals all I rollover the time have with XXX prepared business, basis as But points than in that year, all right, portfolio, Floris, So when adding. historical the works

got So of that that is think run just a shows how movement lot it’s that also is business, into in strength the the a have so air friction. -- space, you right a in are more it retail function the of it this coming many it’s retailers I and do drives platform terms open of but that of the the direction. that you we just

say, material of I a percentage. big is do is are but to reimbursements our a we percentage what So obviously, smaller revenue, a doing, of it’s it suffice think part

Floris Van Dijkum

very then what at on as these some potential follow-up, that are with retail of are a -- you be cinema you on you how mixed-use And going think entitlement but zero process happen there, in? new extended Ontario, or update going Carillon the the Pan rate mixed-use -- box obviously. then, -- maybe us there’s as and I happening particular, you the going Could in would terms site changed very an might on elements sold of short-term, in your I us on there? almost then very is at your a And has maybe there fact developments that give to maybe maybe interested forward, development and once there be Am, former other in cap your sites, particular, that thinking thinking California the what’s thought you update you that, in of low of at and cinema little think, process what’s is

John Kite

strategy Carillon, I the just for to that we future that a then of differently and laid Let details. of did going One been terms in example, on we that have give we you But pretty than changed. hasn’t have at out you Loudoun, looked the the give when our clear kind me developments, Tom specifically, developments, am we quite that second and

us in to it’s capital, not and great is terms do great estate, lot that. we of Carillon looking new but of a think piece I are a of for investing real

to in Loudoun. minimize One maximize investment investment We the and there the looking are

give more So but I Tom will theme hasn’t thematically, that let changed, details. you

Tom McGowan

that up hotel. selling center Yeah. property the Indianapolis. expansion in Then Pan There use no on was ended was that deal question the that a was property and a for of City Am, highest specifically, convention we a and the best that large

part that was straightforward for So easy very and us.

LA. Then on of East Ontario,

XX-acre a have parcel. or X,XXX great We

of in city are repurposing the concepts process on with the and working that working standpoint. we So various of zoning property

So moving along that is nicely.

all developments approach these, are not taking the Carillon, on that right of or measured make forcing sense So including we periods don’t which projects just very we thing, a doing based in. upon the time are

Operator

want ahead on Did go and to move question? you to the me next

John Kite

Yeah.

Sorry.

Heath Fear

Yeah. Please.

John Kite

Floris. Thanks, Sure.

Operator

moment. One

from next with Piper Sandler. Our question comes Alexander Goldfarb

open. is line Your

Alexander Goldfarb

Hey. Good afternoon out there.

So assumptions, the two Heath, low your first guys questions. bad pretty you think, were half. debt in I

or that, something I bps half low. budgeting your pretty think it points. was XX XXX Back basis it was like

parties Bath the ones. the about know already Bed all of and AMC, You known

trying based headlines to, or surface that’s of on is question is of just that are below and tenants out being there a pending this there, there historic, but burbling to conservative it teams and seem we the from get just concerning are trying because big be truly know maybe don’t a out that sense, there about. my tenants sort there’s bad that cautious not stuff really, you like Are debt. the are doesn’t So number like, you just alone, the to are on peers other

bit just for So more perspective? looking a

Heath Fear

of uncertainties. year of and full in as the environment And we typically, think, debt. of typical are we points between is macro basis I basis there’s looking run no XXX-basis-point that a that Alex, it of bad points XXX a laying history, and really environment then No. and rooted XX on the revenues is top back, question strange economy assumption the in

have So am enough I I this I saying, to in sure XYZ case out. isn’t cold Alex, there in well, a debt falls I make pocket, have where better my list bad cover

what us nothing add strange. is assume little to environment historical to be let’s see okay, the extra, plus let’s just saying, it’s specific. there’s we a So going It’s it’s because close --

to no it, really it. there’s magic that’s So

Alexander Goldfarb

like get on initiative, second the apartment is the question shopping more is the transaction Okay. maybe converting existing And color, sort -- third this adding second we the maybe or centers, apartment front, are improves buying put back is land some you just especially then you apartments. bit environment or to guys fields, behind adjacent Are of this is centers and floors to parking can this a guys normalcy. like steadily as to

you a more of to think, and would John, Just JV you run perspective sort deals bring everything. help said I bit these and partners do

So bit just a color. more

John Kite

I Yeah everything except it the mean, I think, bullet. Sure. was last

We looking Generally acquire. not like own already out are for land the we speaking, land. adjacent actively to

bit contributed and say, have mean, we we and So, yes, and have that a there, have everything done sometimes the vis-à-vis I interest capital. contributed mentioned little equity a interesting, a lot value we because of of been you Alex, it’s XX% parking taking, land the sometimes, then

said, on be they partner not think, depending at do whether of the business of operating obviously, some look might it we been point, this ourselves, sort believe bit little deal. really to significantly. the I a but own is everything, last several percentage going the years That dependent having what on generally solely over have to we we it’s have learning So pretty

higher be very we it we complement are about to-date. been profile. business. generally again, go as But is making growing to going revenue in a stream how It we we and it’s this kind potential right? growth have a people where the to are So -- multifamily, to point of is of nice measured add But own that has want estate quality the primary we the it’s real

is, a that our leverage units X,XXX amassed have an and But interest the the of almost the will reason By people are that, is of don’t a I way. I it entitled. kind substantial we right? equity have or we it part X grow are of way, have that continue lot measured ownership probably, mentioned business, why interest we we already so really We to but that to that’s ability think of X,XXX times, a in do mean in measured. units

are We thoughtful.

Alexander Goldfarb

those are you but the to And have operating are are you then, could that control point, -- all build? or X,XXX those under that John, those right what now units,

John Kite

Yeah.

Heath Fear

is… That

John Kite

sorry. No. Those have No. we am and No. are of under those then No. operating are construction. many I how

Heath Fear

Yeah.

there So five opportunities or zoning is to One develop. through we X,XXX that we that just with the units basically four that have number and at out process we may one have would be Loudoun, able are have gotten you confused

construction there you the us it and Corner XXX project, look towards at we first very right is will inventory for occupancy if But end of that will an opportunities there’s what is multifamily have that begin the of under The of So be just is year. measured. units this now,

determination the right times will opportunity have land are. But to We that list. it’s good entitled our future inside make when

Alexander Goldfarb

you. Thank

Operator

One moment next our question. for

question next comes Barclays. Our with from Powell Anthony

line Your open. is

Anthony Powell

Hi. Good afternoon.

your said, into You slide point, some that delivery total a the rate, people positive is space lease deck new the for growth at which the versus actually you. very will it to with money That want to put retail put to [inaudible] centers. in more suggests me and construct

see? in economics that, to we money the next a we new that more retail time strong and results start far how So away we have from that build the is given easier there that are risk people centers

Heath Fear

later. let is This I hi. add Heath. will start on Anthony, John and

low are think still going new we in I environment. that the be such continued So or environment a low environment supply to supply is

the plan below especially where where mean, replacement construction value. some really, have you cost what can you it at even look get I buy redevelopment if an existing can versus you in center what maybe may are center existing you for, costs

to lot any we what things looking on a our good think, our supply for and some not for are for of I a are terms densification wood of still greenfield redevelopment obviously, is structurally, us look looking going basis. multi-use projects new to go-forward And on raw as So like certainly or we to of chop existing of got projects parcels have ourselves, do construction well. in

pulling us, personally, is one our plan same capital again, of So the are on levers not at looking not I of sort -- we and it’s everyone else think way. we allocation

to it’s at than I let economically, But supply. to probably new point will I is think it acquire John. build better this

John Kite

a in five, to finding don’t land get going stuff is Heath and mean, up process through to have own No. entitlement Anthony. there minimum up really are the if years would and a I think it. perfectly, where to deal you revenue. ground ground would into deal getting I that generally you take you just three also mean, you probably it want yield the to said remember, enough I

So you reasons, previous I a at of -- still working like there’s we does and the it’s feel through right? candidly, it point, many overbuild are mean, still new -- development, an just from push just one but towards not I decade, this

but I -- this the and work better you today. a as that reasons So is it’s see don’t better why that becomes is mean there’s business it very, primary time. business this overbuild, is a XXX changing I strong any why, reasons through one very at of

example of generally that deals as tradition at you otherwise do returns would That’s And when we look landing well In why be and occasionally, land already what we we the an that. getting. and our deals. the we the own above do are

Anthony Powell

peers seeing you this back other either I it. morning. environment? allocation, there? now your new deals or about seeing I is out capital so any feels mean And What just priority some the Got but on that come Thanks. are given up to as the ramp pipeline some exactly or in leasing, our to start you to of know well talking going deals them room turn announced have

John Kite

think, acquisition to weeks us. that more centers. be couple larger mean, I as environment to No. the to there is market. There’s portfolios even said, come in to product last of six still been individual no a that interest That have continues maybe I market being tepid. coming there’s would appears to the no It that question

in opportunities. are actively involved we So reviewing

one we in of two mentioned, sector. entire the top have the I sheets balance As

do something if we now. to So can. right are very, we want But we selective very

We have do. plenty to

packaging, about the in at And so I know if terms back new same deal, mean, deals coming in were pulled they point coming I things to it’s I just market. I guess, think time, right? don’t back probably around, of are it’s some

pairing more So, that we acquisitions, are on, for if generally us, we disposition. a we trade are with really are focused doing

that’s a Heath So mean, happen. -- can at we I have whole kind we a are, year, we said, half we it’s lot be is neutral. But are are to now, that again, impact early. where right another which looking a of why

Anthony Powell

you. Thank Great.

John Kite

Thank you.

Heath Fear

Welcome.

Anthony Powell

That’s it for me.

Operator

question. our One moment for next

Next question comes from America. Lizzy Doykan from Bank of

line is Your open.

Lizzy Doykan

wanted you missed more shop see more drop occupancy. to if bit we small give seems I I decline a on if just to it. saw could Apologies color in everyone. the dip Hi, the It than last even quarter?

John Kite

it’s mean, it. really, a there’s of of Sure. majority part It’s it, I simple. I pretty small mean, the

is kind opportunity in environment had really, where getting to it if we space, quickly annual accelerating power. really are getting, majority bumps of we tenants was getting recapturing where XX% they us we pricing the of actually And rent that the but it move the to are moving Craig, probably, we are drop, think, I of tenants of and default. this in I we an out enact are the very that quality are think

our -- more we really to will something want I So there’s mean really that we and hands that’s really want continue get it. it’s to on.

Heath Fear

was the you Yeah. in I will just our shop add, rate the recall, sector at small highest if lease XX.X%.

where tremendous really just are this a now, So are we as we opportunity. viewing sitting

As got a have leases time before, we it John effectuate change. takes to and said long

So a in get and tenant do we we better faster to rent better are it. going recapture with can

happening. what’s that’s So

John Kite

pre-COVID That XX.X% can if obviously back Yeah. I reason that, we here thing that’s to we time. takes theme is, the think get theme. no more the march to there’s the it believe space, was important so we want But won’t speak but and is, space, it

Lizzy Doykan

that’s XX% just I inventory expectations been there XX% function you on lower a just on Thanks. And is the been XX helpful. outlay growth? quarter on just compared rent good last what’s curious of deck Okay. executed I on terms percentage or opportunity. spread what’s your And have spread the just around in is And of -- comment of I was then the That’s executed there, left. there the the a that’s anchor with expected noticed page anything on to

Heath Fear

we way. sign certainly that average math. spread decelerating simple in-place not a are No. that a is and This It’s our calculating just the rents taking basically

would you obviously, to are much average left, can spread, we be As we you column trying have see to a well, are in doing rents and got XX% the least at the with we that. place, saying, that better conservative can we than see, our

being able number. here, give you this an of anticipate for to you that, we presentation we conservative outperform we are that and will to trying be but So see four, will explanation footnote

John Kite

Our Why the team be that exact don’t asked leasing same isn’t to case. the We lower? expect that question.

Lizzy Doykan

Okay. Thanks everyone.

Operator

our question. next One for moment

from with comes Mueller question next Our JPMorgan. Michael

open. is Your line

Michael Mueller

Hi. Yeah.

Just two quick ones.

you community just all, demand the activity, talked the or X.X% And option you like about bumps that in product just on geography? comes lifestyle QX when of is, various was renewals? versus any seeing then it when or all are that to the First was excluding question types differences neighborhood second

John Kite

Yeah.

of options. excludes it First all,

is new I that’s So And leases. sorry, second part? the am Mike, what

Michael Mueller

Yeah.

demand you types, any seeing differences across Just product basically? are the

John Kite

mean, investor as I the broke and portfolio lifestyle Really, groups been and types one There’s have. in deck, neighborhood, the three that cross-pollinization to that’s out wanting benefits of we the these our be power. we in of mixed-use of product kind different food of such community major retailers

really been So there. differential no -- real and there has

of we in are two of And which Texas that are are is the think comes of geography benefiting from from strong, as our we Florida, you our space I almost revenue perspective, geographies very in I the and -- XX% mean that. from those a so I know, mean, XX% highest states. the

lot a of two very markets us for retailers. important opportunities, afforded growing are has that because So those

I lot. But increase. what’s dropped and it’s has that, the to the over I driving the point a few much by and we when you years get supply the when made broad-based, of last very that point I this friction mean, in that’s up so token, remarks has gone kind think demand same mean

Michael Mueller

it. Got

Thank you. Okay.

John Kite

you. Thank

Heath Fear

Mike. Thanks,

Operator

for question. One moment next our

comes with Lisa question Jefferies. [Linda] next Tsai Our (sic) from

Your line open. is

Linda Tsai

Linda. It’s Hi.

the In better tenants bumps, with you the comfortable of like those about when terms cost it to increase composition? do tenant in our cost types your which opportunity ratios. fixed occupancy are have portfolio and at rent How ratios occupancy achieving look success think sounds you capacity

John Kite

question. Sure, good Linda. Very

on I mean, a cost air. online of when is when low cost to comparing think again, beauties crazy. of back relative customers platform of are the only, is other of one is to on open basis, occupancy and I kind acquisition that retail the you are theme that’s, of comparing my the especially types you this to the

to other platforms. high been think see when you in here at I look high historically is cost of you teens. can that mean, we have that, I kind single-digit the the you and drive So occupancy total that portfolio, compare

bumps. that to see their You that, real driver is ability rent to pay can a in continue

foot who the is the by which it’s why about make But retailers selections we to a that are, token, race. have same mentioned never great we

the You that always mix, to occupy. the are are perform looking retailer’s between never you to needle ability -- merchandising the thread and to cost

very of to sweet that spot -- are right relates now, all very a So those. is kind good in a good it we as

Heath Fear

think, customer all job high different be have a our But And in and that as concept. to possible. chain higher geographics I scales we watching healthy wage -- simply see good through a as ratio, maybe some of all, supply difficult areas very wanting are little will more fluctuations doing that we

big a around it’s So focus here.

Linda Tsai

tenant and certain relate region? gains it there particular types back of sales to just kind that of does or a capacity wage Are have better

John Kite

-- I right? particular and is No. a there’s Yeah. retailer. same don’t really it so and could real performs be estate of It store think across can pick you they different brand, a down very the how comes to why even type is important. individual This the

top it is mean quality real you I so dirt. us the the times of focus We What’s on heard estate. on have of talk we the fungible. on focus about, many

be and I partnership for prosper. to are able to then quality we be able partnership. good produce real So high as long that a we and should estate I we results should should us to as that or mean prosper pretty customers to continue own say, allow managing our produce, very it’s it to at

Linda Tsai

down, given periods commodity of shops for anchors expect do in costs some shorten? payback and small terms then and And the space you on to coming payback periods demand

John Kite

be the on I depends you returns, we which why though And spreads, when our deal, our fiduciaries job our total more been portfolio. than getting that seeing about general so capital individual GAAP rent return than look talk Linda, capital years and to in the them know. it, lot mean, on where we play. we good we and And and into spreads really when bottomline But investor more that’s comes our much focused high less those it shorten right? is generally even focus yes, you But you are great that’s are on spreads, at look very is, they at three with we as especially doing. on are have getting we -- a are growth

Linda Tsai

Thanks.

John Kite

you. Thank

Operator

next our for moment question. One

Wells from Our with comes Dori next Kesten Fargo. question

line is open. Your

Dori Kesten

Thanks. the back excluding months, Good CapEx over I expect trend to you cost next old How XX months the guess, online? Bath do Bed spaces get XX to spend to morning. and including the

John Kite

the So Bath again, excluding cost, done. Bed is space

somewhere million in of well. the the it’s what the between those $XXX might upwards look you that to total it’s of $XX as up million and if $XX neighborhood next and XX at Over inventory million so Bed probably months, get additional cost, Bath leased and of

And of that that spend into part probably will you XXXX later see XXXX. you -- see will

significant got spend. CapEx So, again, we have

out pipeline. got sign a significant have open We

be going to next, two it, it’s So call years. over the elevated

Heath Fear

construction we we general managers down. movement contractors, in costs, pushing stabilizing, of and some be in think, to I some general, those start see will do able as to construction see savings But more begin that

much like we feel are some these costs. in stable area of we tackle as we more So a

Dori Kesten

Thank Okay. you.

Operator

question. next One our moment for

Our next from question comes Wesley with Baird. Golladay

open. line is Your

Wesley Golladay

Hey, everyone.

and Just is there materially pricing curious that any best power which markets have the is separating? region

John Kite

there like just about drive is example, pricing is way widespread. mean, power. to that that pretty a for market others in well one some earlier. -- see terms and but I markets than not bit balanced our the Hey, obviously, the in Right growth, region, ability it’s were in Wes. annual we York now embedded growth We talking outpacing of another market of that it’s history higher of because rent of terms New have the very is

that Chicago, solid been have been as suburbanization cetera, as I last said, beneficiary are of of be years that the the significant those look, big And like said, also, and et or to -- appears fading. New our and well. at But markets pretty when look New we there’s couple a growing gateway like Seattle a not York, that over you

basic. there’s bid I of out a just for type it’s pretty pretty retail, So, there strong mean, this

Wesley Golladay

it And can earlier or at remarks, there comes I fees think expense? for for Hamilton mentioned is the amortization next Crossing, you Hamilton prepared stopped you to to in you then the would anything when okay, And development then quantify because, noticeable fees we that? year, down that interest Cross step Okay. the as mark-to-market look debt

John Kite

Yeah.

it’s in the So back about less deceleration first the was it fees, the year. part, of $X year the first of half million half than of the the

that winding is the first Crossing project, again, of down. So, phase Hamilton

So those fees ending are going to be soon.

However, there is there. a potential phases future for

XXXX. the the more on, maybe of into fees year So turn you development before see may and some end

then terms question that So, to year… hopefully, something that going in your that part XXXX. And the the can Next -- amortization? debt repeat of was was we of would second the be

Wesley Golladay

The Yeah. gain? mark-to-market

John Kite

$X Yeah. The and probably into those of, gains, I we hit. call see XXXX a $X.XX the will mark-to-market -- maturities million it, around decline will as

Wesley Golladay

Okay. Thanks for that.

Operator

our for moment next One question.

Street. Green question next with Schmidt comes Our Paulina from Rojas

open. is Your line

Paulina Rojas Schmidt

everyone. Hello,

have The second this not Two types? Is place taking progressing a seeing mall also the at in is air migrate your you open some pace? property trend across this to it lifestyle seen questions. it tenants so steady centers or we you about or looking heard you accelerate And have at migration is, highlighted mainly your are other also space and presentation. to one them of

John Kite

Paulina. Hey,

should I it’s trends that the fact obviously, trend, very know really right air retail effective. there’s segment the is don’t Tom mean it’s I comment, open the space, cost just but So retail if macro, this word. macro, and less

types. So these not in did really they much delineate as you are as retailers product finding once different

do think, to I So thematically, understand. it’s important

in have The detail, more Tom why and more they can has the give is open Tom retailers realized I air retailers that’s and a have changed think you detail. want little to their platform again, these can But give trend. I quickly. profitability a business than business. and realized the significant just think sector the it’s it’s grow the

Tom McGowan

you Yeah. become more ingress convenience. factor lives more And to down of comes as that get then major center, up pull and open Paulina, critical shop the is it convenience to really car immediately things their and busy out the on cross your think that in think, store well. pull with a and can shopping people that one various into is air an I as I

an to you that, And week, a in one in these then are means then they to X their where enclosed overwhelm to of able a times a you convenient if just situation, doesn’t And our with or diversify, shops structure, addition may were expense maybe some that X a A saying, shopping event shopper need retailers primary they get times centers. It be week. and these it we different are more mean that just leaving start in to numbers but touch atmosphere. have locations to

shopping productive So that’s great we Sephora even like leaning is an seeing strength, open of are are and that that. said, groups some very a or consistent. out this center like more more center seeing even like power a maybe higher into we just air John is And beyond maybe evolution the

of think tentacles industry. which see big will years, couple been over a obviously has next I air the So the to to we help continue expand these open

Paulina Rojas Schmidt

if you the overage has another line structuring this to forcing expect growth NOI the positive income And what you what see be with helpful. a you I contribution year-to-date? you. and growth. rent on so one, is full Thank believe categories this been we driving mentioned. Can That’s year touch in retailer other short property

John Kite

of overage that seeing a over rent are tenants. We array broader

tenant So particular not one really type. it’s

rent that paid are are We percentage never tenants paying us percentage that all. us at

us thought overdraft retailer amount is of just was never have paying furniture possible. a We that we

So restaurants, broad, grocery it’s discounters, it’s it’s the extremely been really stores.

that are we the are We in are we it, highest rent in we overage it experiencing and level the seeing theaters. of seeing have name we experienced highest company. experienced the levels, you everywhere So even ever

So expect trend we that to continue.

Operator

for the not remarks. over back And like I time. showing to John at questions further Kite any am call this closing I’d any to turn

John Kite

you for all wanted today for having great us interest Have in to thank join day. time a KRG. the to an and just say, thank again, taking I you Well,

Operator

this Ladies conclude presentation. and gentlemen, today’s does

You may have now and disconnect wonderful day. a

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