Kite Realty Group Reports Third Quarter 2024 Operating Results

INDIANAPOLIS, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Kite Realty Group Trust (NYSE: KRG), a premier owner and operator of high-quality, open-air grocery-anchored centers and vibrant mixed-use assets, reported today its operating results for the third quarter ended September 30, 2024. For the quarters ended September 30, 2024 and 2023, net income attributable to common shareholders was $16.7 million, or $0.08 per diluted share, compared to $2.1 million, or $0.01 per diluted share, respectively. For the nine months ended September 30, 2024 and 2023, net loss attributable to common shareholders was $17.8 million, or $0.08 per diluted share, compared to net income of $39.5 million, or $0.18 per diluted share, respectively.

   Company raises 2024 NAREIT FFO and Same Property NOI Guidance

   Leased an all-time high volume of approximately 1.7 million square feet at 11.1% comparable blended cash leasing spreads

   Acquired a grocery-anchored center in the Atlanta MSA for $40.1 million

   Issued $350 million of 4.95% senior unsecured notes due December 2031

"The KRG team continues to capitalize on the strong demand for space in our high-quality shopping centers and mixed-use projects, as demonstrated by our all-time high leasing volume,” said John A. Kite, Chairman and CEO. "As we enter the back half of our elevated lease-up phase, we look forward to allocating higher levels of free cash flow to select development projects and evaluating a variety of opportunities afforded by our below-target leverage and favorable cost of debt.”

Third Quarter 2024 Financial and Operational Results

• Generated NAREIT FFO of the Operating Partnership of $113.9 million, or $0.51 per diluted share, for the third quarter and $344.3 million, or $1.54 per diluted share, year to date.
• Same Property NOI increased by 3.0% for the third quarter and increased by 2.4% year to date.
• Executed 205 new and renewal leases representing approximately 1.7 million square feet.
  • Blended cash leasing spreads of 11.1% on 155 comparable leases, including 24.9% on 35 comparable new leases, 11.9% on 59 comparable non-option renewals and 7.7% on 61 comparable option renewals.
  • Cash leasing spreads of 16.7% on a blended basis for comparable new and non-option renewal leases.
• Operating retail portfolio ABR per square foot of $21.01 at September 30, 2024, a 2.2% increase year-over-year.
• Retail portfolio leased percentage of 95.0% at September 30, 2024, a 20-basis point increase sequentially.
• Portfolio leased-to-occupied spread at period end of 270 basis points, which represents $32.6 million of signed-not-open NOI.

• Acquired Parkside West Cobb (Atlanta MSA), a 141,627 square foot grocery-anchored center, for $40.1 million.
• Activated the One Loudoun Expansion (Washington, D.C. MSA), which is expected to include approximately 86,000 square feet of retail and 33,000 square feet of office with estimated net project costs of $65.0 million to $75.0 million generating a 7.25% to 8.25% yield.

• As of September 30, 2024, the Company's net debt to Adjusted EBITDA was 4.9x.
• Issued $350 million of senior unsecured notes due December 15, 2031 at a fixed interest rate of 4.95%. The Company expects proceeds will be used to satisfy its $350 million senior unsecured notes that mature on March 15, 2025.
• Subsequent to quarter end, closed on an amended $1.1 billion unsecured revolving credit facility and an amended $250 million unsecured term loan facility. The term of the unsecured revolving credit facility was extended three years and now matures on October 3, 2028 with the option to further extend such maturity date by either one 1-year period or up to two 6-month periods. In addition, the amended credit facility provides the Company with the ability to obtain more favorable pricing in certain circumstances when the Company's total leverage ratio meets defined targets. The interest rate margin on the unsecured term loan facility was reduced to a rate of Adjusted Term SOFR plus a margin ranging from 0.75% to 1.60% (from 2.00% to 2.50% previously) or a base rate plus a margin ranging from 0.00% to 0.60%.

On October 28, 2024, the Company's Board of Trustees declared a fourth quarter 2024 dividend of $0.27 per common share, which represents a 3.8% sequential increase and an 8.0% year-over-year increase. The fourth quarter dividend will be paid on or about January 16, 2025, to shareholders of record as of January 9, 2025.

2024 Earnings Guidance

The Company now expects to generate net income attributable to common shareholders of $0.02 to $0.04 per diluted share in 2024. The Company is updating its 2024 NAREIT FFO guidance range to $2.06 to $2.08 per diluted share from $2.04 to $2.08 per diluted share, based, in part, on the following assumptions:

• 2024 Same Property NOI range of 2.5% to 3.0%, which represents a 25-basis point increase at the midpoint.
• Full-year bad debt assumption of 0.6% to 0.8% of total revenues.

Earnings Conference Call

Kite Realty Group will conduct a conference call to discuss its financial results on Thursday, October 31, 2024, 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 or at the following link: KRG Third Quarter 2024 Webcast. The dial-in registration link is: KRG Third Quarter 2024 Teleconference Registration. In addition, a webcast replay link will be available on KRG's website.

About Kite Realty Group

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 over 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 September 30, 2024, the Company owned interests in 179 U.S. open-air shopping centers and mixed-use assets, comprising approximately 27.7 million square feet of gross leasable space. For more information, please visit kiterealty.com.

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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.

Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: economic, business, banking, 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 a potential economic slowdown or recession, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending); 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 the Company's tenants; the competitive environment in which the Company operates, including potential oversupplies of, or a 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 tenants' 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 the states of Texas, Florida, and North Carolina and the metropolitan statistical areas of New York, Atlanta, Seattle, Chicago, and Washington, D.C.; civil unrest, acts of violence, terrorism or war, acts of God, climate change, epidemics, pandemics, 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, especially in Florida and Texas coastal areas; risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; other factors affecting the real estate industry generally; whether our current development projects and new development opportunities will benefit from our favorable cost of debt, below-target leverage and higher levels of free cash flow; and other risks identified in reports the Company files with the Securities and Exchange Commission 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, 2023, 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. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Please see the following pages for the corresponding definitions and reconciliations of such non-GAAP financial measures.