Kite Realty Group Reports Fourth Quarter and Full Year 2024 Operating Results and Provides 2025 Guidance

INDIANAPOLIS, Feb. 11, 2025 (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 fourth quarter and year ended December 31, 2024. For the quarters ended December 31, 2024 and 2023, net income attributable to common shareholders was $21.8 million, or $0.10 per diluted share, compared to $8.0 million, or $0.04 per diluted share, respectively. For the years ended December 31, 2024 and 2023, net income attributable to common shareholders was $4.1 million, or $0.02 per diluted share, compared to $47.5 million, or $0.22 per diluted share, respectively. Net income for the year ended December 31, 2024 was driven by a $66.2 million impairment charge associated with an asset that remains classified as held for sale as of December 31, 2024. Excluding the impairment charge, net income for the year ended December 31, 2024 would have been $70.3 million, or $0.32 per diluted share.

   Leased approximately 5.0 million square feet in 2024 at 12.8% comparable blended cash leasing spreads

   2024 Same Property NOI increased 4.8% in the fourth quarter and 3.0% on a year-over-year basis

   Increased ABR per square foot to $21.15

   Improved Net Debt to Adjusted EBITDA to 4.7x

   Company provides initial 2025 outlook

"Looking back at 2024, I could not be prouder of what the KRG team was able to accomplish,” said John A. Kite, Chairman and CEO. "We achieved all-time high leasing volumes, improved our long-term embedded growth profile, further fortified our pristine balance sheet, and outperformed our original guidance. Looking forward to 2025, I have never had more conviction as it relates to KRG's readiness to seize on a spectrum of opportunities that are currently in front of us. We will continue to capitalize on the strong demand to re-lease recently recaptured space while simultaneously setting in motion a series of initiatives to redefine our portfolio and longer-term growth profile.”

Fourth Quarter 2024 Financial and Operational Results

• Generated NAREIT FFO of the Operating Partnership of $119.5 million, or $0.53 per diluted share.
• Generated Core FFO of the Operating Partnership of $115.8 million, or $0.52 per diluted share.
• Same Property Net Operating Income (NOI) increased by 4.8%.
• Executed 170 new and renewal leases representing approximately 1.2 million square feet.
  • Blended cash leasing spreads of 12.5% on 121 comparable leases, including 23.6% on 23 comparable new leases, 14.4% on 69 comparable non-option renewals, and 6.8% on 29 comparable option renewals.
  • Cash leasing spreads of 16.9% on a blended basis for comparable new and non-option renewal leases.
• Operating retail portfolio annualized base rent (ABR) per square foot of $21.15 at December 31, 2024, a 2.2% increase year-over-year.
• Retail portfolio leased percentage of 95.0% at December 31, 2024, a 110-basis point increase year-over-year.
• Portfolio leased-to-occupied spread at period end of 240 basis points, which represents $27.3 million of signed-not-open NOI.

• Generated NAREIT FFO of the Operating Partnership of $463.7 million, or $2.07 per diluted share, which represents a 2.0% year-over-year increase.
• Generated Core FFO of the Operating Partnership of $443.9 million, or $1.99 per diluted share, which represents a 4.7% year-over-year increase.
• Same Property NOI increased by 3.0%.
• Executed 720 new and renewal leases representing approximately 5.0 million square feet at comparable cash spreads of 12.8%.
  • Cash leasing spreads of 19.9% on a blended basis for comparable new and non-option renewal leases.
• Executed 22 new anchor leases at a blended comparable cash leasing spread of 36.7%.
  • New anchor leasing activity included 19 different retailers and increased our percentage of ABR from properties with a grocery component to 80.0%.

• Subsequent to quarter end, acquired Village Commons (Miami MSA), a 170,976 square foot Publix-anchored center, for $68.4 million.
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• As of December 31, 2024, the Company's net debt to Adjusted EBITDA was 4.7x.
• As previously announced, 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%.
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On February 10, 2025, the Company's Board of Trustees declared a first quarter 2025 dividend of $0.27 per common share, which represents an 8.0% year-over-year increase. The first quarter dividend will be paid on or about April 16, 2025, to shareholders of record as of April 9, 2025.

2025 Earnings Guidance

The Company expects to generate net income attributable to common shareholders of $0.45 to $0.51 per diluted share in 2025, NAREIT FFO of $2.02 to $2.08 per diluted share, and Core FFO of $1.98 to $2.04 per diluted share, based, in part, on the following assumptions:

• 2025 Same Property NOI range of 1.25% to 2.25%.
• Full-year credit disruption of 1.95% of total revenues at the midpoint, inclusive of a 0.85% general bad debt reserve and a 1.10% impact from anchor bankruptcies.
• Interest expense, net of interest income, of $122.0 million at the midpoint.

Earnings Conference Call

Kite Realty Group will conduct a conference call to discuss its financial results on Wednesday, February 12, 2025, at 1:00 p.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 Fourth Quarter 2024 Webcast. The dial-in registration link is: KRG Fourth 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), a real estate investment trust (REIT), is a premier owner and operator 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 platform 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 December 31, 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 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 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 changes in consumer behavior due to public health crises 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 cyber attacks and the loss of confidential information and other business disruptions; risks associated with the use of artificial intelligence and related tools; 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.