Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Wachovia Securities Equity Conference 2008
23 slides from Kite Realty Group Trust's conference presentation, Jun 23, 2008
Slide 1: Wachovia Securities Equity Conference June 23-26, 2008
Wachovia Securities Equity Conference June 23-26, 2008
Slide 2: Disclaimer
DISCLAIMER This presentation may include certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, our plans, objectives, expectations and intentions and other statements containe
Slide 3: Primary Objectives for the Company
COMPANY OVERVIEW PRIMARY OBJECTIVES FOR THE COMPANY Balance Sheet Management Development Complete Current Development Pipeline 72% pre-leased or committed Commence construction of Visible Shadow Pipeline Execute capital plan Continue to Manage Debt Maturities Internal Growth Operational Efficiencies
Slide 4: Company Overview: Consumer Behavior and Property Type Allocation
COMPANY OVERVIEW Information as of March 31, 2008 Consumer Behavior Nationwide consumption levels will fluctuate, but a portion of the consumer’s behavior is derived from necessity. Grocery-anchored centers and value-oriented retailers such as Target and Wal-Mart will continue to create shopping cen
Slide 5: Geographic Diversification
COMPANY OVERVIEW Information as of March 31, 2008 GEOGRAPHIC DIVERSIFICATION Projected Total GLA Including Pipelines1,2 (1) Total GLA includes owned GLA, square footage attributable to non-owned outlot structures on land that the Company owns and non-owned anchor space that currently exists or is un
Slide 6: Strong Tenant Diversity
COMPANY OVERVIEW Information as of March 31, 2008 except as noted STRONG TENANT DIVERSITY Top 10 Retail Tenants by Base Rent % of Portfolio S&P Annualized Base Rent Credit Rating1 1 Lowe's Home Improvement 3.4% A+ 2 Publix 2.4% n/a 3 Petsmart 2.2% BB 4 Marsh Supermarkets 2.2% n/a 5 Circuit City 2.1%
Slide 7: Embedded Growth: Current Developments
GROWTH STRATEGY Information as of March 31, 2008 EMBEDDED GROWTH: CURRENT DEVELOPMENTS STRONG UPSIDE Only 21% occupied Growth source for late 2008 and early 2009 LOW RISK PROFILE 72% leased or committed 50% funded Execute small shop leases and build out tenant spaces 7
Slide 8: Selective Acquisitions: Rivers Edge Shopping Center
GROWTH STRATEGY SELECTIVE ACQUISITIONS A CASE STUDY: RIVERS EDGE SHOPPING CENTER Location: Keystone-Castleton, the most heavily traveled retail corridor in Indianapolis Competitive Advantage: Off-market pricing, long-standing relationships Capitalization: Partially funded by non-core, net-lease asse
Slide 9: Same Store Growth via Lease Expirations
GROWTH STRATEGY Information as of March 31, 2008 SAME STORE GROWTH VIA LEASE EXPIRATIONS Nearly 30 percent ($21 million) of annualized base rent expires from 2010 to 2012 From 2010 to 2012, over 560,000 square feet per year will expire (compared to 250,000 per year from 2008 to 2009) Annual Base Ren
Slide 10: Emphasizing Internal Growth
GROWTH STRATEGY Information as of March 31, 2008 EMPHASIZING INTERNAL GROWTH Existing Vacancy Operating retail portfolio is 92.8 percent leased 348,000 square feet are available to be leased Negotiating lease for 25,000 square foot junior anchor space vacated early 2008 – equates to .5% increase in
Slide 11: Peer Group Comparison
PEER GROUP COMPARISON Assuming a peer group average multiple of 12.8x, our stock is trading at a 26% discount Share Price Consensus Company 6/11/2008 Estimate 1 Multiple Federal Realty $77.00 $3.91 19.7x Acadia Realty Trust $24.16 $1.32 18.3x Equity One, Inc $22.12 $1.43 15.5x Regency Centers Corp $
Slide 12: Peer Group Comparison: Dividend Yield
PEER GROUP COMPARISON Our dividend yield remains attractive Share Current Price Annual Company 6/11/2008 Dividend1 Yield Ramco Gershenson $21.47 $1.85 8.6% Cedar Shopping Centers $11.91 $0.90 7.6% Developers Diversified $38.04 $2.76 7.3% Inland Real Estate Corp $14.58 $0.98 6.7% Weingarten Realty $3
Slide 13: Development & Redevelopment Pipeline
DEVELOPMENT & REDEVELOPMENT PIPELINE Information as of March 31, 2008 Projected % Leased/ Total Est. Project MSA Anchor Tenants Total GLA1 Committed3 Cost (000s) Target (non-owned), Michael’s, Bayport Commons2 Tampa, FL 286,000 87.3% $27,300 Best Buy, PetSmart 2 Ft. Lauderdale, FL 163,600 75.1% $47,
Slide 14: Visible Shadow Pipeline
VISIBLE SHADOW PIPELINE Information as of March 31, 2008 KRG % Est. Total Est. Total Project MSA Owned GLA1 Cost1 (000s) Potential Tenancy Parkside Town Commons2 40% Raleigh, NC 1,500,000 $134,000 Mixed Use Center Grocery, Theater Delray Marketplace3 50% Delray Beach, FL 318,000 $100,000 Jr. Boxes,
Slide 15: Development Pipeline: Eddy Street Commons Case Study
DEVELOPMENT PIPELINE Information as of March 31, 2008 A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS $200 million mixed-use development next to the University of Notre Dame in South Bend, IN will be completed in phases $70 million Phase I, which will include retail, office and multifamily, was
Slide 16: Eddy Street Commons Phase I
DEVELOPMENT PIPELINE A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS Phase I – Retail, Office, Multi-family, Parking Garage 16
Slide 17: Value Creation Embedded in Current Development Pipeline
DEVELOPMENT PIPELINE VALUE CREATION EMBEDDED IN CURRENT DEVELOPMENT PIPELINE Current Development Pipeline 1 $131M Visible Shadow Pipeline 1,2 $165M Total Pipeline Cost - KRG Share $296M Projected Yield 8.5% Projected NOI $25.2M Value at 6.5% Cap Rate $388M Less Cost $(296M) Estimated Value Creation
Slide 18: Strong Demographics
STRONG DEMOGRAPHICS DEVELOPMENT NOT DEPENDENT ON GROWTH Radius Radius Operating Portfolio 3 Mile 5 Mile Development Pipeline 3 Mile 5 Mile 2007 Est. Population 49,691 124,977 2007 Est. Population 44,549 118,951 2012 Est. Population 54,416 136,673 2012 Est. Population 51,023 133,272 Projected Annual
Slide 19: Managing Debt Maturities
MANAGING DEBT MATURITIES AGGRESSIVE REFINANCING, SOLID EXECUTION AS OF MARCH 31, 2008 AS OF SEPTEMBER 30, 2007 2008 Maturities: $21 million 2008 Maturities: $118 million $18.5 million construction loans $109.4 million construction/land loans 2 loans with late 2008 maturities $2.5 million other varia
Slide 20: Committed Management
COMMITTED MANAGEMENT Senior management owns approximately 23 percent of the Company and has acquired over 400,000 shares and 800,000 units since the IPO at a cost of approximately $21M Tenure with Company Ownership 1 Al Kite Executive Chairman 47 years 10.7% John Kite President & CEO 16 years 8.2% T
Slide 21: Operating Metrics
OPERATING METRICS For the Three Months Ended March 31, 2008 Selected Peer Group KRG Average1 NOI / Revenue 73.9% 70.0% G&A / Revenue from Rental 6.0% 6.3% Properties Fixed Charge Coverage2 2.7x 2.7x FFO Payout % 66% 67% Portfolio % Leased 93.2% 94.5% (1) Peer Group consists of KIM, DDR, AKR, REG and
Slide 22: In Conclusion
IN CONCLUSION A SOLID FOUNDATION A CLEAR STRATEGY Healthy pay-out ratio 2008 – 2012 Growth initiatives Strong fixed charge coverage Shadow pipeline Capital available for development Internal growth pipeline Financial strength ‘A’ locations Good real estate wins High occupancy Below market rents 22
Slide 23: Corporate Profile
CORPORATE PROFILE Kite Realty Group Trust is a full-service, vertically integrated real estate investment trust engaged primarily in the ownership, operation, management, leasing, acquisition, construction, expansion, and development of high quality neighborhood and community shopping centers in sel
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