Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q4 2023 Earnings Presentation
30 slides from Kite Realty Group Trust's earnings presentation, Feb 14, 2024
Slide 1: Investor Update Q4 2023
KGTE: INVESTOR UPDATE Q4 2023 © 2024 Kite Realty Group | kiterealty.com
Slide 2: Company snapshot and key portfolio metrics
Founded / IPO NYSE Market Cap1 Enterprise Value1 Operating Retail Total Owned Retail Retail Portfolio Annualized Base Rent Net Debt to Properties GLA (SF) Percent Leased (ABR) per SF Adjusted EBITDA ABR from Assets with a ABR from Community and ABR in Sun Belt Markets3 Fitch Credit Rating Grocery Co
Slide 3: Investment highlights
▪ ✓ Operating margins and metrics are among the best in the open-air retail sector ✓ Management team has deep experience operating open-air real estate ▪ ✓ Low leverage with manageable near-term maturities ✓ Received a ‘Positive’ credit rating outlook upgrade from S&P Global Ratings ✓ Over $1.1B of
Slide 4: Q4 2023 outperformance and operating results
2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 Outperformance largely driven by lower than expected bad debt and an increase in overage rent Minimum base rent growth and lower bad debt drove outsized SSNOI growth Healthy leasing volume continues at extremely strong s
Slide 5: 2024 guidance and same property NOI growth
Net income ▪ Same property NOI growth range of 1.0% to 2.0% Depreciation and amortization ▪ Full-year bad debt assumption of 0.75% to 1.25% NAREIT FFO of total revenues Same property NOI growth excluding below items City Center Theater Bed Bath & Beyond, net of backfills Change in Bad Debt (43 bps i
Slide 6: Signed-not-open pipeline
• – The signed-not-open pipeline increased $4M quarter-over-quarter to $31M as a result of tenants that commenced rent in the fourth quarter of 2023, net of new leases signed • Signed 55 new leases representing $13M of NOI in the fourth quarter of 2023 • 65 tenants commenced rent in the fourth quart
Slide 7: Net asset value and hypothetical growth
• • • Annualized portfolio cash NOI • Other assets value Liabilities Shares Note: These are hypothetical NAV growth and cap rates. KRG is not representing it can achieve these results or that a third party would ascribe a similar cap rate to the portfolio. 1. Assumes a stock price of $21.50 as of Fe
Slide 8: Peer comparison of key metrics
ABR per SF Net Debt to Adjusted EBITDA 3-Mile Population1 3-Mile Average Household Income1 % of ABR from Assets with a Grocery Component (Since 2019) (Since 2019) (Since 2019) 14.5% 11.2% 13.0% 3.3% 8.2% 1.5% 1.7% 8.8% 8.0% 6.7% 6.7% 0.9% REG FRT KIM BRX KRG REG FRT KIM BRX KRG FRT BRX KIM REG KRG N
Slide 9: Peer comparison versus peer average
Peer Average KRG - 4Q'23 Peer Average KRG - 4Q'23 Peer Average KRG - 4Q'23 Peer Average KRG - 4Q'23 Note: Peer group includes AKR, BRX, FRT, KIM, PECO, REG, and ROIC. Source of all peer data is from 4Q 2023 supplemental disclosures, except AKR and ROIC data is from 3Q 2023 supplemental disclosures.
Slide 10: Multi-tenant retail supply and demand trends
• • • Note: Data pertains to multi-tenant retail, excluding single-tenant and net lease retail. Source: BofA Global Research as of November 13, 2023. Source: CBRE Research
Slide 11: Lease structure: CPI, fixed rent bumps and fixed CAM
• • • CPI Fixed Rent Bumps Greater Than or Equal to 3% Fixed CAM
Slide 12: Balance sheet strength and peer leverage
Net Debt + Preferred / Adjusted EBITDA Debt Service Coverage Ratio Liquidity Weighted Average Interest Rate1 Unencumbered NOI as a % of Total NOI Fixed Rate Debt Fitch S&P Moody’s 6.7x 6.4x 6.0x 6.0x 6.1x 5.1x 5.1x KRG PECO REG KIM BRX FRT ROIC AKR Note: Source of all peer data is from 4Q 2023 suppl
Slide 13: Debt maturity profile
Note: Maturity profile assumes that all loan extension options are exercised by the Company.
Slide 14: Further Strengthened Portfolio Has Significant Potential
Further Strengthened Portfolio Has Significant Potential
Slide 15: Population growth in Sun Belt states
1. Source: US Census Bureau, Vintage 2022 Population Estimates from July 1, 2021 to July 1, 2022. Top 15 states include FL, ID, SC, TX, SD, MT, DE, AZ, NC, UT, TN, GA, NV, OK and ME.
Slide 16: Portfolio composition and demographics
• • • • • Note: 3-mile demographic statistics are weighted by 4Q 2023 ABR and sourced from PopStats. Remaining 1% of KRG’s portfolio is unanchored or single-tenant assets.
Slide 17: Anchor vacancy redevelopment opportunity
• • Count Square feet Capital / SF Total capital ($, M) Previous tenants’ ABR Estimated New ABR2 Cash lease spread Return on capital New NOI incl. NNN ($, M) FFO / Share 1. Estimate of potential outcomes of remaining anchor vacancies excluding one theater lease that is not representative of the anch
Slide 18: Leasing activity and spreads
• • # of Leases Signed Leased SF Signed Blended Cash Spread Non-Option Renewal Spread
Slide 19: Top tenants and tenant categories
Grocery / Drug / Big Box Wine & Spirits The TJX Companies, Inc. Office Supply / Electronics Best Buy Co., Inc. Medical Pet Stores Ross Stores, Inc. Hardware / Auto PetSmart, Inc. Banks Michaels Stores, Inc. Gap Inc. Quick Service Restaurants Full Service Restaurants Dick’s Sporting Goods, Inc. Publi
Slide 20: Anchor and shop tenant exposure
rh —— Anchor and Shop Tenant Exposure KITE + Diverse and balanced tenant mix provides strong durability in KRG’s cash flow + Anchor revenue stream predominantly composed of grocers and discount retailers * Shop composition includes a strong mix of restaurants, apparel and service tenants Grocery / D
Slide 21: Big Names. Small Spaces.
— Big Names. Small Spaces. Pi KITE > Top 50 Small Sea RAS 99% ~760 29% 15% (< 10K Square Feet) National Brands Stores Of Small Shop ABR Of Portfolio ABR vA ~ Pairing Typical Small Shop Tenants With Newer Retail Concepts KEY TOP 50 SHOP TENANTS (by ABR) = oie. . Sater Be verizon’ ‘E Mobile Bath & Bod
Slide 22: ESG and governance highlights
Invested in small business in the form of tenant ✓ 92% Independent Trustees allowance and landlord work ✓ Entirely independent committees Scope 1 2,275.2 2,657.5 16.8% Meals packed through Kite Cares initiative ✓ Lead independent Trustee Hours dedicated to KRG volunteer time off (VTO) ✓ Majority vot
Slide 23: Project Green
• • • • Project Green began with a simple concept – celebrating each new lease in the KRG portfolio with the planting of a tree. Then one tree for each lease quickly became 100. As a perpetual commitment to environmental stewardship, KRG looks forward to continuing Project Green and its impact for a
Slide 24: Updated 5-Year ESG Goals
—— Updated 5-Year ESG Goals (Established in 2021) KRG recognizes the importance ESG initiatives play in our ability to generate long-term, sustainable returns, and setting goals signals our long-term ESG commitment 5-YEAR GOALS (To be completed by 12/31/2026) ENVIRONMENTAL Ke CURRENT STATUS (4Q’23)
Slide 25: Forward-Looking Statements
Forward-Looking Statements This Investor Update, 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 A
Slide 26: Net Operating Income and Same Property NOI definitions
NET OPERATING INCOME AND SAME PROPERTY NET OPERATING INCOME The Company uses property net operating income (“NOI”) and cash NOI, which are non-GAAP financial measures, to evaluate the performance of our properties. The Company defines NOI and cash NOI as income from our real estate, including lease
Slide 27: EBITDA definitions
EBITDA The Company defines EBITDA, a non-GAAP financial measure, as net income before interest expense, income tax expense of the taxable REIT subsidiary, and depreciation and amortization. For informational purposes, the Company also provides Adjusted EBITDA, which it defines as EBITDA less (i) Adj
Slide 28: Reconciliation of Same Property NOI to Net Income
Appendix: Reconciliation of Same Property NOI to Net Income KITE Kite Realty Group Trust ‘Same Property Net Operating Income (NOP (dollarsin thousands) (unaudited) ‘Three Months Ended December 34, ‘Year Ended December 34, 2028 72022 ‘Change: 2025 2022 Change: Number of properties in same property po
Slide 29: Funds from Operations reconciliation
KRG NYSE Appendix: Funds from Operations Kite Realty Group Trust Funds From Operations ("FFO” 22 (dollars in thousands, except per share amounts) (unaudited) ‘Three Months Ended Year Ended December 31, 3h. 2023 2022 2023 2022 Net income (loss) $ 8164 $ (1052) $ 48,383 $ (12,154) Less: net income att
Slide 30: Reconciliation of EBITDA to Net Income
PA — Appendix: Reconciliation of EBITDA to Net Income KITE Kite Realty Group Trust Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) (dollars in thousands) (unaudited) Three Months Ended December 31, 2023 Net income $ 8,164 Depreciation and amortization 102,898 Interest expen
Kite Realty Group Trust — Q4 2023 Earnings Presentation on 6ix