Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Investor Presentation (August 2014)
24 slides from Kite Realty Group Trust's investor presentation, Aug 12, 2014
Slide 1: Investor Presentation August 2014
Investor Presentation August 2014
Slide 2: Agenda
AGENDA KITE REALTY GROUP TRUST INDUSTRY TRENDS COMPLETED COMPANY OBJECTIVES FINANCIAL HIGHLIGHTS FUTURE GROWTH INITIATIVES & VALUE-ADD OPPORTUNITIES * AGENDA City Center, New York
Slide 3: Kite Realty Group Trust
rl KITE REALTY GROUP KITE REALTY GROUP TRUST TP 888.577.5600 @ kiterealty.com
Slide 4: Kite Realty Group Trust
* KITE REALTY GROUP TRUST TICKER SYMBOL :: KRG (NYSE since 2004) FOUNDED :: 1971 HEADQUARTERS :: Indianapolis, Indiana PORTFOLIO :: (1) 124 OPERATING RETAIL 2 OPERATING OFFICE 4 REDEVELOPMENT 3 DEVELOPMENT 133 PROPERTIES SQUARE FOOTAGE :: (1) (MILLIONS) 19.6 OPERATING PROPERTIES 1.0 TOTAL REDEVELOPM
Slide 5: Combined Company Overview
Number of Properties / Owned SF 133 / 20.6mm Total Occupancy (Owned SF) 95.5% Shop Occupancy (Owned SF) 86.1% Annualized Base Rent per SF $13.81 Annualized Base Rent per SF (excluding ground leases) $15.00 Number of States 26 Enterprise Value (1) $3.9bn Net Debt / Enterprise Value (1) 42% Retail Div
Slide 6: Combined Company Tenant Profile
Pro Forma Top 10 Tenants (1) COMBINED COMPANY TENANT PROFILE Overview Large national retail brands Significant diversification with no tenant representing more than 4% of ABR Kite will build upon existing and new relationships to drive performance Considerable tenant overlap provides seamless transi
Slide 7: Industry Trends
KITE REALTY GROUP INDUSTRY TRENDS TB 888.577.5600 > kiterealty.com
Slide 8: Defensibility in Rising Rate Environment
10-Year / 20-Year Average GDP Growth: 1.76% / 2.57% 10-Year / 20-Year Average CPI Growth: 2.39% / 2.43% DEFENSIBILITY IN RISING RATE ENVIRONMENT Economic growth drives NOI while monetary policy and U.S. Treasury yields have historically shown little effect on capitalization rates REITs yielded posit
Slide 9: Completed Company Objectives & Financial Highlights
COMPLETED COMPANY OBJECTIVES & FINANCIAL HIGHLIGHTS
Slide 10: Key Milestones
KITE REALTY GROUP * KEY MILESTONES Successfully completed merger with Inland Diversified on July 1st, 2014. KRG now has 133 properties across 26 states totaling 20.6 million square feet Acquired nine-property portfolio in November 2013 – 38% of ABR in Houston, Texas FURTHER ENHANCE BALANCE SHEET FLE
Slide 11: Property Operating Income, Same Property NOI and Rent Spread Growth
PROPERTY OPERATING INCOME SAME PROPERTY NOI AND RENT SPREAD GROWTH The quality of our portfolio and asset locations allow us to generate significant same property NOI and rent spread growth *
Slide 12: Merger Transaction with Inland Diversified Real Estate Trust
MERGER TRANSACTION WITH INLAND DIVERSIFIED REAL ESTATE TRUST
Slide 13: Merger rationale: high-quality portfolio and scale
Attractive portfolio in terms of asset quality, tenant base and geography Desirable locations with higher annualized base rent (“ABR”) and strong demographics (3-mile average household income of ~$76k; 2013 population density of ~54,000) (1) Combined portfolio (95.5% leased as of 6/30/2014) Diverse
Slide 14: Synergies, cost savings and balance sheet strength
Scalable platform provides for substantial G&A and operating synergies Total synergies of approximately $17 million for the combined company Results in incremental operating expense of approximately $8 million Reduces Kite’s G&A load as a percentage of asset base and revenues Significantly reduces K
Slide 15: Transaction Impact
60 133 Properties (2) Square Feet (2) Total Occupancy (3)(4) Number of States Total ABR ($ PSF) (4)(5) Average HHI (3 mi.) (4) 73 9.9 million 95.2% $13.48 $80,931 10.7 million 95.7% 23 $14.06 $71,389 20.6 million 95.5% 26 $13.81 $76,160 Legacy Equity Market Value (1) $0.9 billion $1.3 billion $2.2 b
Slide 16: High-Quality Portfolio with Staggered Lease Expirations
HIGH-QUALITY PORTFOLIO WITH STAGGERED LEASE EXPIRATIONS Retail ABR Breakdown Retail Lease Expirations Wheatland Wheatland, TX (Dallas MSA) Mullins Crossing Evans, GA (Augusta MSA) University Town Center Norman, OK *
Slide 17: Strong Operating Metrics
STRONG OPERATING METRICS Portfolio Occupancy (1) Total ABR ($ PSF) (1)(2) 2013 Population (000s) (1)(3) ___________________________ Includes development and redevelopment projects. Pro Forma at $13.81 includes Ground Leases for Kite and excludes for Inland Diversified. Pro Forma Excluding Ground Lea
Slide 18: Flexible Capital Structure
FLEXIBLE CAPITAL STRUCTURE A well-staggered debt maturity schedule provides the financial flexibility for Kite to execute its growth strategy Pro Forma Capital Structure as of 06/30/14 (2) Pro Forma Debt Maturity Schedule as of 06/30/14 ($mm) (1) Cash $23mm 0.6% Unsecured Facilities $355mm outstandi
Slide 19: Future Growth Initiatives & Value-Add Opportunities
FUTURE GROWTH INITIATIVES & VALUE-ADD OPPORTUNITIES
Slide 20: Company Objectives and Strategy
COMPANY OBJECTIVES AND STRATEGY Company Objectives Lower leverage and conservative balance sheet provides financial flexibility Staggered debt maturity schedule minimizes refinancing risk Strong liquidity profile Establish path to investment grade rating and reduce overall cost of capital Create lar
Slide 21: Focused Geographic Expansion
Upon completion of the transaction, Kite now owns 133 properties comprised of 20.6 million square feet across 26 states; Kite will continue to focus on core markets for long-term expansion FOCUSED GEOGRAPHIC EXPANSION ___________________________ (1) Includes development and redevelopment projects fo
Slide 22: Market Discounting Kite Performance: Consistent Operating Performance
MARKET DISCOUNTING KITE PERFORMANCE CONSISTENT OPERATING PERFORMANCE (1) ___________________________ Source: SNL. KRG number pro forma for merger. Kite’s operating fundamentals have outperformed its shopping center peers and the Company is focused on continuing to improve its balance sheet and maint
Slide 23: Markets Continue to Discount KRG Value
MARKET DISCOUNTING KITE PERFORMANCE BUT MARKETS CONTINUE TO DISCOUNT KRG VALUE (1) ___________________________ Source: SNL. Despite Kite’s strong overall performance, the market appears to be discounting the Company’s valuation * Price / FFO 2014E BALANCE SHEET STRENGTH PROVEN TOP TIER OPERATOR VALU
Slide 24: Forward-looking statements
Certain statements in this presentation that are not in the present or past tense or that discuss the Company’s expectations (including any use of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “might,” “outlook,” “project”, “should” or si
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