Kite Realty Group Trust · NYSE:KRG

Kite Realty Group Trust — Investor Presentation (June 2017)

30 slides from Kite Realty Group Trust's investor presentation, Jun 2, 2017

  1. Slide 1: Investor Update June 2017

    INVESTOR UPDATE JUNE 2017 City Center (White Plains, NY) Eddy Street Commons (South Bend, IN)

  2. Slide 2: Company Snapshot

    © 2017 Kite Realty Group kiterealty.com Investor Update | 2 COMPANY SNAPSHOT KITE REALTY GROUP TRUST Note: Unless otherwise indicated, the source of all data contained herein is publicly available information that has been filed with the Securities & Exchange Commission as of Q1’17. 1.) Source: SNL;

  3. Slide 3: Kite's Core Strategy

    © 2017 Kite Realty Group kiterealty.com Investor Update | 3 KITE’S CORE STRATEGY INTERTWINED IN ALL ASPECTS HIGH-QUALITY PORTFOLIO OPERATIONS AND GROWTH OPPORTUNITIES INVESTMENT GRADE BALANCE SHEET  Need-based and value oriented retailers  93% internet resistant / omni-channel  Over 70% ABR comin

  4. Slide 4: KRG Provides Attractive Investment Opportunity

    © 2017 Kite Realty Group kiterealty.com Investor Update | 4 KRG PROVIDES ATTRACTIVE INVESTMENT OPPORTUNITY 1.) 2017E FFO per share refers to consensus estimates for companies as of May 2017 per FactSet, which may not reflect the Company’s or the applicable peer company’s estimates. FFO Payout Ratio

  5. Slide 5: Trading Multiple Does Not Reflect Operational Performance

    © 2017 Kite Realty Group kiterealty.com Investor Update | 5 KITE’S TRADING MULTIPLE DOES NOT REFLECT ITS STRONG, CONSISTENT OPERATIONAL PERFORMANCE 5.3% 4.6% 4.2% 3.5% 3.3% 3.3% 3.2% 3.0% 2.9% 2.7% 2.4% ROIC AKR KRG REG RPAI BRX WRI FRT DDR RPT KIM QUARTERLY AVERAGE SPNOI GROWTH FROM Q1’13-Q1’17 (1)

  6. Slide 6: Tenant Takeaways from Las Vegas ICSC

    © 2017 Kite Realty Group kiterealty.com Investor Update | 6 TENANT TAKEAWAYS FROM LAS VEGAS ICSC RECAP FROM CONFERENCE  195 SCHEDULED MEETINGS WITH RETAILERS, NOT INCLUDING IMPROMPTU OR UNSCHEDULED MEETINGS  RETAILERS ARE CONTINUING TO OPEN STORES, SOME WITH AGGRESSIVE PLANS  CONTINUED FOCUS ON T

  7. Slide 7: High-Quality Portfolio

    HIGH-QUALITY PORTFOLIO

  8. Slide 8: Well-Positioned Real Estate with Geographically Diverse Footprint

    © 2017 Kite Realty Group kiterealty.com Investor Update | 8 WELL-POSITIONED REAL ESTATE WITH A GEOGRAPHICALLY DIVERSE FOOTPRINT West: 12.2% of ABR $23.55 ABR / SF Mid-Central: 17.6% of ABR $15.38 ABR / SF Florida: 24.1% of ABR $14.89 ABR / SF Southeast: 17.8% of ABR $14.28 ABR / SF Northeast: 11.1%

  9. Slide 9: Focus on Credit Strength and High-Quality Tenants

    © 2017 Kite Realty Group kiterealty.com Investor Update | 9 FOCUS ON CREDIT STRENGTH AND HIGH-QUALITY TENANTS STRONG MIX OF TENANTS ACROSS OUR DIVERSIFIED PORTFOLIO Top 10 Tenants By ABR # Stores % ABR 1 Publix 15 2.7% 2 TJ Maxx 22 2.5% 3 Petsmart 20 2.2% 4 Bed Bath & Beyond 19 2.2% 5 Ross Dress For

  10. Slide 10: Diverse Tenant Base Leaves Minimal Exposure to Store Closures

    © 2017 Kite Realty Group kiterealty.com Investor Update | 10 DIVERSE TENANT BASE LEAVES MINIMAL EXPOSURE TO STORE CLOSURES TOTAL ANNOUNCED CLOSURES CURRENT KRG CLOSURES AS OF 5/31/17 ABR EXPOSURETENANT Gander Mountain 32 1 0.1% TBD HH Gregg 220 1 0.1% 1 JCPenney 138 3 0.1% None Kmart / Sears 108 / 4

  11. Slide 11: Necessity Focused Retail Portfolio

    © 2017 Kite Realty Group kiterealty.com Investor Update | 11 NECESSITY FOCUSED RETAIL PORTFOLIO 67% OF ABR GENERATED FROM ASSETS ANCHORED WITH A GROCER (1) Unanchored Strip, 1% Commercial, 3% Lifestyle Center, 3% Non-Grocer Strip, 4% Power Center (No Grocer), 22% Grocer, 31% Power Center (w/Grocer),

  12. Slide 12: Internet Resistant Retailer Base

    © 2017 Kite Realty Group kiterealty.com Investor Update | 12 INTERNET RESISTANT 52.6% SERVICES, ENTERTAINMENT 21.7% GROCER, SPECIALTY STORES 14.6% RESTAURANTS 16.3% MULTI-CHANNEL 40.4% SOFT GOODS 15.1% HOME IMPROVEMENT GOODS 11.5% DISCOUNT RETAILERS 10.6% SPORTING GOODS 3.2% INTERNET RISK 7.0% ELECT

  13. Slide 13: Operations and Growth Opportunities

    OPERATIONS AND GROWTH OPPORTUNITIES

  14. Slide 14: Internal NOI Growth Opportunities

    © 2017 Kite Realty Group kiterealty.com Investor Update | 14 INTERNAL NOI GROWTH OPPORTUNITIES 2017 expected same-property NOI growth of 2-3% with additional growth from our current development pipeline and future 3-R projects Operating Properties  Positive cash rent spread on non-option renewals –

  15. Slide 15: Rental Stream Well-Balanced Between Anchors and Shops

    © 2017 Kite Realty Group kiterealty.com Investor Update | 15 RENTAL STREAM IS WELL-BALANCED BETWEEN ANCHORS AND SHOPS 33% 39% 44% 45% 50% 54% 55% 56% 59% 63% AKR ROIC WRI REG FRT KRG RPAI BRX KIM DDR ANCHOR TENANT ABR AS A PERCENTAGE OF TOTAL PORTFOLIO ABR (1) (2) 1.) Peer data sourced from publicly

  16. Slide 16: Small Shop Leasing – An Opportunity for Growth

    © 2017 Kite Realty Group kiterealty.com Investor Update | 16 SMALL SHOP LEASING – AN OPPORTUNITY FOR GROWTH 75.4% 78.2% 79.9% 83.3% 85.6% 85.9% 87.7% 88.6% 90.0% Q 1' 10 Q 1 '1 1 Q 1' 12 Q 1' 13 Q 1' 14 Q 1' 15 Q 1 '1 6 Q 1' 17 G O A L +17.5% GROWTH FROM Q1’10-Q1’17 ~30% of small shop ABR derived fr

  17. Slide 17: Operating Efficiency Metrics

    © 2017 Kite Realty Group kiterealty.com Investor Update | 17 OPERATING EFFICIENCY METRICS 4.0% 4.6% 5.9% 7.2% 7.3% 7.7% 8.5% 8.7% 9.0% 13.4% FRT WRI KRG BRX ROIC RPAI KIM RPT REG DDR G&A / Revenue (%) 76.4% 75.0% 74.5% 73.9% 73.3% 72.1% 71.6% 70.9% 69.0% 68.1% KIM BRX KRG REG ROIC RPT DDR RPAI WRI F

  18. Slide 18: In-Process 3-R Projects & Opportunities

    © 2017 Kite Realty Group kiterealty.com Investor Update | 18 IN-PROCESS 3-R PROJECTS & OPPORTUNITES  Redevelop: substantial renovations; e.g. teardowns, remerchandising, exterior / interior improvements  Repurpose: substantial alterations, including changing the product-type  Reposition: less sub

  19. Slide 19: Portofino Shopping Center (Houston, TX): A Case Study

    © 2017 Kite Realty Group kiterealty.com Investor Update | 19 PORTOFINO SHOPPING CENTER (HOUSTON, TX): A CASE STUDY  Demolition/expansion of existing vacant space to accommodate Nordstrom Rack and rightsize existing Old Navy store  Shop relocation and façade renovations to better position existing

  20. Slide 20: Fishers Station (Indianapolis, IN): A Case Study

    © 2017 Kite Realty Group kiterealty.com Investor Update | 20 FISHERS STATION (INDIANAPOLIS, IN): A CASE STUDY  Previously anchored by 57,639 square foot Marsh Supermarket  Successful negotiation of a new 123,000 square foot Kroger Marketplace drove the redevelopment of the center  Demolition of j

  21. Slide 21: Investment Grade Balance Sheet

    INVESTMENT GRADE BALANCE SHEET

  22. Slide 22: Resilient Balance Sheet

    © 2017 Kite Realty Group kiterealty.com Investor Update | 22 RESILIENT BALANCE SHEET  Moody’s / S&P Ratings: Baa3 / BBB-  Debt Service Coverage: 3.5x  Net Debt / Adjusted EBITDA: 6.9x  Secured Debt / Undepreciated Total Assets: 16.7%  Unencumbered Assets / Total Assets: 65%  Weighted Average D

  23. Slide 23: Efficient Debt Structure Relative to Peers

    © 2017 Kite Realty Group kiterealty.com Investor Update | 23 Note: Peer data sourced from publicly available information as of Q1’17 supplemental. EFFICIENT DEBT STRUCTURE RELATIVE TO PEERS DDR REG BRX RPAI ROIC RPT KRG WRI KIM WEIGHTED AVERAGE MATURITIES AND WEIGHTED AVERAGE INTEREST RATES 4.0% Wei

  24. Slide 24: Well-Staggered Debt Maturity Profile

    © 2017 Kite Realty Group kiterealty.com Investor Update | 24 WELL-STAGGERED DEBT MATURITY PROFILE 38 45 170 215 215 11 83 200 200 95 80 75 300 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ Mortgage Debt Line of Credit Term Loan Private Placement Senior Unsecured Notes 1.) Chart excludes an

  25. Slide 25: Forward-Looking Statements

    © 2017 Kite Realty Group kiterealty.com Investor Update | 25 FORWARD-LOOKING STATEMENTS This supplemental information package, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities A

  26. Slide 26: Non-GAAP Financial Measures: FFO

    © 2017 Kite Realty Group kiterealty.com Investor Update | 26 NON-GAAP FINANCIAL MEASURES Funds from Operations Funds from Operations (FFO) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The Company calculates FF

  27. Slide 27: Non-GAAP Financial Measures: EBITDA

    © 2017 Kite Realty Group kiterealty.com Investor Update | 27 NON-GAAP FINANCIAL MEASURES Earnings Before Interest Expense, Income Tax Expense, Depreciation and Amortization (EBITDA) We define EBITDA, a non-GAAP financial measure, as net income before depreciation and amortization, interest expense a

  28. Slide 28: Appendix – Reconciliation of FFO to Net Income

    © 2017 Kite Realty Group kiterealty.com Investor Update | 28 APPENDIX – RECONCILIATION OF FFO TO NET INCOME 1.) “FFO of the Operating Partnership" measures 100% of the operating performance of the Operating Partnership’s real estate properties. “FFO attributable to Kite Realty Group Trust common sha

  29. Slide 29: Appendix – Reconciliation of Same Property NOI to Net Income

    © 2017 Kite Realty Group kiterealty.com Investor Update | 29 APPENDIX – RECONCILIATION OF SAME PROPERTY NOI TO NET INCOME 1.) Same property analysis excludes operating properties in redevelopment as well as office properties (Thirty South Meridian and Eddy Street Commons). 2.) Excludes leases that a

  30. Slide 30: Appendix – Reconciliation of EBITDA / Adjusted EBITDA to Net Income

    © 2017 Kite Realty Group kiterealty.com Investor Update | 30 APPENDIX – RECONCILIATION OF EBITDA / ADJUSTED EBITDA TO NET INCOME 1.) Relates to current quarter GAAP operating income for Cove Center operating property that was sold during the quarter. 2.) Represents Adjusted EBITDA for the three mont

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