Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Investor Presentation (March 2008)
26 slides from Kite Realty Group Trust's investor presentation, Mar 3, 2008
Slide 1: Kite Realty Group Trust First Quarter 2008
KITE REALTY GROUP TRUST FIRST QUARTER 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 Internal Growth Operational Efficiencies Existing Vacancy Development Complete Current Development Pipeline Financing Secured (76% funded) Commence construction of Visible Shadow Pipeline Execute capital plan Continue to Manage Debt Maturities Bala
Slide 4: Consumer Behavior and Property Type Allocation
COMPANY OVERVIEW Information as of December 31, 2007 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 will continue to create shopping center traffi
Slide 5: Geographic Diversification
COMPANY OVERVIEW Information as of December 31, 2007 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
Slide 6: Strong Tenant Diversity
COMPANY OVERVIEW Information as of December 31, 2007 except as noted STRONG TENANT DIVERSITY Top 10 Retail Tenants by Base Rent % of Portfolio S&P Annualized Base Rent Credit Rating 2 1 Lowe's Home Improvement 3.5% A+ 2 Publix 2.5% n/a 3 Marsh Supermarkets 2.2% n/a 4 Circuit City 1 2.2% n/a 5 Bed Ba
Slide 7: Embedded Growth: Current Developments
GROWTH STRATEGY Information as of December 31, 2007 EMBEDDED GROWTH: CURRENT DEVELOPMENTS STRONG UPSIDE Only 27% occupied Growth source for late 2008 and early 2009 23% remaining to be leased: 118,000 square feet of shops LOW RISK PROFILE 77% leased or committed 76% funded, with additional costs cov
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 December 31, 2007 SAME STORE GROWTH VIA LEASE EXPIRATIONS Nearly 30 percent ($20 million) of annualized base rent expires from 2010 to 2012 From 2010 to 2012, over 530,000 square feet per year will expire (compared to 250,000 per year from 2008 to 2009) Annual Base
Slide 10: Emphasizing Internal Growth
GROWTH STRATEGY Information as of December 31, 2007 EMPHASIZING INTERNAL GROWTH Existing Vacancy Operating retail portfolio is a healthy 94.8 percent leased 246,000 square feet are available to be leased Leasing one-quarter of this space at our portfolio average shop rent of $20 per square foot coul
Slide 11: Peer Group Comparison: FFO Growth
PEER GROUP COMPARISON At 8.6%, our FFO per share growth from 2006 to 2007 was 32% better than our peer group average of 6.5% 2006 2007 % Company FFO/sh FFO/sh Growth Kimco Realty Corporation $2.21 $2.59 17.3% Federal Realty $3.26 $3.63 11.3% Developers Diversified $3.41 $3.79 11.1% Acadia Realty Tru
Slide 12: Peer Group Comparison: Multiples
PEER GROUP COMPARISON Assuming a peer group average multiple of 12.6x, our stock is trading at a 23% discount Price Consensus Company 2/27/2008 Estimate 1 Multiple Federal Realty $74.14 $3.91 19.0x Acadia Realty Trust $23.19 $1.35 17.2x Equity One, Inc $21.83 $1.42 15.4x Regency Centers Corp $60.45
Slide 13: Peer Group Comparison: Dividend Yield
PEER GROUP COMPARISON Our dividend yield remains attractive Current Price Annual 1 Company 2/27/2008 Dividend Yield Ramco Gershenson $22.76 $1.85 8.1% Cedar Shopping Centers $11.90 $0.90 7.6% Inland Real Estate Corp $14.04 $0.98 7.0% Developers Diversified $40.26 $2.76 6.9% Weingarten Realty $32.74
Slide 14: Peer Group Comparison: Fixed Charge Coverage
PEER GROUP COMPARISON Operating cash flow ensures a healthy fixed charge coverage ratio Fixed Charge Company Coverage Regency Centers Corp 3.4x Federal Realty 2.9x Acadia Realty Trust 2.9x Developers Diversified 2.7x Inland Real Estate Corp 2.6x Equity One, Inc 2.3x Kimco Realty Corporation 2.2x Wei
Slide 15: Development & Redevelopment Pipeline
DEVELOPMENT & REDEVELOPMENT PIPELINE Information as of December 31, 2007 Projected Percent 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 Cobblestone Plaza2 Ft. Lauderdale, FL
Slide 16: Visible Shadow Pipeline
VISIBLE SHADOW PIPELINE Information as of December 31, 2007 KRG % Est. Total Est. Total Project MSA 1 Owned GLA 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. Box
Slide 17: A Case Study in Risk Mitigation: Eddy Street Commons
DEVELOPMENT PIPELINE Information as of December 31, 2007 A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS $200 million mixed-use development near 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 18: Eddy Street Commons Phase I
DEVELOPMENT PIPELINE A CASE STUDY IN RISK MITIGATION: EDDY STREET COMMONS Phase I – Retail, Office, Multi-family 18
Slide 19: Value Creation Embedded in Current Development Pipeline
DEVELOPMENT PIPELINE VALUE CREATION EMBEDDED IN CURRENT DEVELOPMENT PIPELINE Current Development Pipeline 1 $92M Visible Shadow Pipeline 1,2 $235M Total Pipeline Cost - KRG Share $327M Projected Yield 8.50% Projected NOI $27.8M Value at 6.5% Cap Rate $428M Less Cost $(327M) Estimated Value Creation
Slide 20: Strong Demographics
STRONG DEMOGRAPHICS DEVELOPMENT NOT DEPENDENT ON GROWTH Portfolio Demographic Comparison Operating Portfolio vs. Development Pipeline 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. P
Slide 21: Development Capital Needs
DEVEOPLMENT CAPITAL NEEDS Information as of December 31, 2007 A CLEAR PLAN Current Development Pipeline 76% funded as of year end 2007 with construction loans in place to fund remaining $36 million Visible Shadow Pipeline Parkside Town Commons Current land loan to be converted to 100% LTC constructi
Slide 22: Managing Debt Maturities
MANAGING DEBT MATURITIES AGGRESSIVE REFINANCING, SOLID EXECUTION AS OF SEPTEMBER 30, 2007 AS OF FEBRUARY 27, 2008 2008 Maturities: $118 million 2008 Maturities: $21 million $109.4 million construction/land loans $17.8 million construction loans 2 loans with late 2008 maturities $8.6 million other va
Slide 23: Committed Management
COMMITTED MANAGEMENT Senior management owns approximately 22 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 7.1% T
Slide 24: Operating Metrics
OPERATING METRICS For the Three Months Ended December 31, 2007 Selected Peer Group KRG Average1 NOI / Revenue 74.1% 69.4% G&A /Total Revenue 3.8% 5.4% Fixed Charge Coverage2 2.9x 2.6x FFO Payout % 60% 69% Portfolio % Leased 94.3% 95.3% (1) Peer Group consists of KIM, DDR, AKR, REG and RPT. (2) Defin
Slide 25: 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 pipeline Internal growth ‘A’ locations Financial strength High occupancy Good real estate wins Below market rents 25
Slide 26: 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
Kite Realty Group Trust — Investor Presentation (March 2008) on 6ix