Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Merger or Acquisition (February 2014)
22 slides from Kite Realty Group Trust's merger presentation, Feb 10, 2014
Slide 1: Kite Realty Group Trust Proposed Transaction with Inland Diversified Real Estate Trust
Kite Realty Group Trust Proposed Transaction with Inland Diversified Real Estate Trust February 2014
Slide 2: Transaction Overview (cont'd)
Pre-closing Inland Diversified is under contract to sell its single-tenant net lease portfolio to Realty Income Corporation for $503 million, which is expected to close prior to the transaction Inland Diversified is required to complete a 1031 Exchange on certain single-tenant assets and redeploy $7
Slide 3: Strategic Rationale
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 ~$71,000; 2013 population density of ~67,000) Stabilized portfolio (95.3% occupancy as of 12/31/2013) Div
Slide 4: Cost Savings & De-Risking; Strong balance sheet
Kite’s scalable platform provides for substantial G&A and operating synergies Total synergies of $17 - $19 million for the combined company Results in incremental operating expense of $6 - $8 million Elimination of external manager contracts results in significant cost savings Reduces Kite’s G&A loa
Slide 5: Inland Diversified – Company Overview
Founded 2008 Number of Properties / Owned SF 57 / 10.2mm Number of Multifamily Properties / Units 3 / 444 Total Occupancy (Owned SF) 95.3% Shop Occupancy (Owned SF) 84.2% Avg. Remaining Lease Term 8.2 years Number of States 22 Enterprise Value (2) $2.1bn Net Debt / Enterprise Value (2) 38.0% Retail
Slide 6: Inland Diversified – Strong Tenancy with Staggered Lease Maturities
Inland Diversified – Strong Tenancy with Staggered Lease Maturities Retail Tenant Diversification Retail ABR Breakdown Retail Lease Expirations Wheatland Wheatland, TX (Dallas MSA) Mullins Crossing Evans, GA (Augusta MSA) University Town Center Norman, OK 6 Tenants S&P Rating % ABR Petsmart BB+ 3.1%
Slide 7: Inland Diversified – Select Assets
Inland Diversified – Select Assets Location White Plains, NY (New York City MSA) Year Built 2004 Owned SF 365,905 SF Leased 100.0% ABR $25.95 PSF Average HHI (3 mi.) $112,579 2013 Population (3 mi.) 106,118 Major Tenants Shop Rite, Nordstrom Rack, National Amusements City Center Bayonne Crossing Pro
Slide 8: Inland Diversified – Select Assets (cont'd)
Inland Diversified – Select Assets (cont’d) Location Las Vegas, NV Year Built 2001-2011 Owned SF 857,831 SF Leased 95.3% ABR $11.07 PSF Average HHI (3 mi.) $85,297 2013 Population (3 mi.) 100,458 Major Tenants Wal-Mart, Sam’s Club, Home Depot Centennial Center Landstown Commons Property Highlights D
Slide 9: Inland Diversified – Select Assets (cont'd)
Inland Diversified – Select Assets (cont’d) Draper Peaks Miramar Square Location Miramar, FL (Fort Lauderdale MSA) Year Built 2008 Owned SF 238,334 SF Leased 85.6% ABR $18.36 PSF Average HHI (3 mi.) $60,022 2013 Population (3 mi.) 162,509 Major Tenants Kohl’s, Staples Property Highlights Includes re
Slide 10: Transaction Impact
57 131 Properties (2) Square Feet (2) Total Occupancy (3)(4) Number of States Total ABR ($ PSF) (4)(5) Average HHI (3 mi.) (4) 74 10.1 million 95.3% $13.14 $76,737 10.2 million 95.3% 22 $14.09 $70,842 20.3 million 95.3% 26 $13.66 $73,494 Pro Forma Equity Market Value (1) $0.8 billion $1.2 billion $2
Slide 11: Geographic Diversification
Pro forma for the transaction, Kite will own 131 properties comprised of 20.3 million square feet across 26 states Geographic Diversification ___________________________ Sources: Inland Diversified provided and Kite management as of 12/31/2013. Includes development and redevelopment and pro forma fo
Slide 12: Strong Operating Metrics
Strong Operating Metrics Portfolio Occupancy (1) Total ABR ($ PSF) (1) 2013 Population (000s) (1) ___________________________ 1. Includes development and redevelopment and pro forma for Kite’s sale of 50th & 12th and Inland Diversified’s announced sale of its single-tenant portfolio to Realty Income
Slide 13: Pro Forma Top Tenants
Pro Forma Top 10 Tenants (1) Pro Forma Tenant Profile Overview Large national retail brands Significant diversification with no tenant representing more than 4% of ABR Kite to build upon existing and new relationships to drive performance Considerable tenant overlap provides seamless transition for
Slide 14: Sources & Uses
$1.2 billion of common stock issued to Inland Diversified shareholders Proceeds from the contracted sale of the net lease portfolio and additional non-core asset sales will be used to repay debt and delever the balance sheet Sources & Uses ___________________________ Note: As of December 31, 2013. N
Slide 15: Transaction Value / Economics
Transaction Value / Economics Transaction Value / Economics ___________________________ Note: As of December 31, 2013. Pro forma for Inland Diversified’s previously-announced sale of its triple net lease assets to Realty Income Corporation. Adjustments for the planned sale of Inland Diversified’s mu
Slide 16: Pro Forma Capitalization
Pro Forma Capitalization (In millions, except per share amounts) ___________________________ Note: As of December 31, 2013. Pro forma for Inland Diversified’s announced sale of its single-tenant portfolio to Realty Income Corporation. Transaction adjustments include repayment of $33 million of Kite’
Slide 17: Pro Forma Debt Maturity Schedule
Pro Forma Debt Maturity Schedule Pro Forma Debt Maturity Schedule A well-staggered debt maturity schedule provides the financial flexibility for Kite to execute its growth strategy ___________________________ Note: As of December 31, 2013. 17
Slide 18: Company Objectives & Strategy
Company Objectives & 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 large
Slide 19: Compelling Investment Opportunity
Compelling Investment Opportunity Unique opportunity to acquire a high-quality portfolio with a strong tenant base at an attractive valuation Greater geographic and tenant diversification Kite’s scalable platform and infrastructure will drive operating efficiencies and significant synergies 100% sto
Slide 20: Appendix
Appendix 20
Slide 21: Forward-looking statements
Certain statements in this presentation that are not in the present or past tense or that discuss Kite’s and/or Inland Diversified’s expectations (including any use of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “might,” “outlook,” “pro
Slide 22: Additional Information About the Proposed Transaction
Additional Information About the Proposed Transaction In connection with the proposed transaction, Kite expects to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Kite and Inland Diversified that also constitutes a prospectus of Kite, which joint p
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