Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q3 2023 Earnings Presentation
30 slides from Kite Realty Group Trust's earnings presentation, Oct 30, 2023
Slide 1: Investor Update Q3 2023
y, KITE INVESTOR UPDATE Q3 2023 © 2023 kite Realty Group | kiterealty.com LISTED
Slide 2: Company overview and key portfolio metrics
Note: Unless otherwise indicated, the source of all Company data is publicly available information that has been or will be filed with the Securities and Exchange Commission for the period ending September 30, 2023. 1. As of October 27, 2023. 2. Assets with a grocery component include centers with a
Slide 3: Investment highlights
▪ ✓ Operating margins and metrics well above open-air retail sector averages ✓ 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 availa
Slide 4: Q3 results and leasing highlights
Outperformance largely driven by lower than expected bad debt and overage rent Minimum base rent growth and lower bad debt drove outsized SSNOI growth Healthy leasing volume continues at extremely strong spreads Shop leased percentage increased year-over-year by 90 bps. Anchor leased percentage decr
Slide 5: Capital allocation priorities
▪ – KRG’s primary capital allocation priority through 2024 is leasing – Demand for space continues to be strong, as evidenced by ~14% blended cash spreads in 3Q and on a trailing twelve-month basis – Through 3Q 2023, KRG has generated > 30% returns on capital for comparable new leases, which signifi
Slide 6: Guidance and outlook
▪ Same property NOI growth of 4.5%, which represents a 100-basis point increase ▪ Bad debt reserves of 45 basis points of total revenues for the full calendar year of 2023 ▪ Bad debt reserves of 75 basis points of total revenues for the fourth quarter of 2023 Net income Gain on sales of operating pr
Slide 7: Performance versus peers
ABR per SF Net Debt to Adjusted EBITDA 3-Mile Population 3-Mile Average Household Income % of ABR from Assets with a Grocery Component 7% 7% 9% 12% 13% FRT REG SITC KIM BRX KRG (Since 2019) 6% 7% 7% 8% 11% SITC REG FRT KIM BRX KRG (Since 2019) -3% 1% 1% 2% 3% SITC FRT BRX KIM REG KRG (Since 2019) No
Slide 8: Operating metrics versus peer average
Peer Average KRG - 3Q'23 Note: Peer group includes AKR, BRX, FRT, KIM, PECO, REG, ROIC and SITC. Source of all peer data is from 2Q 2023 supplemental disclosures, except KIM and ROIC data is from 3Q 2023 supplemental disclosures. 1, “Recovery Ratios” are computed by dividing tenant reimbursements by
Slide 9: Retail industry supply and demand trends
• • • Note: Data pertains to multi-tenant retail, excluding single-tenant and net lease retail. Source: CBRE Research Source: BofA Global Research as of August 22, 2023
Slide 10: Lease structure and rent escalators
• • • CPI Fixed Rent Bumps Greater Than or Equal to 3% Fixed CAM
Slide 11: Balance sheet strength versus peers
Notes: Source of all peer data is from 2Q 2023 supplemental disclosures, except KIM and ROIC data is from 3Q 2023 supplemental disclosures. Net Debt + Preferred / Adjusted EBITDA Debt Service Coverage Ratio Liquidity Weighted Average Interest Rate Unencumbered NOI as a % of Total NOI Fixed Rate Debt
Slide 12: Well-Staggered Maturity Ladder
PA —— Well-Staggered Maturity Ladder mCITE Debt Maturity Profile as of September 30, 2023 (Sin M) $12 $150 15% of Total Debt Outstanding $10 $4 $300 $120 $430 $400 eed) $400 see $100 $100 $26 ‘$40 s7 mmmse 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032+ = Mortgage Debt ™ Unsecured Debt = Unsecure
Slide 13: Further Strengthened Portfolio Has Significant Potential
Further Strengthened Portfolio Has Significant Potential
Slide 14: 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 15: Portfolio composition and demographics
Note: 3-mile demographic statistics are weighted by 3Q 2023 ABR and sourced from PopStats. Remaining 1% of KRG’s portfolio is unanchored or single-tenant assets. • • • • •
Slide 16: Anchor vacancy redevelopment opportunity
1. Estimate of potential outcomes of remaining anchor vacancies. 2. New ABR is actual for executed and average in-place ABR for anchor tenants in the KRG portfolio as of 3Q’23. 3. Includes only comparable leases (35 of 68). 4. Represents the percentage increase of the Company's average in-place ABR
Slide 17: Leasing activity and cash spreads
• • # of Leases Signed Leased SF Signed Blended Cash Spread Non-Option Renewal Spread
Slide 18: Top tenants and tenant categories
1. Number of stores represents stores at consolidated and unconsolidated properties. 2. Percent of weighted ABR includes ground lease rent and represents the Company’s share of the ABR at consolidated and unconsolidated properties. The TJX Companies, Inc. Best Buy Co., Inc. Ross Stores, Inc. PetSmar
Slide 19: Anchor and Shop Tenant Exposure
PA —— Anchor and Shop Tenant Exposure mCITE + 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 TOTAL PORT
Slide 20: Big Names. Small Spaces.
—— Big Names. Small Spaces. PA KITE > Top 50 Small Sea 99% ~760 29% 15% (< 10k Square Feet) National Brands Stores Of Small Shop ABR Of Portfolio ABR _4 (@ > Pairing Typical Small Shop Tenants With Newer Retail Concepts KEY TOP 50 SHOP TENANTS (by ABR) KEY NEW SHOP TENANTS RECENTLY SIGNED @ATHLETA a
Slide 21: ESG metrics and governance
Scope 1 2,275.2 2,657.5 16.8% Scope 2 18,255.3 16,977.6 (7.0%) Electricity usage reduction (year-over-year) Metric tons CO2e eliminated (tons) Properties with water efficiency measures1 Properties with LED lighting1 Trees planted through Project Green1 EV charging stations1 Waste diversion rate Prop
Slide 22: 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 as lo
Slide 23: ESG governance and initiatives
- Establish Goals - Monitor and measure progress - Hold organization accountable - Tenant relationships and satisfaction - Vendor relationships and satisfaction - Identify and execute energy efficient initiatives - Foster vendor relationships and satisfaction - Implement energy efficient initiatives
Slide 24: Updated 5-Year ESG Goals
—— Updated 5-Year ESG Goals (Established in 2021) KRG recognizes the importance ESG ini long-term ESG commitment tives play EAR GO. S (To be completed by 12/31/2026) | Install LED parking lot lighting at 80% of KRG-owned and managed properties Install smart irrigation controls at 25% of KRG-owned an
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
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: Appendix: Reconciliation of Same Property NOI to Net Income
Pi Appendix: Reconciliation of Same Property NOI to Net Income mCITE Kite Realty Group Trust Same Property Net Operating Income ("NOI") (dollars in thousands) (unaudited) ‘Three Months Ended September 20, Nine Months Ended September 30. 72023-2022 Change «_~—2023—~—=«*SCS202 Change ‘numb of properti
Slide 29: Appendix: Funds from Operations
Appendix: Funds from Operations KITE Kite Realty Group Trust Funds From Operations (“FFO")" (dollars in thousands, except per share amounts) (unaudited) ‘Three Months Ended Nine Months Ended September 30, September 30 223 ‘2022 223 2022 Netincome (loss) $ 2377 $ (772) $ aoz1y $ (11302) Less netincom
Slide 30: Appendix: Reconciliation of EBITDA to Net Income
Pi Appendix: Reconciliation of EBITDA to Net Income mCITE ite Realty Group Trust Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) (dollars in thousands) (unaudited) Three Months Ended Septet SOE Net income $ 277 Depreciation and amortization 105,930 Interest expense 25,484 I
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