Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q2 2024 Earnings Presentation
30 slides from Kite Realty Group Trust's earnings presentation, Jul 31, 2024
Slide 1: Investor Update Q2 2024
KGTE: Cl atest Connons ~Las Vegas, NV MSA Nora Plaza - Indianapolis, IN MSA INVESTOR UPDATE | Q@2 2024 USTED © 2024 Kite Realty Group | kiterealty.com
Slide 2: Kite Realty Group at a glance
Enterprise Founded / IPO NYSE Market Cap1 Value1 Operating Retail Total Owned Retail Portfolio Annualized Base Net Debt to Properties Retail GLA (SF) Percent Leased Rent (ABR) per SF Adjusted EBITDA ABR from ABR from Assets ABR in Sun Community & S&P / Moody’s / with a Grocery Belt Markets3 Neighbor
Slide 3: Investment highlights
✓ Operating margins and metrics are among the best in the open-air retail sector ✓ Management team has deep experience operating open- air real estate ✓ Low leverage with manageable near-term maturities ✓ In 2024, received credit rating upgrades from S&P to BBB and Moody’s to Baa2, and an outlook up
Slide 4: Outperformance driven by base rent growth and lower bad debt
2016 2017 2018 2019 2020 2021 2022 2023 Q2 2024 2016 2017 2018 2019 2020 2021 2022 2023 Q2 2024 Outperformance driven by base rent growth and lower than expected bad debt Base rent growth and improvement in net tenant recoveries Healthy leasing volume continues at extremely strong spreads Anchor and
Slide 5: 2024 guidance
▪ Same property NOI growth range of 2.0% to Net income 3.0%, which represents a 50-basis point Depreciation and amortization increase at the midpoint Realized loss on sales of operating properties, net ▪ Full-year bad debt assumption of 0.5% to 1.0% Realized gain on sale of unconsolidated property,
Slide 6: Signed-not-open pipeline
• – The signed-not-open (SNO) pipeline increased $3.0M quarter-over-quarter to $35.3M as a result of new leases signed in the second quarter of 2024, net of tenants that commenced rent in the second quarter of 2024 • Signed 55 new leases representing $9.7M of NOI in the second quarter of 2024 • 49 t
Slide 7: Peer comparison: ABR per SF, leverage, demographics
ABR per SF Net Debt to Adjusted EBITDA 3-Mile Population1 3-Mile Average Household Income1 % of ABR from Assets with a Grocery Component (Since 2019) (Since 2019) (Since 2019) 17.1% 12.2% 2.8% 11.7% 8.6% 2.0% 2.0% 10.2% 8.9% 7.0% 7.2% 1.4% REG FRT KIM BRX KRG REG FRT KIM BRX KRG FRT BRX KIM REG KRG
Slide 8: Operating metrics versus peer average
Peer Average KRG - 2Q'24 Peer Average KRG - 2Q'24 Peer Average KRG - 2Q'24 Peer Average KRG - 2Q'24 Note: Peer group includes AKR, BRX, FRT, KIM, PECO, REG, and ROIC. Source of all peer data is from 2Q 2024 supplemental disclosures, except FRT, KIM, REG, and UE data is from 1Q 2024 supplemental disc
Slide 9: Multi-tenant retail supply and demand
• • • Note: Data pertains to multi-tenant retail, excluding single-tenant and net lease retail. Source: BofA Global Research as of March 8, 2024. Source: CBRE Research
Slide 10: Lease structure: rent bumps and fixed CAM
• • Shops (< 10K Square Feet) Anchors (> 10K Square Feet) Total Fixed Rent Bumps Greater Than or Equal to 3% (% of Lease Count) Fixed CAM (% of Lease Count) Greater Than or Equal to 3.0% Greater Than or Equal to 3.5% Greater Than or Equal to 4.0%
Slide 11: Results by center type
• • Community / Neighborhood Centers 43.0% 33.9% 22.8% 15.9% 5.4% 30.2% 6.4% Power Centers 36.1% 31.6% 79.4% 33.0% (8.7%) 25.7% 49.4% Lifestyle / Mixed-Use Centers 26.7% 72.4% 58.3% 27.1% 6.5% 18.4% 18.4% Community / Neighborhood Centers 13.9% 12.6% 10.4% 4.2% 2.2% 2.1% 1.3% Power Centers 10.5% 11.7
Slide 12: Balance sheet and leverage versus peers
Net Debt + Preferred / Adjusted EBITDA Debt Service Coverage Ratio Available Liquidity Weighted Average Interest Rate1 Unencumbered NOI as a % of Total NOI Fixed Rate Debt Fitch S&P Moody’s 7.1x 6.6x 6.1x 5.6x 5.6x 5.1x 5.2x KRG PECO REG BRX KIM FRT ROIC AKR Note: Source of all peer data is from 2Q
Slide 13: Debt maturity profile
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033+ Note: Maturity profile assumes that all loan extension options are exercised by the Company. 1. Reflects the payoff of the $120.0 million unsecured term loan that matured on July 17, 2024 using a portion of the proceeds from the January 2024 issuanc
Slide 14: Sun Belt Has Significant Potential
Has Significant Potential x w e < ral a 5 a re} 4 a i > a z Ss i)
Slide 15: Population growth by state
1. Source: US Census Bureau, Vintage 2022 Population Estimates from July 1, 2021 to July 1, 2022. Top 15 states include FL, ID, SC, TX, SD, MT, DE, AZ, NC, UT, TN, GA, NV, OK and ME.
Slide 16: Portfolio demographics
• • • • • Note: 3-mile demographic statistics are weighted by 2Q 2024 ABR and sourced from PopStats. Remaining 1% of KRG’s portfolio is unanchored or single-tenant assets.
Slide 17: Investor day series in KRG markets
✓ Reimagine the traditional investor day into four installments in KRG’s markets ✓ Showcase the quality of our diverse open-air retail portfolio ✓ Gain a deeper understanding of KRG’s platform through four themes: operate, lease, develop, and allocate ✓ Highlight the KRG team’s wealth of industry kn
Slide 18: Leasing of 61 spaces to national tenants
• • • Count Square feet Capital / SF (TI / LL Work / Lease Commissions) Total capital ($, M) Previous tenants’ ABR New tenants’ ABR Cash lease spread Return on capital New NOI incl. NNN ($, M) For 61 Spaces National Tenants 1. Includes only comparable leases (32 of 61). 2. Represents the estimated t
Slide 19: Top tenants
Grocery / Big Box Wine & Spirits 1 The TJX Companies, Inc. Office Supply / Electronics 2 Best Buy Co., Inc. Medical Pet Stores 3 Ross Stores, Inc. Hardware / Auto 4 PetSmart, Inc. Banks 5 Michaels Stores, Inc. Pharmacy / Drug 6 Gap Inc. Quick Service Restaurants 7 Dick’s Sporting Goods, Inc. Full Se
Slide 20: Anchor and shop tenant exposure
rh —— Anchor and Shop Tenant Exposure KITE + 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 21: Big Names. Small Spaces.
—— Big Names. Small Spaces. Pi KITE ~ Top 50 Small Shop Tenants 99% ~7710 29% 16% (< 10K Square Feet) National Brands Stores Of Small Shop ABR Of Portfolio ABR JS ~ Pairing Established Small Shop Tenants With Newer Retail Concepts KEY TOP 50 SHOP TENANTS (by ABR) S AT&T ER verizon’ ‘TF Mobile Bath &
Slide 22: Corporate responsibility and governance
Invested in small business in the form of tenant ✓ 91% Independent Trustees allowance funds and landlord work ✓ Entirely independent committees Contributed to our local communities since the ✓ Lead independent Trustee Scope 1 3,215.3 3,041.0 5.4% inception of our Kite Cares platform ✓ Majority votin
Slide 23: 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 a
Slide 24: Updated 5-Year Corporate Responsibility Goals
rh —— Updated 5-Year Corporate Responsibility Goals (Established in 2021) MITE KRG recognizes the importance Corporate Responsibility initiatives play in our ability to generate long-term, sustainable returns 5-YEAR GOALS (To be completed by 12/31/2026) CURRENT STATUS (2Q’24) ENVIRONMENTAL > Install
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 subsidiaries, and depreciation and amortization. For informational purposes, the Company also provides Adjusted EBITDA, which it defines as EBITDA less (i) E
Slide 28: Reconciliation of Same Property NOI to Net Income
Appendix: Reconciliation of Same Property NOI to Net Income KITE Kite Realty Group Trust ‘Same Property Net Operating Income ("NOI") (dollars in thousands) (unaudited) ‘Three Months Ended June 30, Six Months Ended June 30, 2024 2023, ‘Change 2024 2023 ‘Change Numbes of propertiesin same property poo
Slide 29: Funds from Operations
PA Appendix: Funds from Operations KITE Kite Realty Group Trust Funds From Operations (“FFO”)'% (dollars in thousands, except per share amounts) (unaudited) ‘Three Months Ended June 30. __Six Months Ended June 30, 2024 2023 2024 2023 Net (loss) income $ (49,303) $ 32481 $ (34867) $ 38,042 Less: net
Slide 30: Reconciliation of EBITDA to Net Income
—— Appendix: Reconciliation of EBITDA to Net Income KRG NYSE Kite Realty Group Trust Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) Net loss Depreciation and amortization Interest expense Income tax expense of taxable REIT subsidiaries EBITDA Unconsolidated Adjusted EBITDA
Kite Realty Group Trust — Q2 2024 Earnings Presentation on 6ix