Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Investor Presentation (November 2017)
32 slides from Kite Realty Group Trust's investor presentation, Nov 13, 2017
Slide 1: November 2017 Investor Update
Slide 2: Company Snapshot
2 November 2017 INVESTOR UPDATE SHARE PRICE (AS OF 11/7/17) $19.03 EQUITY MARKET CAPITALIZATION (AS OF 11/7/17) $1.6 BN ENTERPRISE VALUE (AS OF 11/7/17) $3.3 BN DIVIDEND YIELD1 6.4% MOODY’S/S&P RATINGS Baa3/BBB- PORTFOLIO SUMMARY Number of Properties 119 Number of States 20 Total GLA (SF) 23.7mm Tot
Slide 3: Gearing Up Shareholder Value the Kite Way
3 November 2017 INVESTOR UPDATE ~$36mm in estimated annual free cash flow1 $83mm limited debt maturities through 2020 6% floating rate debt exposure 3.4x debt service coverage 76% of ABR from top 50 MSAs and destination locations 93% of tenants are internet resistant/omni-channel 66% grocery-anchore
Slide 4: KRG Provides Attractive Investment Opportunity
4 November 2017 INVESTOR UPDATE DIVIDEND VS. 2017E FFO1 PRICE VS. 2017E FFO1 KIMAKRFRTDDRROICRPTRPAIWRIKRGREGUEBRXCDR 64%PEER GROUPMEDIAN 59.1% FRTAKRUEREGROICWRIKIMRPAICDRRPTKRGBRXDDR 12.4xPEER GROUPMEDIAN 9.1x CONSERVATIVE FFO PAYOUT RATIO SUPPORTS POTENTIAL FUTURE DIVIDEND INCREASES DISCOUNTED MU
Slide 5: Kite's Consistent, Strong Operational Performance Is at the Top End of Its Peer Group
5 November 2017 INVESTOR UPDATE 3.6% SPNOI GROWTH AS REPORTED OVER LAST 4 YEARS QUARTERLY AVERAGE SPNOI GROWTH FROM Q3'13-Q3'171 ROIC REG RPAI WRI BRX FRT DDR RPT KIM CDR 4.6% AKR 3.7% KRG 3.3% 3.6% 4.1% 3.3% 3.3% 3.1% 3.0% 2.5% 2.3% 2.2% 1.1% 2.9%PEER AVERAGE KRG SPNOI ADJ. FOR BAD DEBT EXPENSEKRG
Slide 6: High-Quality Portfolio
November 2017 INVESTOR UPDATE HIGH-QUALITY PORTFOLIO Necessity-Driven and Experiential-Based Open-Air Shopping Centers
Slide 7: Well-Positioned Real Estate Footprint
7 November 2017 INVESTOR UPDATE NORTHEAST 11.2% OF ABR SOUTHEAST 18.4% OF ABR FLORIDA 24.3% OF ABR MID-CENTRAL 16.7% OF ABR WEST 12.4% OF ABR MIDWEST 17.0% OF ABR 76% OF ABR DERIVED FROM TOP 50 MSAs AND DESTINATION LOCATIONS1 (1) Destination locations (i.e., areas with high-disposable income) includ
Slide 8: Top 12 Centers Comprise 29% of Total Core Portfolio ABR
8 November 2017 INVESTOR UPDATE CITY CENTER MSA: New York City, NY OWNED GLA 360,880 SF ABR PER SF $26.70 LANDSTOWN COMMONS MSA: Virginia Beach, VA OWNED GLA 398,349 SF ABR PER SF $19.21 CENTENNIAL CENTER MSA: Las Vegas, NV OWNED GLA 334,396 SF ABR PER SF $25.05 PORTOFINO SHOPPING CENTER MSA: Housto
Slide 9: Top 12 Centers Comprise 29% of Total Core Portfolio ABR
9 November 2017 INVESTOR UPDATE PARKSIDE TOWN COMMONS MSA: Raleigh, NC OWNED GLA 347,072 SF ABR PER SF $20.20 DELRAY MARKETPLACE MSA: Miami, FL OWNED GLA 260,146 SF ABR PER SF $26.17 HIGH-QUALITY PROPERTIES Top 12 Centers Comprise 29% of Total Core Portfolio ABR HOLLY SPRINGS TOWNE CENTER MSA: Ralei
Slide 10: Top 12 Centers Comprise 29% of Total Core Portfolio ABR
10 November 2017 INVESTOR UPDATE DRAPER PEAKS MSA: Salt Lake City, UT OWNED GLA 227,494 SF ABR PER SF $19.88 HIGH-QUALITY PROPERTIES Top 12 Centers Comprise 29% of Total Core Portfolio ABR TRADERS POINT MSA: Indianapolis, IN OWNED GLA 325,623 SF ABR PER SF $16.91 THE LANDING AT TRADITION MSA: Port S
Slide 11: Strong Mix of High-Quality Tenants Across Our Diversified Portfolio
11 November 2017 INVESTOR UPDATE Top 10 Tenants by ABR Credit Rating # Stores % ABR 1 The TJX Companies, Inc. A+ 22 2.5% 2 Publix Supermarkets, Inc. A 14 2.5% 3 Petsmart, Inc. B+ 19 2.2% 4 Bed Bath & Beyond, Inc. BBB+ 19 2.2% 5 Ross Stores, Inc. A- 18 2.1% 6 Lowe's Companies, Inc. A- 5 1.8% 7 Office
Slide 12: Necessity-Focused Retail Portfolio
12 November 2017 INVESTOR UPDATE Asset Classification Key Power Center (No Grocer): 3 + anchors over 20K SF Grocer: No more than 2 anchors over 20K SF in addition to grocer Power Center (w/Grocer): 3 + anchors over 20K SF in addition to grocer (1) Grocer includes traditional grocers, specialty groce
Slide 13: Internet-Resistant Retail Base
13 November 2017 INVESTOR UPDATE INTERNET-RESISTANT 53.6% Services, Entertainment 22.3% Restaurants 16.1% Grocer, Specialty Stores 15.2% MULTI-CHANNEL 39.3% Soft Goods 14.0% Home Improvement Goods 11.8% Discount Retailers 10.3% Sporting Goods 3.2% INTERNET RISK 7.1% Electronic / Books 5.0% Office Su
Slide 14: Enhancing Kite's Portfolio with Strong Retail Tenants
14 November 2017 INVESTOR UPDATE RECENT TENANT OPENINGS ~363,000 SF OF ANCHOR SPACE OPENED OVER THE LAST FOUR QUARTERS FOOD / FITNESS / ENTERTAINMENT / SERVICE DISCOUNT RETAILERS / SOFT GOODS / SPORTING GOODS / SPECIALTY 91% OF TOTAL SQUARE FEET OPENED DIVERSE TENANT BASE Enhancing Kite’s Portfolio
Slide 15: Minimal Exposure to Announced Store Closures
15 November 2017 INVESTOR UPDATE MINIMAL IMPACT REALIZED IN 2017: ~1% OF ABR1 TENANT # OF KRG LOCATIONS AT 1/1/2017 # OF KRG LOCATIONS AT 9/30/2017 REMAINING ABR EXPOSURE AT 9/30/17 Gander Mountain 1 0 None HH Gregg 1 0 None JCPenney 3 3 0.1% Kmart / Sears 1 / 2 1 / 2 0.3% / 0.2% Macy’s 1 1 0.1% Mar
Slide 16: Growth Opportunities
November 2017 INVESTOR UPDATE GROWTH OPPORTUNITIES Increasing Value Through Efficient Operations and the 3-R Platform
Slide 17: Increasing Value Through Efficient Operations and the 3-R Platform
17 November 2017 INVESTOR UPDATE • Attractive NOI Margin: 74.6%, trailing twelve months • Efficient G&A / Revenues: 6.1%, trailing twelve months • Opportunity Areas: Operating expense savings, overage rent, and ancillary income • New and renewal cash rent spreads: - 2016: 18.6% and 7.1% respectively
Slide 18: Top-Tier Operating Efficiency Metrics
18 November 2017 INVESTOR UPDATE KRG CONSISTENTLY RANKS IN TOP TIER ACROSS PEERS FOR EFFICIENCY ROIC 75.1% KRG 74.6% BRX 74.0% KIM 72.9% RPAI 69.2% FRT 68.6% 68.2% WRI NOI MARGIN % REG 72.2% DDR 71.4% RPT 70.9% FRT 4.1% WRI 4.4% ROIC 5.3% KRG 6.1% KIM 8.3% RPT 8.8% 9.1 % DDR G&A / REVENUES % BRX 7.2
Slide 19: Proven Ability to Create Positive Operating Results
19 November 2017 INVESTOR UPDATE (1) KRG Supplementals Q4’10 through Q3’17. Q3'172016201520142013201220112010 92.2% 93.3% 94.2% 95.3% 94.8% 95.4% 95.4% 94.5% 2. 5 % GR O WT H SINCE 2010 Q3'172016201520142013201220112010 $12.80 $13.26 $12.95 $13.18 $15.15 $15.22 $15.78 $16.32 27 .5 % GR O WT H SINCE
Slide 20: Redevelopment Execution and Opportunity
20 November 2017 INVESTOR UPDATE REDEVELOP REPURPOSE REPOSITION Substantial renovations, including teardowns, remerchandising, and exterior/interior improvements Significant property alterations, including product-type changes Less substantial asset enhancements, generally $5mm or less investment CO
Slide 21: Investment Grade Balance Sheet
November 2017 INVESTOR UPDATE INVESTMENT GRADE BALANCE SHEET Well-Positioned for the Future
Slide 22: Significantly Improved Metrics
22 November 2017 INVESTOR UPDATE (1) KRG Supplementals Q4’11 through Q3’17. Q3'17201620152014201320122011 9.7x 8.6x 7.4x 6.5x 7.0x 7.0x 6.9x 2.8x LOWERED Q3'17201620152014201320122011 1.6x 1.6x 2.0x 3.2x 3.4x 3.3x 3.4x 1.8x INCREASED Q3'17201620152014201320122011 42% 28% 30% 23% 12% 7% 6% 3,600 bps
Slide 23: Efficient Debt Structure Relative to Peers
23 November 2017 INVESTOR UPDATE 5.7 YEARS WEIGHTED AVERAGE DEBT MATURITY WEIGHTED AVERAGE DEBT MATURITIES AND WEIGHTED AVERAGE INTEREST RATE1 DDR ROICBRX RPAI KIMRPTWRI REGKRG WEIGHTED AVERAGE DEBT MATURITY (YEARS) WEIGHTED AVERAGE INTEREST RATE (%) 4.0% 5.7 YEARS (1) Peer data sourced from publicl
Slide 24: Well-staggered Debt Maturity Profile
24 November 2017 INVESTOR UPDATE (1) Excludes annual principal payments and net premiums on fixed rate. ONLY $83mm THROUGH 2020 SCHEDULE OF DEBT MATURITIES ($ IN MILLIONS)1 2017 2018 2019 2020 2021 2022 2023 20252024 2027+2026 MORTGAGE DEBT LINE OF CREDIT TERM LOAN PRIVATE PLACEMENT SENIOR UNSECURED
Slide 25: Forward-Looking Statements
25 November 2017 INVESTOR UPDATE FORWARD-LOOKING STATEMENTS This supplemental information package, together with other statements and information publicly disseminated by us, contains certain for- ward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
Slide 26: Free Cash Flow and Funds From Operations definitions
26 November 2017 INVESTOR UPDATE FREE CASH FLOW Free Cash Flow is reflected on an annual basis and is defined as Funds From Operations (FFO) as adjusted, less capital expenditures, capitalized internal costs, tenant improvements, plus non-cash items, and after dividends paid. FUNDS FROM OPERATIONS F
Slide 27: Net Operating Income and Same Property NOI
27 November 2017 INVESTOR UPDATE NET OPERATING INCOME AND SAME PROPERTY NET OPERATING INCOME (CONT.) The Company also uses same property NOI ("Same Property NOI"), a non-GAAP financial measure, to evaluate the performance of our proper- ties. Same Property NOI excludes properties that have not been
Slide 28: Appendix – Consolidated Statements of Operations
28 November 2017 INVESTOR UPDATE APPENDIX – CONSOLIDATED STATEMENTS OF OPERATIONS
Slide 29: Appendix – Reconciliation of FFO to Net Income
29 November 2017 INVESTOR UPDATE (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 shareholders” reflects a reduction for the redeemable noncontrolling weighted
Slide 30: Appendix – Reconciliation of Same Property NOI
30 November 2017 INVESTOR UPDATE (1) Same Property NOI excludes eight properties in redevelopment, the recently completed Northdale Promenade redevelopment as well as office properties (Thirty South Meridian and Eddy Street Commons). (2) Excludes leases that are signed but for which tenants have not
Slide 31: Appendix – Reconciliation of EBITDA/Adjusted EBITDA to Net Income
31 November 2017 INVESTOR UPDATE (1) Represents Adjusted EBITDA for the three months ended September 30, 2017 (as shown in the table above) multiplied by four. (2) Partner share of consolidated joint venture debt is calculated based upon the partner’s pro-rata ownership of the joint venture, multipl
Slide 32: 5600 kiterealty.com S MERIDIAN STREET SUITE 1100 INDIANAPOLIS, IN 46204
888 577 5600 kiterealty.com 30 S MERIDIAN STREET SUITE 1100 INDIANAPOLIS, IN 46204
Kite Realty Group Trust — Investor Presentation (November 2017) on 6ix