Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q3 2024 Earnings Presentation
31 slides from Kite Realty Group Trust's earnings presentation, October 2024
Slide 1: Q3 2024 Investor Update
oe OLE SOY 1a KGTE: Waterford Lakes Village - Orlando, FLMSA | N Vv E s | Co) R Centennial Gateway ~Las Vegas, NV MSA. Q@3 2024 KRG USTED NYSE © 2024 Kite Realty Group | kiterealty.com Lincoln Park - Dallas / Fort Worth, TRMSA Draper Peaks ~ Salt Lake City UT MSA
Slide 2: Company overview 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: Q3 2024 results highlights
2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 Driven by base rent growth and lower than expected bad debt Driven by improvements in occupancy and net tenant recoveries All-time high leasing volume at strong spreads Anchor and shop leased percentages
Slide 5: 2024 guidance and FFO reconciliation
▪ Same property NOI growth range of 2.5% to Net income 3.0%, which represents a 25-basis point Depreciation and amortization increase at the midpoint Realized gain on sale of unconsolidated property, net ▪ Full-year bad debt assumption of 0.6% to 0.8% Impairment charges of total revenues NAREIT FFO
Slide 6: Signed-not-open pipeline
• Leased-to-occupied spread at period end (270 bps) expected to remain elevated due to strong leasing demand for Bed Bath & Beyond backfills and additional small shop lease-up potential – The signed-not-open (SNO) pipeline decreased $2.7M quarter-over-quarter to $32.6M as a result of new leases sign
Slide 7: Peer comparison: growth, leverage and 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) 18.3% (Since 2019) 12.1% 3.3% 12.2% 8.7% 2.2% 2.3% 10.1% 9.0% 7.1% 7.3% 1.4% FRT REG KIM KRG BRX REG FRT KIM BRX KRG FRT BRX KIM REG KRG
Slide 8: Peer comparison of operating metrics
Peer Average KRG - 3Q'24 Peer Average KRG - 3Q'24 Peer Average KRG - 3Q'24 Peer Average KRG - 3Q'24 Note: Peer group includes AKR, BRX, FRT, KIM, PECO, REG, and ROIC. Source of all peer data is from 3Q 2024 supplemental disclosures, except FRT and KIM data is from 2Q 2024 supplemental disclosures. 1
Slide 9: Retail supply and demand trends
• • • Note: Data pertains to multi-tenant retail, excluding single-tenant and net lease retail. Source: BofA Global Research as of August 19, 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 38.6% 33.9% 22.8% 15.9% 5.4% 30.2% 6.4% Power Centers 31.1% 31.6% 79.4% 33.0% (8.7%) 25.7% 49.4% Lifestyle / Mixed-Use Centers 26.5% 72.4% 58.3% 27.1% 6.5% 18.4% 18.4% Community / Neighborhood Centers 13.5% 12.6% 10.4% 4.2% 2.2% 2.1% 1.3% Power Centers 10.4% 11.7
Slide 12: Balance sheet and credit metrics
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 6.3x 6.0x 6.0x 5.6x 5.7x 5.1x 5.2x KRG PECO REG KIM BRX FRT AKR ROIC Note: Source of all peer data is from 3Q
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.
Slide 14: Further Strengthened Portfolio Has Significant Potential
— Further Strengthened Portfolio Has Significant Potential
Slide 15: Population growth in Sun Belt states
1. Source: US Census Bureau, Vintage 2023 Population Estimates from July 1, 2022 to July 1, 2023. Top 10 states include SC, FL, TX, ID, NC, DE, DC, TN, UT, and GA.
Slide 16: Portfolio composition and demographics
• • • • • Note: 3-mile demographic statistics are weighted by 3Q 2024 ABR and sourced from PopStats. Remaining 2% of KRG’s portfolio is unanchored or single-tenant assets.
Slide 17: Mixed-use assets overview
% of Q3 2024 Annualized Total Portfolio NOI % of Retail Square Footage % of Office Square Footage % of 2024 YTD SPNOI Growth of 2.4% Embedded Rent Escalators % of 2024 YTD Total Overage Rent % of 2024 YTD Specialty Leasing Income Number of Visitors in 2023 Number of Retail and Office Tenants Residen
Slide 18: Investor day series plan
✓ 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 k
Slide 19: National tenant lease-up opportunity
• • • 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 66 Spaces National Tenants 1. Includes only comparable leases (34 of 66). 2. Represents the estimated t
Slide 20: 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 21: 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 22: Big Names. Small Spaces.
—— Big Names. Small Spaces. Pi KITE ~ Top 50 Small Shop Tenants 98% ~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 23: 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 24: 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 25: 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 (3Q’24) ENVIRONMENTAL > Install
Slide 26: 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 27: Net Operating Income and Same Property NOI definitions
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 28: 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 29: 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 September 30. Nine Months Ended Seotember 30. 2024 2023 _ Change 2024 2023 _ Change Numbes of properties in same
Slide 30: Funds from Operations
KRG NYSE Appendix: Funds from Operations 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. 2024 2023 2024 2023 Net income (loss) $ 17053 $ 2177 $ = «(17,814) $ 40,2
Slide 31: Reconciliation of EBITDA to Net Income
PA —— Appendix: Reconciliation of EBITDA to Net Income KITE Kite Realty Group Trust Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) (dollars in thousands) (unaudited) Three Months Ended September 30, 2024 Net income $ Depreciation and amortization Interest expense Income ta
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