Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q1 2024 Earnings Presentation
32 slides from Kite Realty Group Trust's earnings presentation, Apr 30, 2024
Slide 1: Kite Investor Update Q1 2024
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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 March 31, 2024. 1. As of April 29, 2024. 2. Assets with a grocery component include centers with a big b
Slide 3: Operating margins and metrics are among the best in the open-air retail sector
✓ 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 ✓ Received a credit rating upgrade from Moody’s to Baa2 with a stable outlook and an outlook upgr
Slide 4: Outperformance driven by base rent growth and lower than expected bad debt
Outperformance driven by base rent growth and lower than expected bad debt Base rent growth and lower bad debt drove SSNOI growth Healthy leasing volume continues at extremely strong spreads Anchor leased percentage increased by 40 bps sequentially while shop leased percentage decreased 30 bps seque
Slide 5: Updated 2024 guidance
▪ Same property NOI growth range of 1.5% to 2.5%, which represents a 50-basis point increase at the midpoint ▪ Full-year bad debt assumption of 0.55% to 1.05% of total revenues, which represents a 20-basis point decrease at the midpoint Net income Depreciation and amortization Realized gains and los
Slide 6: Signed-not-open pipeline
• – The signed-not-open (SNO) pipeline increased $1.0M quarter-over-quarter to $32.3M as a result of tenants that commenced rent in the first quarter of 2024, net of new leases signed • Signed 38 new leases representing $7.3M of NOI in the first quarter of 2024 • 52 tenants commenced rent in the fir
Slide 7: Net asset value illustration
• • • • Annualized portfolio cash NOI Other assets value Liabilities Shares Note: These are hypothetical NAV growth and cap rates. KRG is not representing it can achieve these results or that a third party would ascribe a similar cap rate to the portfolio. 1. Assumes a stock price of $21.70 as of Ap
Slide 8: Peer comparison: growth and portfolio metrics
ABR per SF Net Debt to Adjusted EBITDA 3-Mile Population1 3-Mile Average Household Income1 % of ABR from Assets with a Grocery Component 8.0% 8.8% 13.0% 16.1% REG FRT KIM BRX KRG (Since 2019) 6.7% 6.7% 8.2% 11.7% REG FRT KIM BRX KRG (Since 2019) 1.3% 1.7% 1.8% 2.8% FRT KIM BRX REG KRG (Since 2019) N
Slide 9: Peer comparison: operating metrics
Peer Average KRG - 1Q'24 Note: Peer group includes AKR, BRX, FRT, KIM, PECO, REG, and ROIC. Source of all peer data is from 1Q 2024 supplemental disclosures, except FRT, KIM, and REG data is from 4Q 2023 supplemental disclosures. 1. “Recovery Ratios” are computed by dividing tenant reimbursements by
Slide 10: Open-air retail supply and demand
• • • Note: Data pertains to multi-tenant retail, excluding single-tenant and net lease retail. Source: CBRE Research Source: BofA Global Research as of March 8, 2024.
Slide 11: Lease structure: fixed rent bumps and fixed CAM
• • • Fixed Rent Bumps Greater Than or Equal to 3% (% of Lease Count) Fixed CAM (% of Lease Count) Shops (< 10K Square Feet) Anchors (> 10K Square Feet) Total
Slide 12: Balance sheet peer comparison
Note: Source of all peer data is from 1Q 2024 supplemental disclosures, except FRT, KIM, and REG data is from 4Q 2023 supplemental disclosures. 1. Includes $54.6 million of the Company’s unconsolidated JV debt. Net Debt + Preferred / Adjusted EBITDA Debt Service Coverage Ratio Available Liquidity We
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: Credit spreads
Note: Sourced from Bloomberg as of April 23, 2024. 1. Securities roll to the most-recently issued 10-year benchmark. 100 bps 150 bps 200 bps 250 bps 300 bps 350 bps 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 • •
Slide 15: Further Strengthened Portfolio Has Significant Potential
— Further Strengthened Portfolio Has Significant Potential nee =, @1 2024 INVESTOR'UPDATE 15
Slide 16: 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 17: Portfolio demographics and composition
Note: 3-mile demographic statistics are weighted by 1Q 2024 ABR and sourced from PopStats. Remaining 1% of KRG’s portfolio is unanchored or single-tenant assets. • • • • •
Slide 18: Investor day series objectives
✓ 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 19: Re-leasing 53 spaces: returns on capital
1. Includes only comparable leases (27 of 53). 2. Represents the estimated total potential new NOI divided by the cost of executing such leases. These numbers are based on Management's estimates and assumptions, and there can be no assurance that such estimates and assumptions will be accurate or re
Slide 20: Leasing volume and spreads
• • # of Leases Signed Leased SF Signed Blended Cash Spread Non-Option Renewal Spread
Slide 21: Top tenants
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 22: Anchor and Shop Tenant Exposure
—— Anchor and Shop Tenant Exposure 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 Ph KITE TOTAL PORTFOLIO C
Slide 23: Big Names. Small Spaces.
Pi —— Big Names. Small Spaces. meITE Top 50 Small Shop Tenants (< 10K Square Feet) 97% 29% 15% 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 we A
Slide 24: 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 25: 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 26: Updated 5-Year ESG Goals
Pi Updated 5-Year ESG Goals (Established in 2021) KITE KRG recognizes the importance ESG ini long-term ESG commitment tives play our ability to generate long-term, sustainable returns, and setting goals signals our EAR GOALS (To be completed by 12/31/2026) CURRENT STATUS (11 ENVIRONMENTAL > Install
Slide 27: 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 28: 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 29: 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 30: 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 March 31 ae ee ‘Number of properties in same property pool forthe period 179 179 Leaced percentage at period end
Slide 31: Funds from Operations
KRG NYSE Appendix: Funds from Operations Kite Realty Group Trust Funds From Operations ("FFO")2 (dollars in thousands, except per share amounts) (unaudited) Three Months Ended March 31, 2024 2023 Net income $ 14436 $ 5,561 Less: net income attributable to noncontrolling interests in properties (67)
Slide 32: Reconciliation of EBITDA to Net Income
Pi —— Appendix: Reconciliation of EBITDA to Net Income mCITE Kite Realty Group Trust Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (dollars in thousands) (unaudited) Three Months Ended March 31, 2024 Net income $ 14,436 Depreciation and amortization 100,379 Interest expen
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