Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q3 2019 Earnings Presentation
23 slides from Kite Realty Group Trust's earnings presentation, Nov 6, 2019
Slide 1: Third Quarter 2019 Investor Update
tee Se We ee Up oma ie: bs “4 THIRD QUARTER 2019 INVESTOR UPDATE KRG 888577 5600 kiterealty.com mmm NYSE
Slide 2: Company overview and key statistics
• High-quality portfolio with diverse tenant base Number of Retail 85 Properties • Over 71% of retail ABR from assets with a Total Retail GLA (SF) 11.9mm grocery component Operating Portfolio • Southern US (aka “Warmer & Cheaper”) 95.4% Percent Leased focus to take advantage of current and projected
Slide 3: Q3 2019 highlights
Q3 2019 FFO, as adjusted, per share was $0.39, in line with KRG’s guidance. SPNOI for Q3 2019 was 2.3% higher year-over-year, driven by an increase in minimum rent and net recoveries. Completely undrawn $600M line of credit, which is enough capacity to retire all of KRG’s debt maturities through 202
Slide 4: Occupancy and ABR per square foot trends
1 Same-Property Occupancy Rate ABR PSF Record Level 96% $18.00 $17.70 95% $17.00 94% $16.00 93% 92.2% $15.00 92% $14.00 91% $13.00 90% $12.00 2013 2014 2015 2016 2017 2018 3Q'19 2013 2014 2015 2016 2017 2018 Q3'19 Larger than average spread (310 bps) due Same-Property Leased Rate1 to continued ancho
Slide 5: Portfolio and company leverage status
Portfolio and Company Leverage Status • Sell non-core assets to generate between $415mm and $500mm of proceeds • Use the proceeds to pay down debt and fortify the balance sheet • Articulate an asset mix and market/geographic strategy Tenants • Campaign for new/underrepresented tenants Ongoing • Deep
Slide 6: Discount to consensus NAV
• At $17.98 per share, KRG trades at a 19% discount to consensus NAV of $22.33 per share1 • The entire retail sector has been under pressure for several years and the retail peer group2 trades at a median NAV discount of 8% to consensus as compared to KRG’s 19% to consensus discount1 • Sentiment for
Slide 7: Project Focus Update
an ECT FOCUS UPDATE
Slide 8: Project Focus sources, uses and portfolio metrics
YE 2018 Today Non-core asset sales $502M Net Debt / EBITDA 6.7x 5.9x Transaction fees (17M) Weighted Average Maturity (Years) 5.8 6.0 Net Proceeds $485M Weighted Average Interest Rate 4.11% 3.99% YE 2018 Today Debt Retired to Date $368M Population (3 Mile) 70,955 72,618 Debt to be Retired 24M Popula
Slide 9: Peer comparison of ABR and leverage
AKR $ 30.29 CDR 8.1x CDR 10.1x FRT 11.0 FRT $ 28.28 ROIC 7.2x KIM 7.3x KIM 10.8 REG $ 22.45 KRG (YE 2018) 6.7x RPT 7.3x REG 10.0 ROIC $ 21.66 RPT 6.6x ROIC 7.2x KRG (Today) 6.0 WRI $ 19.53 KIM 6.4x SITC 6.7x RPT 5.9 RPAI $ 19.38 BRX 6.2x KRG (YE 2018) 6.7x KRG (YE 2018) 5.8 UE $ 19.13 KRG (Today) 5.
Slide 10: Debt maturity schedule
$ in millions $300 $95 $95 $250 $200 $46 YE 2018 $300 $100 $213 $166 $182 $80 $75 $12 $10 $10 $0 $21 $17 $300 $ in millions Line of credit can pay 100% of maturities through 2025 $250 $200 $95 $179 $162 $300 Today $100 $80 $75 $7 $11 $10 $10 $0 $17 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2
Slide 11: FFO multiple and net debt to EBITDA vs peers
Avg Peer FFO Multiple = 13.8x 10.0x KRG FFO Multiple = 11.6x 8.0x Avg Peer FFO Multiple = 17.2x 6.0x 4.0x UE WRI REG RPAI AKR FRT KRG AAT BRX UBA2 SITC ROIC RPT KIM BFS2 WSR CDR Net Debt / EBITDA Net Debt + Pref / EBITDA 1. Source data from S&P Global and company supplementals as of 9/30/19 and equi
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Slide 13: Corporate relocations to the Sun Belt
“JPMorgan Weighs “Charles Schwab to “70 financial firms flee Shifting Thousands of move 1,000 jobs out of NYC for Palm Beach Jobs Out of New York San Francisco” County Florida in 3 years” Area” Associated Press Palm Beach BDB Bloomberg “Honeywell HQ is “1,800 companies left “Amazon plans Austin movi
Slide 14: Population migration trends
*Prior to SALT legislation migration impact* Note: Sourced from Bloomberg analysis of US Census data. © 2019 Kite Realty Group Third Quarter 2019 Investor Presentation | 14
Slide 15: Property classification and demographics
Note: STI: Popstats based on estimated 2018 data on a 5-mile radius from the U.S. Census Bureau, weighted by ABR. Property classification based on definition by Green Street Advisors. In summary: Neighborhood Center: Convenience-oriented center often anchored by a grocery Community Center: Larger ce
Slide 16: Top tenants
1 Publix Supermarkets, Inc. NR 11 2.4% 2 The TJX Companies, Inc. A+ 16 2.1% 3 Bed Bath & Beyond, Inc. BB+ 16 2.0% 4 Ross Stores, Inc. A+ 14 1.9% 5 PetSmart, Inc. BBB+ 14 1.8% 6 Dick’s Sporting Goods, Inc. B- 7 1.6% 7 Nordstrom Rack NR 6 1.6% 8 Michaels Stores, Inc. BBB+ 12 1.4% 9 LA Fitness BB- 4 1.
Slide 17: Operating and development opportunities
• $1.3M of additional cash NOI from in-process development projects • Continue to identify redevelopment opportunities to enhance portfolio quality • Completed Project Focus • ABR of tenants opened during Q3 is 15% higher than the ABR for the operating retail portfolio • Embedded average contractual
Slide 18: Anchor leasing and annualized NOI coming online
# of Leases Signed 21 Anchors as % of GLA 69% Square Feet of New Leases 556k Anchors as % of ABR 49% Total Expected Cost $44M Anchor Leased % 97% Return on Capital ~15% Number of Anchors Spaces Vacant 8 Comparable Cash Lease Spread1 ~17% Annualized NOI Coming Online $6.0 $5.3 $5.0 $5.0 $4.5 $4.0 $3.
Slide 19: Forward-Looking Statements
Forward-Looking Statements This supplemental information package, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
Slide 20: Funds from Operations
FUNDS FROM OPERATIONS Funds from Operations (FFO) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The Company calculates FFO, a non-GAAP financial measure, in accordance with the best practices described in the A
Slide 21: EBITDA
EBITDA The Company defines EBITDA, a non-GAAP financial measure, as net income before depreciation and amortization, interest expense and income tax expense of taxable REIT subsidiary. For informational purposes, the Company has also provided Adjusted EBITDA, which the Company defines as EBITDA less
Slide 22: |
© 2019 Kite Realty Group Third Quarter 2019 Investor Presentation | 22
Slide 23: EBITDA and net debt reconciliation
($ in thousands) Three Months Ended September 30, 2019 or Pro-Forma where Indicated Consolidated net loss $ (20,117 ) Adjustments to net income Depreciation and amortization 31,985 Interest expense 14,302 Income tax benefit of taxable REIT subsidiary (41 ) Earnings Before Interest, Taxes, Depreciati
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