Kite Realty Group Trust · NYSE:KRG

Kite Realty Group Trust — Investor Presentation (September 2015)

31 slides from Kite Realty Group Trust's investor presentation, Sep 17, 2015

  1. Slide 1: Investor Update September 2015

    INVESTOR UPDATE September 2015 Chapel Hill (Dallas, TX) Livingston Center (Livingston, NJ)

  2. Slide 2: The Look Ahead

    THE LOOK AHEAD

  3. Slide 3: Organic Drivers for NOI Growth

    © 2015 Kite Realty Group kiterealty.com Investor Update | 3 Operational Excellence Active Development/Redevelopment The 3 R's ORGANIC DRIVERS FOR NOI GROWTH ~2.00‐ 3.00% ~2.25% ~2.25% Embedded NOI Growth Of ~7.5+% ~7.5% + ~3.00% ~2.25% ~3.00%

  4. Slide 4: Embedded NOI Growth and Sources of NOI

    © 2015 Kite Realty Group kiterealty.com Investor Update | 4 Annual Portfolio GAAP NOI LQA ~$250,000 Pro Forma Adjustments (1) + $7,000 Total Portfolio GAAP NOI ~$257,000 Less: 3‐R’s Current NOI (2) (~$48,000) Core Portfolio GAAP NOI ~$209,000 Plus: Incremental Re/Development NOI ~$11,700 VARIOUS OUT

  5. Slide 5: Operational Excellence

    © 2015 Kite Realty Group kiterealty.com Investor Update | 5 OPERATIONAL EXCELLENCE The “Kite Way”  Industry leading operating platform Top efficiency margins in the sector  Cash renewal spreads of 6‐8% on shop leases Achieved on >90% of expiring shop leases; most with 3% annual bumps  90+% retent

  6. Slide 6: Active Development / Redevelopment

    © 2015 Kite Realty Group kiterealty.com Investor Update | 6 ACTIVE DEVELOPMENT / REDEVELOPMENT 1. Calculated as the sum of land held for development and construction in process, divided by gross asset value. Development / Redevelopment Expertise  Long history of experience in development Completed

  7. Slide 7: The R's: Repurpose, Reposition, Redevelop

    © 2015 Kite Realty Group kiterealty.com Investor Update | 7 THE 3 R’s: REPURPOSE, REPOSITION, REDEVELOP 52% 20% 28% The 3 R’s Pipeline Breakdown Redevelopment Repurpose Reposition Redevelopment: 8.0‐9.0% Repurpose: 9.5‐10.5% Reposition: 10.5‐11.5% Expected Returns Summary $105‐125mm in redevelopment

  8. Slide 8: Short-Term Impact; Long-Term NAV Benefit

    © 2015 Kite Realty Group kiterealty.com Investor Update | 8 SHORT‐TERM IMPACT; LONG‐TERM NAV BENEFIT Q1 '15 A Q2 '15A Q3 '15E Q4 '15E 2015E 4.4% 3.7% 3‐3.5% Peer Avg. ~3.3%⁽¹⁾ KRG Historical Avg. ~4.5% 1. Peers include AKR, BRX, CDR, DDR, EQY, FRT, KIM, REG, RPAI, RPT. All same store numbers exclude

  9. Slide 9: Efficient Capital Allocation to Benefit NAV

    © 2015 Kite Realty Group kiterealty.com Investor Update | 9 EFFICIENT CAPITAL ALLOCATION TO BENEFIT NAV Using free cash flow to fund redevelopment pipeline yields high return on capital and boosts portfolio NAV ~$50mm in free cash flow for 2015FY $105‐125mm of 3 R’s; with ~10% average return Portfol

  10. Slide 10: Portfolio Overview

    PORTFOLIO OVERVIEW

  11. Slide 11: Company Snapshot

    © 2015 Kite Realty Group kiterealty.com Investor Update | 11 COMPANY SNAPSHOT KITE REALTY GROUP TRUST FL, 26% IN, 13% TX, 12% NV, 10% TRI‐ST, 8% NC, 6% OK, 5% GA, 3% VA, 3% UT, 3% TN, 2% SC, 2% AL, 2% Other, 5% Note: All data as of 06/30/15 unless otherwise noted. 1. ABR excludes ground lease revenu

  12. Slide 12: Over 70% of ABR from Top MSAs

    © 2015 Kite Realty Group kiterealty.com Investor Update | 12 OVER 70% OF ABR FROM TOP 50 MSAs 46% of FL’s ABR from Top 50 MSA 54% of the SE’s ABR from Top 50 MSA 81% of the NE’s ABR from Top 50 MSA 77% of the Midwest’s ABR from Top 50 MSA 91% of TX/OK’s ABR from Top 50 MSA 94% of the West’s ABR from

  13. Slide 13: What Differentiates Kite?

    © 2015 Kite Realty Group kiterealty.com Investor Update | 13 Long‐standing and cohesive management team Shareholder value creation via NAV‐focused initiatives Robust platform results in top tier operational efficiencies Diverse, high‐quality portfolio Strong development/redevelopment portfolio

  14. Slide 14: Top Tier Operating Efficiency

    © 2015 Kite Realty Group kiterealty.com Investor Update | 14 TOP TIER OPERATING EFFICIENCY 4.6% 5.1% 5.5% 6.5% 7.2% 7.9% 8.0% 8.5% 8.9% 9.2% 9.3% WRI FRT KRG BRX DDR ROIC KIM EQY RPT REG RPAI G&A / Revenues (%) 75.3% 75.0% 74.3% 74.1% 73.1% 72.0% 71.3% 71.1% 70.4% 70.1% 70.0% BRX ROIC KRG EQY REG KI

  15. Slide 15: Dramatically Transformed High-Quality Portfolio

    © 2015 Kite Realty Group kiterealty.com Investor Update | 15 Grocery Anchored, 13% Hybrid (Power W/ Grocery), 52% Power / Regional Center, 33% Other, 2%⁽²⁾ PORTFOLIO OVERVIEW DRAMATICALLY TRANSFORMED HIGH‐QUALITY PORTFOLIO Top tier retail portfolio with an ABR of $15.25, is comprised mostly with gro

  16. Slide 16: Increasing Leases with Key National Tenants

    © 2015 Kite Realty Group kiterealty.com Investor Update | 16 INCREASING LEASES WITH KEY NATIONAL TENANTS STRONG MIX OF TENANTS ACROSS OUR DIVERSIFIED PORTFOLIO Continued support of strong tenants further enhances the quality and strength of our assets; limited exposure to any single tenant provides

  17. Slide 17: Consistent Operators of Quality Assets

    © 2015 Kite Realty Group kiterealty.com Investor Update | 17 CONSISTENT OPERATORS OF QUALITY ASSETS Superior Same‐Property NOI Growth 4.4% 4.9% 4.9% 4.7% 4.4% 4.7% 4.8% 4.4% 3.7% 0.0 1.0 2.0 3.0 4.0 5.0 Same‐Property NOI Growth (%) Growing ABR Through High Quality Assets $12.80 $13.26 $12.95 $13.18

  18. Slide 18: Portfolio Transformation

    PORTFOLIO TRANSFORMATION

  19. Slide 19: Recent Transactions Support Core Markets

    © 2015 Kite Realty Group kiterealty.com Investor Update | 19 RECENT TRANSACTIONS SUPPORT CORE MARKETS West ~15% of Total ABR Summit at Scottsdale (Scottsdale, AZ) Sold at 5.25% cap rate Q3 2015 Mid‐Central ~15% of Total ABR Village on the Parkway (Dallas, TX) Sold at 4.5% cap rate Q3 2015 Midwest ~1

  20. Slide 20: Growing the Portfolio

    © 2015 Kite Realty Group kiterealty.com Investor Update | 20 GROWING THE PORTFOLIO Developments⁽¹⁾ AcquisitionsRedevelopments 1. Developments’ percentage leased refers to leased or committed square feet. Portofino Shopping Center Houston 375,000 SF 92% Leased Tamiami Crossing Naples 145,000 SF 100%

  21. Slide 21: Strategically Recycled Sale Proceeds

    © 2015 Kite Realty Group kiterealty.com Investor Update | 21 STRATEGICALLY RECYCLED SALE PROCEEDS $13.02 $19.71 Dispositions Acquisitions 50% Improvement In ABR per SF 50% Increase $74K $107K Dispositions Acquisitions 45% Increase In Household Income Note: Dispositions include the 15‐ asset disposit

  22. Slide 22: Dramatically Upgraded Portfolio

    © 2015 Kite Realty Group kiterealty.com Investor Update | 22 DRAMATICALLY UPGRADED PORTFOLIO Dispositions Acquisitions Walgreens Plaza, Jacksonville, NC AHHI: $57,000 Eastside Junction, Athens, AL Population: 12,000 Colleyville Downs, Colleyville, TX AHHI: $130,000 Rampart Commons, Las Vegas, NV Pop

  23. Slide 23: Acquisition: Colleyville Downs

    © 2015 Kite Realty Group kiterealty.com Investor Update | 23 ACQUISITION: COLLEYVILLE DOWNS Summary MSA GLA % Leased Population AHHI Dallas 201,000 SF 93% 255,000 $128,000  Ability to create additional value through lease‐ up and below‐market rent from first generation leases completed before Whole

  24. Slide 24: Acquisition: Belle Isle Station

    © 2015 Kite Realty Group kiterealty.com Investor Update | 24 ACQUISITION: BELLE ISLE STATION Summary MSA GLA % Leased Population Vehicle Traffic Daily Oklahoma City 400,000 SF 99% 197,000 100,000  Adjacent to the highest sales producing mall in Oklahoma City  Average home prices in the surrounding

  25. Slide 25: Acquisition: Livingston Shopping Center

    © 2015 Kite Realty Group kiterealty.com Investor Update | 25 ACQUISITION: LIVINGSTON SHOPPING CENTER Summary MSA GLA % Leased Population AHHI New York‐Newark 140,000 SF 95% 150,000 $168,000  Located in Western Essex County, one of the most affluent areas in the country  Leveraged relationships to

  26. Slide 26: Acquisition: Chapel Hill

    © 2015 Kite Realty Group kiterealty.com Investor Update | 26 ACQUISITION: CHAPEL HILL Summary  Showcases one of HEB’s premier Central Market stores; one of 9 total and only one in the MSA  Recent backfill of Borders bookstore with The Container Store  Exceptional visibility and continuous retail

  27. Slide 27: Balance Sheet

    BALANCE SHEET

  28. Slide 28: Strong Balance Sheet & Capital Position

    © 2015 Kite Realty Group kiterealty.com Investor Update | 28 STRONG BALANCE SHEET & CAPITAL POSITION 9.1x 9.7x 8.6x 7.4x 6.5x 6.5x 2010 2011 2012 2013 2014 Current Net Debt / EBITDA Multiple 1031 Proceeds $80 Expansion of Term Loan $170 1031 Proceeds $12 Acquisitions $145 Debt Pay Down $105 Chapel H

  29. Slide 29: Well-Staggered Debt Maturity Profile

    © 2015 Kite Realty Group kiterealty.com Investor Update | 29 WELL‐STAGGERED DEBT MATURITY PROFILE $263 $50 $64 $0 $446 $178 $249 $277 $167 0 100 200 300 400 500 600 700 2016 2017 2018 2019 2020 2021 2022 2023 2024+ Mortgage Debt Term Loan Construction Debt Senior Unsecured Notes ($mm) 1. Chart exclu

  30. Slide 30: Unquestionable Value Proposition in KRG

    © 2015 Kite Realty Group kiterealty.com Investor Update | 30 UNQUESTIONABLE VALUE PROPOSITION IN KRG KEY NAV COMPONENTS PER Q2 2015 SUPPLEMENTAL Apply Portfolio Cap Rate “PCR” Apply PCR Less ~75‐100 bps Buying opportunity vs. both public and private valuations Cash Net Operating Income (NOI) Supplem

  31. Slide 31: | This presentation, together with other statements and information publicly disseminated by us, contains

    © 2015 Kite Realty Group kiterealty.com Investor Update | 31 This presentation, 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 Ex

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