Kite Realty Group Trust · NYSE:KRG
Kite Realty Group Trust — Q3 2024 Earnings Presentation
31 slides from Kite Realty Group Trust's earnings presentation, Oct 30, 2024
Slide 1: Investor Update Q3 2024
rh KITE INVESTOR ee UPDATE Q3 2024 KRG NYSE © 2024 Kite Realty Group | kiterealty.com Lincoln Park - Dallas / Fort Worthy TR MSA Draper Peaks - Salt Lake City UT MSA
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 September 30, 2024. 1. As of October 28, 2024. 2. Assets with a grocery component include centers with a
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: Third quarter operating highlights
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 increased sequentially by 20 bps and 40 bps, respectively Spread represents $32.6M of NOI, of wh
Slide 5: 2024 guidance and FFO
▪ Same property NOI growth range of 2.5% to 3.0%, which represents a 25-basis point increase at the midpoint ▪ Full-year bad debt assumption of 0.6% to 0.8% of total revenues Net income Depreciation and amortization Realized gain on sale of unconsolidated property, net Impairment charges NAREIT FFO
Slide 6: Leasing and 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 of 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 9.0% 10.1% 12.2% 18.3% FRT REG KIM KRG BRX (Since 2019) 7.1% 7.3% 8.7% 12.1% REG FRT KIM BRX KRG (Since 2019) 1.4% 2.2% 2.3% 3.3% FRT BRX KIM REG KRG (Since 2019)
Slide 8: Operating margin and recovery ratios versus peers
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. “Recovery Ratios” are computed by dividing tenant reimbursements by the s
Slide 9: 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 August 19, 2024.
Slide 10: Lease structure: 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 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% 11
Slide 12: Balance sheet strength versus peers
Note: Source of all peer data is from 3Q 2024 supplemental disclosures, except FRT and KIM data is from 2Q 2024 supplemental disclosures. 1. Includes $45.4 million of the Company’s unconsolidated JV debt. Net Debt + Preferred / Adjusted EBITDA Debt Service Coverage Ratio Available Liquidity Weighted
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 asset metrics
% 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: Leasing of 66 spaces: returns on capital
1. Includes only comparable leases (34 of 66). 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: 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. 1 The TJX Companies, Inc. 2 Best Buy Co., Inc. 3 Ross Stores, Inc. 4
Slide 21: 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 Discount Retaile
Slide 22: Big Names. Small Spaces.
—— Big Names. Small Spaces. Top 50 Small Shop Tenants (< 10K Square Feet) 98% National Brands PA KITE 29% Of Small Shop ABR 16% Stores Of Portfolio ABR 4 KEY TOP 50 SHOP TENANTS (by ABR) SATET ERX verizon’ ‘TF Mobile Bath & Body Works BANK OF AMERICA SEPHORA Pairing Established Small Shop Tenants Wi
Slide 23: ESG metrics and governance
Scope 1 3,215.3 3,041.0 5.4% Scope 2 28,993.9 26,636.0 (8.1%) 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 Prope
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 as lo
Slide 25: Updated 5-Year Corporate Responsibility Goals
—— Updated 5-Year Corporate Responsibility Goals (Established in 2021) PA KITE KRG recognizes the importance Corporate Responsibility initiatives play in our ability to generate long-term, sustainable returns - YEAR GOALS (To be completed by 12/31/2026) CURRENT STATUS (3Q’24) ENVIRONMENTAL a2 Contin
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
Pi Appendix: Reconciliation of Same Property NOI to Net Income mCITE Kite Realty Group Trust ‘Same Property Net Operating Income ("NOI (Gollan thousands) (unaudited) “Three Months Ended September 30, Nine Months Ended September 30. 2024 2023 _change_ 2024 72023 _chenge ‘Number of properties in same
Slide 30: Funds from Operations
Pi Appendix: Funds from Operations MITE 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, 2028 2023 2028 2023 Net income (loss) $ 17053 «$ «2477 $ (17818) $= 40.219 Les
Slide 31: 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 September 30,2024 Net income $ 17,053 Depreciation and amortization 96,656 Interest exp
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