Attached files
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| 8-K - FORM 8-K 03/09/2012 - KITE REALTY GROUP TRUST | form8k_030912.htm |
Investors and Analysts
PRESENTED TO:
3.2012
KITE HEADQUARTERS Indianapolis, IN
KITE REALTY GROUP
2
DISCLAIMER
This presentation contains certain statements that are not historical fact and may constitute forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which
may cause the actual results of the Company to differ materially from historical results or from any
results expressed or implied by such forward-looking statements, including, without limitation: national
and local economic, business, real estate and other market conditions, particularly in light of the recent
slowing of growth in the U.S. economy; financing risks, including the availability of and costs associated
with sources of liquidity; the Company’s ability to refinance, or extend the maturity dates of, its
indebtedness; the level and volatility of interest rates; the financial stability of tenants, including their
ability to pay rent and the risk of tenant bankruptcies; the competitive environment in which the
Company operates; acquisition, disposition, development and joint venture risks; property ownership
and management risks; the Company’s ability to maintain its status as a real estate investment trust
(“REIT”) for federal income tax purposes; potential environmental and other liabilities; impairment in the
value of real estate property the Company owns; risks related to the geographical concentration of our
properties in Indiana, Florida and Texas; assumptions underlying our anticipated growth sources; and
other factors affecting the real estate industry generally. The Company refers you to the documents filed
by the Company from time to time with the Securities and Exchange Commission, specifically the
section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2011, which discuss these and other factors that could adversely affect the Company’s
results. The Company undertakes no obligation to publicly update or revise these forward-looking
statements (including the FFO and net income estimates), whether as a result of new information, future
events or otherwise.
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which
may cause the actual results of the Company to differ materially from historical results or from any
results expressed or implied by such forward-looking statements, including, without limitation: national
and local economic, business, real estate and other market conditions, particularly in light of the recent
slowing of growth in the U.S. economy; financing risks, including the availability of and costs associated
with sources of liquidity; the Company’s ability to refinance, or extend the maturity dates of, its
indebtedness; the level and volatility of interest rates; the financial stability of tenants, including their
ability to pay rent and the risk of tenant bankruptcies; the competitive environment in which the
Company operates; acquisition, disposition, development and joint venture risks; property ownership
and management risks; the Company’s ability to maintain its status as a real estate investment trust
(“REIT”) for federal income tax purposes; potential environmental and other liabilities; impairment in the
value of real estate property the Company owns; risks related to the geographical concentration of our
properties in Indiana, Florida and Texas; assumptions underlying our anticipated growth sources; and
other factors affecting the real estate industry generally. The Company refers you to the documents filed
by the Company from time to time with the Securities and Exchange Commission, specifically the
section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2011, which discuss these and other factors that could adversely affect the Company’s
results. The Company undertakes no obligation to publicly update or revise these forward-looking
statements (including the FFO and net income estimates), whether as a result of new information, future
events or otherwise.
3
COMPANY OVERVIEW
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• Stable Operating Portfolio
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• 54 Properties in the Retail Operating Portfolio; 93.3% leased
• Diverse tenant base: Largest tenant represents only 2.9% of annualized base rent
• 5 mile demographics: Population - 126,000; Average Household Income - $85,000
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• Increased Leasing & Operating
Productivity
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• Over 840,000 square feet of leasing production in 2011 at aggregate rent spreads of 6.3%
• 9 consecutive quarters of positive cash rent spreads
• Same property net income for the fourth quarter of 2011 increased 5.7% over the prior year
and 3.7% for the full year 2011 compared to 2010. • Average annualized retail operating portfolio rents per square foot grew 3.3% from the
previous quarter. • Revenue from property operations increased 13.8% in the fourth quarter over the same
period in the prior year. |
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• Development & Redevelopment
Progress |
• Commenced construction at Delray Marketplace in Delray Beach, Florida.
• Transitioned Four Corner/Maple Valley in Seattle, Washington and New Hill Place Phase I
near Raleigh, North Carolina to in-process developments. Construction is expected to commence in the first half of 2012. • Scheduled to open Whole Foods at Oleander Point in Wilmington, North Carolina in May
2012. • Commenced construction of a single-tenant property in Indianapolis, Indiana that is leased
to Walgreens. |
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• Cash NOI Growth Potential
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• $5.9 million of annualized cash NOI (see page 21).
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Information as of December 31, 2011
LEASING
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PORTFOLIO SAME STORE NOI TRENDS
KITE REALTY GROUP
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LEASED PERCENTAGES: RETAIL OPERATING PORTFOLIO
KITE REALTY GROUP
RENT SPREADS
KITE REALTY GROUP
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2011
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2010
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2009
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New Leases
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8.6%
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9.8%
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4.4%
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Renewals
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2.9%
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<3.5%>
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<0.8%>
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Weighted Total
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6.4%
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5.1%
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2.1%
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Cash Rent Spreads
• Nine consecutive quarters of positive aggregate rent spreads
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• Company-wide focus on leasing the portfolio to high-credit tenants.
• Total annual production (square feet):
• 2009 - 673,000
• 2010 - 1,100,600
• 2011 - 842,200
Total Leasing Production - New and Renewal Leases
By Quarter (square feet)
LEASING - ACTIVITY
KITE REALTY GROUP
RETAIL RELATIONSHIPS
Recent Retail Relationships
• National Retailers: Nordstrom Rack / The Container Store / Arhaus Furniture / Whole Foods /
Fresh Market / Advanced Auto / Babies “R” Us and Toys “R” Us / Ulta / Urban Outfitters /
Vitamin Shoppe / buybuy Baby / Apricot Lane / Bobby Chan / Chico’s / Dollar Tree / Goodwill
/ White House | Black Market / JoS. A. Bank
Fresh Market / Advanced Auto / Babies “R” Us and Toys “R” Us / Ulta / Urban Outfitters /
Vitamin Shoppe / buybuy Baby / Apricot Lane / Bobby Chan / Chico’s / Dollar Tree / Goodwill
/ White House | Black Market / JoS. A. Bank
• Restaurants: BJ’s Brewhouse / Buffalo Wild Wings / Corner Bakery / Jason’s Deli / Pei Wei /
Max’s Grille / Shula Burger / Brother’s Bar & Grill
Max’s Grille / Shula Burger / Brother’s Bar & Grill
KITE REALTY GROUP
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DIVERSE TENANT BASE
Quality Retail Tenants
KITE REALTY GROUP
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(1) Annualized base rent represents the monthly contractual rent for December 2011 for each applicable tenant multiplied by 12. Excludes tenant reimbursements.
(2) S&P credit ratings for parent company as of 1/20/2012.
Information as of December 31, 2011
DEVELOPMENT/REDEVELOPMENT
KITE REALTY GROUP
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DELRAY MARKETPLACE
Delray Beach, Florida
Delray Beach, Florida
In-Process Development
• Including anchors Publix and Frank
Theatres, we currently have 24
executed leases. The center is
approximately 72% pre-leased or
committed.
Theatres, we currently have 24
executed leases. The center is
approximately 72% pre-leased or
committed.
• Commenced construction in the 4th
quarter of 2011.
quarter of 2011.
• Closed on a $62 million construction
loan in November 2011.
loan in November 2011.
• The $93 million project is scheduled
to open in November 2012.
to open in November 2012.
KITE REALTY GROUP
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NEW HILL PLACE
Holly Springs, North Carolina
Holly Springs, North Carolina
In-Process Development
•Closed on the sale of land to, and
entered into a site development
agreement with, Target in February
2012.
entered into a site development
agreement with, Target in February
2012.
•The $57 million development is
approximately 73% pre-leased or
committed including Dick’s Sporting
Goods, Marshall’s, Michael’s, and Petco.
approximately 73% pre-leased or
committed including Dick’s Sporting
Goods, Marshall’s, Michael’s, and Petco.
•Phase I of New Hill Place is scheduled
to commence construction in spring,
2012 after finalizing construction loan.
to commence construction in spring,
2012 after finalizing construction loan.
•Phase I of the development is
scheduled to open in spring, 2013.
scheduled to open in spring, 2013.
KITE REALTY GROUP
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FOUR CORNER/MAPLE VALLEY
Maple Valley, Washington
Maple Valley, Washington
In-Process Development/Redevelopment
•Commenced construction at the end of
February 2012.
February 2012.
•Three anchor leases for 80,000 square feet
are fully executed with Grocery Outlet,
Johnson’s Home & Garden, and Walgreens.
are fully executed with Grocery Outlet,
Johnson’s Home & Garden, and Walgreens.
•Construction loan to be finalized prior to
construction commencement.
construction commencement.
•The $24 million project is scheduled to
partially open in late 2012.
partially open in late 2012.
KITE REALTY GROUP
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OLEANDER POINT
Wilmington, North Carolina
Wilmington, North Carolina
In-Process Redevelopment
• KRG turned over the space to a
newly constructed Whole Foods
during the 4th quarter with an
opening scheduled for May
2012.
newly constructed Whole Foods
during the 4th quarter with an
opening scheduled for May
2012.
• The project is 86% pre-leased or
committed as of December 31,
2011.
committed as of December 31,
2011.
Before
After
After
KITE REALTY GROUP
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HIGH QUALITY RECENTLY COMPLETED REAL ESTATE
Rivers Edge
• Successfully redeveloped and was
100% leased as of December 31,
2011.
100% leased as of December 31,
2011.
• Anchored by Nordstrom Rack, The
Container Store, buybuy Baby, Arhaus
Furniture, and BGI Fitness.
Container Store, buybuy Baby, Arhaus
Furniture, and BGI Fitness.
Eddy Street Commons
• Successfully developed and was
96.8% leased as of December 31,
2011.
96.8% leased as of December 31,
2011.
• Anchored by Urban Outfitters,
Hammes Bookstore, and University
of Notre Dame
Hammes Bookstore, and University
of Notre Dame
KITE REALTY GROUP
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HIGH QUALITY RECENTLY COMPLETED REAL ESTATE
Cobblestone Plaza
• Successfully developed and was
92.2% leased as of December 31,
2011.
92.2% leased as of December 31,
2011.
• Anchored by Whole Foods, Party City,
and All Pets Emporium.
and All Pets Emporium.
South Elgin Commons
• Successfully developed and was
100% leased as of December 31,
2011.
100% leased as of December 31,
2011.
• Anchored by LA Fitness, Toys “R”
Us/Babies “R” Us, Ross Stores and
a non-owned Super Target.
Us/Babies “R” Us, Ross Stores and
a non-owned Super Target.
BALANCE SHEET
KITE REALTY GROUP
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DEBT AND CAPITAL MARKETS UPDATE
Primary Debt Capital Market Initiatives
• Manage fixed to floating ratio to a goal of 80%/20% (w/construction loan debt).
• Capitalize on low long-term interest rate environment.
• De-levering in process through NOI growth and non-core asset sales.
Significant 2012 Planned Debt Transactions
• Refinance Plaza at Cedar Hill and Fox Lake Crossing
• Secure long-term financing at Cobblestone Plaza and Rivers Edge
• Finalize construction loans for development at Four Corner Square/Maple Valley
and New Hill Place - Phase I.
and New Hill Place - Phase I.
KITE REALTY GROUP
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SCHEDULE OF DEBT MATURITIES
Extend duration of maturities while continuing to stagger debt maturities to mitigate risk.
Information as of December 31, 2011
(1) Chart excludes annual principal payments and net premiums on fixed rate debt.
(2) Assumes the Company exercises the one year extension option on unsecured line of credit.
(3) As of March 9, 2012, only $10.8 million remaining.
KITE REALTY GROUP
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NOI GROWTH POTENTIAL THROUGH INCREMENTAL CASH NOI
• NOI growth potential through continued cash rent commencement from
executed leases at operating properties and in-process development and
redevelopment properties.
executed leases at operating properties and in-process development and
redevelopment properties.
• Continue to improve our debt-to-EBITDA level as tenants who have
executed leases take occupancy.
executed leases take occupancy.
Information as of December 31, 2011