Kite Realty Group Reports First Quarter 2025 Operating Results

INDIANAPOLIS, April 29, 2025 (GLOBE NEWSWIRE) -- Kite Realty Group (NYSE: KRG), a premier owner and operator of high-quality, open-air grocery-anchored centers and vibrant mixed-use assets, reported today its operating results for the first quarter ended March 31, 2025. For the quarters ended March 31, 2025 and 2024, net income attributable to common shareholders was $23.7 million, or $0.11 per diluted share, compared to $14.2 million, or $0.06 per diluted share, respectively.

   Company raises 2025 guidance

   Acquired Legacy West in the Dallas MSA for $785M ($408M at KRG's share) in a Joint Venture with GIC

   Leased approximately 844,000 square feet at 13.7% comparable blended cash leasing spreads

"In addition to another strong quarter, the KRG team is proud to announce the acquisition of Legacy West through a recently formed strategic joint venture with GIC, a global institutional investor,” said John A. Kite, Chairman and CEO. "Legacy West is an iconic mixed-use asset with significant mark-to-market potential that further establishes KRG's prominent presence in the Dallas MSA. We intend to fund our investment in a manner that is both strategic and disciplined, utilizing a blend of asset sales and debt to ensure the transaction is accretive to earnings, enhances the quality of our portfolio, and maintains leverage at or below our long-term target of 5.0x to 5.5x net debt to EBITDA.”

First Quarter 2025 Financial and Operational Results

• Generated NAREIT FFO of the Operating Partnership of $122.8 million, or $0.55 per diluted share.
• Generated Core FFO of the Operating Partnership of $118.1 million, or $0.53 per diluted share.
• Same Property Net Operating Income (NOI) increased by 3.1%.
• Executed 182 new and renewal leases representing approximately 844,000 square feet.
  • Blended cash leasing spreads of 13.7% on 126 comparable leases, including 15.6% on 26 comparable new leases, 20.1% on 67 comparable non-option renewals, and 7.0% on 33 comparable option renewals.
  • Cash leasing spreads of 18.7% on a blended basis for comparable new and non-option renewal leases.
• Operating retail portfolio annualized base rent (ABR) per square foot of $21.49 at March 31, 2025, a 3.1% increase year-over-year.
• Retail portfolio leased percentage of 93.8% at March 31, 2025, a 20-basis point decrease year-over-year.
  • The leased percentage incorporates several recent anchor bankruptcies, which impacted the leased rate by approximately 140 basis points.
• Portfolio leased-to-occupied spread at period end of 260 basis points, which represents $27.5 million of signed-not-open NOI.

First Quarter 2025 Capital Allocation Activity

• Entered into a joint venture ("JV”) with GIC with the purpose of co-investing in high-quality, open-air retail and mixed-use assets. Subsequent to quarter end, the JV completed the acquisition of Legacy West (Dallas MSA), an iconic mixed-use destination, for $785 million ($408 million at KRG's share). As part of the acquisition, the JV assumed a $304 million mortgage ($158 million at KRG's share) at a 3.8% coupon. The Company will act as the operating member of the JV, and under the terms of the arrangement, the Company will own a 52.0% majority interest. Legacy West is located in the heart of Plano, which is the Dallas MSA's leading submarket for job and population growth over the past decade. The property includes approximately 344,000 square feet of retail (48% of total NOI), 444,000 square feet of office (27% of total NOI), and 782 multifamily units (25% of total NOI). Citigroup Global Markets Inc. acted as financial advisor to Kite Realty Group. Greenhill, a Mizuho affiliate, acted as financial advisor to GIC.
• As previously announced, acquired Village Commons (Miami MSA), a 170,976 square foot Publix-anchored center, for $68.4 million.
• Subsequent to quarter end, sold Stoney Creek Commons (Indianapolis MSA), an 84,094 square foot center, for $9.5 million.

First Quarter 2025 Balance Sheet Overview

• As of March 31, 2025, the Company's net debt to Adjusted EBITDA was 4.7x.

Dividend

On April 29, 2025, the Company's Board of Trustees declared a second quarter 2025 dividend of $0.27 per common share, which represents an 8.0% year-over-year increase. The second quarter dividend will be paid on or about July 16, 2025, to shareholders of record as of July 9, 2025.

2025 Earnings Guidance

The Company expects to generate net income attributable to common shareholders of $0.41 to $0.47 per diluted share in 2025. The Company is raising its 2025 NAREIT FFO guidance range to $2.04 to $2.10 per diluted share from $2.02 to $2.08 per diluted share, and its Core FFO guidance range to $2.00 to $2.06 per diluted share from $1.98 to $2.04 per diluted share, based, in part, on the following assumptions:

• 2025 Same Property NOI range of 1.25% to 2.25%.
• Full-year credit disruption of 1.95% of total revenues at the midpoint, inclusive of a 1.00% general bad debt reserve and a 0.95% impact from anchor bankruptcies.
• Interest expense, net of interest income, excluding unconsolidated joint ventures, of $123.5 million at the midpoint.

The following table reconciles the Company's 2025 net income guidance range to the Company's 2025 NAREIT and Core FFO guidance ranges:

Earnings Conference Call

Kite Realty Group will conduct a conference call to discuss its financial results on Wednesday, April 30, 2025, at 1:00 p.m. Eastern Time. A live webcast of the conference call will be available on KRG's website at www.kiterealty.com or at the following link: KRG First Quarter 2025 Webcast. The dial-in registration link is: KRG First Quarter 2025 Teleconference Registration. In addition, a webcast replay link will be available on KRG's website.

About Kite Realty Group

Kite Realty Group (NYSE: KRG), a real estate investment trust (REIT), is a premier owner and operator of open-air shopping centers and mixed-use assets. The Company's primarily grocery-anchored portfolio is located in high-growth Sun Belt and select strategic gateway markets. The combination of necessity-based grocery-anchored neighborhood and community centers, along with vibrant mixed-use assets, makes the KRG portfolio an ideal platform for both retailers and consumers. Publicly listed since 2004, KRG has over 60 years of experience in developing, constructing and operating real estate. Using operational, investment, development, and redevelopment expertise, KRG continuously optimizes its portfolio to maximize value and return to shareholders. As of March 31, 2025, the Company owned interests in 180 U.S. open-air shopping centers and mixed-use assets, comprising approximately 27.8 million square feet of gross leasable space. For more information, please visit kiterealty.com.

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Safe Harbor

This release, 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 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed or implied by the forward-looking statements.

Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: economic, business, banking, real estate and other market conditions, particularly in connection with low or negative growth in the U.S. economy as well as economic uncertainty (including from an economic slowdown or recession, disruptions related to tariffs and other trade or sanction issues, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending); 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, the Company's indebtedness; the level and volatility of interest rates; the financial stability of the Company's tenants; the competitive environment in which the Company operates, including potential oversupplies of, or a reduction in demand for, rental space; acquisition, disposition, development and joint venture risks; property ownership and management risks, including the relative illiquidity of real estate investments, and expenses, vacancies or the inability to rent space on favorable terms or at all; the Company's ability to maintain the Company's status as a real estate investment trust for U.S. federal income tax purposes; potential environmental and other liabilities; impairment in the value of real estate property the Company owns; the attractiveness of our properties to tenants, the actual and perceived impact of e-commerce on the value of shopping center assets, and changing demographics and customer traffic patterns; business continuity disruptions and a deterioration in our tenants' ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed to operate efficiently, causing costs to rise sharply and inventory to fall; risks related to our current geographical concentration of properties in the states of Texas, Florida, and North Carolina and the metropolitan statistical areas of New York, Atlanta, Seattle, Chicago, and Washington, D.C.; civil unrest, acts of violence, terrorism or war, acts of God, climate change, epidemics, pandemics, natural disasters and severe weather conditions, including such events that may result in underinsured or uninsured losses or other increased costs and expenses; changes in laws and government regulations, including governmental orders affecting the use of the Company's properties or the ability of its tenants to operate, and the costs of complying with such changed laws and government regulations; possible changes in consumer behavior due to public health crises and the fear of future pandemics; our ability to satisfy environmental, social or governance standards set by various constituencies; insurance costs and coverage, especially in Florida and Texas coastal areas; risks associated with cyber attacks and the loss of confidential information and other business disruptions; risks associated with the use of artificial intelligence and related tools; other factors affecting the real estate industry generally; whether Legacy West will achieve anticipated levels of mark-to-market potential and help us establish an improved presence in the Dallas MSA; our ability to fund our investments in the manner anticipated; our ability to achieve our desired debt leverage levels; and other risks identified in reports the Company files with the Securities and Exchange Commission or in other documents that it publicly disseminates, including, in particular, the section titled "Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in the Company's quarterly reports on Form 10-Q. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

This Earnings Release also includes certain forward-looking non-GAAP information. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Please see the following pages for the corresponding definitions and reconciliations of such non-GAAP financial measures.