Core Viewpoint - The recent non-binding takeout offer for Plymouth Industrial signifies a growing trend in M&A activity within the real estate sector, driven by favorable market conditions and significant valuation disparities among REITs [1][6]. Group 1: M&A Activity Drivers - The median REIT is currently trading at 81.8% of NAV, with some REITs as low as 46% and others at 198%, creating opportunities for accretive M&A transactions [1][6]. - Strong fundamentals in REITs are evident, with 60.7% of REITs beating earnings in Q2 2025, indicating robust performance in the sector [5][6]. - There is ample capital available for acquisitions, with private equity firms and publicly traded REITs well-capitalized following the reopening of equity and debt markets post-pandemic [6][7]. Group 2: Sector-Specific Transaction Volume - Industrial REITs have been particularly active, acquiring 90 properties in 2025 for a total of $3.94 billion [8]. - In the shopping center sector, Blackstone's buyout of ROIC and 86 individual property purchases by shopping center REITs totaling $2.39 billion highlight increased M&A interest [9]. - The multifamily sector has seen significant activity, with Equity Residential acquiring a portfolio from Blackstone for $964 million and BSR REIT selling to Avalon Bay for $618 million, alongside $2.7 billion in individual asset purchases [10]. Group 3: Targeted REITs for Acquisition - Whitestone REIT is a potential target due to its trading at $12.91, significantly below its NAV of $17.88, despite strong asset performance [12][17]. - Centerspace is trading at 73.9% of NAV, with a unique portfolio that is outperforming in its markets, making it an attractive acquisition target [18][19]. - Kite Realty is noted for its large discount to NAV and strong cash flows, presenting an opportunity for accretive acquisitions [21][23]. - Farmland Partners is strategically selling assets to buy back stock, potentially leading to a full company sale in the future [24][25]. - Armada Hoffler is trading at a substantial discount to NAV, with a market price of $7.15 compared to an NAV of $12.49, indicating a significant acquisition opportunity [25][30].

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) [EXPLANATORY NOTE](index=3&type=section&id=EXPLANATORY%20NOTE) This report combines the quarterly reports on Form 10-Q for Kite Realty Group Trust and Kite Realty Group, L.P. due to their interrelated operations - The report combines 10-Q filings for Kite Realty Group Trust (Parent Company) and Kite Realty Group, L.P. (Operating Partnership)[7](index=7&type=chunk) - The Parent Company is the sole general partner of the Operating Partnership, owning approximately **97.8%** of common partnership interests as of June 30, 2025[8](index=8&type=chunk)[36](index=36&type=chunk) - The Operating Partnership focuses on ownership, operation, acquisition, development, and redevelopment of high-quality, open-air, grocery-anchored shopping centers and mixed-use assets in high-growth Sun Belt and strategic gateway markets[8](index=8&type=chunk)[34](index=34&type=chunk) - The Parent Company has no material assets or liabilities other than its investment in the Operating Partnership; all debt is incurred by the Operating Partnership[9](index=9&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Kite Realty Group Trust and Kite Realty Group, L.P. and their subsidiaries for the periods ended June 30, 2025, and December 31, 2024 [KITE REALTY GROUP TRUST](index=5&type=section&id=KITE%20REALTY%20GROUP%20TRUST) The financial statements for Kite Realty Group Trust show a slight increase in total shareholders' equity and a significant turnaround from a net loss in the prior year to substantial net income for the three and six months ended June 30, 2025 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets for Kite Realty Group Trust show a decrease in total assets from $7,091,767 thousand at December 31, 2024, to $6,858,340 thousand at June 30, 2025, primarily due to a reduction in net investment properties and short-term deposits - **Total Assets:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $6,858,340 | | December 31, 2024 | $7,091,767 | - **Net Investment Properties:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $5,761,745 | | December 31, 2024 | $6,046,530 | - **Mortgage and Other Indebtedness, net:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,022,496 | | December 31, 2024 | $3,226,930 | - **Total Shareholders' Equity:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,317,716 | | December 31, 2024 | $3,312,110 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For the three and six months ended June 30, 2025, Kite Realty Group Trust reported a significant turnaround from a net loss in the prior year to substantial net income - **Net Income (Loss) Attributable to Common Shareholders:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $110,318 | $(48,638) | +$158,956 | | Six Months Ended June 30 | $134,048 | $(34,482) | +$168,530 | - **Net Income (Loss) Per Common Share – Basic and Diluted:** | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.50 | $(0.22) | +$0.72 | | Six Months Ended June 30 | $0.61 | $(0.16) | +$0.77 | - **Gain (Loss) on Sales of Operating Properties, net:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $103,022 | $(1,230) | +$104,252 | | Six Months Ended June 30 | $103,113 | $(1,466) | +$104,579 | - **Impairment Charges:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $66,201 | $(66,201) | | Six Months Ended June 30 | $0 | $66,201 | $(66,201) | - **Interest Expense:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(34,052) | $(30,981) | $(3,071) | | Six Months Ended June 30 | $(67,006) | $(61,345) | $(5,661) | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) The consolidated statements of shareholders' equity show a slight increase in total shareholders' equity from $3,312,110 thousand at December 31, 2024, to $3,317,716 thousand at June 30, 2025 - **Total Shareholders' Equity:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,317,716 | | December 31, 2024 | $3,312,110 | | June 30, 2024 | $3,421,601 | | December 31, 2023 | $3,568,138 | - **Net Income (Loss) Attributable to Common Shareholders (Six Months):** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $134,048 | | June 30, 2024 | $(34,482) | - **Distributions to Common Shareholders (Six Months):** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(118,710) | | June 30, 2024 | $(109,818) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased, while investing activities shifted from a net use to a net provision of cash, largely due to proceeds from short-term deposits and sales of operating properties - **Net Cash Provided by Operating Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $206,894 | $195,686 | +$11,208 | - **Net Cash Provided by (Used in) Investing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $178,030 | $(154,601) | +$332,631 | - **Net Cash (Used in) Provided by Financing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(330,641) | $76,480 | $(407,121) | - **Cash, Cash Equivalents and Restricted Cash, End of Period:** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $187,835 | | June 30, 2024 | $158,995 | [KITE REALTY GROUP, L.P. AND SUBSIDIARIES](index=9&type=section&id=KITE%20REALTY%20GROUP,%20L.P.%20AND%20SUBSIDIARIES) The financial statements for Kite Realty Group, L.P. and subsidiaries largely mirror those of the Parent Company, reflecting its role as the primary operating entity [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The Operating Partnership's consolidated balance sheets show a decrease in total assets from $7,091,767 thousand at December 31, 2024, to $6,858,340 thousand at June 30, 2025, mainly due to a reduction in net investment properties and short-term deposits - **Total Assets:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $6,858,340 | | December 31, 2024 | $7,091,767 | - **Net Investment Properties:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $5,761,745 | | December 31, 2024 | $6,046,530 | - **Mortgage and Other Indebtedness, net:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,022,496 | | December 31, 2024 | $3,226,930 | - **Total Partners' Equity:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,317,716 | | December 31, 2024 | $3,312,110 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=10&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For the three and six months ended June 30, 2025, the Operating Partnership reported a significant shift from a net loss in the prior year to net income, mirroring the Parent Company's performance - **Net Income (Loss) Attributable to Common Unitholders:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $112,518 | $(49,377) | +$161,895 | | Six Months Ended June 30 | $136,712 | $(35,008) | +$171,720 | - **Net Income (Loss) Per Common Unit – Basic and Diluted:** | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.50 | $(0.22) | +$0.72 | | Six Months Ended June 30 | $0.61 | $(0.16) | +$0.77 | - **Gain (Loss) on Sales of Operating Properties, net:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $103,022 | $(1,230) | +$104,252 | | Six Months Ended June 30 | $103,113 | $(1,466) | +$104,579 | - **Impairment Charges:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $66,201 | $(66,201) | | Six Months Ended June 30 | $0 | $66,201 | $(66,201) | - **Interest Expense:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(34,052) | $(30,981) | $(3,071) | | Six Months Ended June 30 | $(67,006) | $(61,345) | $(5,661) | [Consolidated Statements of Partners' Equity](index=11&type=section&id=Consolidated%20Statements%20of%20Partners'%20Equity) The consolidated statements of partners' equity for Kite Realty Group, L.P. and subsidiaries show a slight increase in total partners' equity from $3,312,110 thousand at December 31, 2024, to $3,317,716 thousand at June 30, 2025 - **Total Partners' Equity:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,317,716 | | December 31, 2024 | $3,312,110 | | June 30, 2024 | $3,421,601 | | December 31, 2023 | $3,568,138 | - **Net Income (Loss) Attributable to Parent Company (Six Months):** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $134,048 | | June 30, 2024 | $(34,482) | - **Distributions to Parent Company (Six Months):** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(118,710) | | June 30, 2024 | $(109,818) | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Operating Partnership's cash flows from operating activities increased, and investing activities shifted from a net use to a net provision of cash, largely due to proceeds from short-term deposits and sales of operating properties - **Net Cash Provided by Operating Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $206,894 | $195,686 | +$11,208 | - **Net Cash Provided by (Used in) Investing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $178,030 | $(154,601) | +$332,631 | - **Net Cash (Used in) Provided by Financing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(330,641) | $76,480 | $(407,121) | - **Cash, Cash Equivalents and Restricted Cash, End of Period:** | Period | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $187,835 | | June 30, 2024 | $158,995 | [KITE REALTY GROUP TRUST AND KITE REALTY GROUP, L.P. AND SUBSIDIARIES](index=13&type=section&id=KITE%20REALTY%20GROUP%20TRUST%20AND%20KITE%20REALTY%20GROUP,%20L.P.%20AND%20SUBSIDIARIES) This section provides essential context and detail for the unaudited consolidated financial statements, covering the company's organization, significant accounting policies, and specific financial activities [NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION](index=13&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Kite Realty Group Trust operates as a REIT through its majority-owned Operating Partnership, focusing on high-quality, open-air, grocery-anchored shopping centers and mixed-use assets in high-growth Sun Belt and strategic gateway markets - The Company's business focuses on ownership, operation, acquisition, development, and redevelopment of high-quality, open-air, grocery-anchored shopping centers and mixed-use assets in high-growth Sun Belt and strategic gateway markets[34](index=34&type=chunk) - The Parent Company is the sole general partner of the Operating Partnership, owning approximately **97.8%** of common partnership interests as of June 30, 2025[36](index=36&type=chunk) - The Company intends to maintain its qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes[35](index=35&type=chunk) [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the Company's significant accounting policies, including the composition of investment properties, recognition of rental income, and the treatment of short-term deposits - **Portfolio Composition (as of June 30, 2025):** | Property Type | Count | Square Footage | | :--- | :--- | :--- | | Operating retail/mixed-use properties | 171 | 27,256,979 | | Operating retail/mixed-use properties – unconsolidated joint ventures | 8 | 2,146,707 | | Total operating retail/mixed-use properties | 179 | 29,403,686 | | Standalone office properties | 2 | 412,812 | - **Investment Properties, at cost:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $7,423,024 | | December 31, 2024 | $7,634,191 | - **Rental Income Components (Six Months Ended June 30):** | Component | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Fixed contractual lease payments | $336,408 | $322,213 | +$14,195 | | Variable lease payments | $87,466 | $80,133 | +$7,333 | | Bad debt reserve | $(3,701) | $(2,133) | $(1,568) | | Straight-line rent adjustments | $5,496 | $6,192 | $(696) | | Amortization of in-place lease liabilities, net | $5,107 | $4,656 | +$451 | | Total Rental Income | $430,354 | $411,649 | +$18,705 | - The Company earned **$2.5 million** of interest income on **$350.0 million** in short-term deposits at a weighted average interest rate of **5.05%** during the six months ended June 30, 2025[42](index=42&type=chunk) [NOTE 3. ACQUISITIONS](index=19&type=section&id=NOTE%203.%20ACQUISITIONS) During the six months ended June 30, 2025, the Company acquired two properties: Village Commons (100% interest) and a 52% interest in Legacy West through a joint venture with GIC - **Acquisitions (Six Months Ended June 30, 2025):** | Property Name | Ownership Interest | MSA | Property Type | Retail Square Footage | Acquisition Price (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Village Commons | 100% | Miami | Multi-tenant retail | 170,976 | $68,400 | | Legacy West | 52% | Dallas/Ft. Worth | Multi-tenant retail, office & multifamily | 342,011 | $408,200 (Company's share) | - The Legacy West Joint Venture acquired Legacy West for a gross purchase price of **$785.0 million**, including the assumption of **$304.0 million** of debt with an interest rate of **3.80%**[62](index=62&type=chunk) - Acquisitions were funded using a combination of available cash on hand, proceeds from dispositions, and borrowings on the Company's unsecured revolving line of credit[61](index=61&type=chunk) - The Company did not acquire any properties during the six months ended June 30, 2024[63](index=63&type=chunk) [NOTE 4. DISPOSITIONS AND IMPAIRMENT CHARGES](index=19&type=section&id=NOTE%204.%20DISPOSITIONS%20AND%20IMPAIRMENT%20CHARGES) The Company completed several dispositions during the six months ended June 30, 2025, resulting in a net gain on sales of operating properties of $102.6 million - **Dispositions (Six Months Ended June 30, 2025):** | Property Name | MSA | Property Type | Square Footage | Sales Price (in thousands) | Gain (Loss) (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Stoney Creek Commons | Indianapolis | Multi-tenant retail | 84,094 | $9,500 | $4,802 | | Fullerton Metrocenter | Los Angeles | Multi-tenant retail | 241,027 | $118,500 | $20,295 | | Denton Crossing (1) | Dallas/Ft. Worth | Multi-tenant retail | 343,345 | $81,593 | $35,636 | | Parkway Towne Crossing (1) | Dallas/Ft. Worth | Multi-tenant retail | 180,736 | $57,653 | $18,133 | | The Landing at Tradition (1) | Port St. Lucie, FL | Multi-tenant retail | 397,199 | $93,754 | $23,710 | | **Total** | | | **1,246,401** | **$361,000** | **$102,576** | (1) Company retained a 52% noncontrolling interest in this property. - The Company contributed three previously wholly owned properties, valued at **$233.0 million**, to a newly formed joint venture with GIC, receiving **$112.1 million** in gross proceeds for the **48%** interest acquired by GIC[65](index=65&type=chunk) - **Impairment Charges:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $66,201 | $(66,201) | | Six Months Ended June 30 | $0 | $66,201 | $(66,201) | - Humblewood Shopping Center and City Center were classified as held for sale as of June 30, 2025. Humblewood was sold on July 21, 2025, for **$18.3 million**[68](index=68&type=chunk)[69](index=69&type=chunk) [NOTE 5. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES](index=21&type=section&id=NOTE%205.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20JOINT%20VENTURES) The Company's investments in unconsolidated joint ventures significantly increased from $19,511 thousand at December 31, 2024, to $390,827 thousand at June 30, 2025, primarily due to the formation of two new joint ventures with GIC - **Investments in Unconsolidated Joint Ventures:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $390,827 | | December 31, 2024 | $19,511 | - Formed Legacy West Joint Venture with GIC in March 2025 (**52%** ownership) to acquire Legacy West in the Dallas/Fort Worth MSA[74](index=74&type=chunk) - Formed GIC Portfolio Joint Venture in June 2025 (**52%** ownership) by contributing three previously wholly owned properties[75](index=75&type=chunk) - The Company acts as the operating member for the Legacy West and GIC Portfolio joint ventures, providing leasing, construction, and property management services for fees[74](index=74&type=chunk)[75](index=75&type=chunk) [NOTE 6. DEFERRED COSTS AND INTANGIBLES, NET](index=22&type=section&id=NOTE%206.%20DEFERRED%20COSTS%20AND%20INTANGIBLES,%20NET) Deferred costs, primarily acquired lease intangible assets and deferred leasing costs, decreased from $238,213 thousand at December 31, 2024, to $208,683 thousand at June 30, 2025 - **Deferred Costs, Net:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $208,683 | | December 31, 2024 | $238,213 | - **Amortization of Deferred Leasing Costs, Lease Intangibles and Other (Six Months Ended June 30):** | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $35,742 | | 2024 | $40,850 | - **Amortization of Above-Market Lease Intangibles (Six Months Ended June 30):** | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $4,221 | | 2024 | $5,177 | [NOTE 7. DEFERRED REVENUE, INTANGIBLES, NET AND OTHER LIABILITIES](index=22&type=section&id=NOTE%207.%20DEFERRED%20REVENUE,%20INTANGIBLES,%20NET%20AND%20OTHER%20LIABILITIES) Deferred revenue and other liabilities decreased from $246,100 thousand at December 31, 2024, to $227,807 thousand at June 30, 2025, with amortization of below-market lease intangibles increasing year-over-year - **Deferred Revenue and Other Liabilities:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $227,807 | | December 31, 2024 | $246,100 | - **Amortization of Below-Market Lease Intangibles (Six Months Ended June 30):** | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $12,900 | | 2024 | $9,800 | [NOTE 8. MORTGAGE AND OTHER INDEBTEDNESS](index=23&type=section&id=NOTE%208.%20MORTGAGE%20AND%20OTHER%20INDEBTEDNESS) The Company's total mortgage and other indebtedness, net, decreased from $3,226,930 thousand at December 31, 2024, to $3,022,496 thousand at June 30, 2025, driven by debt repayments and new issuances - **Total Mortgage and Other Indebtedness, Net:** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $3,022,496 | | December 31, 2024 | $3,226,930 | - **Debt Composition (as of June 30, 2025):** | Type | Amount Outstanding (in thousands) | Ratio | Weighted Average Interest Rate | Weighted Average Years to Maturity | | :--- | :--- | :--- | :--- | :--- | | Fixed rate debt | $2,857,178 | 94% | 4.28% | 4.8 | | Variable rate debt | $168,400 | 6% | 7.63% | 1.2 | | **Total (net)** | **$3,022,496** | **100%** | **4.46%** | **4.6** | - Repaid **$350.0 million** principal balance of **4.00%** senior unsecured notes due March 2025 and issued **$300.0 million** of **5.20%** senior unsecured notes due 2032, using proceeds to repay a **$150.0 million** unsecured term loan and revolving line of credit borrowings[88](index=88&type=chunk)[89](index=89&type=chunk) - **Debt Maturities (as of June 30, 2025):** | Year | Total (in thousands) | | :--- | :--- | | 2025 | $82,641 | | 2026 | $415,181 | | 2027 | $503,120 | | 2028 | $103,757 | | 2029 | $404,324 | | Thereafter | $1,516,555 | [NOTE 9. DERIVATIVE INSTRUMENTS, HEDGING ACTIVITIES AND OTHER COMPREHENSIVE INCOME](index=27&type=section&id=NOTE%209.%20DERIVATIVE%20INSTRUMENTS,%20HEDGING%20ACTIVITIES%20AND%20OTHER%20COMPREHENSIVE%20INCOME) The Company uses interest rate derivative agreements, primarily cash flow hedges, to manage variable interest rate risk, not for speculative purposes - The Company uses interest rate derivative agreements to manage potential future variable interest rate risk, not for trading or speculative purposes[105](index=105&type=chunk) - **Hedging Relationships (as of June 30, 2025):** | Type of Hedge | Aggregate Notional (in thousands) | Fair Value Assets (Liabilities) (in thousands) | | :--- | :--- | :--- | | Cash Flow Hedges (variable to fixed) | $700,000 | $4,719 | | Fair Value Hedges (fixed to floating) | $155,000 | $(1,191) | - The fair value of derivatives is classified within **Level 2** of the fair value hierarchy[110](index=110&type=chunk) - Approximately **$5.2 million** was reclassified as a reduction to interest expense for the six months ended June 30, 2025, with an estimated **$8.7 million** decrease to interest expense expected over the next **12 months**[111](index=111&type=chunk) [NOTE 10. SEGMENT REPORTING](index=29&type=section&id=NOTE%2010.%20SEGMENT%20REPORTING) The Company operates as a single reportable segment, focusing on the ownership and operation of high-quality, open-air shopping centers and mixed-use assets - The Company's primary business is the ownership and operation of high-quality, open-air shopping centers and mixed-use assets, aggregated into one reportable segment due to economic similarity[114](index=114&type=chunk) - The Chief Executive Officer (CODM) evaluates financial performance and allocates resources based on net operating income (NOI) for each property[115](index=115&type=chunk) - **Net Operating Income (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenue | $432,864 | $415,191 | +$17,673 | | Total Expenses | $112,104 | $108,757 | +$3,347 | | Net Operating Income | $320,760 | $306,434 | +$14,326 | [NOTE 11. SHAREHOLDERS' EQUITY](index=30&type=section&id=NOTE%2011.%20SHAREHOLDERS'%20EQUITY) The Board of Trustees declared a cash distribution of $0.27 per common share and Common Unit for Q2 2025, totaling $0.54 per share/unit for the six months ended June 30, 2025 - **Cash Distributions per Common Share/Unit:** | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Q2 | $0.27 | $0.25 | +$0.02 | | Six Months Ended June 30 | $0.54 | $0.50 | +$0.04 | - The Company has an existing share repurchase program for up to **$300.0 million** of common shares, extended to February 28, 2026. No shares were repurchased during the six months ended June 30, 2025[119](index=119&type=chunk)[120](index=120&type=chunk) [NOTE 12. EARNINGS PER SHARE OR UNIT](index=31&type=section&id=NOTE%2012.%20EARNINGS%20PER%20SHARE%20OR%20UNIT) Basic and diluted earnings per share/unit are calculated based on weighted average common shares/units outstanding, considering potentially dilutive securities like Limited Partner Units and exchangeable notes - **Net Income (Loss) Per Common Share – Basic and Diluted:** | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.50 | $(0.22) | +$0.72 | | Six Months Ended June 30 | $0.61 | $(0.16) | +$0.77 | - Potentially dilutive securities include outstanding options, Limited Partner Units, Appreciation Only Long-Term Incentive Plan Units, deferred common share units, and common shares issuable upon the exchange of Exchangeable Notes[122](index=122&type=chunk) - No securities had a dilutive impact for the three and six months ended June 30, 2024, due to the net loss allocable to common shareholders and common unitholders[123](index=123&type=chunk) [NOTE 13. COMMITMENTS AND CONTINGENCIES](index=31&type=section&id=NOTE%2013.%20COMMITMENTS%20AND%20CONTINGENCIES) The Company has various commitments, including completion guarantees for development projects and tenant-specific spaces, and outstanding letters of credit totaling $4.5 million - The Company is obligated under various completion guarantees for development projects and tenant-specific space, with sufficient financing expected from free cash flow or revolving facility borrowings[124](index=124&type=chunk) - Outstanding letters of credit totaled **$4.5 million** as of June 30, 2025, with no amounts advanced[125](index=125&type=chunk) - No material litigation is currently threatened or ongoing against the Company; routine litigation is not expected to have a material adverse impact[126](index=126&type=chunk) [NOTE 14. SUBSEQUENT EVENTS](index=31&type=section&id=NOTE%2014.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2025, the Company experienced severe flooding at one property, completed the disposition of Humblewood Shopping Center for $18.3 million, and amended pricing terms of its Revolving Facility and term loans - One property experienced severe flooding; adequate third-party insurance (subject to a **$0.3 million** deductible) is in place, and no significant adverse impact is expected[127](index=127&type=chunk) - Humblewood Shopping Center was sold on July 21, 2025, for **$18.3 million**, with an anticipated gain on sale. Proceeds are restricted for **180 days** for a potential 1031 Exchange[129](index=129&type=chunk) - The Operating Partnership amended the pricing terms of the Revolving Facility, **$300M Term Loan**, and **$250M Term Loan** to remove the **0.10%** SOFR spread adjustment and decreased credit ratings-based pricing credit spread on the **$300M Term Loan**[129](index=129&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=33&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity, offering a detailed analysis of revenue, expenses, and key financial metrics [Overview](index=34&type=section&id=Overview) Kite Realty Group Trust, a REIT, operates through its Operating Partnership, focusing on grocery-anchored shopping centers and mixed-use assets in high-growth Sun Belt and strategic gateway markets - Kite Realty Group Trust is a publicly held REIT focused on high-quality, open-air, grocery-anchored shopping centers and mixed-use assets in high-growth Sun Belt and strategic gateway markets[135](index=135&type=chunk) - As of June 30, 2025, the Company owns interests in **179** operating retail/mixed-use properties (**29.4 million** square feet) and **two** standalone office properties (**0.4 million** square feet)[136](index=136&type=chunk) - The Company monitors inflation and tariffs, which may lead to higher prices for tenants, potentially reducing consumer demand and impacting rent pricing, although many leases contain mitigating provisions[137](index=137&type=chunk) [Operating Activity](index=35&type=section&id=Operating%20Activity) During Q2 2025, the Company executed 170 new and renewal leases totaling 1,214,631 square feet, achieving a 17.0% cash leasing spread on comparable leases - **Leasing Activity (Q2 2025):** | Metric | Value | | :--- | :--- | | Total leases executed | 170 spaces, 1,214,631 sq ft | | Cash leasing spread (133 comparable leases) | 17.0% | | New leases cash leasing spread (38 comparable leases) | 31.3% | | Non-option renewal leases cash leasing spread (52 comparable leases) | 19.7% | | Blended cash spread (comparable new and non-option renewal) | 25.5% | - New tax legislation, effective July 4, 2025, permanently extends the **20%** deduction for 'qualified REIT dividends' and increases the REIT asset test limit for taxable REIT subsidiaries from **20%** to **25%** for taxable years beginning after December 31, 2025[141](index=141&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) The Company's results of operations for the three and six months ended June 30, 2025, showed a significant improvement in net income compared to the prior year, primarily driven by substantial gains on property sales and the absence of impairment charges - **Net Income (Loss) Attributable to Common Shareholders:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $110,318 | $(48,638) | +$158,956 | | Six Months Ended June 30 | $134,048 | $(34,482) | +$168,530 | - **Total Revenue:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $213,395 | $212,434 | +$961 | | Six Months Ended June 30 | $435,157 | $419,873 | +$15,284 | - **Gain (Loss) on Sales of Operating Properties, net:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $103,022 | $(1,230) | +$104,252 | | Six Months Ended June 30 | $103,113 | $(1,466) | +$104,579 | - **Impairment Charges:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0 | $66,201 | $(66,201) | | Six Months Ended June 30 | $0 | $66,201 | $(66,201) | - **Interest Expense:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(34,052) | $(30,981) | $(3,071) | | Six Months Ended June 30 | $(67,006) | $(61,345) | $(5,661) | [Net Operating Income and Same Property Net Operating Income](index=41&type=section&id=Net%20Operating%20Income%20and%20Same%20Property%20Net%20Operating%20Income) Net Operating Income (NOI) and Same Property NOI are non-GAAP measures used to evaluate property performance, showing increases for the three and six months ended June 30, 2025 - NOI is defined as income from real estate (including lease termination fees) less property operating expenses, excluding depreciation, interest, and impairment[175](index=175&type=chunk) - Same Property NOI includes NOI of properties owned for the full periods presented, excluding certain non-recurring items and properties acquired, sold, or under development[176](index=176&type=chunk)[180](index=180&type=chunk) - **Total Property NOI:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $157,010 | $153,925 | +2.0% | | Six Months Ended June 30 | $320,760 | $306,434 | +4.7% | - **Same Property NOI:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $144,104 | $139,512 | +3.3% | | Six Months Ended June 30 | $287,903 | $279,038 | +3.2% | [NAREIT Funds From Operations](index=43&type=section&id=NAREIT%20Funds%20From%20Operations) NAREIT FFO for the Operating Partnership showed a slight decrease for Q2 2025 but an increase for the six-month period compared to 2024, with Core FFO indicating healthy core cash flow generation - **NAREIT FFO of the Operating Partnership:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $113,965 | $117,487 | (3.00%) | | Six Months Ended June 30 | $236,745 | $230,327 | +2.79% | - **Core FFO of the Operating Partnership:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $113,160 | $111,605 | +1.40% | | Six Months Ended June 30 | $231,224 | $218,948 | +5.61% | - **Core FFO per share of the Operating Partnership – diluted:** | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.50 | $0.50 | 0.00% | | Six Months Ended June 30 | $1.03 | $0.98 | +5.10% | [Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")](index=44&type=section&id=Earnings%20before%20Interest,%20Taxes,%20Depreciation%20and%20Amortization%20(%22EBITDA%22)) EBITDA for the three months ended June 30, 2025, was $244,737 thousand, with Adjusted EBITDA at $149,952 thousand, reflecting the Company's operational earnings and leverage - **EBITDA (Three Months Ended June 30, 2025):** | Metric | Amount (in thousands) | | :--- | :--- | | Net income | $112,599 | | Depreciation and amortization | $97,887 | | Interest expense | $34,052 | | Income tax expense of taxable REIT subsidiaries | $199 | | **EBITDA** | **$244,737** | - **Adjusted EBITDA (Three Months Ended June 30, 2025):** | Metric | Amount (in thousands) | | :--- | :--- | | Adjusted EBITDA | $149,952 | | Annualized Adjusted EBITDA | $590,690 | - **Net Debt to Adjusted EBITDA (as of June 30, 2025):** | Metric | Value | | :--- | :--- | | Company share of Net Debt | $3,004,846 thousand | | Net Debt to Adjusted EBITDA | **5.1x** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains a strong balance sheet with $182.0 million in cash and equivalents and $1.1 billion available under its Revolving Facility, providing ample liquidity for operations and investments - As of June 30, 2025, the Company had **$182.0 million** in cash and cash equivalents, **$5.6 million** in restricted cash, and **$1.1 billion** of remaining availability under its unsecured revolving credit facility[194](index=194&type=chunk)[199](index=199&type=chunk) - The Company repaid **$350.0 million** of **4.00%** senior unsecured notes due March 2025 and a **$150.0 million** unsecured term loan due July 2026, and issued **$300.0 million** of **5.20%** senior unsecured notes due 2032[194](index=194&type=chunk)[196](index=196&type=chunk) - Short-term liquidity needs include operating expenses, scheduled interest (**$70.0 million**) and principal payments (**$2.6 million**) for the remainder of 2025, expected dividend payments, and recurring capital expenditures[203](index=203&type=chunk) - Long-term liquidity needs include funding new development projects (e.g., One Loudoun Expansion, **$65.0-$75.0 million** expected funding), redevelopment, acquisitions, and payment of indebtedness at maturity[206](index=206&type=chunk)[208](index=208&type=chunk) - **Debt Maturities (as of June 30, 2025):** | Year | Total (in thousands) | | :--- | :--- | | 2025 | $82,641 | | 2026 | $415,181 | | 2027 | $503,120 | | 2028 | $103,757 | | 2029 | $404,324 | | Thereafter | $1,516,555 | [Cash Flows](index=49&type=section&id=Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased by $11.2 million to $206.9 million, while investing activities shifted to a net provision of cash, and financing activities resulted in a net cash outflow - **Net Cash Provided by Operating Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $206,894 | $195,686 | +$11,208 | - **Net Cash Provided by (Used in) Investing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $178,030 | $(154,601) | +$332,631 | - **Net Cash (Used in) Provided by Financing Activities:** | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(330,641) | $76,480 | $(407,121) | - Key investing activities in H1 2025 included receiving **$350.0 million** from short-term deposit maturity, investing **$253.9 million** in the Legacy West unconsolidated joint venture, and receiving **$232.5 million** net proceeds from property sales and joint venture contribution[219](index=219&type=chunk) - Key financing activities in H1 2025 included borrowing **$398.0 million** on the Revolving Facility and **$298.5 million** from Notes Due 2032, repaying **$398.0 million** on the Revolving Facility, **$350.0 million** senior unsecured notes, and a **$150.0 million** unsecured term loan, and paying **$122.4 million** in distributions[224](index=224&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) As of June 30, 2025, the Company had $3.0 billion in outstanding consolidated indebtedness, with 94% fixed-rate and 6% variable-rate debt (after hedging) - As of June 30, 2025, the Company had **$3.0 billion** of outstanding consolidated indebtedness, with **94%** fixed-rate and **6%** variable-rate debt (reflecting hedge agreements)[221](index=221&type=chunk) - A **100-basis point** change in interest rates on **$400.0 million** of fixed-rate debt maturing within the next **18 months** would change annual cash flow by **$4.0 million**[222](index=222&type=chunk) - A **100-basis point** change in interest rates on unhedged variable-rate debt would change annual cash flow by **$1.7 million**[222](index=222&type=chunk) - The Company is most vulnerable to a change in short-term Secured Overnight Financing Rate ("SOFR") interest rates[222](index=222&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The Chief Executive Officer and Chief Financial Officer of both Kite Realty Group Trust and Kite Realty Group, L.P. concluded that their disclosure controls and procedures were effective as of June 30, 2025 - The Chief Executive Officer and Chief Financial Officer of both Kite Realty Group Trust and Kite Realty Group, L.P. concluded that their disclosure controls and procedures were effective as of June 30, 2025[223](index=223&type=chunk)[226](index=226&type=chunk) - There has been no change in the Parent Company's or Operating Partnership's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting[225](index=225&type=chunk)[227](index=227&type=chunk) [PART II — OTHER INFORMATION](index=52&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=52&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Company is not currently subject to any material litigation, nor is any material litigation threatened - The Company is not subject to any material litigation, nor is any material litigation currently threatened against it[230](index=230&type=chunk) - Routine litigation, claims, and administrative proceedings are not expected to have a material adverse impact on the consolidated financial condition, results of operations, or cash flows[230](index=230&type=chunk) [ITEM 1A. RISK FACTORS](index=52&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[231](index=231&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=52&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No shares of common stock were surrendered or repurchased by the Company during the three months ended June 30, 2025, to satisfy tax obligations related to restricted share vesting - No shares of common stock were surrendered or repurchased by the Company during the three months ended June 30, 2025[232](index=232&type=chunk) - As of June 30, 2025, **$300.0 million** remained available for repurchases under the Company's Share Repurchase Program, which was extended to February 28, 2026[233](index=233&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=52&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Not applicable - Not applicable[234](index=234&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=52&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Not applicable - Not applicable[235](index=235&type=chunk) [ITEM 5. OTHER INFORMATION](index=52&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No officers or trustees adopted or terminated any Rule 10b5-1(c) trading arrangements or "non-Rule 10b5-1 trading arrangements" during the three months ended June 30, 2025 - None of the Company's officers or trustees adopted or terminated any Rule 10b5-1(c) trading arrangements or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[236](index=236&type=chunk) [ITEM 6. EXHIBITS](index=53&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, indentures, credit agreements, certifications, and Inline XBRL documents - The exhibits include Articles of Amendment, Bylaws, Supplemental Indentures, Credit Agreements, various certifications (e.g., **31.1**, **31.2**, **32.1**, **32.2**), and Inline XBRL documents[237](index=237&type=chunk) [SIGNATURES](index=54&type=section&id=SIGNATURES) The report is duly signed on behalf of Kite Realty Group Trust and Kite Realty Group, L.P. by John A. Kite and Heath R. Fear as of July 31, 2025 - The report was signed by John A. Kite (Chairman and Chief Executive Officer) and Heath R. Fear (Executive Vice President and Chief Financial Officer) for both Kite Realty Group Trust and Kite Realty Group, L.P[240](index=240&type=chunk) - The signing date for the report was July 31, 2025[240](index=240&type=chunk)

Financial Data and Key Metrics Changes - Kite Realty Group Trust reported NAREIT FFO per share of $0.51 and core FFO per share of $0.50 for Q2 2025, reflecting strong operational performance [14] - Same property NOI grew by 3.3%, driven by a 250 basis point contribution from higher minimum rents and a 50 basis point improvement in net recoveries [15] - The company increased its NAREIT and core FFO per share guidance by $0.01 each, primarily due to lower than anticipated bad debt and higher than anticipated overage rent [15] Business Line Data and Key Metrics Changes - Blended cash leasing spreads in Q2 were 17%, the highest quarterly blended spread in the past five years [5] - Leasing spreads for non-option renewals were nearly 20% in Q2 and 16% over the last twelve months [6] - New leasing volume more than doubled sequentially, driven by 11 new anchor leases executed in Q2 [6] Market Data and Key Metrics Changes - Over 80% of the boxes recaptured due to recent bankruptcies are leased or in active negotiations, indicating strong demand in the market [11] - The small shop lease rate increased by 30 basis points sequentially and 80 basis points year over year, reflecting a disciplined approach to leasing [8] Company Strategy and Development Direction - The company is focused on capital recycling efforts to reshape its portfolio and reduce exposure to at-risk tenants, with significant steps taken in executing its long-term portfolio vision [10] - Strategic partnerships with GIC now comprise over $1 billion of gross asset value, indicating a strong focus on lifestyle and mixed-use assets [11] - The company aims to enhance its long-term growth profile by prioritizing credit quality and strong starting rents in its leasing strategy [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing momentum and the potential for significant occupancy gains in the coming quarters [14][45] - The company is focused on delivering strong results and creating long-term value, despite short-term disruptions from anchor bankruptcies [12][18] - Management believes that the current market conditions present a great opportunity for growth and investment in the stock [49] Other Important Information - The company has comprehensive flood insurance for Eastgate Crossing, which suffered flooding due to Tropical Storm Chantal [12] - The company opportunistically returned to the public debt market by issuing a seven-year $300 million bond at a coupon of 5.2% [17] Q&A Session Summary Question: Have you seen any meaningful changes in lease gestation periods? - Management noted that leasing activity has picked up substantially, indicating strong demand across the board [20] Question: What are you hearing from prospective tenants regarding higher embedded escalators? - Management reported success in generating higher growth, with embedded growth in the overall portfolio at 3.4% for the first half of the year [23][24] Question: Can you comment on the forward leasing pipeline and July activity? - Management expressed confidence in the strong demand and the quality of opportunities available for retailers [27] Question: What is the latest on the sale of City Center? - The property is still being marketed for sale, with new leasing activity providing some positive momentum [37] Question: How are you seeing investor interest in larger community centers? - Management indicated strong demand for larger format centers, with institutional investors showing renewed interest [43] Question: What is the appetite for share buybacks today? - Management stated that they are always considering buybacks but are currently focused on capital investments with high returns [102]

Financial Data and Key Metrics Changes - Kite Realty Group Trust reported NAREIT FFO per share of $0.51 and core FFO per share of $0.50 for Q2 2025, reflecting a year-over-year growth despite temporary disruptions from anchor bankruptcies [15][16] - Same property NOI grew by 3.3%, driven by a 250 basis point contribution from higher minimum rents and a 50 basis point improvement in net recoveries [16] - The company increased its NAREIT and core FFO per share guidance by $0.01 each, primarily due to lower than anticipated bad debt and higher than anticipated overage rent [16] Business Line Data and Key Metrics Changes - Blended cash leasing spreads in Q2 were 17%, the highest quarterly blended spread in the past five years, with non-option renewals showing almost 20% leasing spreads [6][7] - New leasing volume more than doubled sequentially, driven by 11 new anchor leases executed in the quarter, including grocery leases with Whole Foods and Trader Joe's [7][8] - Small shop lease rates increased by 30 basis points sequentially and 80 basis points year-over-year, with embedded escalators on new and non-option renewal small shop leases at 3.4% for 2025 [8][9] Market Data and Key Metrics Changes - The company reported that over 80% of the boxes recaptured due to recent bankruptcies are leased or in active negotiations, indicating strong demand in the leasing pipeline [8][12] - The strategic partnership with GIC now comprises over $1 billion in gross asset value, reflecting strong investor interest in lifestyle and mixed-use assets [11][12] Company Strategy and Development Direction - The company is focused on capital recycling efforts to reshape its portfolio and reduce exposure to at-risk tenants, with a strategy to increase focus on smaller format grocery-anchored centers and select lifestyle and mixed-use assets [11][12] - The management emphasized the importance of upgrading tenancy to bolster the durability of cash flows, trading short-term earnings disruption for long-term growth potential [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing momentum and the potential for significant occupancy gains in the coming quarters, despite the challenges posed by recent bankruptcies [15][46] - The company is confident in its ability to accelerate rent commencement timelines through proactive engagement with tenants and efficient permitting processes [32][46] - Management believes that the current market conditions present a great opportunity for growth, positioning the company well for the next few years [46][50] Other Important Information - The company has comprehensive flood insurance for Eastgate Crossing, which suffered flooding due to Tropical Storm Chantal, ensuring coverage well in excess of estimated damages [13] - The company opportunistically returned to the public debt market by issuing a seven-year $300 million bond at a coupon of 5.2% [18] Q&A Session Summary Question: Have you seen any meaningful changes in lease gestation periods? - Management noted that leasing activity has picked up substantially, indicating strong demand across the board [21] Question: What are you hearing from prospective tenants regarding higher embedded escalators? - Management reported success in generating higher growth, with average escalators for anchor tenants improving from around 1% to 1.5% [23][24] Question: Can you comment on the forward leasing pipeline and July activity? - Management expressed confidence in the strong demand and the quality of opportunities available, indicating a significant increase in new lease volume [27][28] Question: What is the latest on the sale of City Center? - The property is still being marketed for sale, with recent leasing activity providing some positive momentum [37] Question: How are you seeing investor interest in larger community centers? - Management indicated strong demand for larger format centers, with institutional investors showing renewed interest in the retail space [44][66] Question: What is the appetite for share buybacks today? - Management stated that they are always considering buybacks but are currently focused on capital investments that yield high returns [100] Question: Can you provide guidance on the equity and JV line for the rest of the year? - Management explained that the JV activities will be reflected in the income statement under unconsolidated subsidiaries, with detailed information available in the supplemental materials [93][94]

Financial Performance - Same Property NOI increased by 33% for the three months ended June 30, 2025, reaching $144104 million, compared to $139512 million in 2024[88] - Same Property NOI increased by 32% for the six months ended June 30, 2025, reaching $287903 million, compared to $279038 million in 2024[88] - Net income attributable to common shareholders was $110318 million for the three months ended June 30, 2025, compared to a loss of $48638 million in 2024[88] - Net income attributable to common shareholders was $134048 million for the six months ended June 30, 2025, compared to a loss of $34482 million in 2024[88] - NAREIT FFO attributable to common shareholders was $111499 million for the three months ended June 30, 2025, compared to $115541 million in 2024[90] - NAREIT FFO attributable to common shareholders was $231816 million for the six months ended June 30, 2025, compared to $226559 million in 2024[90] - Adjusted EBITDA annualized reached $590690 million[93] Portfolio and Transactions - YTD 2025 transaction activity shows acquisitions of $4766 million at a 65% effective yield and dispositions of $2584 million at a 65% yield, resulting in net transaction activity of +$2182 million[35] - The signed-not-open (SNO) pipeline increased to $316 million, with 37% from anchor tenants and 63% from shop tenants[21] - 88% of the SNO pipeline is from the same property NOI pool, and 12% is from the non-same property NOI pool[21]

Core Insights - Kite Realty Group (KRG) reported revenue of $213.4 million for the quarter ended June 2025, marking a year-over-year increase of 0.5% and a surprise of +0.12% over the Zacks Consensus Estimate of $213.14 million [1] - The company achieved an EPS of $0.51, a significant improvement from -$0.22 a year ago, aligning with the consensus EPS estimate [1] - The stock has returned +1.8% over the past month, underperforming the Zacks S&P 500 composite's +3.4% change, and currently holds a Zacks Rank 4 (Sell) [3] Revenue Breakdown - Rental income was reported at $211.18 million, slightly below the average estimate of $212.5 million, reflecting a year-over-year increase of +2.6% [4] - Tenant recoveries amounted to $41.7 million, which was lower than the two-analyst average estimate of $45.13 million [4] - Minimum rent revenue was reported at $150.71 million, compared to the average estimate of $165.92 million [4] - Net Earnings Per Share (Diluted) was $0.50, exceeding the average estimate of $0.07 [4]

分组1 - Kite Realty Group (KRG) reported quarterly funds from operations (FFO) of $0.51 per share, matching the Zacks Consensus Estimate, but down from $0.53 per share a year ago [1] - The company posted revenues of $213.4 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.12% and up from $212.43 million year-over-year [2] - Kite Realty Group shares have declined approximately 8.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.3% [3] 分组2 - The future performance of Kite Realty Group's stock will largely depend on management's commentary during the earnings call and the outlook for FFO [3][4] - The current consensus FFO estimate for the upcoming quarter is $0.50 on revenues of $211.98 million, and for the current fiscal year, it is $2.07 on revenues of $864.59 million [7] - The Zacks Industry Rank places the REIT and Equity Trust - Retail sector in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

[Earnings Press Release](index=3&type=section&id=Earnings%20Press%20Release) Provides a comprehensive overview of Kite Realty Group's strong second-quarter 2025 financial and operational performance, including key highlights, strategic initiatives, and updated guidance [Second Quarter 2025 Highlights](index=3&type=section&id=Second%20Quarter%202025%20Highlights) Kite Realty Group reported strong second-quarter 2025 results, highlighted by a significant turnaround in net income to $110.3 million from a net loss of $48.6 million year-over-year, raising its 2025 guidance driven by robust operational performance and strategic capital moves Q2 2025 vs Q2 2024 Net Income | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Loss) Attributable to Common Shareholders | $110.3 million | ($48.6 million) | | Net Income (Loss) per Diluted Share | $0.50 | ($0.22) | - Key strategic and operational achievements for Q2 2025 include: - Raised full-year 2025 guidance[8](index=8&type=chunk) - Leased approximately **1.2 million square feet** with **17.0% comparable blended cash leasing spreads**[9](index=9&type=chunk) - Formed a second Joint Venture (JV) with GIC, generating **$112.1 million in gross proceeds**[9](index=9&type=chunk) - Sold Fullerton Metrocenter for gross proceeds of **$118.5 million**[9](index=9&type=chunk) - Issued **$300 million** of 5.20% senior unsecured notes due 2032[9](index=9&type=chunk) - CEO John A. Kite attributed the strong quarter to persistent tenant demand, leading to higher starting rents and an improved merchandising mix, with the company's capital allocation strategy involving acquiring a majority stake in Legacy West while monetizing minority interests and selling non-core assets[9](index=9&type=chunk) [Second Quarter 2025 Financial and Operational Results](index=3&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Results) The company generated NAREIT FFO of $0.51 per share and Core FFO of $0.50 per share, with Same Property NOI increasing by 3.3%, executing 170 leases totaling 1.2 million square feet at 17.0% blended cash leasing spreads, and retail portfolio ABR per square foot growing 5.4% year-over-year to $22.02 despite a 150 basis point decrease in leased percentage to 93.3% due to anchor bankruptcies Q2 2025 Key Financial Metrics | Metric | Value | Per Diluted Share | | :--- | :--- | :--- | | NAREIT FFO of the Operating Partnership | $114.0 million | $0.51 | | Core FFO of the Operating Partnership | $113.2 million | $0.50 | - Same Property Net Operating Income (NOI) increased by **3.3%**[10](index=10&type=chunk) - Executed **170 new and renewal leases** for approximately **1.2 million square feet**[10](index=10&type=chunk) - Blended cash leasing spreads were **17.0%**, with new leases at **31.3%** and non-option renewals at **19.7%**[10](index=10&type=chunk) - Operating retail portfolio ABR per square foot increased **5.4% YoY** to **$22.02**[10](index=10&type=chunk) - Retail portfolio leased percentage was **93.3%**, a **150 bps decrease YoY**, mainly due to anchor bankruptcies[10](index=10&type=chunk) [Second Quarter 2025 Capital Allocation and Balance Sheet](index=4&type=section&id=Second%20Quarter%202025%20Capital%20Allocation%20and%20Balance%20Sheet) KRG was active in capital allocation, acquiring a majority stake in Legacy West while monetizing minority interests and selling non-core assets, and issuing $300 million in senior unsecured notes to repay existing debt, resulting in a net debt to Adjusted EBITDA of 5.1x - Acquired a **52.0% interest** in Legacy West (Dallas/Fort Worth MSA) for **$785 million** (**$408 million** at KRG's share) through a JV with GIC[14](index=14&type=chunk) - Formed a second JV with GIC by contributing three shopping centers, generating gross proceeds of **$112.1 million** while retaining a **52.0% ownership interest**[14](index=14&type=chunk) - Sold Fullerton Metrocenter (Los Angeles MSA) for **$118.5 million** and two other properties for a combined **$27.8 million**[14](index=14&type=chunk) - Issued **$300 million** of 5.20% senior unsecured notes due 2032, using proceeds to repay a term loan and other borrowings[14](index=14&type=chunk) - Net debt to Adjusted EBITDA was **5.1x** as of June 30, 2025[14](index=14&type=chunk) [Dividend](index=4&type=section&id=Dividend) The Board of Trustees declared a third-quarter 2025 dividend of $0.27 per common share, marking a 3.8% increase compared to the previous year, payable on October 16, 2025 - A Q3 2025 dividend of **$0.27 per common share** was declared, a **3.8% year-over-year increase**[13](index=13&type=chunk) - The dividend will be paid on or about October 16, 2025, to shareholders of record as of October 9, 2025[13](index=13&type=chunk) [2025 Earnings Guidance](index=4&type=section&id=2025%20Earnings%20Guidance) Kite Realty Group raised its full-year 2025 guidance, now expecting NAREIT FFO per diluted share between $2.06 and $2.10 and Core FFO between $2.02 and $2.06, based on assumptions including 1.50% to 2.50% Same Property NOI growth Updated 2025 Guidance (per diluted share) | Metric | Low | High | | :--- | :--- | :--- | | Net Income | $0.75 | $0.79 | | NAREIT FFO | $2.06 | $2.10 | | Core FFO | $2.02 | $2.06 | - Key assumptions for the 2025 guidance include: - Same Property NOI growth between **1.50% and 2.50%**[15](index=15&type=chunk) - Full-year credit disruption of **1.85% of total revenues** at the midpoint[15](index=15&type=chunk) - Interest expense, net of interest income, of **$124.75 million** at the midpoint[15](index=15&type=chunk) [Company and Risk Overview](index=5&type=section&id=Company%20and%20Risk%20Overview) Kite Realty Group is a REIT specializing in open-air, grocery-anchored shopping centers and mixed-use assets, primarily in high-growth Sun Belt markets, facing risks including economic conditions, financing, tenant stability, and geographical concentration - KRG is a REIT owning and operating **181 U.S. open-air shopping centers and mixed-use assets**, totaling **~29.8 million sq. ft. of GLA** as of June 30, 2025[18](index=18&type=chunk) - The portfolio is primarily grocery-anchored and located in high-growth Sun Belt and strategic gateway markets[18](index=18&type=chunk) - Key risk factors include: - Economic slowdowns, rising interest rates, and inflation[20](index=20&type=chunk) - Financing risks, including availability and cost of liquidity[20](index=20&type=chunk) - Financial stability of tenants and the competitive retail environment[20](index=20&type=chunk) - Geographical concentration of properties in Texas, Florida, and North Carolina[20](index=20&type=chunk) [Financial and Operating Data](index=8&type=section&id=Financial%20and%20Operating%20Data) Presents detailed financial statements and key operating metrics for Kite Realty Group, offering a comprehensive view of its performance and balance sheet position [Results Overview](index=8&type=section&id=Results%20Overview) This section provides a comprehensive summary of KRG's financial results and operating statistics, with Q2 2025 total revenue at $213.4 million, net income at $110.3 million, and a Same Property NOI increase of 3.3% Q2 2025 Financial Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenue | $213,395 | $212,434 | | Net income (loss) | $110,318 | $(48,638) | | NAREIT FFO | $113,965 | $117,487 | | Core FFO | $113,160 | $111,605 | Q2 2025 Operating Ratios and Statistics | Metric | Q2 2025 | | :--- | :--- | | Same Property NOI performance | 3.3% | | Net debt to Adjusted EBITDA | 5.1x | | Percent leased – retail | 93.3% | | Retail ABR per square foot | $22.02 | | Total new and renewal lease cash rent spread | 17.0% | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Kite Realty Group reported total assets of $6.86 billion, a decrease from $7.09 billion at year-end 2024, with total liabilities decreasing to $3.44 billion and total equity remaining stable at $3.32 billion Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net investment properties | $5,761,745 | $6,046,530 | | Total assets | $6,858,340 | $7,091,767 | | Mortgage and other indebtedness, net | $3,022,496 | $3,226,930 | | Total liabilities | $3,435,816 | $3,679,690 | | Total equity | $3,319,633 | $3,314,003 | [Consolidated Statements of Operations](index=10&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, KRG's total revenue was $213.4 million, and net income significantly improved to $112.6 million, driven by a $103.0 million gain on property sales, contrasting with a $49.3 million net loss in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $213,395 | $212,434 | | Total expenses | $166,809 | $233,515 | | Impairment charges | $— | $66,201 | | Gain (loss) on sales of operating properties, net | $103,022 | $(1,230) | | Net income (loss) | $112,599 | $(49,303) | | Net income (loss) attributable to common shareholders | $110,318 | $(48,638) | [Same Property Net Operating Income (NOI)](index=11&type=section&id=Same%20Property%20Net%20Operating%20Income) For Q2 2025, Same Property NOI for the 175-property pool increased by 3.3% to $144.1 million, driven by higher minimum rent and tenant recoveries, with total property NOI growing by 2.0% for the quarter Same Property NOI Growth (in thousands) | Period | 2025 Same Property NOI | 2024 Same Property NOI | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $144,104 | $139,512 | 3.3% | | Six Months Ended June 30 | $287,903 | $279,038 | 3.2% | - The Same Property Pool consists of **175 properties**[35](index=35&type=chunk)[37](index=37&type=chunk) - It excludes properties acquired, sold, or in development/redevelopment during 2024 and 2025, as well as standalone office properties[35](index=35&type=chunk)[37](index=37&type=chunk) [Net Operating Income and Adjusted EBITDA by Quarter](index=12&type=section&id=Net%20Operating%20Income%20and%20Adjusted%20EBITDA%20by%20Quarter) In Q2 2025, KRG generated Net Operating Income (NOI) of $157.0 million and Adjusted EBITDA of $144.5 million, with a consolidated NOI margin of 74.0% and a retail recovery ratio of 92.0% Quarterly NOI and Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | | NOI | $157,010 | $163,750 | $159,429 | $153,925 | | Adjusted EBITDA | $144,473 | $151,917 | $146,321 | $144,411 | | NOI/Revenue – Retail | 74.4% | 74.7% | 75.1% | 74.3% | | Recovery Ratio – Retail | 92.0% | 91.4% | 92.1% | 91.6% | [NAREIT Funds From Operations (FFO)](index=13&type=section&id=NAREIT%20Funds%20From%20Operations) For Q2 2025, NAREIT FFO was $114.0 million ($0.51 per diluted share), and Core FFO was $113.2 million ($0.50 per share), with Adjusted Funds From Operations (AFFO) at $81.7 million FFO Reconciliation Summary - Q2 2025 (in thousands) | Metric | Amount | | :--- | :--- | | Net income | $112,599 | | Adjustments (Depreciation, Gain on Sale, etc.) | $1,366 | | **NAREIT FFO of the Operating Partnership** | **$113,965** | | Non-cash adjustments | $(805) | | **Core FFO of the Operating Partnership** | **$113,160** | FFO Per Diluted Share | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | NAREIT FFO per share | $0.51 | $0.53 | | Core FFO per share | $0.50 | $0.50 | [Portfolio and Capital Structure](index=14&type=section&id=Portfolio%20and%20Capital%20Structure) Details Kite Realty Group's joint ventures, debt profile, capital allocation activities including acquisitions and dispositions, and ongoing development projects [Joint Venture Summary](index=14&type=section&id=Joint%20Venture%20Summary) As of June 30, 2025, KRG's total investment in unconsolidated joint ventures was $390.8 million, including key interests in Legacy West and the GIC Portfolio, resulting in a Q2 2025 net loss of $3.2 million for KRG - KRG's total investment in unconsolidated JVs was **$390.8 million** as of June 30, 2025[48](index=48&type=chunk) - Key unconsolidated JVs include: - Legacy West (**52% economic interest**) - GIC Portfolio (**52% economic interest**) - Nuveen Portfolio (**20% economic interest**) [Debt Profile](index=15&type=section&id=Debt%20Profile) KRG maintains a strong debt profile with investment-grade ratings, $1.28 billion in liquidity, a net debt to Adjusted EBITDA ratio of 5.1x, and $3.21 billion in total debt with 89% fixed-rate [Key Debt Metrics](index=15&type=section&id=Key%20Debt%20Metrics) As of Q2 2025, KRG reported a net debt to Adjusted EBITDA ratio of 5.1x, total liquidity of $1.28 billion, investment-grade credit ratings, and 95% unencumbered consolidated NOI - **Net Debt to Adjusted EBITDA:** **5.1x**[52](index=52&type=chunk) - **Total Liquidity:** **$1,277.5 million**[51](index=51&type=chunk) - **Senior Unsecured Debt Ratings:** BBB/Positive (Fitch), Baa2/Stable (Moody's), BBB/Stable (S&P)[51](index=51&type=chunk) - **Unencumbered Consolidated NOI:** **95% of Total Consolidated NOI**[51](index=51&type=chunk) [Summary of Outstanding Debt](index=16&type=section&id=Summary%20of%20Outstanding%20Debt) As of June 30, 2025, KRG's total outstanding debt was $3.21 billion, with a weighted average interest rate of 4.46% and a 4.7-year maturity, with 89% of the debt being fixed-rate Total Outstanding Debt Summary | Debt Type | Amount Outstanding (in thousands) | Ratio | Weighted Avg. Interest Rate | Weighted Avg. Years to Maturity | | :--- | :--- | :--- | :--- | :--- | | Fixed rate debt | $2,857,178 | 89% | 4.28% | 4.9 | | Variable rate debt | $168,400 | 5% | 7.63% | 1.2 | | **Total** | **$3,213,337** | **100%** | **4.46%** | **4.7** | [Maturity Schedule of Outstanding Debt](index=17&type=section&id=Maturity%20Schedule%20of%20Outstanding%20Debt) KRG's debt maturity schedule is staggered, with significant maturities in 2026 ($400 million) and 2027 ($284.7 million), and the company utilizes interest rate swaps to manage exposure - Upcoming significant debt maturities include: - **2025:** **$80.0 million** - **2026:** **$400.0 million** - **2027:** **$284.7 million** - **2028:** **$350.0 million**[59](index=59&type=chunk) - The company uses interest rate swaps to manage exposure, with an aggregate notional value of **$700 million** to fix variable-rate debt and **$155 million** to float fixed-rate debt as of June 30, 2025[59](index=59&type=chunk) [Acquisitions and Dispositions](index=19&type=section&id=Acquisitions%20and%20Dispositions) During 2025, KRG acquired Village Commons and a 52% share in Legacy West for a total of $476.6 million, while disposing of six properties/interests, including Fullerton Metrocenter, generating $258.4 million in proceeds 2025 Acquisitions (at KRG's share, in thousands) | Property Name | MSA | Acquisition Price | | :--- | :--- | :--- | | Village Commons | Miami | $68,400 | | Legacy West | Dallas/Ft. Worth | $408,200 | | **Total** | | **$476,600** | 2025 Dispositions (in thousands) | Property Name | MSA | Sales Price | | :--- | :--- | :--- | | Stoney Creek Commons | Indianapolis | $9,500 | | Fullerton Metrocenter | Los Angeles | $118,500 | | GIC Portfolio Contribution (48% interest) | Various | $112,120 | | Humblewood Shopping Center | Houston | $18,250 | | **Total** | | **$258,370** | [Development and Redevelopment Projects](index=20&type=section&id=Development%20and%20Redevelopment%20Projects) KRG has one active development project, the One Loudoun Expansion, with an estimated cost of $81.0M–$91.0M, and several future opportunities for expansion and redevelopment at existing properties - The primary active project is the One Loudoun Expansion (Washington, D.C. MSA), with a total project cost at KRG's share of **$81.0M–$91.0M** and an estimated remaining spend of **$58.0M–$68.0M**[66](index=66&type=chunk) - Future opportunities include potential expansions and redevelopments at properties like Carillon, One Loudoun (hotel and residential), and Glendale Town Center, among others[67](index=67&type=chunk) [Portfolio Characteristics](index=21&type=section&id=Portfolio%20Characteristics) Describes the geographic diversification of Kite Realty Group's properties, its top tenants, retail leasing trends, and the schedule of upcoming lease expirations [Geographic Diversification](index=21&type=section&id=Geographic%20Diversification) KRG's portfolio is heavily concentrated in the South (65.4% of ABR), with Texas as the largest state (29.2%), followed by Florida (11.2%), demonstrating regional focus ABR by Region | Region | % of Weighted ABR | | :--- | :--- | | South | 65.4% | | West | 14.1% | | Midwest | 12.6% | | Northeast | 7.9% | Top 5 States by ABR | State | % of Weighted ABR | | :--- | :--- | | Texas | 29.2% | | Florida | 11.2% | | Indiana | 6.2% | | Virginia | 5.9% | | Maryland | 5.5% | [Top 25 Tenants by ABR](index=22&type=section&id=Top%2025%20Tenants%20by%20ABR) KRG's tenant base is diversified, with the top 25 tenants accounting for 26.1% of total ABR, led by The TJX Companies (2.6%), Ross Stores (1.8%), and PetSmart (1.7%) - The top 25 tenants represent **26.1% of total weighted ABR**[74](index=74&type=chunk) Top 5 Tenants by % of Weighted ABR | Rank | Tenant | % of Weighted ABR | | :--- | :--- | :--- | | 1 | The TJX Companies, Inc. | 2.6% | | 2 | Ross Stores, Inc. | 1.8% | | 3 | PetSmart, Inc. | 1.7% | | 4 | Best Buy Co., Inc. | 1.4% | | 5 | Dick's Sporting Goods, Inc. | 1.3% | [Retail Leasing Spreads](index=23&type=section&id=Retail%20Leasing%20Spreads) In Q2 2025, KRG achieved a strong blended cash rent spread of 17.0% on over 1 million square feet of comparable leases, with new leases showing a 31.3% increase and non-option renewals up 19.7% Q2 2025 Comparable Cash Rent Spreads | Category | Leases | Sq. Ft. | Cash Rent Spread | | :--- | :--- | :--- | :--- | | New Leases | 38 | 219,271 | 31.3% | | Non-Option Renewals | 52 | 159,247 | 19.7% | | Option Renewals | 43 | 648,679 | 8.2% | | **Total** | **133** | **1,027,197** | **17.0%** | [Lease Expirations](index=24&type=section&id=Lease%20Expirations) KRG has a well-staggered lease expiration schedule, with only 3.0% of pro-rata ABR expiring in the remainder of 2025, and the highest concentrations in 2027 (12.8%) and 2028 (15.4%) Lease Expirations by % of Pro Rata ABR | Year | % of Total ABR Expiring | | :--- | :--- | | 2025 | 3.0% | | 2026 | 10.6% | | 2027 | 12.8% | | 2028 | 15.4% | | 2029 | 14.9% | | 2030 and Beyond | 32.4% | [Supplemental Information](index=25&type=section&id=Supplemental%20Information) Offers additional context through components of Net Asset Value, definitions of non-GAAP financial measures, and essential contact information for investors and analysts [Components of Net Asset Value](index=25&type=section&id=Components%20of%20Net%20Asset%20Value) This section details the components for estimating Net Asset Value (NAV), including an annualized normalized portfolio cash NOI of $585.4 million and total annualized portfolio cash NOI of $627.2 million, alongside net debt and other assets/liabilities Key NAV Components (in thousands) | Component | Value | | :--- | :--- | | Annualized Normalized Portfolio Cash NOI (excl. ground leases) | $585,390 | | Annualized ground lease NOI | $41,800 | | **Total Annualized Portfolio Cash NOI** | **$627,190** | | Mortgage and other indebtedness, net | $(3,025,578) | | Pro rata adjustment for joint venture debt | $(181,064) | [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) This section defines key non-GAAP financial measures such as NAREIT FFO, Core FFO, AFFO, NOI, Same Property NOI, and Adjusted EBITDA, explaining their relevance for evaluating operating performance - **NAREIT FFO:** Defined as net income excluding real estate depreciation, gains/losses from property sales, and impairment write-downs[93](index=93&type=chunk) - **Core FFO:** Modifies FFO to exclude certain non-cash items like amortization of financing costs, non-cash compensation, and straight-line rent adjustments[96](index=96&type=chunk) - **Same Property NOI:** Measures NOI for a consistent pool of properties owned for the full periods presented to eliminate the impact of acquisitions and dispositions[100](index=100&type=chunk)[101](index=101&type=chunk) - **Adjusted EBITDA:** Defined as EBITDA adjusted for items like gains on sales, merger costs, and other non-recurring activities to provide a measure of core operational earnings[104](index=104&type=chunk) [Contact Information](index=7&type=section&id=Contact%20Information) This section provides contact details for Kite Realty Group's corporate office and investor relations personnel, along with a list of covering analysts from various investment banks - Investor Relations Contact: - Tyler Henshaw, SVP, Capital Markets & Investor Relations - Phone: **317.713.7780** - Email: **thenshaw@kiterealty.com**[7](index=7&type=chunk)[25](index=25&type=chunk)

Core Insights - Kite Realty Group reported a significant turnaround in net income for Q2 2025, achieving $110.3 million or $0.50 per diluted share, compared to a net loss of $48.6 million or $0.22 per diluted share in Q2 2024 [1][4][21] - The company raised its 2025 earnings guidance, expecting net income attributable to common shareholders to be between $0.75 and $0.79 per diluted share, and increased its NAREIT FFO guidance range to $2.06 to $2.10 per diluted share [2][9] Financial Performance - For the six months ended June 30, 2025, net income attributable to common shareholders was $134.0 million or $0.61 per diluted share, compared to a net loss of $34.5 million or $0.16 per diluted share in the same period of 2024 [1][21] - The company generated NAREIT FFO of $114.0 million or $0.51 per diluted share for Q2 2025, and Core FFO of $113.2 million or $0.50 per diluted share [6][24] - Same Property Net Operating Income (NOI) increased by 3.3% [6][31] Leasing and Portfolio Activity - Kite Realty executed approximately 1.2 million square feet in new and renewal leases with a comparable blended cash leasing spread of 17.0% [3][6] - The retail portfolio's leased percentage was 93.3% as of June 30, 2025, reflecting a 150-basis point decrease year-over-year, primarily due to recent anchor bankruptcies [6][31] - The company entered into a joint venture with GIC, contributing three larger-format shopping centers, generating gross proceeds of $112.1 million while maintaining a 52.0% ownership interest [3][6] Capital Allocation and Debt Management - Kite Realty sold Fullerton Metrocenter for gross proceeds of $118.5 million and issued $300 million of senior unsecured notes due August 2032 at a fixed interest rate of 5.20% [3][10] - The company’s net debt to Adjusted EBITDA ratio was 5.1x as of June 30, 2025 [10] - The Board of Trustees declared a third quarter 2025 dividend of $0.27 per common share, representing a 3.8% year-over-year increase [8] Market Position and Strategy - The company focuses on high-quality, open-air grocery-anchored centers and mixed-use assets, primarily located in high-growth Sun Belt and strategic gateway markets [13] - Kite Realty's operational performance is driven by strong tenant demand, leading to higher starting rents and improved merchandising mix [3][6]

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