Kite Realty Group Trust (KRG) investor relations material

Strategic initiatives and portfolio transformation

• Project Elevate resulted in $1 billion of asset sales, focusing on lower-growth, large-format shopping centers and reducing credit risk by eliminating 61 at-risk anchor tenants and improving the tenant watch list.

• No plans for a second large-scale disposition; future asset sales will be limited to 2–3 properties per year for prudent portfolio management.

• Tax loss sales and 1031 exchanges totaling $225 million and $110 million, respectively, are in process, with potential for a special dividend if not executed.

• Portfolio quality and balance sheet strength have improved, with a recent upgrade to BBB+ by Fitch.

• Focus is shifting from asset sales to earnings growth and achieving an 8–10% total return through FFO and dividend growth.

Financial performance and capital allocation

• Same-store NOI growth was 3.7% in the first half of the year, outperforming initial guidance, with continued strength expected into 2027.

• Signed-Not-Open pipeline remains elevated at $37 million, supporting future growth.

• CapEx will stay elevated at $100–$125 million annually through 2028, primarily for lease-up capital, which is generating strong returns.

• $240 million in excess funds expected by year-end, with a current bias toward balance sheet conservatism, though options include debt retirement, acquisitions, or stock buybacks depending on market conditions.

• $280 million of debt matures next year, with refinancing strategies dependent on market outlook and use of excess funds.

Leasing, tenant mix, and market dynamics

• Leasing spreads remain strong, with non-option renewals at 18% and embedded rent growth rising from 156 to 185 basis points over two years.

• Small shop occupancy is at 92.3% with a goal of 94%, while anchor occupancy is at 96.3% with a goal of 98%.

• Tenant watch list has improved significantly, with risk exposure reduced and grocery stores now comprising five of the top 15 tenants.

• Retailer demand remains robust across geographies, with no significant regional disparities; Texas and Florida are particularly strong.

• Limited new supply and healthy consumer demand are supporting rent growth and occupancy.