KITE REALTY GROUP TRUST
For the period ended Dec 31, 2023. Filed Feb 20, 2024.
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FY2023 · Filed Feb 20, 2024
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Item 2. Properties
As of December 31, 2023, we owned interests in a portfolio of 180 operating retail properties totaling approximately 28.1 million square feet and one office property with 0.3 million square feet in 24 states. Of the 180 operating retail properties, 10 contain an office component. We also own interests in two development projects under construction as of December 31, 2023 and an additional two properties with future redevelopment opportunities. See“Schedule III – Consolidated Real Estate and Accumulated Depreciation” for a list of encumbrances on our properties.
Operating Properties
The following table summarizes the geographic diversity of the Company’s retail operating properties by region and state, ranked by ABR, as of December 31, 2023(GLA and ABR in thousands):
| Region/State | Number of Properties(1) | OwnedGLA/NRA(2) | TotalWeightedRetail ABR(3) | % ofWeightedRetail ABR(3) |
|---|---|---|---|---|
| South | ||||
| Texas | 44 | 7,492 | $153,000 | 26.4% |
| Florida | 30 | 3,510 | 66,619 | 11.5% |
| Maryland | 8 | 1,412 | 34,363 | 5.9% |
| North Carolina | 8 | 1,535 | 32,856 | 5.7% |
| Virginia | 7 | 1,130 | 31,252 | 5.4% |
| Georgia | 10 | 1,707 | 26,335 | 4.5% |
| Tennessee | 3 | 580 | 8,698 | 1.5% |
| Oklahoma | 3 | 505 | 8,300 | 1.4% |
| South Carolina | 2 | 262 | 3,551 | 0.6% |
| Total South | 115 | 18,133 | 364,974 | 62.9% |
| West | ||||
| Washington | 10 | 1,661 | 30,606 | 5.3% |
| Nevada | 5 | 845 | 28,184 | 4.9% |
| Arizona | 5 | 726 | 15,829 | 2.7% |
| California | 2 | 530 | 12,417 | 2.1% |
| Utah | 2 | 388 | 8,062 | 1.4% |
| Total West | 24 | 4,150 | 95,098 | 16.4% |
| Midwest | ||||
| Indiana | 15 | 1,636 | 30,753 | 5.3% |
| Illinois | 8 | 1,163 | 24,736 | 4.3% |
| Michigan | 1 | 308 | 6,542 | 1.1% |
| Missouri | 1 | 453 | 4,048 | 0.7% |
| Ohio | 1 | 236 | 2,152 | 0.4% |
| Total Midwest | 26 | 3,796 | 68,231 | 11.8% |
| Northeast | ||||
| New York | 8 | 1,083 | 30,873 | 5.3% |
| New Jersey | 4 | 340 | 11,256 | 1.9% |
| Massachusetts | 1 | 264 | 4,167 | 0.7% |
| Connecticut | 1 | 206 | 3,645 | 0.6% |
| Pennsylvania | 1 | 136 | 1,982 | 0.4% |
| Total Northeast | 15 | 2,029 | 51,923 | 8.9% |
| Total | 180 | 28,108 | $580,226 | 100.0% |
(1)Number of properties represents consolidated and unconsolidated retail properties.
(2)Owned GLA/NRA represents gross leasable area owned by the Company and excludes the square footage of development and redevelopment projects.
(3)Total weighted retail ABR and percent of weighted retail ABR includes ground lease rent and represents the Company’s share of the ABR at consolidated and unconsolidated properties.
Development and Redevelopment Projects
In addition to our operating properties, as of December 31, 2023, we owned an interest in two development projects currently under construction. The following table sets forth information with respect to the Company’s active development projects as of December 31, 2023(dollars in thousands):
| Project | MSA | KRGOwnership % | ProjectedCompletion Date(1) | TotalCommercial GLA | TotalMultifamily Units | Total Project Costs – at KRG's Share(2) | KRG EquityRequirement(2) | KRGRemaining Spend | EstimatedStabilized NOIto KRG | Estimated RemainingNOI to Come Online(3) |
|---|---|---|---|---|---|---|---|---|---|---|
| Active Projects | ||||||||||
| Carillon MOB | Washington, D.C./Baltimore | 100% | Q4 2024 | 126,000 | — | $59,700 | $59,700 | $30,100 | $3.5M–$4.0M | $1.0M–$1.5M |
| The Corner – IN(4) | Indianapolis, IN | 50% | Q4 2024 | 24,000 | 285 | 31,900 | — | — | $1.7M–$1.9M | $1.7M–$1.9M |
| Total | 150,000 | 285 | $91,600 | $59,700 | $30,100 | $5.2M–$5.9M | $2.7M–$3.4M | |||
(1)Projected completion date represents the earlier of one year after completion of project construction or substantial occupancy of the property.
(2)Total project costs and KRG equity requirement for Carillon MOB represent costs to KRG post-merger and exclude any costs spent to date prior to the merger with RPAI.
(3)Estimated remaining NOI to come online excludes in-place NOI and NOI related to tenants that have signed leases but have not yet commenced paying rent.
(4)The Company does not have any equity requirements related to this development. Total project costs are at KRG’s share and are net of KRG’s share of a $13.5 million TIF.
Tenant Diversification
No individual retail tenant accounted for more than 2.7% of the portfolio’s ABR for the year ended December 31, 2023. The following table summarizes the top 25 tenants at the Company’s retail properties based on minimum rents in place as of December 31, 2023(GLA and dollars in thousands):
| Tenant | Primary DBA/Number of Stores | Number of Stores(1) | TotalLeasedGLA/NRA(2) | ABR(3) | % of WeightedABR(4) |
|---|---|---|---|---|---|
| The TJX Companies, Inc. | T.J. Maxx (18), Marshalls (12), HomeGoods (11), Homesense (3), T.J. Maxx & HomeGoods combined (2), Sierra (1) | 47 | 1,378 | $15,422 | 2.7% |
| Best Buy Co., Inc. | Best Buy (15), Pacific Sales (1) | 16 | 633 | 11,294 | 1.9% |
| Ross Stores, Inc. | Ross Dress for Less (31), dd’s DISCOUNTS (1) | 32 | 908 | 10,833 | 1.9% |
| PetSmart, Inc. | 32 | 657 | 10,666 | 1.8% | |
| Michaels Stores, Inc. | Michaels | 28 | 631 | 8,279 | 1.4% |
| Gap Inc. | Old Navy (25), The Gap (3),Athleta (3), Banana Republic (2) | 33 | 448 | 8,216 | 1.4% |
| Dick’s Sporting Goods, Inc. | Dick’s Sporting Goods (12), Golf Galaxy (1) | 13 | 625 | 7,893 | 1.4% |
| Publix Super Markets, Inc. | 14 | 672 | 6,935 | 1.2% | |
| Total Wine & More | 15 | 355 | 6,151 | 1.1% | |
| Nordstrom, Inc. | Nordstrom Rack | 10 | 307 | 5,882 | 1.0% |
| The Kroger Co. | Kroger (6), Harris Teeter (2), QFC (1), Smith’s (1) | 10 | 355 | 5,844 | 1.0% |
| Lowe’s Companies, Inc. | 6 | — | 5,838 | 1.0% | |
| BJ’s Wholesale Club, Inc. | 3 | 115 | 5,514 | 1.0% | |
| Ulta Beauty, Inc. | 25 | 259 | 5,465 | 0.9% | |
| Five Below, Inc. | 30 | 271 | 5,301 | 0.9% | |
| Burlington Stores, Inc. | 11 | 515 | 5,298 | 0.9% | |
| Albertsons Companies, Inc. | Safeway (3), Jewel-Osco (2), Tom Thumb (2) | 7 | 345 | 5,100 | 0.9% |
| Petco Health And WellnessCompany, Inc. | 19 | 266 | 4,990 | 0.9% | |
| Kohl’s Corporation | 7 | 265 | 4,865 | 0.8% | |
| The Container Store Group, Inc. | 7 | 152 | 4,592 | 0.8% | |
| DSW Designer ShoeWarehouse | 16 | 314 | 4,568 | 0.8% | |
| Office Depot, Inc. | Office Depot (11), OfficeMax (3) | 14 | 308 | 4,432 | 0.8% |
| Trader Joe’s | 10 | 120 | 4,187 | 0.7% | |
| Mattress Firm Group Inc. | Mattress Firm (24), Sleepy’s (5) | 29 | 144 | 4,174 | 0.7% |
| Barnes & Noble, Inc. | 8 | 192 | 4,113 | 0.7% | |
| Total Top Tenants | 442 | 10,235 | $165,852 | 28.6% |
(1)Number of stores represents stores at consolidated and unconsolidated properties.
(2)Total leased GLA/NRA excludes the square footage of structures located on land owned by the Company and ground-leased to tenants.
(3)ABR represents the monthly contractual rent for December 31, 2023 for each applicable tenant multiplied by 12 and does not include tenant reimbursements. ABR represents 100% of the ABR at consolidated properties and the Company’s share of the ABR at unconsolidated properties including ground lease rent.
(4)Percent of weighted ABR includes ground lease rent and represents the Company’s share of the ABR at consolidated and unconsolidated properties.
Lease Expirations
In 2024, leases representing 8.3% of total retail ABR are scheduled to expire. The following table summarizes the scheduled lease expirations for retail tenants as of December 31, 2023, assuming none of the tenants exercise renewal options(dollars in thousands, except per square foot data):
| Expiring Retail GLA(2) · Expiring ABR per Sq. Ft.(3) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Number ofExpiring Leases(1) · Shop Tenants · Anchor Tenants · Expiring ABR(Pro rata) · Expiring Ground Lease ABR(Pro rata) · % ofTotal ABR(Pro rata) · Shop Tenants · Anchor Tenants · Total | |||||||||
| 2024 | 485 | 1,167,418 | 898,001 | $47,440 | $582 | 8.3% | $31.45 | $12.96 | $23.41 |
| 2025 | 498 | 1,157,045 | 2,439,120 | 66,465 | 4,748 | 12.3% | 31.15 | 12.81 | 18.71 |
| 2026 | 484 | 1,070,288 | 2,203,523 | 64,144 | 4,456 | 11.8% | 31.17 | 14.33 | 19.84 |
| 2027 | 527 | 1,197,417 | 2,361,375 | 71,216 | 5,979 | 13.3% | 32.04 | 14.08 | 20.12 |
| 2028 | 557 | 1,215,924 | 2,814,481 | 84,191 | 6,651 | 15.6% | 35.02 | 14.80 | 20.90 |
| 2029 | 388 | 872,995 | 2,488,383 | 65,910 | 2,967 | 11.9% | 34.39 | 15.11 | 20.12 |
| 2030 | 166 | 472,579 | 737,328 | 24,657 | 1,566 | 4.5% | 30.35 | 14.22 | 20.52 |
| 2031 | 152 | 413,549 | 614,162 | 23,544 | 2,331 | 4.5% | 33.14 | 16.19 | 23.01 |
| 2032 | 169 | 415,594 | 1,003,118 | 28,095 | 328 | 4.9% | 32.57 | 14.95 | 20.11 |
| 2033 | 191 | 501,328 | 709,077 | 28,287 | 3,778 | 5.5% | 34.15 | 15.81 | 23.41 |
| Beyond | 178 | 326,476 | 1,318,471 | 37,164 | 5,727 | 7.4% | 38.88 | 18.56 | 22.59 |
| 3,795 | 8,810,613 | 17,587,039 | $541,113 | $39,113 | 100.0% | $32.74 | $14.67 | $20.70 | |
(1)Lease expirations table reflects rents in place as of December 31, 2023 and does not include option periods; 2024 expirations include 51 month-to-month retail tenants. This column also excludes ground leases.
(2)Expiring GLA excludes the square footage of structures located on land owned by the Company and ground-leased to tenants.
(3)ABR represents the monthly contractual rent as of December 31, 2023 for each applicable tenant multiplied by 12. Excludes tenant reimbursements and ground lease revenue.
Lease Activity – New and Renewal
During 2023, the Company executed new and renewal leases on 740 individual spaces totaling 4.9 million square feet (14.3% cash leasing spread on 552 comparable leases). New leases were signed on 218 individual spaces for 1.1 million square feet of GLA (41.3% cash leasing spread on 107 comparable leases), while non-option renewal leases were signed on 310 individual spaces for 1.2 million square feet of GLA (13.0% cash leasing spread on 233 comparable leases) and option renewals were signed on 212 individual spaces for 2.6 million square feet of GLA (8.1% cash leasing spread). The blended cash spreads for comparable new and non-option renewal leases were 22.7%. Comparable new and renewal leases are defined as those for which the space was occupied by a tenant within the last 12 months.
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