* Funds from operations (FFO) for the portfolio of $1,521,000
* Retail operating portfolio occupancy rate at 92.8%
* 13 properties under development with total projected cost of
approximately $120 million
* Three acquisitions completed for an aggregate purchase price of
$36.4 million
INDIANAPOLIS, Sept. 20 /PRNewswire-FirstCall/ -- Kite Realty Group Trust
(NYSE: KRG), a full service real estate investment trust focused primarily on
neighborhood and community shopping centers, announced today results for the
second quarter ended June 30, 2004.
The results for the second quarter reflect the operations of Kite Property
Group, the Company's predecessor. The Company completed its initial public
offering on August 16, 2004. Certain properties and operations that will be
included in the Company's results of operations from and after August 16, 2004
are not included in the results of operations of Kite Property Group as
reported below.
Financial and Operating Results
For the three months ended June 30, 2004, funds from operations (FFO), a
widely accepted supplemental measure of REIT performance, increased 128% for
the Kite Property Group portfolio to $1,521,000, compared with FFO of $668,000
for the same period in the prior year. Kite Property Group's share of FFO was
$818,000 for the second quarter of 2004, a 141% increase over $340,000 for the
same period of the prior year.
For the six months ended June 30, 2004, FFO for the Kite Property Group
portfolio was $3,519,000, an increase of 76% over $2,003,000 for the same
period in the prior year. Kite Property Group's share of FFO for the six
months ended June 30, 2004 was $2,111,000, an 84% increase over $1,149,000 for
the same period in the prior year. A complete reconciliation containing
adjustments from GAAP net income to FFO is included in this release.
Kite Property Group's net loss for the three months ended June 30, 2004
was $381,000 compared to a net loss of $523,000 for the same period a year
earlier. For the six months ended June 30, 2004, net loss was $50,000
compared to a net loss of $373,000 for the same period last year.
Revenues from rental property increased 109% to $6,103,000 from $2,927,000
for the same period last year. At quarter end, Kite Property Group owned an
interest in 17 retail operating and 12 retail development properties, with
1,845,478 million square feet and 574,560 square feet respectively. Occupancy
of the retail operating portfolio at quarter end was at 92.8%. Kite Property
Group also owned five commercial operating properties and one commercial
development property with 545,673 square feet and 115,000 square feet,
respectively. Occupancy of the commercial operating portfolio was at 98.5%.
John A. Kite, President and Chief Executive Officer, said, "Our
performance in the second quarter reflects a company-wide commitment to
executing acquisitions that enhance the growth of our portfolio with high-
quality shopping centers in affluent markets. With our solid balance sheet
and focused strategy, we remain committed to our goal of producing reliable
growth in earnings, funds from operations and cash flow as well as generating
attractive returns as we capitalize on our extensive development pipeline."
Acquisition Activities
During the quarter ended June 30, 2004, Kite Property Group completed the
following acquisitions:
* Silver Glen Crossings community shopping center in South Elgin, Illinois
(a suburb of Chicago, Illinois) for a total purchase price of
approximately $23.4 million;
* Cedar Hill Village community shopping center in Cedar Hill, Texas (a
suburb of Dallas, Texas) for a total purchase price of approximately
$6.8 million; and
* Galleria Plaza community shopping center in Dallas, Texas for a total
purchase price of approximately $6.2 million.
Subsequent to June 30, 2004, Kite Realty Group Trust or its predecessor
completed eight acquisitions as summarized below:
* A 99.9% interest in the Wal-Mart Plaza community shopping center in
Gainesville, Florida for a total purchase price of approximately $8.5
million;
* An outlot adjacent to Kite Property Group's existing shopping center at
Eagle Creek in Naples, Florida for a total purchase price of
approximately $1.1 million;
* A 25% interest in Fishers Station neighborhood shopping center in
Fishers, Indiana (a suburb of Indianapolis, Indiana) for a total
purchase price of approximately $2.1 million inclusive of $1.4 million
in assumed debt;
* The Plaza at Cedar Hill community shopping center in Dallas, Texas for a
total purchase price of approximately $38.7 million, inclusive of
$27.5 million in assumed debt;
* The Publix at Acworth neighborhood shopping center in Acworth, Georgia
(a suburb of Atlanta, Georgia) for a total purchase price of
approximately $9.2 million;
* The Hamilton Crossing community shopping center in Carmel, Indiana (a
suburb of Indianapolis, Indiana) for a total purchase price of
approximately $15.5 million;
* The Waterford Lakes neighborhood shopping center in Orlando, Florida for
a total purchase price of approximately $9.1 million; and
* Sunland Towne Centre community shopping center in El Paso, Texas for a
total purchase price of $32.1 million, inclusive of $17.8 million in
assumed debt.
Kite Realty Group Trust has also entered into binding acquisition
agreements to acquire the following two properties.
* Centre at Panola neighborhood shopping center in Lithonia, Georgia (a
suburb of Atlanta, Georgia) for a total purchase price of $9.2 million,
inclusive of $5.3 million in assumed debt; and
* Marsh Supermarket in Fishers, Indiana (a suburb of Indianapolis,
Indiana) for a total purchase price of $5.0 million.
Development Activities As of June 30, 2004, Kite Property Group had 12 retail properties under
development that are expected to total an aggregate of 1,411,265 total square
feet, of which a total of 574,560 square feet is owned by the Company and the
remaining interest will be retained by the anchor tenants. The total
estimated project cost for these properties is approximately $115 million, of
which approximately $49 million had been incurred as of June 30, 2004.
As of June 30, 2004, Kite Property Group had one commercial development,
100% leased, with 115,000 square feet. The total estimated cost of this
property is approximately $4.9 million, of which approximately $1.6 million
had been incurred as of June 30, 2004. This property has a projected opening
date of November 2004.
Financing Activities
Initial Public Offering
On August 16, 2004, Kite Realty Group Trust (the "Company") completed an
initial public offering of 16,300,000 common shares at $13.00 per share for
gross proceeds of $211.9 million. On September 14, 2004, the underwriters of
the offering exercised their over-allotment option to purchase an additional
2,000,000 common shares at the public offering price of $13.00 per share,
which resulted in additional gross proceeds of $26.0 million. Net proceeds
from the offering have been or will be used to pay down debt, acquire
properties and purchase joint venture interests.
Line of Credit
On August 31, 2004, Kite Realty Group Trust entered into a three-year,
$150 million secured revolving credit facility with Wachovia Bank, N.A., an
affiliate of Wachovia Capital Markets, LLC, one of the underwriters of the
initial public offering, and Lehman Commercial Paper Inc., an affiliate of
Lehman Brothers Inc., another of the underwriters of the initial public
offering. Borrowings under the facility will bear interest at a floating rate
of LIBOR plus 135 to 150 basis points, depending on the leverage ratio, and
will be secured by certain of the properties. The amount that the Company may
borrow under the facility will be dependent on it maintaining a minimum
"borrowing base" of properties. As of August 31, 2004, approximately $40
million was available for draw under the facility. Up to an additional 13
unencumbered properties are available to be added to the borrowing base, as
additional funds are required. The new credit facility will be utilized
principally to fund growth opportunities including acquisitions and
development activities.
Other Matters
The Company expects to pay a pro rata initial distribution on its common
shares with respect to the period commencing upon the completion of its
initial public offering and ending September 30, 2004, based on a distribution
of $0.1875 per share for a full quarter. Declarations of distributions must
be authorized by the Company's board of trustees. The Company's board of
trustees expects to consider declaration of this distribution at its next
regularly scheduled board meeting in early November.
The Company expects to file its Form 10-Q for the second quarter on or
before September 24, 2004.
About Kite Realty Group Trust
Kite Realty Group Trust is a full-service, vertically integrated real
estate investment trust focused primarily on the development, construction,
acquisition, ownership and operation of high quality neighborhood and
community shopping centers in selected growth markets in the United States.
The Company owns interests in a portfolio of operating retail properties,
retail properties under development, operating commercial properties, a
related parking garage, commercial property under development and parcels of
land that may be used for future development of retail or commercial
properties.
Safe Harbor
Certain statements in this document that are not historical fact may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results of the Company to differ materially from historical
results or from any results expressed or implied by such forward-looking
statements, including without limitation: national and local economic,
business, real estate and other market conditions; the competitive environment
in which the Company operates; financing risks; property management risks; the
level and volatility of interest rates; financial stability of tenants; the
Company's ability to maintain its status as a REIT for federal income tax
purposes; acquisition, disposition, development and joint venture risks;
potential environmental and other liabilities; and other factors affecting the
real estate industry generally. The Company refers you to the documents filed
by the Company from time to time with the Securities and Exchange Commission,
which discuss these and other factors that could adversely affect the
Company's results.
Kite Property Group
Combined Condensed Balance Sheets (See Note A)
As of As of
June 30, December 31,
2004 2003
Assets: (Unaudited)
Investment properties, at cost:
Land $38,484,407 $19,319,563
Land held for development 7,137,095 7,137,095
Buildings, improvements and
equipment 170,654,709 78,673,523
Construction in progress 50,986,999 48,681,767
267,263,210 153,811,948
Less: accumulated depreciation (11,162,421) (4,465,775)
256,100,789 149,346,173
Cash and cash equivalents 3,445,828 2,189,478
Tenant receivables, including accrued
straight-line rent 2,535,736 1,520,487
Investments in unconsolidated
entities, at equity 1,162,577 2,136,158
Other assets 23,297,063 16,143,410
Total Assets $286,541,993 $171,335,706
Liabilities and Owners' Equity:
Mortgage and other indebtedness $236,579,554 $141,498,289
Cash distributions and losses in
excess, net of investment
in unconsolidated entities, at
equity 2,887,896 2,864,690
Minority interest 6,010,891 1,137,914
Other liabilities 41,925,335 20,277,304
Total liabilities 287,403,676 165,778,197
Owners' Equity (Deficit) (861,683) 5,557,509
Total Liabilities and Owners' Equity
(Deficit) $286,541,993 $171,335,706
Kite Property Group
Combined Statements of Operations (See Note A)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenue:
Minimum rent $4,901,039 $2,356,201 $8,170,768 $4,175,255
Tenant reimbursements 625,585 272,174 1,004,365 433,066
Other property related
revenue 576,264 298,517 1,391,696 579,219
Service fee revenue 1,239,284 862,756 2,587,998 1,874,367
Construction revenue 571,721 3,108,137 1,457,428 3,927,856
Other income (34,893) (27,628) 73,669 109,684
Total revenue 7,879,000 6,870,157 14,685,924 11,099,447
Expenses:
Property operating 1,739,007 844,474 2,813,560 1,402,535
Real estate taxes 847,791 360,376 1,228,490 527,296
Cost of construction 1,240,376 3,848,007 3,373,782 4,975,286
General, administrative,
and other 738,483 427,232 1,352,264 1,130,018
Depreciation and
amortization 1,542,273 736,184 2,452,900 1,264,903
Total expenses 6,107,930 6,216,273 11,220,996 9,300,038
Operating income 1,771,070 653,884 3,464,928 1,799,409
Interest expense 2,138,985 910,697 3,468,968 1,890,495
Minority interest
(income) loss (56,055) 42,196 (72,043) 45,427
Equity in earnings
(loss) of
unconsolidated entities 42,508 (308,237) 25,698 (327,250)
Net loss $(381,462) $(522,854) $(50,385) $(372,909)
Note A to financial statements: The financial statements of Kite Property
Group represent the combined financial position and results of operations
of those real estate properties and service companies held by Al Kite,
John Kite and Paul Kite ("the Principals") which were contributed on
August 16, 2004 to Kite Realty Group Trust or its subsidiary as part of
the initial public offering and related formation transactions. The
Principals have operations, which were not contributed, and, therefore,
the financial statements are not intended to represent the financial
position and results of operations of the Principals.
Non-GAAP Financial Measure - Funds From Operations (FFO)
(Unaudited)
The following table presents a reconciliation of generally accepted
accounting principals to the Company's FFO calculation for the periods
presented:
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net loss $(381,462) $(522,854) $(50,385) $(372,909)
Add: depreciation and
amortization of
consolidated entities 1,542,273 736,184 2,452,900 1,264,903
Add: depreciation and
amortization of
unconsolidated entities 98,754 314,577 364,750 584,581
Add (deduct): minority
interest* 56,055 (42,196) 72,043 (45,427)
Add: joint venture partners'
interests in net income
(loss) of unconsolidated
entities* 38,594 (173,497) 179,180 (135,036)
Add: joint venture partners'
interests in depreciation
and amortization of
unconsolidated entities* 166,737 355,526 500,707 706,680
Funds From Operations of
the Kite Property Group
Portfolio 1,520,951 667,740 3,519,195 2,002,792
Less: minority interest (56,055) 42,196 (72,043) 45,427
Less: minority interest
share of depreciation and
amortization (441,976) (188,062) (656,449) (327,937)
Less: joint venture
partners' interests in net
(income) loss of
unconsolidated entities (38,594) 173,497 (179,180) 135,036
Less: joint venture
partners' interests in
depreciation and amortization
of unconsolidated entities (166,737) (355,526) (500,707) (706,680)
Funds From Operations
allocable to Kite
Property Group $817,589 $339,845 $2,110,816 $1,148,638
* Amounts represent the minority and joint venture partners' interests
acquired in connection with the initial public offering and related
formation transactions.
Funds from Operations, ("FFO"), is a widely used performance measure for
real estate companies and is provided here as a supplemental measure of
operating performance. The Company calculates FFO in accordance with the best
practices described in the April 2002 National Policy Bulletin of the National
Association of Real Estate Investment Trusts, which the Company refers to as
the White Paper. The White Paper defines FFO as net income (computed in
accordance with GAAP), excluding gains (or losses) from sales of property,
plus depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures.
Given the nature of its business as a real estate owner and operator, the
Company believes that FFO is helpful to investors as a starting point in
measuring its operational performance because it excludes various items
included in net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of property and
depreciation and amortization, which can make periodic and peer analyses of
operating performance more difficult. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indicator
of its financial performance, is not an alternative to cash flow from
operating activities (determined in accordance with GAAP) as a measure of its
liquidity, and is not indicative of funds available to fund its cash needs,
including its ability to make distributions. The Company's computation of FFO
may not be comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or that interpret the
current NAREIT definitions differently than the Company does.
Contact: Investors/Media:
Kite Realty Group Trust The Ruth Group
Dan SinkStephanie Carrington / Jason Rando
Chief Financial Officer (646) 536-7017 / 7025
(317) 577-5609 scarrington@theruthgroup.comdsink@kiterealty.comjrando@theruthgroup.com
SOURCE Kite Realty Group Trust
-0- 09/20/2004
/CONTACT: Dan Sink, Chief Financial Officer of Kite Realty Group Trust,
+1-317-577-5609, dsink@kiterealty.com; or Investors-Media - Stephanie
Carrington, +1-646-536-7017, scarrington@theruthgroup.com, or Jason Rando,
+1-646-536-7025, jrando@theruthgroup.com, both of The Ruth Group for Kite
Realty Group Trust/
(KRG)
CO: Kite Realty Group Trust
ST: Indiana
IN: FIN RLT
SU: ERN
KC
-- NYM039 --
7502 09/20/200409:00 EDThttp://www.prnewswire.com