Highlights
- Funds From Operations (FFO) was $0.10 per diluted common share for
the first quarter of 2011.
- 33 new and renewal leases for 183,000 square feet were executed
during the quarter for aggregate cash rent spreads of 5.8%.
- Same Property NOI and leased percentage increased 1.0% and 1.9%,
respectively.
- Operating retail portfolio leased percentage improved year over
year to 92.3% from 90.0%.
- Executed a lease with Whole Foods to anchor the recently acquired
Oleander Point Shopping Center in Wilmington, North Carolina.
INDIANAPOLIS--(BUSINESS WIRE)--
Kite Realty Group Trust (NYSE: KRG) (the “Company”) today announced
results for its first quarter ended March 31, 2011. Financial statements
and exhibits attached to this release include results for the three
months ended March 31, 2011 and 2010.
Financial and Operating Results
For the three months ended March 31, 2011, funds from operations (FFO),
a widely accepted supplemental measure of REIT performance established
by the National Association of Real Estate Investment Trusts, was $6.9
million, or $0.10 per diluted share, for the Kite Portfolio compared to
$7.1 million, or $0.10 per diluted share, for the same period in the
prior year. The Company’s allocable share of FFO was $6.1 million for
the three months ended March 31, 2011 compared to $6.3 million for the
same period in 2010.
Given the nature of the Company’s business as a real estate owner and
operator, the Company believes that FFO is helpful to investors when
measuring operating performance because it excludes various items
included in net income that do not relate to or are not indicative of
operating performance, such as gains or losses from sales of operating
properties, and depreciation and amortization, which can make periodic
and peer analyses of operating performance more difficult. The Company
believes presenting FFO in this manner allows investors and other
interested parties to form a more meaningful assessment of the Company’s
operating results. A reconciliation of net income to FFO is included in
the attached table.
Net loss attributable to Kite Realty Group Trust was $2.2 million for
the first quarter of 2011 compared to a net loss in the prior year of
$1.1 million. This change is primarily attributable to a $1.4 million
dividend for the first quarter of 2011 on preferred shares issued in
late 2010. The Company’s total revenue for the first quarter of 2011 was
$24.4 million, down from $25.6 million for the same period in 2010. This
decrease reflects a decline in construction volume of $1.9 million and
reduced gains on land and outlot sales of $0.5 million. These decreases
were partially offset by improvement in base rent and reimbursement
revenue of $1.0 million due to higher occupancy levels.
John A. Kite, Kite Realty Group’s Chairman and Chief Executive Officer,
said, “We continued our operating and leasing momentum as we leased over
180,000 square feet and generated positive same property net operating
income of 1.0%. The same property leased percentage also improved by
almost 2.0%. We are on track to complete both in-process developments in
the second half of 2011 and we continue to focus on the leasing of our
other development projects.”
Operating Portfolio
As of March 31, 2011, the Company owned interests in 52 retail operating
properties totaling approximately 7.9 million square feet. The owned
gross leasable area (“GLA”) in the Company’s retail operating portfolio
was 92.3% leased as of March 31, 2011, compared to 92.2% leased as of
the end of the prior quarter.
In addition, the Company owns four operating commercial properties
totaling 581,400 square feet. As of March 31, 2011, the owned net
rentable area of the commercial operating portfolio was 92.0% leased,
compared to 94.8% at the end of the prior quarter. The combined retail
and commercial operating portfolio leased percentage was 92.3% leased as
of March 31, 2011, compared to 92.5% leased as of the end of the prior
quarter.
On a same property basis, the leased percentage of 54 same store
operating properties increased 1.9% to 92.4% at March 31, 2011 from
90.5% at March 31, 2010. Same property net operating income for these
properties increased 1.0% in the first quarter of 2011 compared to the
same period in the prior year.
Leasing Activities
During the first quarter of 2011, the Company executed a combined 33 new
and renewal leases totaling approximately 183,000 square feet with
aggregate cash rent spreads of 5.8%. New leases were signed with 21
tenants for approximately 115,400 square feet of GLA. These leases
represent a 9.1% positive cash rent spread. A total of 12 leases for
67,600 square feet were renewed during the quarter. Nine of these
renewals were completed at flat or positive rent spreads. Combined with
three negative spread renewals, rental rates for all renewals decreased
approximately 1.1%.
Also during the quarter, 15 tenants commenced paying rent with
annualized base rent of approximately $950,000.
Development and Acquisition Activities
In February, the Company acquired a 52,000 square foot neighborhood
shopping center in Wilmington, North Carolina as a redevelopment
opportunity. Whole Foods will replace former anchor Lowe’s Foods at the
renamed Oleander Point. Construction at the center is currently
scheduled to commence this summer, which would permit Whole Foods to
open in the spring of 2012. Construction costs are anticipated to total
approximately $5.0 million.
The Company also completed the acquisition of the remaining 40% interest
in The Centre from its joint venture partners for a purchase price of
$2.3 million. It assumed all leasing and management responsibilities for
this 81,000 square foot retail property located in Carmel, Indiana. The
Company intends to redevelop the existing center.
As of March 31, 2011, the Company owned interests in two in-process
development projects that are expected to total approximately 260,700
owned square feet upon completion. The total estimated cost of these
projects is approximately $68.2 million, of which approximately $56.5million
had been incurred as of March 31, 2011. The Company also has six
properties in its redevelopment pipeline representing a projected total
of approximately 625,000 of owned square feet with an estimated $37.2
million expected to be spent on redevelopment costs.
Financing Activities
During the quarter, the Company completed the following financing
activities:
-
Entered into long-term financing on its International Speedway Square
property located in Daytona, Florida. The $21 million loan has a
10-year term and carries a fixed interest rate of 5.77%. The net
proceeds were used to pay down the Company’s line of credit.
-
Secured financing on land held for development at the intersection of
Highways 951 and 41 in Naples, Florida. The $7.8 million loan has a 30
month term and carries a variable interest rate of LIBOR plus 300
basis points. The net proceeds were used to pay down the Company’s
line of credit.
-
Extended the maturity date of a $3.5 million loan on a commercial
asset leased to the State of Indiana. The loan has a new maturity date
of February 2014 at a rate of LIBOR plus 325 basis points.
-
Reduced the loan balance on the unconsolidated Parkside Town Commons
property to $20.2 million and extended the maturity date to August
2013 at an interest rate of LIBOR plus 275 basis points. The Company’s
share of this loan balance is $8.1 million as of March 31, 2011.
Subsequent to the end of the quarter, the Company received commitments
from a syndicate of banks for an amendment and restatement of its $200
million unsecured revolving credit facility. The amended and restated
facility will have a term of three years with a one-year extension at
the Company’s option. The banks’ commitments are subject to normal and
customary due diligence and closing, which the Company expects to occur
in the second quarter.
Distributions
On March 17, 2011, the Board of Trustees declared a quarterly common
share cash distribution of $0.06 per common share for the quarter ended
March 31, 2011 payable to shareholders of record as of April 6, 2011.
This distribution was paid on April 13, 2011. The Board of Trustees
anticipates declaring a quarterly cash distribution for the quarter
ending June 30, 2011 later in the second quarter.
On May 3, 2011, the Board of Trustees declared a quarterly preferred
share cash distribution of $0.515625 per preferred share covering the
distribution period from March 2, 2011 to June 1, 2011 payable to
shareholders of record as of May 18, 2011. This distribution will be
paid on June 1, 2011.
FFO Guidance
The Company is reaffirming its FFO guidance for the year ending December
31, 2011 in a range of $0.40 to $0.45 per diluted share. Following is a
reconciliation of estimated net loss per common share to estimated
diluted FFO per share:
|
Guidance Range for 2011
|
|
|
|
|
|
|
|
|
Low
|
|
|
High
|
|
Net loss per diluted share
| | | | | | | | |
$
|
(0.06
|
)
| | |
$
|
(0.01
|
)
|
|
Depreciation and amortization
| | | | | | | | |
|
0.46
|
|
|
|
|
0.46
|
|
|
FFO per diluted share
| | | | | | | | |
$
|
0.40
|
|
|
|
$
|
0.45
|
|
| | | | | | | | | | | |
|
Earnings Conference Call
The Company will conduct a conference call to discuss its financial
results on Friday, May 6th at 1:00 p.m. eastern time. A live
webcast of the conference call will be available online on the Company’s
website at www.kiterealty.com.
The dial-in numbers are (866) 277-1181 for domestic callers and (617)
597-5358 for international callers (passcode 70368151). In addition, a
telephonic replay of the call will be available until August 6, 2011.
The replay dial-in telephone numbers are (888) 286-8010 for domestic
callers and (617) 801-6888 for international callers (passcode 99213799).
About Kite Realty Group Trust
Kite Realty Group Trust is a full-service, vertically integrated real
estate investment trust engaged in the ownership, operation, management,
leasing, acquisition, construction, redevelopment and development of
neighborhood and community shopping centers in selected markets in the
United States. At March 31, 2011, the Company owned interests in a
portfolio of 62 operating and redevelopment properties totaling
approximately 9.2 million square feet and an additional two properties
currently under development totaling 0.5 million square feet.
Safe Harbor
This press release contains certain statements that are not historical
fact and 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, particularly in light of the
recent recession; financing risks, including the availability of and
costs associated with sources of liquidity; the Company’s ability to
refinance, or extend the maturity dates of, its indebtedness; the level
and volatility of interest rates; the financial stability of tenants,
including their ability to pay rent and the risk of tenant bankruptcies;
the competitive environment in which the Company operates; acquisition,
disposition, development and joint venture risks; property ownership and
management risks; the Company’s ability to maintain its status as a real
estate investment trust (“REIT”) for federal income tax purposes;
potential environmental and other liabilities; impairment in the value
of real estate property the Company owns; risks related to the
geographical concentration of our properties in Indiana, Florida and
Texas; and other factors affecting the real estate industry generally.
The Company refers you the documents filed by the Company from time to
time with the Securities and Exchange Commission, specifically the
section titled “Risk Factors” in the Company’s Annual Report on Form
10-K for the year ended December 31, 2010, which discuss these and other
factors that could adversely affect the Company’s results. The Company
undertakes no obligation to publicly update or revise these
forward-looking statements (including the FFO and net income estimates),
whether as a result of new information, future events or otherwise.
|
|
|
|
| | |
|
| | |
| | | | | | | | | |
|
Kite Realty Group Trust Consolidated Balance Sheets (Unaudited) |
| | | | | | | | | |
|
| | | | | March 31,
2011 | | | | December 31,
2010 | |
| Assets: | | | | | | | | | | | | |
|
Investment properties, at cost:
| | | | | | | | | | | | |
|
Land
| | | | |
$
|
229,454,821
| | | |
$
|
228,707,073
| |
|
Land held for development
| | | | | |
27,386,474
| | | | |
27,384,631
| |
|
Buildings and improvements
| | | | | |
790,204,170
| | | | |
780,038,034
| |
|
Furniture, equipment and other
| | | | | |
5,234,399
| | | | |
5,166,303
| |
|
Construction in progress
| | | | | |
163,586,816
| | | | |
158,636,747
| |
| | | | | |
1,215,866,680
| | | | |
1,199,932,788
| |
|
Less: accumulated depreciation
| | | | | |
(159,997,199
|
)
| | | |
(152,083,936
|
)
|
| | | | | |
1,055,869,481
| | | | |
1,047,848,852
| |
|
Cash and cash equivalents
| | | | | |
8,136,797
| | | | |
15,394,528
| |
|
Tenant receivables, including accrued straight-line rent of
$9,547,176 and $9,113,712, respectively, net of allowance for
uncollectible accounts
| | | | | |
17,884,508
| | | | |
18,204,215
| |
|
Other receivables
| | | | | |
4,194,074
| | | | |
5,484,277
| |
|
Investments in unconsolidated entities, at equity
| | | | | |
16,867,808
| | | | |
11,193,113
| |
|
Escrow deposits
| | | | | |
10,357,558
| | | | |
8,793,968
| |
|
Deferred costs, net
| | | | | |
25,260,550
| | | | |
24,207,046
| |
|
Prepaid and other assets
| | | | | |
1,924,312
| | | | |
1,656,746
| |
| Total Assets | | | | |
$
|
1,140,495,088
| | | |
$
|
1,132,782,745
| |
| | | | | | | | | | | |
|
| Liabilities and Equity: | | | | | | | | | | | | |
|
Mortgage and other indebtedness
| | | | |
$
|
627,300,804
| | | |
$
|
610,926,613
| |
|
Accounts payable and accrued expenses
| | | | | |
32,703,307
| | | | |
32,362,917
| |
|
Deferred revenue and other liabilities
| | | | | |
14,287,472
| | | | |
15,399,002
| |
| Total Liabilities | | | | | |
674,291,583
| | | | |
658,688,532
| |
|
Commitments and contingencies
| | | | | | | | | | | | |
|
Redeemable noncontrolling interests in the Operating Partnership
| | | | | |
43,582,754
| | | | |
44,115,028
| |
| Equity: | | | | | | | | | | | | |
| Kite Realty Group Trust Shareholders’ Equity: | | | | | | | | | | | | |
|
Preferred Shares, $.01 par value, 40,000,000 shares authorized,
2,800,000 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively
| | | | | |
70,000,000
| | | | |
70,000,000
| |
|
Common Shares, $.01 par value, 200,000,000 shares authorized
63,558,296 shares and 63,342,219 shares issued and outstanding at
March 31, 2011 and December 31, 2010, respectively
| | | | | |
635,583
| | | | |
633,422
| |
|
Additional paid in capital
| | | | | |
448,794,514
| | | | |
448,779,180
| |
|
Accumulated other comprehensive loss
| | | | | |
(1,708,751
|
)
| | | |
(2,900,100
|
)
|
|
Accumulated deficit
| | | | | |
(99,412,067
|
)
| | | |
(93,447,581
|
)
|
| Total Kite Realty Group Trust Shareholders’ Equity | | | | | |
418,309,279
| | | | |
423,064,921
| |
| Noncontrolling Interests | | | | | |
4,311,472
| | | | |
6,914,264
| |
| Total Equity | | | | | |
422,620,751
| | | | |
429,979,185
| |
| Total Liabilities and Equity | | | | |
$
|
1,140,495,088
| | | |
$
|
1,132,782,745
| |
| | | | | | | | | | | |
|
|
|
|
|
| | |
| | | | | |
|
Kite Realty Group Trust Consolidated Statements of Operations For the Three Months Ended March 31, 2011 and 2010 (Unaudited) |
| | | | | |
|
| | | | | Three Months Ended
March 31, | |
| | | | | 2011 | |
|
| 2010 | |
| Revenue: | | | | | | | | | | | | |
|
Minimum rent
| | | | |
$
|
18,367,242
| | | |
$
|
17,735,211
| |
|
Tenant reimbursements
| | | | | |
5,179,210
| | | | |
4,841,261
| |
|
Other property related revenue
| | | | | |
888,532
| | | | |
1,099,812
| |
|
Construction and service fee revenue
| | | | | |
10,038
| | | | |
1,879,350
| |
| Total revenue | | | | | |
24,445,022
| | | | |
25,555,634
| |
| Expenses: | | | | | | | | | | | | |
|
Property operating
| | | | | |
4,910,012
| | | | |
4,574,352
| |
|
Real estate taxes
| | | | | |
3,312,944
| | | | |
3,376,314
| |
|
Cost of construction and services
| | | | | |
49,913
| | | | |
1,758,318
| |
|
General, administrative, and other
| | | | | |
1,848,452
| | | | |
1,375,970
| |
|
Depreciation and amortization
| | | | | |
9,176,873
| | | | |
8,544,855
| |
| Total expenses | | | | | |
19,298,194
| | | | |
19,629,809
| |
| Operating income | | | | | |
5,146,828
| | | | |
5,925,825
| |
|
Interest expense
| | | | | |
(5,901,625
|
)
| | | |
(7,096,863
|
)
|
|
Income tax benefit (expense) of taxable REIT subsidiary
| | | | | |
16,073
| | | | |
(25,836
|
)
|
|
Loss from unconsolidated entities
| | | | | |
(87,625
|
)
| | | |
—
| |
|
Other income
| | | | | |
49,038
| | | | |
65,750
| |
| Consolidated net loss | | | | | |
(777,311
|
)
| | | |
(1,131,124
|
)
|
|
Net loss attributable to noncontrolling interests
| | | | | |
70,494
| | | | |
56,444
| |
|
Dividends on preferred shares
| | | | | |
(1,443,750
|
)
| | | |
—
| |
| Net loss attributable to Kite Realty Group Trust | | | | |
$
|
(2,150,567
|
)
| | |
$
|
(1,074,680
|
)
|
| | | | | | | | | | | |
|
| Net loss per common share attributable to Kite Realty Group Trust
common shareholders – basic and diluted | | | | |
$
|
(0.03
|
)
| | |
$
|
(0.02
|
)
|
| | | | | | | | | | | |
|
Weighted average common shares outstanding – basic and diluted | | | | | |
63,448,048
| | | | |
63,121,498
| |
| Dividends declared per common share | | | | |
$
|
0.0600
| | | |
$
|
0.0600
| |
| | | | | | | | | | | |
|
|
|
|
|
| | |
| | | | | |
|
Kite Realty Group Trust Funds From Operations For the Three Months Ended March 31, 2011 and 2010 (Unaudited) |
| | | | | |
|
| | | | | Three Months Ended
March 31, | |
| | | | | 2011 | |
|
| 2010 | |
|
Consolidated net loss
| | | | |
$
|
(777,311
|
)
| | |
$
|
(1,131,124
|
)
|
|
Less dividends on preferred shares
| | | | | |
(1,443,750
|
)
| | | |
—
| |
|
Less net income attributable to noncontrolling interests in
properties
| | | | | |
(16,586
|
)
| | | |
(79,089
|
)
|
|
Add depreciation and amortization of consolidated entities, net of
noncontrolling interests
| | | | | |
9,014,386
| | | | |
8,322,513
| |
|
Add depreciation and amortization of unconsolidated entities
| | | | | |
83,200
| | | | |
—
| |
|
Funds From Operations of the Operating Partnership1 | | | | | |
6,859,939
| | | | |
7,112,300
| |
|
Less redeemable noncontrolling interests in Funds From Operations
| | | | | |
(754,593
|
)
| | | |
(796,578
|
)
|
|
Funds From Operations allocable to the Company1 | | | | |
$
|
6,105,346
| | | |
$
|
6,315,722
| |
| | | | | | | | | | | |
|
|
Basic FFO per share of the Operating Partnership
| | | | |
$
|
0.10
| | | |
$
|
0.10
| |
|
Diluted FFO per share of the Operating Partnership
| | | | |
$
|
0.10
| | | |
$
|
0.10
| |
| | | | | | | | | | | |
|
|
Basic weighted average Common Shares outstanding
| | | | | |
63,448,048
| | | | |
63,121,498
| |
|
Diluted weighted average Common Shares outstanding
| | | | | |
63,763,668
| | | | |
63,137,031
| |
|
Basic weighted average Common Shares and Units outstanding
| | | | | |
71,303,746
| | | | |
71,095,552
| |
|
Diluted weighted average Common Shares and Units outstanding
| | | | | |
71,619,366
| | | | |
71,291,084
| |
|
____________________
|
|
1
|
|
|
“Funds From Operations of the Operating Partnership” measures 100%
of the operating performance of the Operating Partnership’s real
estate properties and construction and service subsidiaries in which
the Company owns an interest. “Funds From Operations allocable to
the Company” reflects a reduction for the redeemable noncontrolling
weighted average diluted interest in the Operating Partnership.
|
| | |
|
|
|
|
|
| |
| | | | |
|
Kite Realty Group Trust Same Property Net Operating Income For the Three Months Ended March 31, 2011 and 2010 (Unaudited) |
| | | | |
|
| | | | | Three Months Ended March 31, |
| | | | | 2011 | |
|
| 2010 | |
|
| %
Change |
|
Number of properties at period end1 | | | | | |
54
| | | | |
54
| | | | |
| | | | | | | | | | | | | | |
|
|
Leased percentage at period end
| | | | | |
92.4%
| | | | |
90.5%
| | | | |
| | | | | | | | | | | | | | |
|
|
Minimum rent
| | | | |
$
|
16,412,069
| | | |
$
|
16,388,214
| | | | |
|
Tenant recoveries
| | | | | |
4,513,604
| | | | |
4,542,846
| | | | |
|
Other income
| | | | | |
104,272
| | | | |
64,992
| | | | |
| | | | | |
21,029,945
| | | | |
20,996,052
| | | | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
|
Property operating expenses
| | | | | |
4,531,410
| | | | |
4,357,777
| | | | |
|
Real estate taxes
| | | | | |
2,762,161
| | | | |
3,038,768
| | | | |
| | | | | |
7,293,571
| | | | |
7,396,545
| | | | |
| | | | | | | | | | | | | | |
|
| | | | | |
| | | | |
| | | | |
| Net operating income – same properties (54 properties)2 | | | | |
$
| 13,736,374 | | | |
$
| 13,599,507 | | | | 1.0% |
| | | | | | | | | | | | | | |
|
| Reconciliation to Most Directly Comparable GAAP Measure: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
|
Net operating income – same properties
| | | | |
$
|
13,736,374
| | | |
$
|
13,599,507
| | | | |
|
Other income (expense), net
| | | | | |
(14,443,191
|
)
| | | |
(14,674,187
|
)
| | | |
|
Dividends on preferred shares
| | | | | |
(1,443,750
|
)
| | | |
—
| | | | |
|
Net loss
| | | | |
$
|
(2,150,567
|
)
| | |
$
|
(1,074,680
|
)
| | | |
|
____________________
|
|
1
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Same Property analysis excludes Courthouse Shadows, Four Corner
Square, Rivers Edge, The Centre and Bolton Plaza properties as the
Company pursues redevelopment of these properties.
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2
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Same Property net operating income is considered a non-GAAP measure
because it excludes net gains from outlot sales, write offs of
straight-line rent and lease intangibles, bad debt expense and
related recoveries, lease termination fees and significant prior
year expense recoveries and adjustments, if any.
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The Company believes that Net Operating Income is helpful to investors
as a measure of its operating 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 depreciation and amortization,
interest expense, and impairment, if any. The Company believes that Same
Property NOI is helpful to investors as a measure of its operating
performance because it includes only the NOI of properties that have
been owned for the full period presented, which eliminates disparities
in net income due to the redevelopment, acquisition or disposition of
properties during the particular period presented, and thus provides a
more consistent metric for the comparison of the Company's properties.
NOI and Same Property NOI should not, however, be considered as
alternatives to net income (calculated in accordance with GAAP) as
indicators of the Company's financial performance.
Source: Kite Realty Group Trust
Contact:
Kite Realty Group Trust
Dan Sink, 317-577-5609
Chief Financial
Officer
dsink@kiterealty.com