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 watchlist.

• No plans for a similar large-scale disposition; future asset sales will be limited to 2–3 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.

Capital allocation and financial outlook

• Approximately $240 million in excess funds expected by year-end, with options including debt retirement, acquisitions, or stock buybacks; current bias is toward balance sheet conservatism.

• Elevated CapEx of $100–$125 million per year will continue through 2027, primarily for lease-up capital, before normalizing after 2028.

• $280 million in debt matures next year, with $175 million at a low interest rate; refinancing strategy depends on market conditions and use of excess funds.

• Leverage will be managed within a 5–5.5% range, with flexibility to exceed temporarily for compelling opportunities.

Leasing, tenant mix, and market dynamics

• Signed-Not-Open pipeline remains strong at $37 million, with non-option renewal leasing spreads at 18%.

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

• Embedded rent growth has increased from 156 to 185 basis points, driven 90% by leasing activity.

• Tenant watchlist has improved significantly, with risk exposure reduced and a higher proportion of grocery anchors.

• Retailer demand remains strong across geographies, with limited new supply and continued expansion into secondary markets.