KITE REALTY GROUP TRUST Q4 FY2024 earnings call

• 2024 was an exceptional year with five million square feet leased, highest in history. New and non-option renewal leases had weighted average rent bumps of 290 basis points. Leased to diverse well-capitalized tenants. Net debt to EBITDA at 4.7 times. Acquired Publix-anchored Village Commons in West Palm Beach. - 2025 outlook includes addressing tenant bankruptcies, improving portfolio cruising speed, progressing One Loudon expansion project, and continuing capital recycling efforts.

In the fourth quarter, same property NOI grew by 4.8%, driven by a 440 basis point increase from minimum rent, a 30 basis point increase in net recoveries, and 10 basis points of lower bad debt. For the full year 2024, same property NOI growth was 3%, with primary contributors being higher minimum rent and net recoveries, offset by slightly higher bad debt compared to 2023. The 2024 year-end same property result is 150 basis points higher than original guidance.

• For 2025, NAREIT FFO guidance is $2.02 to $2.08 per share and Core FFO guidance is $1.98 to $2.04 per share. - Assumptions include same property NOI growth of 1.75%, full-year bad debt assumption of 85 basis points of total revenues, an additional disruption of 110 basis points of total revenues related to anchor bankruptcies, interest expense net of interest income of $122 million, and no impact from transactional activity. - Midpoint assumes strong operational gains partially offset by recent bankruptcies acting as a 160 basis point drag on same property NOI growth and a $0.04 drag on NAREIT and Core FFO.

• Tenant bankruptcies causing short-term disruption in rent and capital invested in backfills, delaying AFFO and cash flow growth. - Volatility in equity capital costs affecting acquisition and disposition decisions.

Q: Todd Thomas from KeyBanc Capital Markets asked about acquisitions, capital recycling, and sale of City Center in White Plains.

A: John Kite discussed being active in the market, recycling capital by selling underperforming assets and acquiring better ones, and City Center being on the market with offers received.

Q: Craig Mailman from Citi followed up on front-loading acquisitions and share buybacks.

A: John Kite said they are actively underwriting assets and share buybacks are always analyzed against deploying capital to leasing.

Q: Jeffrey Spector from Bank of America Securities asked about conservatism in guidance and backfilling.

A: Heath Fear explained assumptions on impacted boxes and the multifaceted approach to reducing exposure to at-risk tenants.

Q: Floris van Dijkum from Compass Point asked about entitlements on land parcels and shop occupancy.

A: John Kite and Heath Fear discussed ongoing entitlement processes and shop occupancy growth despite disruptions.

Q: Paulina Rojas Schmidt from Green Street asked about lease recapture rights and assumptions on lease assumptions.

A: John Kite and Heath Fear talked about existing lease recapture rights and conservative assumptions on lease assumptions for long-term value.

Q: Alexander Goldfarb from Piper Sandler asked about Core FFO introduction and focus on cash flow.

A: John Kite explained Core FFO is an addition to NAREIT FFO, focusing on core cash-driven operations.

Q: Michael Mueller from JPMorgan asked about pool size of potential dispositions and types of tenants with high rent bumps.

A: John Kite discussed potential dispositions and types of small shop tenants with high rent bumps.

Q: Linda Tsai from Jefferies asked about outcomes for Party City leases with designation rights.

A: Heath Fear explained decisions on each lease designation based on maximizing long-term value.

Q: Alec Fagan from Baird asked about targeting tenants and types of tenants.

A: John Kite and Heath Fear discussed targeting grocery, value players, and fitness tenants and the strong group of tenants they work with