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Washington, D.C. 20549
FORM 10-K
[X] | Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2004
OR
[ ] | Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 |
For the transition period from to
Commission File Number: 001-32268
Kite Realty Group Trust
Maryland |
11-3715772 |
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State of
Organization: |
IRS Employer
Identification Number: |
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30 S. Meridian
Street, Suite 1100 Indianapolis, Indiana 46204 Telephone: (317) 577-5600 (Address, including zip code and telephone number, including area code, of principal executive offices) |
Title of each class |
Name of each exchange on which registered |
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---|---|---|---|---|---|---|
Common Shares, $0.01 par
value |
New York Stock
Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Documents Incorporated by Reference
KITE REALTY GROUP TRUST
Annual Report on Form 10-K
For the Fiscal Year
Ended
December 31, 2004
TABLE OF CONTENTS
Item No. |
Page |
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---|---|---|---|---|---|---|---|---|---|---|---|---|
Part
I |
||||||||||||
1. |
Business |
1 | ||||||||||
2. |
Properties |
23 | ||||||||||
3. |
Legal Proceeding |
32 | ||||||||||
4. |
Submission of Matters to a Vote of Security Holders |
32 | ||||||||||
Part
II |
||||||||||||
5. |
Market for the Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
33 | ||||||||||
6. |
Selected Financial Data |
35 | ||||||||||
7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
36 | ||||||||||
7A. |
Quantitative and Qualitative Disclosures About Market Risk |
48 | ||||||||||
8. |
Financial Statements and Supplementary Data |
49 | ||||||||||
9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
49 | ||||||||||
9A. |
Controls and Procedures |
49 | ||||||||||
9B. |
Other Information |
49 | ||||||||||
Part
III |
||||||||||||
10. |
Directors and Executive Officers of the Registrant |
50 | ||||||||||
11. |
Executive Compensation |
50 | ||||||||||
12. |
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
50 | ||||||||||
13. |
Certain Relationships and Related Transactions |
50 | ||||||||||
14. |
Principal Accountant Fees and Services |
50 | ||||||||||
Part
IV |
||||||||||||
15. |
Exhibits and Financial Statement Schedule |
51 | ||||||||||
Signatures |
52 |
PART I
FORWARD-LOOKING STATEMENTS
|
national and local economic, business, real estate and other market conditions; |
|
the ability of tenants to pay rent; |
|
the competitive environment in which the Company operates; |
|
financing risks; |
|
property management risks; |
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the level and volatility of interest rates; |
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the financial stability of tenants; |
|
the Companys ability to maintain its status as a real estate investment trust (REIT) for federal income tax purposes; |
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acquisition, disposition, development and joint venture risks; |
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potential environmental and other liabilities; |
|
other factors affecting the real estate industry generally; and |
|
other risks identified in this Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the SEC) or in other documents that we publicly disseminate. |
ITEM 1. BUSINESS
Unless the context suggests otherwise, references to we, us, our or the Company refer to Kite Realty Group Trust and our business and operations conducted through our directly or indirectly owned subsidiaries, including Kite Realty Group, L.P., our operating partnership (the Operating Partnership) and their predecessor companies. References to Kite Property Group or the Predecessor mean our predecessor businesses.
Overview
Recent Developments
|
Hamilton Crossing. On August 19, we acquired the Hamilton Crossing community shopping center in Carmel, Indiana (a suburb of Indianapolis, Indiana) for a total purchase price of approximately $15.5 million; |
|
Waterford Lakes. On August 20, we acquired the Waterford Lakes neighborhood shopping center in Orlando, Florida for a total purchase price of approximately $9.1 million; |
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Publix at Acworth. On August 20, we acquired 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; |
|
Plaza at Cedar Hill. On August 31, we acquired the Plaza at Cedar Hill community shopping center in Dallas, Texas for a total purchase price of approximately $38.6 million, inclusive of $27.4 million in assumed debt; |
2
|
Sunland Towne Centre. On September 16, we acquired the Sunland Towne Centre community shopping center in El Paso, Texas for a total purchase price of approximately $32.1 million, inclusive of $17.8 million in assumed debt; and |
|
Centre at Panola. On September 30, we acquired the Centre at Panola neighborhood shopping center in Lithonia, Georgia (a suburb of Atlanta, Georgia) for a total purchase price of approximately $9.4 million, inclusive of $4.5 million in assumed debt. |
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Eastgate Pavilion. On December 1, we acquired the Eastgate Pavilion community shopping center in Cincinnati, Ohio for a total cash purchase price of approximately $27.6 million; and |
|
Four Corner Square. On December 20, we acquired the Four Corner Square neighborhood shopping center in Maple Valley, Washington (Seattle area) for a total cash purchase price of approximately $10.5 million. |
|
176th & Meridian, a 14,560 square foot build-to-suit Walgreens located in Puyallup, Washington (Seattle MSA) (opened August 2004); |
|
82nd & Otty, a 10,000 square foot retail property in Clackamas, Oregon, (Portland MSA) (opened November 2004); and |
|
Indiana State Motor Pool, a 115,000 square foot commercial property in Indianapolis, Indiana (opened November 2004). |
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Traders Point, a projected 366,377 square foot (including 81,377 square feet of non-owned anchor and outlot space) upscale community shopping center located in Indianapolis, Indiana; and |
|
Cool Creek Commons, a projected 138,000 square foot (including 12,200 square feet of non-owned outlot space) upscale neighborhood shopping center located in a northern suburb of Indianapolis, Indiana. |
3
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a pro-rated quarterly cash distribution of $0.09375 per Common Share (based on a distribution of $0.1875 per share for a full quarter) for the period commencing upon completion of our IPO and related formation transactions on August 16, 2004 and ending September 30, 2004, which was paid on October 15, 2004; and |
|
a quarterly cash distribution of $0.1875 per Common Share (which is equivalent to $0.75 per Common Share on an annualized basis) for the quarterly period ending December 31, 2004, which was paid on January 18, 2005. |
Subsequent Events in 2005
|
Plaza Volente, a 156,308 square foot shopping center in Austin, Texas, for an estimated cash purchase price of $36.1 million; |
|
Indian River Square, a 144,134 square foot shopping center in Vero Beach, Florida, for an estimated cash purchase price of $16.4 million; and |
|
Fountain Oaks, a 160,598 square foot shopping center in Atlanta, Georgia, for an estimated cash purchase price of $26.0 million inclusive of $13.7 million of assumed indebtedness. |
4
option to terminate its agreement with the Company if any of the other acquisitions do not simultaneously close. There can be no assurance that the conditions to completion of the acquisitions will be met or that these acquisitions will in fact be consummated.
Hedging Transactions
Development Property Acquisition
Business Strategy
|
successfully completing the construction and lease-up of our development portfolio; |
|
continuing to pursue well-located land which can support development; |
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acquiring well-located, high quality retail properties through our investment and market selection process; |
|
maintaining a focused property management and leasing strategy; |
|
selling assets and recycling capital; and |
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leveraging our construction and advisory services businesses. |
5
Market and Trade Area: In order to take advantage of our current resources and create economies of scale, our development and acquisition activities are focused primarily in or near the markets in which we currently operate or in which we have had previous experience. By having a presence in a market and developing relationships in that market, we have a greater awareness of market trends and opportunities. |
|
average household income in a three- and five-mile radius; |
|
historical and projected population growth; |
|
density of population within a one, three or five mile radius of the center depending on the characteristics of the property; |
|
transportation patterns and infrastructure; |
|
barriers to the development of competing centers; and |
|
diverse employment base. |
Property Characteristics: We focus on neighborhood and community shopping centers anchored by market-leading retailers or smaller operators with dominant niche positions. In addition, we focus on the presence of one or more additional anchors for these centers, including off-price retailers, office superstores, grocers and fabric and clothing retailers, all of whom we believe increase traffic at the centers and are generally beneficial to the value of the center. We also seek properties with a diverse tenant mix that includes service retailers, such as banks, florists, video stores, restaurants, apparel and specialty shops. We target dominant shopping centers that generate a steady, repetitive flow of traffic by providing staple goods to the community and offering a high level of convenience with ease of access and abundant parking. |
We plan to focus our new investments in the shopping center sector, but also may selectively pursue commercial development opportunities in markets where we currently operate and where we believe we can leverage our |
6
existing infrastructure and relationships to generate attractive risk adjusted returns. In evaluating future investments in properties other than neighborhood and community shopping centers, we seek properties or transactions that have unique characteristics that present a compelling case for investment. Examples might include properties having high entry yields, properties that are outside of our target markets but are being sold as part of a portfolio package, properties that are debt-free, a transaction in which we might issue units in our operating partnership or properties that provide substantial growth potential through redevelopment. |
Retailer Relationships: We seek to partner with key tenants and retailers, such as Lowes, Walgreens, Old Navy, Bed Bath & Beyond, Staples, Publix, Kohls, Target and Wal-Mart, to identify attractive investments in new and existing markets. We seek to maintain strong tenant and retailer relationships in order to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-tenanting space. |
We believe that we will continue to source a significant volume of growth opportunities through the extensive network of tenant, corporate and institutional relationships that we have established (through our Predecessor) over the last four decades. Additionally, we believe our status as a publicly traded umbrella partnership REIT will enhance our ability to acquire properties from tax-motivated sellers through the use of Operating Partnership units as consideration, thereby providing sellers with liquidity and diversification while providing the opportunity for substantial deferral of income taxes that otherwise would be due as a result of a cash sale. |
7
Financing Strategy
Business Segments
Competition
8
Government Regulation
Insurance
Offices
Employees
Available Information
9
Risk Factors
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risks related to our operations; |
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risks related to our organization and structure; and |
|
tax risks. |
RISKS RELATED TO OUR OPERATIONS
We expect to continue to experience rapid growth and may not be able to adapt our management and operational systems to respond to the integration of additional properties without significant disruption or expense.
10
Our future developments, acquisitions and investment opportunities may not yield the returns we expect or may result in shareholder dilution.
Our results of operations will be significantly influenced by the economies of the markets in which we operate, and the market for retail space generally.
We had approximately $283 million of consolidated indebtedness outstanding as of December 31, 2004, which may impede our operating performance and reduce our ability to incur additional indebtedness to fund our growth.
11
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requiring us to use a substantial portion of our funds from operations to pay interest, which reduces the amount available for distributions; |
|
making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and |
|
limiting our ability to borrow more money for operating or capital needs or to finance acquisitions in the future. |
Our financial covenants may restrict our operating and acquisition activities.
Failure by any major tenant with leases in multiple locations to make rental payments to us, because of a deterioration of its financial condition or otherwise, could seriously harm our performance.
We may be unable to collect balances due from any tenants in bankruptcy.
12
We may experience reduced revenue with respect to our Glendale Mall property while we evaluate strategic alternatives with respect to this property.
Our current and future joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.
13
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we may share decision-making authority with our joint venture partners regarding major decisions affecting the ownership or operation of the joint venture and the joint venture property, such as the sale of the property or the making of additional capital contributions for the benefit of the property, which may prevent us from taking actions that are opposed by our joint venture partners; |
|
prior consent of our joint venture partners may be required for a sale or transfer to a third party of our interests in the joint venture, which restricts our ability to dispose of our interest in the joint venture; |
|
our joint venture partners might become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture; |
|
our joint venture partners may have business interests or goals with respect to the property that conflict with our business interests and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property; |
|
disputes may develop with our joint venture partners over decisions affecting the property or the joint venture, which may result in litigation or arbitration that would increase our expenses and distract our officers and/or trustees from focusing their time and effort on our business, and possibly disrupt the day-to-day operations of the property such as by delaying the implementation of important decisions until the conflict or dispute is resolved; and |
|
we may suffer losses as a result of the actions of our joint venture partners with respect to our joint venture investments. |
Adverse market conditions may impede our ability to renew leases or re-let space as leases expire and require us to undertake unbudgeted capital improvements, which could harm our business.
We face significant competition, which may impede our ability to renew leases or re-let space as leases expire, require us to undertake unbudgeted capital improvements, or impede our ability to make future developments or acquisitions or increase the cost of these developments or acquisitions.
14
We may not be successful in identifying suitable development projects or acquisitions that meet our criteria, which may impede our growth.
Redevelopment activities may be delayed or otherwise may not perform as expected.
We may not be able to sell properties when appropriate.
15
Our performance and value are subject to risks associated with real estate assets and with the real estate industry.
|
local oversupply, increased competition or reduction in demand for space; |
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inability to collect rent from tenants; |
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vacancies or our inability to rent space on favorable terms; |
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inability to finance property development, tenant improvements and acquisitions on favorable terms; |
|
increased operating costs, including insurance premiums, utilities and real estate taxes; |
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costs of complying with changes in governmental regulations; |
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the relative illiquidity of real estate investments; |
|
changing demographics; and |
|
changing traffic patterns. |
16
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
Our organizational documents contain provisions that generally would prohibit any person (other than members of the Kite family who, as a group, are currently allowed to own up to 21.5% of our outstanding Common Shares) from beneficially owning more than 7% of our outstanding Common Shares (or up to 9.8% in the case of certain designated investment entities, as defined in our declaration of trust), which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.
17
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discourage a tender offer or other transactions or a change in management or control that might involve a premium price for our shares or otherwise be in the best interests of our shareholders; or |
|
compel a shareholder who has acquired our shares in excess of these ownership limitations to dispose of the additional shares and, as a result, to forfeit the benefits of owning the additional shares. Any acquisition of our Common Shares in violation of these ownership restrictions will be void ab initio and will result in automatic transfers of our Common Shares to a charitable trust, which will be responsible for selling the Common Shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees. |
Certain provisions of Maryland law could inhibit changes in control.
|
business combination moratorium/fair price provisions that, subject to limitations, prohibit certain business combinations between us and an interested shareholder (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these combinations; and |
|
control share provisions that provide that control shares of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a control share acquisition (defined as the direct or indirect acquisition of ownership or control of control shares from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances. |
18
Our management has limited experience operating a REIT or a public company.
Certain officers and trustees may have interests that conflict with the interests of shareholders.
Certain members of our management team have outside business interests that could require time and attention.
We depend on external capital.
Our rights and the rights of our shareholders to take action against our trustees and officers are limited.
19
We may have assumed liabilities in connection with our formation transactions.
Our shareholders have limited ability to prevent us from making any changes to our policies that they believe could harm our business, prospects, operating results or share price.
Our share price could be volatile and could decline, resulting in a substantial or complete loss on our shareholders investment.
|
our operating performance and the performance of other similar companies; |
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actual or anticipated differences in our quarterly operating results; |
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changes in our revenues or earnings estimates or recommendations by securities analysts; |
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publication of research reports about us or our industry by securities analysts; |
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additions and departures of key personnel; |
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strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; |
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the passage of legislation or other regulatory developments that adversely affect us or our industry; |
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speculation in the press or investment community; |
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actions by institutional shareholders; |
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changes in accounting principles; |
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terrorist acts; and |
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general market conditions, including factors unrelated to our performance. |
20
A substantial number of our Common Shares will be eligible for sale in the near future, which could cause our Common Share price to decline significantly.
TAX RISKS
Failure of our company to qualify as a REIT would have serious adverse consequences to us and our shareholders.
21
We will pay some taxes even if we qualify as a REIT.
22
ITEM 2. PROPERTIES
Retail Operating Properties
Operating Retail Properties Table I
Property(1)(2) |
State |
MSA |
Year Built/ Renovated |
Year Added to Operating Portfolio |
Acquired, Redeveloped, or Developed |
Total GLA(3) |
Owned GLA(3) |
Percentage of Owned GLA Leased(4) |
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Intl
Speedway Square(5) |
FL |
Daytona Beach |
1999 |
1999 |
Developed |
233,901 | 220,901 | 100.0 | % | |||||||||||||||||||||||||
Kings
Lake Square |
FL |
Naples |
1986 |
2003 |
Acquired |
85,497 | 85,497 | 97.5 | % | |||||||||||||||||||||||||
Wal-Mart
Plaza(6) |
FL |
Gainesville |
1970 |
2004 |
Acquired |
177,766 | 177,766 | 99.1 | % | |||||||||||||||||||||||||
Waterford
Lakes |
FL |
Orlando |
1997 |
2004 |
Acquired |
77,948 | 77,948 | 100.0 | % | |||||||||||||||||||||||||
Shops at Eagle
Creek |
FL |
Naples |
1998 |
2003 |
Acquired |
75,944 | 75,944 | 93.6 | % | |||||||||||||||||||||||||
Circuit City
Plaza |
FL |
Fort Lauderdale |
2004 |
2004 |
Developed |
435,906 | 45,906 | 91.5 | % | |||||||||||||||||||||||||
Centre at
Panola |
GA |
Atlanta |
2001 |
2004 |
Acquired |
73,079 | 73,079 | 100.0 | % | |||||||||||||||||||||||||
Publix at
Acworth |
GA |
Atlanta |
1996 |
2004 |
Acquired |
69,628 | 69,628 | 100.0 | % | |||||||||||||||||||||||||
Silver Glen
Crossings |
IL |
Chicago |
2002 |
2004 |
Acquired |
138,274 | 132,725 | 88.4 | % | |||||||||||||||||||||||||
Glendale
Mall(5) |
IN |
Indianapolis |
1958/ 2000 |
1999 |
Redeveloped |
724,026 | 579,189 | 86.7 | % | |||||||||||||||||||||||||
Boulevard
Crossing |
IN |
Kokomo |
2004 |
2004 |
Developed |
214,696 | 112,696 | 90.3 | % | |||||||||||||||||||||||||
Hamilton
Crossing |
IN |
Indianapolis |
1999 |
2004 |
Acquired |
87,374 | 82,374 | 92.7 | % | |||||||||||||||||||||||||
Fishers
Station(7) |
IN |
Indianapolis |
1989 |
2004 |
Acquired |
114,457 | 114,457 | 86.2 | % | |||||||||||||||||||||||||
Whitehall
Pike |
IN |
Bloomington |
1999 |
1999 |
Developed |
128,997 | 128,997 | 100.0 | % | |||||||||||||||||||||||||
The
Centre(8) |
IN |
Indianapolis |
1986 |
1986 |
Developed |
80,689 | 80,689 | 100.0 | % | |||||||||||||||||||||||||
The
Corner |
IN |
Indianapolis |
1984/ 2003 |
1984 |
Developed |
42,545 | 42,545 | 100.0 | % | |||||||||||||||||||||||||
Stoney Creek
Commons |
IN |
Indianapolis |
2000 |
2000 |
Developed |
154,282 | (*) |
(*) |
||||||||||||||||||||||||||
50 S.
Morton |
IN |
Indianapolis |
1999 |
1999 |
Developed |
2,000 | 2,000 | 100.0 | % | |||||||||||||||||||||||||
Ridge
Plaza |
NJ |
Oak
Ridge |
2002 |
2003 |
Acquired |
114,928 | 114,928 | 94.4 | % | |||||||||||||||||||||||||
Eastgate
Pavilion |
OH |
Cincinnati |
1995 |
2004 |
Acquired |
231,730 | 231,730 | 100.0 | % | |||||||||||||||||||||||||
82nd &
Otty(9) |
OR |
Portland |
2004 |
2004 |
Developed |
154,845 | 9,845 | 100.0 | % | |||||||||||||||||||||||||
Plaza at Cedar
Hill |
TX |
Dallas |
2000 |
2004 |
Acquired |
299,783 | 299,783 | 100.0 | % | |||||||||||||||||||||||||
Sunland Towne
Centre |
TX |
El
Paso |
1996 |
2004 |
Acquired |
312,571 | 307,595 | 98.9 | % | |||||||||||||||||||||||||
Galleria
Plaza(10) |
TX |
Dallas |
2002 |
2004 |
Acquired |
44,306 | 44,306 | 100.0 | % | |||||||||||||||||||||||||
Cedar Hill
Village |
TX |
Dallas |
2002 |
2004 |
Acquired |
139,092 | 44,262 | 100.0 | % | |||||||||||||||||||||||||
Preston
Commons |
TX |
Dallas |
2002 |
2002 |
Developed |
142,564 | 27,564 | 85.6 | % | |||||||||||||||||||||||||
Burlington
Coat(11) |
TX |
San Antonio |
1992/ 2000 |
2000 |
Redeveloped |
107,400 | 107,400 | 100.0 | % | |||||||||||||||||||||||||
50th
& 12th |
WA |
Seattle |
2004 |
2004 |
Developed |
14,500 | 14,500 | 100.0 | % | |||||||||||||||||||||||||
176th & Meridian |
WA |
Seattle |
2004 |
2004 |
Developed |
14,560 | 14,560 | 100.0 | % | |||||||||||||||||||||||||
Four Corner
Square |
WA |
Seattle |
1985 |
2004 |
Acquired |
73,086 | 73,086 | 89.1 | % | |||||||||||||||||||||||||
Total |
4,566,374 | 3,391,900 | 95.3 | % |
Note: An (*) indicates
that this property consists of parcels which are ground leased to tenants.
(1) | All properties are wholly-owned, except as indicated. |
(2) | Unless otherwise noted, each property is owned in fee by the Company. |
23
(3) | Owned GLA represents gross leaseable area at the property that is owned by us. Total GLA includes Owned GLA, plus square footage attributable to non-owned outlot structures and non-owned anchor space. |
(4) | Percentage of Owned GLA Leased (includes square footage of non-owned structures on outlots that we ground lease to tenants). |
(5) | A third party manages this property. |
(6) | We acquired a 99.9% interest in this property through a joint venture with a third party that manages the property. At the current time, we receive 85% of the cash flow from the property, which percentage may decrease under certain circumstances. |
(7) | This property is divided into two parcels: a grocery store and small shops. We acquired a 25% interest in the small shops on July 23, 2004 in a joint venture and a 100% interest in the grocery store on November 24, 2004. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is distributed to the Company. |
(8) | We own a 60% interest in this property through a joint venture with the third party that manages the property. |
(9) | We do not own the land at this property. We have leased the land pursuant to two ground leases that expire in 2017. We have six five-year options to renew this lease. |
(10) | We do not own the land at this property. We lease the land pursuant to a ground lease that expires in 2027. We have five five-year renewal options. |
(11) | We do not own the land at this property. We have leased the land pursuant to a ground lease that expires in 2012. We have six five-year renewal options and a right of first refusal to purchase the land. |
24
Operating Retail Properties Table II
Property |
State |
MSA |
Encumbrances |
Annualized Base Rent Revenue |
Annualized Ground Lease Revenue |
Annualized Total Retail Revenue |
Percentage of Annualized Total Retail Revenue |
Base Rent Per Leased Owned GLA(1) |
Major Tenants and Non-Owned Anchors(2) |
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Intl
Speedway Square |
FL |
Daytona
Beach |
$ | 19,923,058 | $2,454,026 |
$216,400 |
$2,670,426 |
7.6% |
$11.11 |
SteinMart, Bed
Bath, Circuit City |
||||||||||||||||||||||||||||
Kings
Lake Square(3) |
FL |
Naples |
1,019,809 |
0 |
1,019,809 |
2.9% |
12.24 |
Publix,
Walgreens |
||||||||||||||||||||||||||||||
Wal-Mart
Plaza |
FL |
Gainesville |
869,336 |
0 |
869,336 |
2.5% |
4.94 |
Wal-Mart, Books A
Million, Save A Lot |
||||||||||||||||||||||||||||||
Waterford
Lakes(3) |
FL |
Orlando |
890,942 |
0 |
890,942 |
2.5% |
11.43 |
Winn-Dixie(4) |
||||||||||||||||||||||||||||||
Shops at Eagle
Creek(3) |
FL |
Naples |
771,936 |
0 |
771,936 |
2.2% |
10.86 |
Winn-Dixie(4) |
||||||||||||||||||||||||||||||
Circuit City
Plaza |
FL |
Fort
Lauderdale |
6,651,191 | 817,204 |
0 |
817,204 |
2.3% |
19.46 |
Circuit City,
Wal-Mart (non-owned), Lowes (non-owned) |
|||||||||||||||||||||||||||||
Centre at
Panola |
GA |
Atlanta |
4,576,012 | 824,148 |
0 |
824,148 |
2.3% |
11.28 |
Publix |
|||||||||||||||||||||||||||||
Publix at
Acworth(3) |
GA |
Atlanta |
799,265 |
0 |
799,265 |
2.3% |
11.48 |
Publix,
CVS |
||||||||||||||||||||||||||||||
Silver Glen
Crossings(3) |
IL |
Chicago |
1,627,756 |
85,000 |
1,712,756 |
4.9% |
13.88 |
Dominicks,
MC Sports |
||||||||||||||||||||||||||||||
Glendale
Mall(3) |
IN |
Indianapolis |
2,792,029 |
140,000 |
2,932,029 |
8.4% |
5.56 |
L.S. Ayres,
Kerasotes Theatre, Lowes (non-owned) |
||||||||||||||||||||||||||||||
Boulevard
Crossing |
IN |
Kokomo |
12,660,000 | 1,271,605 |
75,000 |
1,346,605 |
3.8% |
12.50 |
TJ Maxx, Petco,
Shoe Carnival, Kohls (non-owned) |
|||||||||||||||||||||||||||||
Hamilton
Crossing(3) |
IN |
Indianapolis |
1,187,999 |
65,000 |
1,252,999 |
3.6% |
15.56 |
Office
Depot |
||||||||||||||||||||||||||||||
Fishers
Station(5) |
IN |
Indianapolis |
5,465,766 | 1,156,319 |
0 |
1,156,319 |
3.3% |
11.73 |
Marsh
Supermarket |
|||||||||||||||||||||||||||||
Whitehall
Pike |
IN |
Bloomington |
9,960,453 | 1,014,000 |
0 |
1,014,000 |
2.9% |
7.86 |
Lowes |
|||||||||||||||||||||||||||||
The
Centre |
IN |
Indianapolis |
2,604,354 | 996,562 |
0 |
996,562 |
2.8% |
12.35 |
Osco |
|||||||||||||||||||||||||||||
The
Corner |
IN |
Indianapolis |
1,926,175 | 477,364 |
0 |
477,364 |
1.4% |
11.22 |
Hancock
Fabrics |
|||||||||||||||||||||||||||||
Stoney Creek
Commons(3) |
IN |
Indianapolis |
(*) |
223,000 |
223,000 |
0.6% |
(*) |
Lowes
(non-owned) |
||||||||||||||||||||||||||||||
50 S.
Morton |
IN |
Indianapolis |
114,000 |
0 |
114,000 |
0.3% |
57.00 |
|||||||||||||||||||||||||||||||
Ridge
Plaza |
NJ |
Oak
Ridge |
16,962,625 | 1,732,090 |
0 |
1,732,090 |
4.9% |
15.96 |
A&P,
CVS |
|||||||||||||||||||||||||||||
Eastgate
Pavilion |
OH |
Cincinnati |
2,209,767 |
0 |
2,209,767 |
6.3% |
9.54 |
Dicks
Sporting Goods, Value City Furniture, Best Buy |
||||||||||||||||||||||||||||||
82nd &
Otty |
OR |
Portland |
1,586,756 | 273,156 |
122,500 |
395,656 |
1.1% |
27.75 |
||||||||||||||||||||||||||||||
Plaza at Cedar
Hill |
TX |
Dallas |
30,258,758 | 3,501,144 |
0 |
3,501,144 |
10.0% |
11.68 |
Hobby Lobby,
Linens ‘N Things, Marshalls |
|||||||||||||||||||||||||||||
Sunland Towne
Centre |
TX |
El
Paso |
18,725,958 | 2,901,099 |
95,280 |
2,996,379 |
8.5% |
9.53 |
Kmart, Circuit
City, Roomstore |
|||||||||||||||||||||||||||||
Galleria
Plaza(3) |
TX |
Dallas |
1,193,750 |
0 |
1,193,750 |
3.4% |
26.94 |
Ultimate
Electronics(4) |
||||||||||||||||||||||||||||||
Cedar Hill
Village(3) |
TX |
Dallas |
643,508 |
0 |
643,508 |
1.8% |
14.54 |
Ultimate
Electronics(4), JC Penney (non-owned) |
||||||||||||||||||||||||||||||
Preston
Commons |
TX |
Dallas |
4,652,591 | 552,652 |
0 |
552,652 |
1.6% |
23.42 |
Lowes
(non-owned) |
|||||||||||||||||||||||||||||
Burlington
Coat(3) |
TX |
San
Antonio |
483,300 |
0 |
483,300 |
1.4% |
4.50 |
Burlington Coat
Factory |
||||||||||||||||||||||||||||||
50th
& 12th |
WA |
Seattle |
4,695,018 | 475,000 |
0 |
475,000 |
1.3% |
32.76 |
Walgreens |
|||||||||||||||||||||||||||||
176th & Meridian |
WA |
Seattle |
4,265,474 | 433,000 |
0 |
433,000 |
1.2% |
29.74 |
Walgreens |
|||||||||||||||||||||||||||||
Four Corner
Square |
WA |
Seattle |
2,500,000 | 682,234 |
0 |
682,234 |
1.9% |
10.47 |
Johnson Hardware
Store |
|||||||||||||||||||||||||||||
Total |
$ | 147,414,189 | $34,165,000 |
$1,022,180 |
$35,187,180 |
100.0% |
$10.57 |
Note: An (*) indicates
that this property consists of parcels which are ground leased to tenants.
(1) | Owned GLA represents gross leaseable area at the property that is owned by us. |
(2) | Represents the three largest tenants that occupy at least 10,000 square feet of GLA at the property, including non-owned anchors. |
(3) | This property is encumbered under the Companys line of credit. |
(4) | In January 2005, Ultimate Electronics filed a petition for Chapter 11 bankruptcy to reorganize its business operations. In February 2005, Winn-Dixie Stores, Inc. filed a petition for Chapter 11 bankruptcy to reorganize its business operations. Winn-Dixie has not advised us of its intentions with respect to their leases with us; however, on March 24, 2005, Ultimate Electronics filed with the United States Bankruptcy Court its intent to close the two stores for which it has leases with us. This filing indicates that the store closings are scheduled to occur on or about June 30, 2005. |
(5) | This property is divided into two parcels: a grocery store and small shops. We acquired a 25% interest in the small shops on July 23, 2004 and a 100% interest in the grocery store on November 24, 2004. |
25
Commercial Properties
Operating Commercial Properties
Property(1) |
MSA |
Year Built/ Renovated |
Acquired, Redeveloped or Developed |
Encumbrances |
Owned NRA(2) |
Percentage of Owned NRA Leased |
Annualized Base Rent |
Percentage of Annualized Commercial Base Rent |
Base Rent Per Leased Sq. Ft. |
Major Tenants(3) |
||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Indiana |
||||||||||||||||||||||||||||||||||||||||||
Thirty
South |
Indianapolis |
1905/2002 |
Redeveloped |
$ | 23,240,515 | 298,346 | 94.8 | % | $ | 4,930,221 | 50.9 | % | $ | 17.43 | Eli Lilly, City Securities, Kite Realty Group | |||||||||||||||||||||||||||
Mid-America
Clinical Labs(4) |
Indianapolis |
1995/2002 |
Redeveloped |
100,000 |
100.0 |
% | 1,721,000 |
17.8 |
% | 17.21 |
Mid-America Clinical Laboratories |
|||||||||||||||||||||||||||||||
PEN
Products(4)(5) |
Indianapolis |
2003 |
Developed |
85,875 | 100.0 | % | 813,236 | 8.4 | % | 9.47 | Indiana Department of Administration | |||||||||||||||||||||||||||||||
Spring Mill
Medical(6) |
Indianapolis |
1998/2002 |
Redeveloped |
6,134,543 | 63,431 | 100.0 | % | 1,523,479 | 15.7 | % | 24.02 | University Medical Diagnostic Associates; Indiana University Health Care Associates |
||||||||||||||||||||||||||||||
Union Station
Parking Garage(4)(7) |
Indianapolis |
1986 |
Acquired |
N/A | N/A | N/A | Denison Parking | |||||||||||||||||||||||||||||||||||
Indiana State
Motor Pool(5) |
Indianapolis |
2004 |
Developed |
3,819,516 | 115,000 | 100.0 | % | 693,450 | 7.2 | % | 6.03 | Indiana Dept. of Administration | ||||||||||||||||||||||||||||||
Total |
$ | 33,194,574 | 662,652 | 97.7 | % | $ | 9,681,386 | 100.0 | % | $ | 14.96 |
(1) |
Unless otherwise noted, each property is wholly-owned in fee by the Company. |
(2) | NRA means Net Rentable Area. |
(3) | We define major commercial tenants as single tenants that occupy at least 10% of the NRA at this property. |
(4) | This property is encumbered under the Companys line of credit. |
(5) | We do not own the land at this property. We have leased the land from the State of Indiana pursuant to a ground lease that expires in 2013 and have constructed improvements that we have leased back to the Indiana Department of Administration. Both the ground lease and the building lease have ten-year terms with two ten-year renewal options that require the approval of both parties. The State has the option to purchase the improvements and our interest as tenant under each of the ground leases at the end of the initial ten-year terms or first renewal term based on negotiated purchase prices set forth in the leases. If the building lease is not renewed at the end of the initial term or first renewal term, we may terminate the ground lease and the State must purchase the improvements at the end of the term at a previously negotiated purchase price. |
(6) | We own a 50% interest in this property through a joint venture with one of the tenants of the property. |
(7) | 2004 annualized minimum rent for Union Station Parking Garage is approximately $500,000. |
26
Retail Development Properties
Property |
MSA |
Type of Property |
Opening Date (1) |
Encumbrances (4) |
Projected Owned GLA/NRA (2) |
Projected Total GLA/NRA (3) |
Total Estimated Project Cost (4) |
Cost Incurred as of 12/31/04 (4) |
Percentage of Owned GLA/NRA Pre-Leased (5) |
Major Tenants and Non-owned Anchors |
||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Florida |
||||||||||||||||||||||||||||||||||||||||||
Eagle Creek,
Phase II(6) |
Naples |
Retail |
Jan.
2005 |
$ | 850 | n/a | 165,000 | $ | 9,080 | $ | 8,520 | n/a | ||||||||||||||||||||||||||||||
Indiana |
||||||||||||||||||||||||||||||||||||||||||
Traders
Point |
Indianapolis |
Retail |
Oct.
2004 |
32,530 | 285,000 | 366,377 | 43,227 | 35,395 | 73.7 | % | Dicks Sporting Goods, Marsh Supermarkets, Bed Bath & Beyond, Kerasotes Theatres, Michaels, Old Navy | |||||||||||||||||||||||||||||||
Cool Creek
Commons |
Indianapolis |
Retail |
Oct.
2004 |
14,951 | 126,000 | 138,529 | 20,013 | 17,954 | 75.8 | % | SteinMart, Fresh Market | |||||||||||||||||||||||||||||||
Traders Point
II |
Indianapolis |
Retail |
Apr.
2005 |
2,000 | 41,000 | 48,600 | 8,288 | 4,379 | 0.0 | % | (see Traders Point) | |||||||||||||||||||||||||||||||
Weston Park,
Phase I(6) |
Indianapolis |
Retail |
Nov.
2004 |
4,214 | n/a | 12,200 | 1,963 | 1,734 | n/a | |||||||||||||||||||||||||||||||||
Greyhound
Commons(6) |
Indianapolis |
Retail |
Feb.
2005 |
| n/a | 201,325 | 4,397 | 3,199 | n/a | Lowes (non-owned) | ||||||||||||||||||||||||||||||||
Red Bank
Commons |
Evansville |
Retail |
Feb.
2005 |
| 34,500 | 246,500 | 6,400 | 4,252 | 39.4 | % | Wal-Mart
(non-owned); Home Depot (non-owned) |
|||||||||||||||||||||||||||||||
Martinsville
Shops |
Martinsville |
Retail |
Mar.
2005 |
| 11,000 | 11,000 | 1,197 | 737 | 0.0 | % | Walgreens (non-owned) | |||||||||||||||||||||||||||||||
Geist
Pavilion |
Indianapolis |
Retail |
Mar.
2005 |
864 | 62,800 | 62,800 | 7,747 | 3,256 | 25.8 | % | ||||||||||||||||||||||||||||||||
Total |
$ | 55,409 | 560,300 | 1,252,331 | $ | 102,312 | $ | 79,426 | 59.9 | % |
(1) | Opening Date is defined as the first date a tenant is open for business or a ground lease or similar payment is made. |
(2) | Projected Owned GLA/NRA represents gross leasable area/net rentable area that is owned by the Company. It excludes square footage attributable to non-owned outlot structures on land that is owned by the Company and ground leased to tenants. |
(3) | Projected Total GLA/NRA includes Projected Owned GLA, plus projected square footage attributable to non-owned outlot structures on land that is owned by the Company, plus non-owned anchor space that is currently existing or under construction. |
(4) | Dollars in thousands. |
(5) | Excludes outlots and parcels owned by the Company and ground leased to tenants. Traders Point has seven such parcels, four of which were pre-leased as of December 31, 2004. |
(6) | All of the land at Eagle Creek Phase II, Weston Park Phase I, and Greyhound Commons is intended to be ground leased to tenants. We have entered into an agreement to enter into a ground lease for the entire Eagle Creek, Phase II property with a big box retailer. The tenant is obligated to pay and is paying a portion of its rent until the ground lease is executed. Weston Park, Phase I consists of three outlots, two of which were ground leased as of December 31, 2004. Greyhound Commons consists of four outlots, two of which were ground leased as of December 31, 2004. |
27
Land Held For Future Development
Option Properties and Rights of First Refusal
|
Erskine Village. A joint venture among Kite South Bend, LLC, Kimco Realty Corporation and Schottenstein Management purchased this 800,000 square foot Scottsdale Mall location in South Bend, Indiana in August 2003 in order to redevelop it. The 58-acre parcel of land is located at the intersection of Miami Street and Ireland Road in South Bend, Indiana. Our Operating Partnership has the right to purchase Kite South Bend, LLCs 25% interest in this joint venture, subject to approval of the other joint venture partners and the lender. |
|
Tarpon Springs Plaza. Tarpon Springs Plaza is a planned development to be located on a 32.7-acre site in Naples, Florida on the southeast corner of Immokalee Road and Interstate 75. Target has committed to construct a 173,800 square foot Super Target on approximately 18 acres. In addition, the center will contain approximately 95,000 square feet of junior boxes, small shop spaces and three outparcels. Our Operating Partnership has the right to acquire the 100% interest in this property held by an entity owned by Messrs. Al Kite, John Kite, Paul Kite and Thomas McGowan. On March 31, 2005, the Company acquired this property at a price equal to Messrs. Al Kite, John Kite, Paul Kite and Tom McGowans net equity in the property, at cost plus the assumption of certain liabilities and the obligation to repay certain indebtedness. The equity portion of the purchase price was paid through the issuance of 214,049 units of the Operating Partnership. |
|
126th Street & Meridian Medical Complex. The proposed medical complex is located at the northeast corner of 126th Street and Meridian in the heart of Carmel, Indianas medical corridor. The approximately 16-acre tract will be divided into two parcels, with each expected to be improved with a 95,000 square foot medical office building. The two parcels will be owned by separate joint venture entities. An entity controlled by Messrs. Al Kite, John Kite, Paul Kite and Thomas McGowan will own 50% of each joint venture entity pursuant to separate option agreements and the remainder will be owned by the tenants of the respective parcels. Our operating partnership has the right to acquire the 50% interest in each joint venture entity, subject to approval of the respective joint venture partners and our lender. The Company has been advised that this project will not be pursued. |
|
the annualized net operating income for the property (based on net operating income over a three-month period which includes the month of exercise) divided by 8.5% multiplied by the contributors interest in the property; or |
|
the then fair market value of the property based on the average of two appraisals (or the average of the two closest of three appraisals in certain circumstances) multiplied by the contributors interest in the property. |
28
Tenant Diversification
Top 20 Tenants by Annualized Base Rent(1)
Tenant |
Type of Property |
Number of Locations |
Leased GLA |
% of Owned GLA/NRA of the Portfolio |
Annualized Base Rent |
Annualized Base Rent per Sq. Ft. |
% of Total Portfolio Annualized Base Rent |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mid-America
Clinical Laboratories |
Commercial |
1 | 100,000 | 2.3 | % | $ | 1,721,000 | $ | 17.21 | 3.6 | % | |||||||||||||||||||
State of
Indiana |
Commercial |
3 | 210,393 | 4.9 | % | 1,663,733 | 7.91 | 3.4 | % | |||||||||||||||||||||
Eli
Lilly |
Commercial |
1 | 99,542 | 2.3 | % | 1,642,443 | 16.50 | 3.4 | % | |||||||||||||||||||||
Marsh
Supermarkets |
Retail |
2 | 122,000 | 2.9 | % | 1,547,847 | 12.69 | 3.2 | % | |||||||||||||||||||||
Circuit
City |
Retail |
3 | 98,485 | 2.3 | % | 1,370,993 | 13.92 | 2.8 | % | |||||||||||||||||||||
Ultimate
Electronics(2) |
Retail |
2 | 63,627 | 1.5 | % | 1,242,732 | 19.53 | 2.6 | % | |||||||||||||||||||||
Dicks
Sporting Goods |
Retail |
2 | 126,672 | 3.0 | % | 1,220,000 | 9.63 | 2.5 | % | |||||||||||||||||||||
Walgreens |
Retail |
3 | 39,070 | 0.9 | % | 1,031,023 | 26.39 | 2.1 | % | |||||||||||||||||||||
Bed Bath &
Beyond |
Retail |
3 | 85,895 | 2.0 | % | 1,021,921 | 11.90 | 2.1 | % | |||||||||||||||||||||
Lowes
Home Center |
Retail |
1 | 128,997 | 3.0 | % | 1,014,000 | 7.86 | 2.1 | % | |||||||||||||||||||||
Publix |
Retail |
3 | 129,357 | 3.0 | % | 989,355 | 7.65 | 2.1 | % | |||||||||||||||||||||
Kmart |
Retail |
1 | 110,875 | 2.6 | % | 850,379 | 7.67 | 1.8 | % | |||||||||||||||||||||
UMDA |
Commercial |
1 | 32,256 | 0.8 | % | 844,402 | 26.18 | 1.8 | % | |||||||||||||||||||||
Winn-Dixie(2) |
Retail |
2 | 103,406 | 2.4 | % | 806,266 | 7.80 | 1.7 | % | |||||||||||||||||||||
A &
P |
Retail |
1 | 58,732 | 1.4 | % | 763,516 | 13.00 | 1.6 | % | |||||||||||||||||||||
Kerasotes
Theatres |
Retail |
2 | 43,050 | 1.0 | % | 739,500 | 17.18 | 1.5 | % | |||||||||||||||||||||
City
Securities |
Commercial |
1 | 34,949 | 0.8 | % | 694,900 | 19.88 | 1.4 | % | |||||||||||||||||||||
Indiana
University Healthcare Associates |
Commercial |
1 | 31,175 | 0.7 | % | 679,077 | 21.78 | 1.4 | % | |||||||||||||||||||||
Dominicks |
Retail |
1 | 65,636 | 1.5 | % | 669,487 | 10.20 | 1.4 | % | |||||||||||||||||||||
Old
Navy |
Retail |
3 | 70,620 | 1.7 | % | 587,958 | 8.33 | 1.2 | % | |||||||||||||||||||||
Total |
1,754,737 | 41.0 | % | $ | 21,100,532 | $ | 12.03 | 43.7 | % |
(1) | Information includes operating retail and commercial properties and development property tenants open for business as of December 31, 2004. |
(2) | In January 2005, Ultimate Electronics filed a petition for Chapter 11 bankruptcy to reorganize its business operations. In February 2005, Winn-Dixie Stores, Inc. filed a filed a petition for Chapter 11 bankruptcy to reorganize its business operations. Winn-Dixie has not advised us of its intentions with respect to their leases with us; however, on March 24, 2005, Ultimate Electronics filed with the United States Bankruptcy Court its intent to close the two stores for which it has leases with us. This filing indicates that the store closings are scheduled to occur on or about June 30, 2005. |
29
Geographic Information
Number of Operating Properties |
Owned GLA/NRA(1) |
Percentage of Owned GLA/NRA |
Total Number of Leases |
Annualized Base Rent Revenue(2) |
% of Annualized Base Rent Revenue |
Annualized Base Rent per Leased Square Foot |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Indiana |
15 | 1,805,599 | 44.5 | % | 178 | $ | 18,691,263 | 42.6 | % | $ | 11.12 | |||||||||||||||||||
Retail Mall |
1 | 579,189 | 14.3 | % | 48 | 2,792,028 | 6.3 | % | 5.56 | |||||||||||||||||||||
Retail |
8 | 563,758 | 13.9 | % | 106 | 6,217,849 | 14.2 | % | 11.71 | |||||||||||||||||||||
Commercial |
6 | 662,652 | 16.3 | % | 24 | 9,681,386 | 22.1 | % | 14.96 | |||||||||||||||||||||
Texas |
6 | 830,910 | 20.5 | % | 59 | 9,275,453 | 21.2 | % | 11.26 | |||||||||||||||||||||
Florida |
6 | 683,962 | 16.9 | % | 88 | 6,823,254 | 15.6 | % | 10.16 | |||||||||||||||||||||
Illinois |
1 | 132,725 | 3.3 | % | 19 | 1,627,756 | 3.7 | % | 13.88 | |||||||||||||||||||||
New
Jersey |
1 | 114,928 | 2.8 | % | 17 | 1,732,090 | 4.0 | % | 15.96 | |||||||||||||||||||||
Georgia |
2 | 142,707 | 3.5 | % | 29 | 1,623,413 | 3.7 | % | 11.38 | |||||||||||||||||||||
Washington |
3 | 102,146 | 2.5 | % | 24 | 1,590,234 | 3.6 | % | 16.88 | |||||||||||||||||||||
Ohio |
1 | 231,730 | 5.7 | % | 6 | 2,209,767 | 5.0 | % | 9.54 | |||||||||||||||||||||
Oregon |
1 | 9,845 | 0.3 | % | 7 | 273,156 | 0.6 | % | 27.75 | |||||||||||||||||||||
Total |
36 | 4,054,552 | 100.0 | % | 427 | $ | 43,846,386 | 100.0 | % | $ | 11.30 |
(1) | Owned GLA/NRA represents gross leaseable area or net leaseable area owned by the Company. It does not include 12 parcels or outlots owned by the Company and ground leased to tenants, which contain non-owned structures totaling approximately 64,447 square feet. It also excludes the square footage of Union Station Parking Garage. |
(2) | Annualized Base Rent Revenue excludes $1,022,180 in annualized ground lease revenue attributable to parcels and outlots owned by the Company and ground leased to tenants. It also excludes approximately $500,000 in 2004 annualized minimum rent attributable to Union Station Parking Garage as well as the leases on properties classified as development properties. |
30
Lease Expirations
Lease Expiration Table Operating Portfolio
Number of Expiring Leases (1) |
Expiring GLA/NRA(2) |
% of Total GLA/NRA Expiring |
Expiring Annualized Base Rent(3) |
% of Total Annualized Base Rent |
Expiring Annualized Base Rent per Sq. Ft. |
Expiring Ground Lease Revenue |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 |
69 | 218,156 | 5.3 | % | $ | 2,409,956 | 5.2 | % | $ | 11.05 | $ | 0 | ||||||||||||||||||
2006 |
62 | 184,944 | 4.5 | % | 2,254,720 | 4.8 | % | 12.19 | 0 | |||||||||||||||||||||
2007 |
60 | 191,311 | 4.7 | % | 2,412,280 | 5.2 | % | 12.61 | 0 | |||||||||||||||||||||
2008 |
37 | 294,849 | 7.2 | % | 2,372,677 | 5.1 | % | 8.05 | 0 | |||||||||||||||||||||
2009 |
42 | 168,841 | 4.1 | % | 2,350,442 | 5.0 | % | 13.92 | 0 | |||||||||||||||||||||
2010 |
24 | 301,946 | 7.4 | % | 2,912,161 | 6.2 | % | 9.64 | 0 | |||||||||||||||||||||
2011 |
25 | 513,157 | 12.5 | % | 4,389,374 | 9.4 | % | 8.55 | 0 | |||||||||||||||||||||
2012 |
27 | 213,443 | 5.2 | % | 2,966,309 | 6.4 | % | 13.90 | 85,000 | |||||||||||||||||||||
2013 |
13 | 162,888 | 4.0 | % | 1,950,509 | 4.2 | % | 11.97 | 240,000 | |||||||||||||||||||||
2014 |
24 | 309,032 | 7.5 | % | 3,284,367 | 7.1 | % | 10.63 | 411,400 | |||||||||||||||||||||
2015 &
Beyond |
61 | 1,537,926 | 37.6 | % | 19,308,708 | 41.4 | % | 12.56 | 891,280 | |||||||||||||||||||||
Total |
444 | 4,096,493 | 100.0 | % | $ | 46,611,503 | 100.0 | % | $ | 11.38 | $ | 1,627,680 |
(1) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(2) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(3) | Excludes ground lease revenue. |
Lease Expiration Table Retail Anchor Tenants(1)
Number of Expiring Leases(2) |
Expiring GLA/NRA(3) |
% of Total GLA/NRA Expiring |
Expiring Annualized Base Rent(4) |
% of Total Annualized Base Rent |
Expiring Annualized Base Rent per Sq. Ft. |
Expiring Ground Lease Revenue |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 |
3 | 65,117 | 1.6 | % | $ | 487,491 | 1.0 | % | $ | 7.49 | $ | 0 | ||||||||||||||||||
2006 |
3 | 60,034 | 1.5 | % | 388,266 | 0.8 | % | 6.47 | 0 | |||||||||||||||||||||
2007 |
5 | 76,926 | 1.9 | % | 609,076 | 1.3 | % | 7.92 | 0 | |||||||||||||||||||||
2008 |
2 | 210,561 | 5.1 | % | 792,783 | 1.7 | % | 3.77 | 0 | |||||||||||||||||||||
2009 |
3 | 65,656 | 1.6 | % | 598,240 | 1.3 | % | 9.11 | 0 | |||||||||||||||||||||
2010 |
9 | 248,324 | 6.1 | % | 2,140,944 | 4.6 | % | 8.62 | 0 | |||||||||||||||||||||
2011 |
5 | 360,651 | 8.8 | % | 1,635,905 | 3.5 | % | 4.54 | 0 | |||||||||||||||||||||
2012 |
3 | 94,890 | 2.3 | % | 716,757 | 1.5 | % | 7.55 | 0 | |||||||||||||||||||||
2013 |
1 | 11,960 | 0.3 | % | 161,460 | 0.3 | % | 13.50 | 0 | |||||||||||||||||||||
2014 |
6 | 125,602 | 3.1 | % | 1,187,243 | 2.6 | % | 9.45 | 0 | |||||||||||||||||||||
2015 &
Beyond |
31 | 1,303,950 | 31.8 | % | 14,390,767 | 30.9 | % | 11.04 | 240,000 | |||||||||||||||||||||
Total |
71 | 2,623,671 | 64.1 | % | $ | 23,108,932 | 49.5 | % | $ | 8.81 | $ | 240,000 |
(1) | Retail anchor tenants are defined as tenants of operating retail properties which occupy 10,000 square feet or more. |
(2) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(3) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(4) | Excludes ground lease revenue. |
31
Lease Expiration Table Retail Shops
Number of Expiring Leases(1) |
Expiring GLA/NRA(2) |
% of Total GLA/NRA Expiring |
Expiring Base Rent(3) |
% of Total Base Rent |
Expiring Base Rent per Sq. Ft. |
Expiring Ground Lease Revenue |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 |
66 | 153,039 | 3.7 | % | $ | 1,922,464 | 4.1 | % | $ | 12.56 | $ | 0 | ||||||||||||||||||
2006 |
57 | 117,807 | 2.9 | % | 1,752,806 | 3.8 | % | 14.88 | 0 | |||||||||||||||||||||
2007 |
53 | 110,430 | 2.7 | % | 1,727,711 | 3.7 | % | 15.65 | 0 | |||||||||||||||||||||
2008 |
34 | 76,323 | 1.9 | % | 1,419,956 | 3.0 | % | 18.60 | 0 | |||||||||||||||||||||
2009 |
39 | 103,185 | 2.5 | % | 1,752,202 | 3.8 | % | 16.98 | 0 | |||||||||||||||||||||
2010 |
14 | 44,744 | 1.1 | % | 591,437 | 1.3 | % | 13.22 | 0 | |||||||||||||||||||||
2011 |
17 | 52,964 | 1.3 | % | 1,111,026 | 2.4 | % | 20.98 | 0 | |||||||||||||||||||||
2012 |
21 | 81,501 | 2.0 | % | 1,658,844 | 3.6 | % | 20.35 | 85,000 | |||||||||||||||||||||
2013 |
8 | 22,574 | 0.6 | % | 443,530 | 1.0 | % | 19.65 | 0 | |||||||||||||||||||||
2014 |
12 | 33,481 | 0.8 | % | 708,774 | 1.5 | % | 21.17 | 411,400 | |||||||||||||||||||||
2015 &
Beyond |
11 | 29,574 | 0.7 | % | 732,432 | 1.6 | % | 24.77 | 891,280 | |||||||||||||||||||||
Total |
332 | 825,622 | 20.2 | % | $ | 13,821,182 | 29.8 | % | $ | 16.74 | $ | 1,387,680 |
(1) | Lease expiration table does not include option periods and 2005 expirations include month-to-month tenants. |
(2) | Expiring GLA excludes square footage for non-owned ground lease structures. |
(3) | Excludes ground lease revenue. |
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
32
PART II
ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High |
Low |
Closing |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August
11, 2004 to September 30, 2004 |
$ | 13.56 | $ | 12.50 | $ | 13.15 | ||||||||
Quarter Ended
December 31, 2004 |
$ | 15.61 | $ | 12.70 | $ | 15.28 |
33
at least 90% of our taxable income. Under certain circumstances, we could be required to make distributions in excess of cash available for distributions in order to meet such requirements. For the taxable year ended December 31, 2004, approximately 99.05% of our distributions to shareholders constituted a return of capital and approximately 0.95% constituted taxable ordinary income dividends.
Measurement Period |
% of Funds From Operations |
|||||
---|---|---|---|---|---|---|
For the
period of two fiscal quarters ending March 31, 2005 |
105 | % | ||||
For the
period of three fiscal quarters ending June 30, 2005 |
100 | % | ||||
For the
period of four fiscal quarters ending September 30, 2005 |
100 | % | ||||
For the
period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending
thereafter |
95 | % |
34
ITEM 6. SELECTED FINANCIAL DATA
The Company |
The Predecessor |
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, |
|||||||||||||||||||||||||||
Period August 16, 2004 through December 31, 2004 |
Period January 1, 2004 through August 15, 2004 |
2003 |
2002 |
2001 |
2000 |
||||||||||||||||||||||
($ in thousands, except share and per share
data) |
|||||||||||||||||||||||||||
Operating
Data: |
|||||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||
Rental
related revenue |
$ | 20,284 | $ | 14,083 | $ | 12,756 | $ | 6,152 | $ | 2,179 | $ | 1,324 | |||||||||||||||
Construction,
service fees and other |
9,364 | 5,368 | 15,002 | 22,445 | 8,585 | 1,180 | |||||||||||||||||||||
Total
revenue |
29,648 | 19,451 | 27,758 | 28,597 | 10,764 | 2,504 | |||||||||||||||||||||
Expenses |
|||||||||||||||||||||||||||
Property
operating |
3,735 | 4,131 | 3,772 | 2,134 | 190 | 266 | |||||||||||||||||||||
Real estate
taxes |
1,836 | 1,596 | 1,207 | 623 | 57 | | |||||||||||||||||||||
General and
administrative |
1,781 | 1,477 | 2,745 | 1,905 | 1,081 | 247 | |||||||||||||||||||||
Cost of
construction and services |
8,787 | 4,405 | 11,537 | 19,509 | 6,437 | 74 | |||||||||||||||||||||
Depreciation
and amortization |
7,865 | 3,584 | 2,893 | 1,306 | 360 | 287 | |||||||||||||||||||||
Interest
expense |
4,460 | 4,829 | 4,207 | 2,285 | 1,249 | 759 | |||||||||||||||||||||
Loan
prepayment penalties and expenses |
1,671 | | | | | | |||||||||||||||||||||
Total
expenses |
30,135 | 20,022 | 26,361 | 27,762 | 9,374 | 1,633 | |||||||||||||||||||||
Minority
interest (income) loss |
(126 | ) | 215 | (233 | ) | 85 | (74 | ) | (7 | ) | |||||||||||||||||
Equity in
earnings (loss) of unconsolidated entities and other, net |
134 | 164 | 273 | 1,318 | 195 | (419 | ) | ||||||||||||||||||||
Income (loss)
of the operating partnership |
(479 | ) | (192 | ) | 1,437 | 2,238 | 1,511 | 445 | |||||||||||||||||||
Limited
partners interests in operating partnership |
147 | | | | | | |||||||||||||||||||||
Net income
(loss) |
$ | (332 | ) | $ | (192 | ) | $ | 1,437 | $ | 2,238 | $ | 1,511 | $ | 445 | |||||||||||||
Net loss per
share (basic and diluted) |
$ | (0.02 | ) | ||||||||||||||||||||||||
Basic and
diluted weighted average shares outstanding |
18,727,977 | ||||||||||||||||||||||||||
Distributions
paid per Common Share |
$ | 0.09375 |
The Company |
The Predecessor |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, |
||||||||||||||||||||||||||||
Year Ended December 31, 2004 |
2003 |
2002 |
2001 |
2000 |
||||||||||||||||||||||||
($ in thousands) |
||||||||||||||||||||||||||||
Balance
Sheet Data: |
||||||||||||||||||||||||||||
Investment
properties, net |
$ | 525,242 | $ | 149,346 | $ | 54,022 | $ | 36,673 | $ | 10,537 | ||||||||||||||||||
Cash and cash
equivalents |
10,103 | 2,189 | 3,493 | 1,200 | 254 | |||||||||||||||||||||||
Total
assets |
569,755 | 171,336 | 71,388 | 49,091 | 18,501 | |||||||||||||||||||||||
Mortgage and
other indebtedness |
283,479 | 141,498 | 58,711 | 40,540 | 14,174 | |||||||||||||||||||||||
Total
liabilities |
343,133 | 165,778 | 70,954 | 49,626 | 20,525 | |||||||||||||||||||||||
Limited
partners interests in the operating partnership |
68,423 | | | | | |||||||||||||||||||||||
Shareholders equity (deficit) |
158,199 | 5,558 | 434 | (535 | ) | (2,024 | ) | |||||||||||||||||||||
Total
liabilities and shareholders equity (deficit) |
569,755 | 171,336 | 71,388 | 49,091 | 18,501 |
35
ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Overview
Summary of Critical Accounting Policies
Purchase Price Allocation
36
Investment Properties
Revenue Recognition
37
Recent Accounting Pronouncements
Results of Operations
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
Acquisition and Development Activities
Property Name |
MSA |
Acquisition Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Silver Glen
Crossings |
Chicago,
IL |
April 1 |
||||||||
Cedar Hill
Village |
Dallas,
TX |
June
28 |
||||||||
Galleria
Plaza |
Dallas,
TX |
June
29 |
||||||||
Wal-Mart
Plaza(1) |
Gainesville,
FL |
July
1 |
||||||||
Eagle Creek Pad
2 |
Naples,
FL |
July
7 |
||||||||
Fishers
Station(2) |
Indianapolis,
IN |
July
23 |
||||||||
Hamilton
Crossing |
Indianapolis,
IN |
August 19 |
38
Property Name |
MSA |
Acquisition Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Waterford
Lakes |
Orlando,
FL |
August 20 |
||||||||
Publix at
Acworth |
Atlanta,
GA |
August 20 |
||||||||
Plaza at Cedar
Hill |
Dallas,
TX |
August 31 |
||||||||
Sunland Towne
Centre |
El Paso,
TX |
September 16 |
||||||||
Centre at
Panola |
Atlanta,
GA |
September 30 |
||||||||
Marsh
Supermarket |
Indianapolis,
IN |
November 24 |
||||||||
Eastgate
Pavilion |
Cincinnati,
OH |
December 1 |
||||||||
Four Corner
Square |
Seattle,
WA |
December 20 |
(1) |
This property is owned through a joint venture with a third party. The company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances. |
(2) |
This property is owned through a joint venture with a third party. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is allocated to the Company. |
Property Name |
MSA |
Operational Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Boulevard
Crossing |
Kokomo,
IN |
February |
||||||||
Circuit City
Plaza |
Ft. Lauderdale,
FL |
March |
||||||||
50th
& 12th |
Seattle,
WA |
August |
||||||||
176th
& Meridian |
Seattle,
WA |
August |
||||||||
Traders
Point(1) |
Indianapolis,
IN |
October |
||||||||
Cool Creek
Commons(2) |
Indianapolis,
IN |
October |
||||||||
82nd
& Otty |
Portland,
OR |
November |
||||||||
Indiana State
Motor Pool |
Indianapolis,
IN |
November |
(1) |
Approximately 74% of the space at this property was leased at December 31, 2004. |
(2) |
Approximately 76% of the space at this property was leased at December 31, 2004. |
Comparison of Operating Results for the Years Ended December 31, 2004 and 2003
39
40
Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002
Acquisition and Development Activities
Comparison of Operating Results for the Years Ended December 31, 2003 and 2002
41
Liquidity and Capital Resources
42
|
our amount of leverage; |
|
a minimum interest coverage ratio; |
|
our minimum tangible net worth; |
|
a minimum fixed charge coverage ratio; |
|
the collateral pool properties generating sufficient net operating income to maintain a certain fixed charge ratio; and |
|
the collateral pool properties maintaining a minimum aggregate occupancy rate. |
Measurement Period |
% of Funds From Operations |
|||||
---|---|---|---|---|---|---|
For the
period of two fiscal quarters ending March 31, 2005 |
105 | % | ||||
For the
period of three fiscal quarters ending June 30, 2005 |
100 | % | ||||
For the
period of four fiscal quarters ending September 30, 2005 |
100 | % | ||||
For the
period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending
thereafter |
95 | % |
43
Cash Flows
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
44
Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002
Off-Balance Sheet Arrangements
Contractual Obligations
Construction Contracts |
Operating Leases |
Consolidated Long Term Debt |
Our Share of Debt of Unconsolidated Joint Venture Entities |
Employment Agreements(1) |
Total |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 |
$ | 8,414,664 | $ | 856,800 | $ | 21,139,541 | $ | 168,965 | $ | 1,440,000 | $ | 32,019,970 | ||||||||||||||
2006 |
| 856,800 | 70,998,588 | 190,836 | 1,440,000 | 73,486,224 | ||||||||||||||||||||
2007 |
| 906,300 | 58,610,344 | 204,250 | 1,440,000 | 61,160,894 | ||||||||||||||||||||
2008 |
| 918,300 | 6,769,384 | 217,491 | | 7,905,175 | ||||||||||||||||||||
2009 |
| 920,800 | 29,751,433 | 2,223,456 | | 32,895,689 | ||||||||||||||||||||
Thereafter |
| 14,129,170 | 92,071,326 | 5,733,899 | | 111,934,395 | ||||||||||||||||||||
Unamortized
Debt Premium |
| | 4,138,747 | | | 4,138,747 | ||||||||||||||||||||
Total |
$ | 8,414,664 | $ | 18,588,170 | $ | 283,479,363 | $ | 8,738,897 | $ | 4,320,000 | $ | 323,541,094 |
(1)In connection with
the Companys IPO and related formation transactions, it entered into employment agreements with seven members of senior management. Under the
agreements, each employee receives a stipulated annual salary through December 31, 2007. Each agreement has an automatic one-year renewal unless the
Company or the employee elects not to renew the agreement.
We intend to satisfy the approximately $32 million of contractual obligations that are due in 2005 primarily with cash generated from operations, draws on our line of credit and, where appropriate, refinancing of indebtedness coming due.
45
Outstanding Indebtedness
Property |
Balance Outstanding |
Interest Rate |
Maturity |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fixed Rate
Mortgages: |
||||||||||||||||||
Preston
Commons |
$ | 4,652,591 | 5.90 | % | 3/11/2013 | |||||||||||||
Whitehall
Pike |
9,960,453 | 6.71 | % | 7/5/2018 | ||||||||||||||
Thirty
South |
23,240,515 | 6.09 | % | 1/11/2014 | ||||||||||||||
Boulevard
Crossing |
12,660,000 | 5.11 | % | 12/11/2009 | ||||||||||||||
Four Corner
Square |
2,500,000 | 4.00 | % | 1/3/2005 | ||||||||||||||
Ridge Plaza
Shopping Center |
16,962,625 | 5.15 | % | 10/11/2009 | ||||||||||||||
Plaza at
Cedar Hill |
27,264,160 | 7.38 | % | 2/1/2012 | ||||||||||||||
Sunland Towne
Center |
17,719,271 | 8.85 | % | 1/11/2006 | ||||||||||||||
Centre at
Panola Phase I |
4,438,551 | 6.78 | % | 1/1/2022 | ||||||||||||||
50th &
12th |
4,695,018 | 5.67 | % | 11/11/2014 | ||||||||||||||
The
Corner |
1,926,175 | 7.65 | % | 7/1/2011 | ||||||||||||||
International
Speedway Square |
19,923,058 | 7.17 | % | 3/11/2011 | ||||||||||||||
176th &
Meridian |
4,265,474 | 5.67 | % | 11/11/2014 | ||||||||||||||
Traders
Point |
2,625,000 | 14.00 | % | 9/30/2006 | ||||||||||||||
152,832,891 | ||||||||||||||||||
Net
unamortized premium on assumed debt of acquired properties |
4,138,747 | |||||||||||||||||
Subtotal
Fixed Rate Mortgages |
156,971,638 |
46
Variable Rate Mortgages: Mortgage Notes Variable |
Interest Rate at 12/31/04 |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fishers
Station |
5,465,766 | LIBOR +
2.75% |
9/1/2008 | 5.15 | % | |||||||||||||
Cool Creek
Commons |
1,135,000 | Prime +
2.00% |
4/30/2006 | 7.15 | % | |||||||||||||
Geist
Pavillion |
863,991 | Prime +
0.25% |
4/5/2005 | 5.40 | % | |||||||||||||
Eagle Creek
Phase II |
850,000 | LIBOR +
2.50% |
4/21/2005 | 4.90 | % | |||||||||||||
Traders Point
II |
2,000,000 | Prime +
1.00% |
3/4/2005 | 6.15 | % | |||||||||||||
Traders Point
III |
471,000 | Prime |
10/5/2006 | 5.15 | % | |||||||||||||
Subtotal
Mortgage Notes |
10,785,757 | |||||||||||||||||
Mortgage Notes Construction |
||||||||||||||||||
82nd &
Otty |
1,586,756 | Prime |
9/12/2005 | 5.15 | % | |||||||||||||
Weston Park
Phase I |
4,213,845 | LIBOR +
2.15% |
7/9/2005 | 4.55 | % | |||||||||||||
Traders
Point |
29,434,000 | LIBOR +
2.35% |
10/5/2006 | 4.75 | % | |||||||||||||
Indiana State
Motor Pool |
3,819,516 | LIBOR +
2.25% |
4/19/2006 | 4.65 | % | |||||||||||||
Cool Creek
Commons |
13,816,660 | LIBOR +
2.25% |
4/30/2006 | 4.65 | % | |||||||||||||
Circuit City
Plaza |
6,651,191 | LIBOR + 1.85% |
6/30/2005 | 4.25 | % | |||||||||||||
Subtotal
Construction Notes |
59,521,968 | |||||||||||||||||
Line of
Credit |
56,200,000 | LIBOR + 1.35% |
8/31/2007 | 3.75 | % | |||||||||||||
Subtotal
Variable Rate Debt |
126,507,725 | |||||||||||||||||
Total
Indebtedness |
$ | 283,479,363 |
Funds From Operations
47
The Company |
The Predecessor |
The Predecessor |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August 16, 2004 through December 31, 2004 |
Period January 1, 2004 through August 15, 2004 |
Combined Year Ended December 31, 2004 |
Year Ended December 31, 2003 |
|||||||||||||||
Funds From
Operations: |
||||||||||||||||||
Net income
(loss) |
$ | (332,322 | ) | $ | (192,380 | ) | $ | (524,702 | ) | $ | 1,436,968 | |||||||
Add: Limited
Partners interests |
(146,968 | ) | | (146,968 | ) | | ||||||||||||
Add:
depreciation and amortization of consolidated entities |
7,816,339 | 3,563,176 | 11,379,515 | 2,887,199 | ||||||||||||||
Add:
depreciation and amortization of unconsolidated entities |
103,518 | 493,571 | 597,089 | 1,174,979 | ||||||||||||||
Add (deduct):
minority interest* |
(24,106 | ) | (214,887 | ) | (238,993 | ) | 232,819 | |||||||||||
Add: joint
venture partners interests in net income (loss) of unconsolidated entities* |
| 288,675 | 288,675 | 458,835 | ||||||||||||||
Add: joint
venture partners interests in depreciation and amortization of unconsolidated entities* |
| 519,277 | 519,277 | 1,672,003 | ||||||||||||||
Funds From
Operations of the Portfolio** |
7,416,461 | 4,457,432 | 11,873,893 | 7,862,803 | ||||||||||||||
Plus:
minority interest deficit |
| 214,887 | 214,887 | (232,819 | ) | |||||||||||||
Less:
minority interest share of depreciation and amortization |
| (1,014,248 | ) | (1,014,248 | ) | (754,301 | ) | |||||||||||
Less: joint
venture partners interests in net (income) loss of unconsolidated entities |
| (288,675 | ) | (288,675 | ) | (458,835 | ) | |||||||||||
Less: joint
venture partners interests in depreciation and amortization of unconsolidated entities |
| (519,277 | ) | (519,277 | ) | (1,672,003 | ) | |||||||||||
Less: Limited
Partners interests |
(2,276,853 | ) | | (2,276,853 | ) | | ||||||||||||
Funds From
Operations allocable to the Company |
$ | 5,139,608 | $ | 2,850,119 | $ | 7,989,727 | $ | 4,744,845 |
__________________
* | Amounts for the period prior to August 16, 2004 represent the minority and joint venture partners interests acquired in connection with the Companys IPO and related formation transactions. |
** | Includes bridge loan exit fee of $1,671,449 related to the Companys IPO and related formation transactions, as well as $0.6 million of additional expense related to the IPO. |
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Related to Fixed Rate Debt
48
value of our fixed rate debt of approximately $7.1 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed rate debt of approximately $7.6 million. A 100 basis point increase or decrease in interest rates on our variable rate debt as of December 31, 2004 would increase or decrease annual cash flows by approximately $1.3 million.
Inflation
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Changes in Internal Control Over Financial Reporting
ITEM 9B. OTHER INFORMATION
49
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
50
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) | Documents filed as part of this report: |
(1) |
Financial Statements: |
Consolidated and combined financial statements for the Company and its Predecessor listed on the index immediately preceeding the financial statements at the end of this report. |
(2) |
Financial Statement Schedule: |
Financial statement schedule for the Company and its Predecessor listed on the index immediately preceeding the financial statements at the end of this report. |
(3) |
Exhibits: |
The Company files as part of this report the exhibits listed on the Exhibit Index. |
(b) | Exhibits: |
(c) | Financial Statement Schedule: |
The Company files as part of this report the financial statement schedule listed on the index immediately preceding the financial statements at the end of this report. |
51
SIGNATURES
KITE REALTY GROUP
TRUST (Registrant) |
||||||||||
March 28,
2005 (Date) |
/s/ JOHN A.
KITE John A. Kite Chief Executive Officer and President (Principal Executive Officer) |
|||||||||
March 28,
2005 (Date) |
/s/ DANIEL R.
SINK Daniel R. Sink Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Signature |
Title |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ ALVIN E.
KITE, JR. (Alvin E. Kite, Jr.) |
Chairman of the Board and Trustee |
March 28,
2005 |
||||||||
/s/ JOHN A.
KITE (John A. Kite) |
Chief Executive Officer, President and Trustee (Principal Executive Officer) |
March 28,
2005 |
||||||||
/s/ WILLIAM E.
BINDLEY (William E. Bindley) |
Trustee |
March 28,
2005 |
||||||||
/s/ RICHARD A.
COSIER (Richard A. Cosier) |
Trustee |
March 27,
2005 |
||||||||
/s/ EUGENE
GOLUB (Eugene Golub) |
Trustee |
March 28,
2005 |
||||||||
/s/ GERALD L.
MOSS (Gerald L. Moss) |
Trustee |
March 28,
2005 |
||||||||
/s/ MICHAEL L.
SMITH (Michael L. Smith) |
Trustee |
March 27,
2005 |
||||||||
/s/ DANIEL R.
SINK (Daniel R. Sink) |
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
March 28,
2005 |
52
Kite Realty Group Trust
Index to Financial Statements
Page |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Consolidated and Combined Financial Statements: |
||||||||||
Report of Independent Registered Public Accounting Firm |
F-2 | |||||||||
Balance Sheets for the Company as of December 31, 2004 and for the Predecessor as of December 31, 2003 |
F-3 | |||||||||
Statements of Operations for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 |
F-4 | |||||||||
Statements of Owners Equity for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 |
F-5 | |||||||||
Statements of Cash Flows for the Company for the Period From August 16, 2004 Through December 31, 2004 and for the Predecessor for the Period From January 1, 2004 Through August 15, 2004 and the Years Ended December 31, 2003 and 2002 |
F-6 | |||||||||
Notes to Consolidated and Combined Financial Statements |
F-8 | |||||||||
Financial Statement Schedule: |
||||||||||
Schedule III Real Estate and Accumulated Depreciation |
F-31 | |||||||||
Notes to Schedule III |
F-33 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of Kite Realty Group Trust:
Indianapolis, Indiana
March 24, 2005
F-2
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE
PREDECESSOR)
CONSOLIDATED AND COMBINED BALANCE SHEETS
The Company |
The Predecessor |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
December 31, 2004 |
December 31, 2003 |
|||||||||
Assets: |
||||||||||
Investment
properties, at cost: |
||||||||||
Land |
$ | 115,806,345 | $ | 19,319,563 | ||||||
Land held for
development |
10,454,246 | 7,137,095 | ||||||||
Buildings and
improvements |
365,043,023 | 77,076,703 | ||||||||
Furniture,
equipment and other |
5,587,052 | 1,596,820 | ||||||||
Construction in
progress |
52,485,321 | 48,681,767 | ||||||||
549,375,987 | 153,811,948 | |||||||||
Less:
accumulated depreciation |
(24,133,716 | ) | (4,465,775 | ) | ||||||
525,242,271 | 149,346,173 | |||||||||
Cash and cash
equivalents |
10,103,176 | 2,189,478 | ||||||||
Tenant
receivables, including accrued straight-line rent |
5,763,831 | 1,520,487 | ||||||||
Other
receivables |
7,635,276 | 5,139,118 | ||||||||
Due from
affiliates |
| 3,905,605 | ||||||||
Investments in
unconsolidated entities, at equity |
155,495 | 2,136,158 | ||||||||
Escrow
deposits |
4,497,337 | 595,459 | ||||||||
Deferred costs,
net |
15,264,271 | 6,053,515 | ||||||||
Prepaid and
other assets |
1,093,176 | 449,713 | ||||||||
Total
Assets |
$ | 569,754,833 | $ | 171,335,706 | ||||||
Liabilities
and Owners Equity: |
||||||||||
Mortgage and
other indebtedness |
$ | 283,479,363 | $ | 141,498,289 | ||||||
Cash
distributions and losses in excess of net investment in unconsolidated entities, at equity |
837,083 | 2,864,690 | ||||||||
Accounts payable
and accrued expenses |
23,919,949 | 9,541,494 | ||||||||
Deferred revenue
and other liabilities |
34,836,430 | 9,266,250 | ||||||||
Due to
affiliates |
| 1,469,560 | ||||||||
Minority
interest |
59,735 | 1,137,914 | ||||||||
Total
liabilities |
343,132,560 | 165,778,197 | ||||||||
Commitments and
Contingencies |
||||||||||
Limited
Partners interests in operating partnership |
68,423,213 | | ||||||||
Owners
Equity: |
||||||||||
Common Shares,
$.01 par value, 200,000,000 shares authorized, 19,148,267 shares issued and outstanding |
191,483 | | ||||||||
Additional paid
in capital and other |
166,861,507 | | ||||||||
Unearned
compensation |
(806,879 | ) | | |||||||
Accumulated
deficit |
(8,047,051 | ) | | |||||||
Owners
equity |
| 5,557,509 | ||||||||
Total
owners equity |
158,199,060 | 5,557,509 | ||||||||
Total
Liabilities and Owners Equity |
$ | 569,754,833 | $ | 171,335,706 |
See accompanying notes.
F-3
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE
PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
The Company |
The Predecessor |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Year Ended December 31, |
|||||||||||||||||||
Period August 16, 2004 through December 31, 2004 |
Period January 1, 2004 through August 15, 2004 |
2003 |
2002 |
||||||||||||||||
Revenue: |
|||||||||||||||||||
Minimum
rent |
$ | 15,558,827 | $ | 11,046,605 | $ | 10,043,847 | $ | 4,031,279 | |||||||||||
Tenant
reimbursements |
2,637,230 | 1,662,576 | 1,199,885 | 90,618 | |||||||||||||||
Other
property related revenue |
2,087,256 | 1,373,503 | 1,511,914 | 2,030,336 | |||||||||||||||
Construction
and service fee revenue |
9,333,868 | 5,257,201 | 14,851,925 | 22,299,937 | |||||||||||||||
Other
income |
30,446 | 110,819 | 149,930 | 144,432 | |||||||||||||||
Total
revenue |
29,647,627 | 19,450,704 | 27,757,501 | 28,596,602 | |||||||||||||||
Expenses: |
|||||||||||||||||||
Property
operating |
3,735,195 | 4,130,747 | 3,772,147 | 2,134,523 | |||||||||||||||
Real estate
taxes |
1,835,837 | 1,595,578 | 1,206,773 | 622,539 | |||||||||||||||
Cost of
construction and services |
8,786,999 | 4,405,160 | 11,536,538 | 19,509,066 | |||||||||||||||
General,
administrative, and other |
1,780,579 | 1,477,112 | 2,745,657 | 1,904,800 | |||||||||||||||
Depreciation
and amortization |
7,864,679 | 3,584,290 | 2,892,506 | 1,305,596 | |||||||||||||||
Total
expenses |
24,003,289 | 15,192,887 | 22,153,621 | 25,476,524 | |||||||||||||||
Operating
income |
5,644,338 | 4,257,817 | 5,603,880 | 3,120,078 | |||||||||||||||
Interest
expense |
4,460,476 | 4,828,888 | 4,207,213 | 2,284,637 | |||||||||||||||
Loan
prepayment penalties and expenses |
1,671,449 | | | | |||||||||||||||
Loss on
disposal of fixed assets |
| | | 250,382 | |||||||||||||||
Minority
interest (income) loss |
(125,800 | ) | 214,887 | (232,819 | ) | 84,969 | |||||||||||||
Equity in
earnings of unconsolidated entities |
134,097 | 163,804 | 273,118 | 1,568,154 | |||||||||||||||
Limited
partners interest in operating partnership |
146,968 | | | | |||||||||||||||
Net income
(loss) |
$ | (332,322 | ) | $ | (192,380 | ) | $ | 1,436,966 | $ | 2,238,182 | |||||||||
Basic and
diluted loss per share |
$ | (0.02 | ) | ||||||||||||||||
Basic and
diluted weighted average Common Shares outstanding |
18,727,977 |
See accompanying notes.
F-4
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE
PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN OWNERS EQUITY
The Company |
The Predecessor |
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Shares |
||||||||||||||||||||||||||||||
Shares |
Amount |
Additional Paid-in Capital |
Accumulated Deficit and Dividends |
Unearned Compensation |
Owners Deficit |
Total |
||||||||||||||||||||||||
Kite
Property Group: |
||||||||||||||||||||||||||||||
Owners
Deficit, December 31, 2001 |
$ | (534,762 | ) | $ | (534,762 | ) | ||||||||||||||||||||||||
Contributions |
219,799 | 219,799 | ||||||||||||||||||||||||||||
Distributions |
(1,488,570 | ) | (1,488,570 | ) | ||||||||||||||||||||||||||
Net
income |
2,238,182 | 2,238,182 | ||||||||||||||||||||||||||||
Owners
Equity, December 31, 2002 |
434,649 | 434,649 | ||||||||||||||||||||||||||||
Contributions |
11,731,177 | 11,731,177 | ||||||||||||||||||||||||||||
Distributions |
(8,045,283 | ) | (8,045,283 | ) | ||||||||||||||||||||||||||
Net
income |
1,436,966 | 1,436,966 | ||||||||||||||||||||||||||||
Owners
Equity, December 31, 2003 |
5,557,509 | 5,557,509 | ||||||||||||||||||||||||||||
Contributions |
2,332,873 | 2,332,873 | ||||||||||||||||||||||||||||
Distributions |
(8,992,939 | ) | (8,992,939 | ) | ||||||||||||||||||||||||||
Net
loss |
(192,380 | ) | (192,380 | ) | ||||||||||||||||||||||||||
Owners
Deficit, August 15, 2004 |
(1,294,937 | ) | (1,294,937 | ) | ||||||||||||||||||||||||||
Kite Realty
Group Trust: |
||||||||||||||||||||||||||||||
Reclassify
Predecessor owners deficit |
(1,294,937 | ) | 1,294,937 | | ||||||||||||||||||||||||||
Gross proceeds
from sale of Common Shares |
18,300,000 | 183,000 | 237,717,000 | 237,900,000 | ||||||||||||||||||||||||||
Issuance of
shares to Principals in exchange for contributed interests |
833,267 | 8,333 | (8,333 | ) | | |||||||||||||||||||||||||
Offering
costs |
(22,427,988 | ) | (22,427,988 | ) | ||||||||||||||||||||||||||
Stock option
activity |
15,000 | 150 | 1,066,800 | (806,879 | ) | 260,071 | ||||||||||||||||||||||||
Distributions
declared |
(7,714,729 | ) | (7,714,729 | ) | ||||||||||||||||||||||||||
Net
loss |
(332,322 | ) | (332,322 | ) | ||||||||||||||||||||||||||
Adjustment to
Limited Partners interests |
(48,191,035 | ) | (48,191,035 | ) | ||||||||||||||||||||||||||
Balances, December 31, 2004 |
19,148,267 | $ | 191,483 | $ | 166,861,507 | $ | (8,047,051 | ) | $ | (806,879 | ) | $ | | $ | 158,199,060 |
See accompanying notes.
F-5
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE
PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
The Company |
The Predecessor |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Years Ended December 31, |
|||||||||||||||||||
Period August 16, 2004 through December 31, 2004 |
Period January 1, 2004 through August 15, 2004 |
2003 |
2002 |
||||||||||||||||
Cash flow
from operating activities: |
|||||||||||||||||||
Net income
(loss) |
$ | (332,322 | ) | $ | (192,380 | ) | $ | 1,436,966 | $ | 2,238,182 | |||||||||
Adjustments to
reconcile net income (loss) to net cash provided by operating activities: |
|||||||||||||||||||
Minority
interest |
125,800 | (214,887 | ) | 232,819 | (84,969 | ) | |||||||||||||
Equity in
earnings of unconsolidated entities |
(134,097 | ) | (163,804 | ) | (273,118 | ) | (1,568,154 | ) | |||||||||||
Limited
partners interest in Operating Partnership |
(146,968 | ) | | | | ||||||||||||||
Straight-line
rent |
(373,944 | ) | (311,899 | ) | (324,383 | ) | (243,030 | ) | |||||||||||
Depreciation
and amortization |
8,345,829 | 3,987,945 | 3,017,579 | 1,327,925 | |||||||||||||||
Provision for
credit losses |
(214,053 | ) | 658,052 | 30,000 | | ||||||||||||||
Compensation
expense for equity awards |
65,071 | | | | |||||||||||||||
Amortization
of in-place lease liabilities |
(1,093,620 | ) | (452,564 | ) | (260,899 | ) | | ||||||||||||
Changes in
assets and liabilities: |
|||||||||||||||||||
Tenant
receivables |
(1,641,334 | ) | (1,046,616 | ) | (786,814 | ) | (16,049 | ) | |||||||||||
Deferred
costs and other assets |
2,748,311 | (908,837 | ) | (4,599,074 | ) | (1,260,117 | ) | ||||||||||||
Accounts
payable and accrued expenses |
3,102,015 | 737,697 | 5,976,650 | 1,257,260 | |||||||||||||||
Net cash
provided by operating activities |
10,450,688 | 2,092,707 | 4,449,726 | 1,651,048 | |||||||||||||||
Cash flow
from investing activities: |
|||||||||||||||||||
Acquisitions
of properties |
(108,287,834 | ) | (46,770,356 | ) | (45,616,460 | ) | | ||||||||||||
Acquisitions
of joint venture and outside minority interests |
(12,451,155 | ) | | | | ||||||||||||||
Capital and
construction expenditures, net |
(32,242,552 | ) | (34,999,943 | ) | (48,550,943 | ) | (18,378,543 | ) | |||||||||||
Change in
construction payables |
2,824,764 | 3,170,506 | 532,379 | 1,847,423 | |||||||||||||||
Distributions
received from unconsolidated entities |
80,710 | 517,233 | 1,375,500 | 551,500 | |||||||||||||||
Contributions
to unconsolidated entities |
| | (242,506 | ) | | ||||||||||||||
Consolidation
of Glendale Malls Cash as of March 31, 2004 |
| 108,822 | | | |||||||||||||||
Consolidation
of acquisitions, acquired joint venture and outside minority interests cash |
665,604 | 82,778 | | | |||||||||||||||
Net cash
used in investing activities |
(149,410,463 | ) | (77,890,960 | ) | (92,502,030 | ) | (15,979,620 | ) |
(Continued)
See accompanying notes.
F-6
KITE REALTY GROUP TRUST AND
KITE PROPERTY GROUP (THE
PREDECESSOR)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
The Company |
The Predecessor |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the Years Ended December 31, |
|||||||||||||||||||
Period August 16, 2004 through December 31, 2004 |
Period January 1, 2004 through August 15, 2004 |
2003 |
2002 |
||||||||||||||||
Cash flow
from financing activities: |
|||||||||||||||||||
Offering
proceeds, net of issuance costs |
215,472,012 | | | | |||||||||||||||
Loan
proceeds |
123,162,602 | 89,185,669 | 112,708,871 | 23,446,740 | |||||||||||||||
Loan
transaction costs |
(5,373,864 | ) | (655,263 | ) | (709,043 | ) | | ||||||||||||
Loan
payments |
(176,113,029 | ) | (10,105,596 | ) | (29,921,150 | ) | (5,275,980 | ) | |||||||||||
Payments and
advances to/from Principals |
(9,000,000 | ) | 6,902,818 | | | ||||||||||||||
Distributions
paid |
(2,571,576 | ) | | | | ||||||||||||||
Contributions
(including minority interest share) |
| 2,681,036 | 14,579,103 | 249,748 | |||||||||||||||
Distributions
(including minority interest share) |
(143,864 | ) | (10,769,219 | ) | (9,908,843 | ) | (1,799,474 | ) | |||||||||||
Net cash
provided by financing activities |
145,432,281 | 77,239,445 | 86,748,938 | 16,621,034 | |||||||||||||||
Increase
(decrease) in cash |
6,472,506 | 1,441,192 | (1,303,366 | ) | 2,292,462 | ||||||||||||||
Cash,
beginning of period |
3,630,670 | 2,189,478 | 3,492,844 | 1,200,382 | |||||||||||||||
Cash, end
of period |
$ | 10,103,176 | $ | 3,630,670 | $ | 2,189,478 | $ | 3,492,844 |
See accompanying notes.
F-7
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation
Organization
Basis of Presentation
F-8
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation
(Continued)
adjustment is reflected in the Companys shareholders equity. For the period from August 16, 2004 through December 31, 2004, the limited partners weighted average interest in the Operating Partnership was 30.7% and as of December 31, 2004, their interest was 30.2%.
Investment in Portfolio Properties
Operating Properties Consolidated
Shops at Eagle
Creek (80%) |
||||||
Kings Lake
Square (80%) |
||||||
Ridge Plaza
Shopping Center (80%) |
||||||
PEN Products
Warehouse (80%) |
||||||
Mid-America
Clinical Labs (80%) |
||||||
Thirty South
(80%) |
||||||
Preston Commons
(80%) |
||||||
Whitehall Pike
(89%) |
||||||
Stoney Creek
Commons (80%) |
||||||
Union Station
Parking Garage (80%) |
||||||
F-9
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 1. Organization and Basis of Presentation
(Continued)
Development Properties Consolidated
Indiana State
Motor Pool (80%) |
||||||
Circuit City
Plaza (80%) |
||||||
50th
& 12th (64%) |
||||||
82nd
& Otty (80%) |
||||||
Boulevard
Crossing (80%) |
||||||
Geist Pavilion
(80%) |
||||||
Cool Creek
Commons (80%) |
||||||
Traders Point
(80%) |
||||||
Weston Park
(80%) |
||||||
Greyhound Commons
(80%) |
||||||
Eagle Creek Phase
II (80%) |
Operating Properties Equity Method
The Centre
(30%) |
||||||
Spring Mill
Medical (40%) |
||||||
Glendale Mall
(43%) |
||||||
50 S. Morton
(44%) |
||||||
The Corner
(50%) |
||||||
International
Speedway Square (35%) |
||||||
Burlington Coat
(27%) |
Development Properties Equity Method
Martinsville
Shops (58%) |
||||||
Red Bank Commons
(44%) |
Glendale Mall was consolidated as of March 31, 2004 pursuant to FIN No. 46 see Note 15.
Note 2. Summary of Significant Accounting Policies
Use of Estimates
Purchase Accounting
F-10
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies
(Continued)
|
the fair value of the building on an as-if-vacant basis and to land determined either by real estate tax assessments, independent appraisals or other relevant data. |
|
above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases. The capitalized above-market and below-market lease values are amortized as a reduction of or addition to rental income over the remaining non-cancelable terms of the respective leases. Should a tenant terminate its lease, the unamortized portion of the lease intangibles would be charged or credited to income. |
|
the value of leases acquired. We utilize independent sources for our estimates to determine the respective in-place lease values. Our estimates of value are made using methods similar to those used by independent appraisers. Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and foregone costs and rent received during the estimated lease-up period as if the space was vacant. The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases. |
Investment Properties
F-11
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies
(Continued)
Escrow Deposits
Cash and Cash Equivalents
Fair Value of Financial Instruments
Revenue Recognition
F-12
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies
(Continued)
Tenant Receivables and Allowance for Doubtful Accounts
2004 |
2003 |
2002 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance,
beginning of year |
$ | 30,000 | $ | | $ | | ||||||||
Consolidation
of joint venture interests |
1,210,942 | | | |||||||||||
Provision for
credit losses |
443,999 | 30,000 | | |||||||||||
Accounts
written off |
(1,172,967 | ) | | | ||||||||||
Balance, end
of year |
$ | 511,974 | $ | 30,000 | $ | |
Concentration of Credit Risk
Earnings Per Share
F-13
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 2. Summary of Significant Accounting Policies
(Continued)
Income Taxes
Reclassifications
Note 3. Deferred Costs
F-14
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 3. Deferred Costs (Continued)
The Company |
The Predecessor |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 |
2003 |
|||||||||
Deferred
financing costs |
$ | 4,958,167 | $ | 1,155,629 | ||||||
Deferred leasing
costs and other |
13,249,752 | 5,835,120 | ||||||||
18,207,919 | 6,990,749 | |||||||||
Less
accumulated amortization |
(2,943,648 | ) | (937,234 | ) | ||||||
$ | 15,264,271 | $ | 6,053,515 |
2005 |
$ | 3,172,845 | ||||
2006 |
2,409,641 | |||||
2007 |
2,094,410 | |||||
2008 |
1,695,813 | |||||
2009 |
1,518,270 |
The Company |
The Predecessor |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For the year ended December 31, |
|||||||||||||||||||
For the period from August 16, 2004 through December 31, 2004 |
For the period from January 1, 2004 through August 15, 2004 |
2003 |
2002 |
||||||||||||||||
Amortization
of deferred financing costs |
$ | 481,150 | $ | 403,655 | $ | 125,073 | $ | 22,329 | |||||||||||
Amortization
of deferred leasing costs |
1,522,110 | 577,335 | 567,655 | 192,853 |
Note 4. Deferred Revenue and Other Liabilities
F-15
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 4. Deferred Revenue and Other Liabilities
(Continued)
The Company |
The Predecessor |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 |
2003 |
|||||||||
Unamortized
in-place lease liabilities |
$ | 23,185,751 | $ | 4,017,978 | ||||||
Construction
billings in excess of cost |
6,586,506 | 3,681,357 | ||||||||
Construction
retainages payable |
4,083,741 | 1,458,412 | ||||||||
Tenant rents
received in advance |
921,390 | 47,299 | ||||||||
Deferred income
taxes |
59,042 | 14,000 | ||||||||
Other |
| 47,204 | ||||||||
$ | 34,836,430 | $ | 9,266,250 |
2005 |
$ | 3,328,326 | ||||
2006 |
2,935,860 | |||||
2007 |
2,627,501 | |||||
2008 |
2,021,707 | |||||
2009 |
1,780,468 |
Note 5. Investments in Unconsolidated Entities
F-16
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 5. Investments in Unconsolidated Entities
(Continued)
The Company |
The Predecessor |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
2004 |
2003 |
|||||||||
Assets: |
||||||||||
Investment
properties, at cost |
$ | 14,707,045 | $ | 75,636,988 | ||||||
Cash and cash
equivalents |
601,423 | 3,769,066 | ||||||||
Tenant
receivables, net |
254,883 | 2,259,996 | ||||||||
Deferred costs
and other assets |
779,356 | 2,819,285 | ||||||||
Total
Assets |
$ | 16,342,707 | $ | 84,485,335 | ||||||
Liabilities and
Partners Equity |
||||||||||
Mortgage and
other indebtedness |
$ | 16,609,675 | $ | 70,717,291 | ||||||
Accounts payable
and accrued expenses |
458,289 | 3,865,203 | ||||||||
Deferred revenue
and other liabilities |
| 256,820 | ||||||||
Due to
affiliates |
| 83,886 | ||||||||
Total
liabilities |
17,067,964 | 74,923,200 | ||||||||
Partners
equity (deficit) |
(725,257 | ) | 9,562,135 | |||||||
Total
Liabilities and Partners Equity |
$ | 16,342,707 | $ | 84,485,335 | ||||||
Company
(Predecessor) share of total assets |
$ | 8,518,002 | $ | 29,874,772 | ||||||
Company
(Predecessor) share of Partners equity (deficit) |
$ | (681,588 | ) | $ | (728,532 | ) | ||||
Company
(Predecessor) share of mortgage and other indebtedness |
$ | 8,738,897 | $ | 28,846,580 |
Total |
Company Share |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
2005 |
$ | 305,051 | $ | 168,965 | ||||||
2006 |
343,082 | 190,836 | ||||||||
2007 |
367,122 | 204,250 | ||||||||
2008 |
390,619 | 217,491 | ||||||||
2009 |
3,736,961 | 2,223,456 | ||||||||
Thereafter |
11,466,840 | 5,733,899 | ||||||||
Total |
$ | 16,609,675 | $ | 8,738,897 |
F-17
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 5. Investments in Unconsolidated Entities
(Continued)
The Company |
The Predecessor |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Period August 16, 2004 Through December 31, 2004 |
Period January 1, 2004 Through August 15, 2004 |
2003 |
2002 |
||||||||||||||||
Revenue: |
|||||||||||||||||||
Minimum
rent |
$ | 1,013,283 | $ | 4,782,846 | $ | 9,594,584 | $ | 8,529,423 | |||||||||||
Tenant
reimbursements |
257,064 | 1,030,909 | 2,025,221 | 2,382,710 | |||||||||||||||
Other
property related revenue |
(7,257 | ) | 149,909 | 899,148 | 4,123,366 | ||||||||||||||
Total
revenue |
1,263,090 | 5,963,664 | 12,518,953 | 15,035,499 | |||||||||||||||
Expenses: |
|||||||||||||||||||
Property
operating |
377,556 | 1,597,348 | 3,849,982 | 3,400,189 | |||||||||||||||
Real estate
taxes |
79,258 | 470,470 | 1,087,605 | 1,081,005 | |||||||||||||||
Depreciation
and amortization |
198,407 | 1,171,243 | 4,283,981 | 2,546,833 | |||||||||||||||
Total
expenses |
655,221 | 3,239,061 | 9,221,568 | 7,028,027 | |||||||||||||||
Operating
income |
607,869 | 2,724,603 | 3,297,385 | 8,007,472 | |||||||||||||||
Interest
expense |
436,173 | 2,244,113 | 4,107,454 | 3,766,454 | |||||||||||||||
Gain (loss)
on sale of assets |
| | 1,610,000 | (44,392 | ) | ||||||||||||||
Net
income |
171,696 | 480,490 | 799,931 | 4,196,626 | |||||||||||||||
Third-party
investors share of net income |
37,599 | 316,686 | 526,813 | 2,628,472 | |||||||||||||||
Company
(Predecessor) share of net income |
$ | 134,097 | $ | 163,804 | $ | 273,118 | $ | 1,568,154 |
Note 6. Property Acquisitions and Pro Forma Information
Property Name |
Location |
Acquisition Date |
Acquisition Cost (Millions) |
Financing Method |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Silver Glen
Crossings |
South Elgin,
IL |
April 1 |
$23.4 |
Debt
(8) |
||||||||||||||
Cedar Hill
Village |
Cedar Hill,
TX |
June
28 |
6.8 |
Debt
(8) |
||||||||||||||
Galleria
Plaza |
Dallas,
TX |
June
29 |
6.2 |
Debt
(8) |
||||||||||||||
Wal-Mart
Plaza(1) |
Gainesville,
FL |
July
1 |
8.5 |
Debt
(8) |
||||||||||||||
Eagle Creek Pad
2 |
Naples,
FL |
July
7 |
1.1 |
Debt
(8) |
||||||||||||||
Fishers
Station(2) |
Fishers,
IN |
July
23 |
2.1
(3) |
Debt
(8) |
||||||||||||||
Hamilton
Crossing |
Carmel,
IN |
August 19 |
15.5 |
IPO
Proceeds |
||||||||||||||
Waterford
Lakes |
Orlando,
FL |
August 20 |
9.1 |
IPO
Proceeds |
||||||||||||||
Publix at
Acworth |
Acworth,
GA |
August 20 |
9.2 |
IPO
Proceeds |
||||||||||||||
Plaza at Cedar
Hill |
Cedar Hill,
TX |
August 31 |
38.6
(4) |
IPO
Proceeds |
||||||||||||||
Sunland Towne
Centre |
El Paso,
TX |
September 16 |
32.1
(5) |
Debt |
||||||||||||||
Centre at
Panola |
Lithonia,
GA |
September 30 |
9.4
(6) |
Debt |
F-18
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information
(Continued)
Property Name |
Location |
Acquisition Date |
Acquisition Cost (Millions) |
Financing Method |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Marsh
Supermarket(7) |
Fishers,
IN |
November 24 |
5.0 |
Debt |
||||||||||||||
Eastgate
Pavilion |
Cincinnati,
OH |
December 1 |
27.6 |
Debt |
||||||||||||||
Four Corner
Square |
Seattle,
WA |
December 20 |
10.5 |
Debt |
________________
(1) | This property is owned through a joint venture with a third party. The Company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances. |
(2) | This property is owned through a joint venture with a third party. The Company is the primary beneficiary and, therefore, this property is consolidated in the accompanying statement of operations. The joint venture partner is entitled to an annual preferred payment of $96,000. All remaining cash flow is distributed to the Company. |
(3) | Inclusive of debt assumed of $1.4 million. |
(4) | Inclusive of debt assumed of $27.4 million. |
(5) | Inclusive of debt assumed of $17.8 million. |
(6) | Inclusive of debt assumed of $4.5 million. |
(7) | Part of the Fishers Station property. |
(8) | This acquisition was initially financed with debt, which was repaid with proceeds from the Companys IPO. |
Assets: |
||||||
Investment
properties, at cost |
$ | 228,937,093 | ||||
Cash and cash
equivalents |
82,778 | |||||
Accounts
receivable |
23,188 | |||||
Other
assets |
6,502,758 | |||||
Total
Assets |
$ | 235,545,817 | ||||
Liabilities: |
||||||
Loans
payable |
$ | 57,695,064 | ||||
Deferred
revenue |
19,303,602 | |||||
Other
Liabilities |
6,339,888 | |||||
Total
Liabilities |
$ | 83,338,554 |
F-19
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information
(Continued)
Assets: |
||||||
Investment
properties, at cost |
$ | 55,217,774 | ||||
Cash and cash
equivalents |
665,604 | |||||
Accounts
receivable |
416,545 | |||||
Other
assets |
1,134,337 | |||||
Total
Assets |
$ | 57,434,260 | ||||
Liabilities: |
||||||
Loans
payable |
$ | 24,172,783 | ||||
Deferred
revenue |
2,178,310 | |||||
Other
Liabilities |
1,328,857 | |||||
Total
Liabilities |
$ | 27,679,950 |
Property Name |
Location |
Acquisition Date |
Acquisition Cost (Millions) |
Financing Method |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ridge Plaza
Shopping Center |
Oak Ridge,
NJ |
March 13 |
$19.7 |
Debt |
||||||||||||||
Kings Lake
Square |
Naples,
FL |
June
10 |
11.4 |
Debt |
||||||||||||||
Shops at Eagle
Creek |
Naples,
FL |
July
8 |
14.5 |
Debt |
F-20
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 6. Property Acquisitions and Pro Forma Information
(Continued)
Year ended December 31 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2004 |
2003 |
|||||||||||||
(unaudited) |
(unaudited) |
|||||||||||||
Pro forma
revenues |
$ | 70,732,218 | $ | 65,667,182 | ||||||||||
Pro forma net
income(1) |
$ | 4,286,558 | $ | 4,831,767 | ||||||||||
Pro forma net
income per share basic and diluted(1) |
$ | 0.22 | $ | 0.25 | ||||||||||
Pro forma
weighted average number of shares outstanding: |
||||||||||||||
basic |
19,148,267 | 19,148,267 | ||||||||||||
diluted |
19,277,703 | 19,277,703 |
(1) | Pro Forma net income for year ended December 31, 2004 excludes our share of direct costs of approximately $1.5 million incurred in connection with the IPO and related formation transactions. |
Note 7. Mortgage Loans and Line of Credit
Principal Balance at December 31, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Description |
2004 |
2003 |
|||||||||
Lines of
credit |
|||||||||||
Maximum
borrowing level of $150 million available through August 30, 2007; interest at the LIBOR + 1.35% to 1.50% (3.75% to 3.90% at December 31, 2004) |
$ | 56,200,000 | $ | | |||||||
Maximum
borrowing level of $4 million available through December 16, 2005; interest at the greater of Prime +0.50% or 4.50% |
| 2,218,020 | |||||||||
Construction
Notes Payable Variable Rate |
|||||||||||
Generally due in
monthly installments of principal and interest and mature at various dates through 2006; interest rates at LIBOR+1.85%-2.35%, ranging from 4.25% to
5.15% |
59,521,968 | 36,711,972 | |||||||||
Mortgage
Notes Payable Fixed Rate |
|||||||||||
Generally due in
monthly installments of principal and interest and mature at various dates through 2022; interest rates ranging from 4.00% to 14.00% |
152,832,891 | 49,882,309 | |||||||||
Mortgage
Notes Payable Variable Rate |
|||||||||||
Generally due in
monthly installments of principal and interest and mature at various dates through 2008; interest rates at Prime to Prime+ 2.00% and LIBOR +2.50% to
2.75%, ranging from 4.90% to 7.15% |
10,785,757 | 52,685,988 | |||||||||
Net premium on
acquired indebtedness |
4,138,747 | | |||||||||
Total
Mortgage and Other Indebtedness |
$ | 283,479,363 | $ | 141,498,289 |
F-21
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 7. Mortgage Loans and Line of Credit
(Continued)
Line of Credit
|
the Companys amount of leverage; |
|
the collateral pool properties generating sufficient net operating income to maintain a certain fixed charge ratio; and |
|
the collateral pool properties maintaining a minimum aggregate occupancy rate. |
F-22
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 7. Mortgage Loans and Line of Credit
(Continued)
Measurement Period |
% of Funds From Operations |
|||||
---|---|---|---|---|---|---|
For the
period of two fiscal quarters ending March 31, 2005 |
105 | % | ||||
For the
period of three fiscal quarters ending June 30, 2005 |
100 | % | ||||
For the
period of four fiscal quarters ending September 30, 2005 |
100 | % | ||||
For the
period of four consecutive fiscal quarters ending December 31, 2005 and for each period of four consecutive quarters ending
thereafter |
95 | % |
2005 |
$ | 21,139,541 | ||||
2006 |
70,998,588 | |||||
2007 |
58,610,344 | |||||
2008 |
6,769,384 | |||||
2009 |
29,751,433 | |||||
Thereafter |
92,071,326 | |||||
279,340,616 | ||||||
Unamortized
premiums |
4,138,747 | |||||
Total |
$ | 283,479,363 |
IPO and Related Formation Transactions
Note 8. Tenant Leases
F-23
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 8. Tenant Leases (Continued)
2005 |
$ | 46,172,855 | ||||
2006 |
44,539,007 | |||||
2007 |
42,458,857 | |||||
2008 |
40,115,018 | |||||
2009 |
38,732,253 | |||||
Thereafter |
290,604,911 | |||||
Total |
$ | 502,622,901 |
2005 |
$ | 856,800 | ||||
2006 |
856,800 | |||||
2007 |
906,300 | |||||
2008 |
918,300 | |||||
2009 |
920,800 | |||||
Thereafter |
14,129,170 | |||||
Total |
$ | 18,588,170 |
Note 9. Shareholders Equity and Limited Partner Interests
Common Shares
F-24
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 9. Shareholders Equity and Limited Partner Interests
(Continued)
Dividend
Yield |
5.77 | % | ||||
Expected life
of option |
5
years |
|||||
Risk-free
interest rate |
3.0 | % | ||||
Expected
stock price volatility |
15.0 | % |
Limited Partner Interests
Note 10. Segment Information
Year Ended December 31, 2004 |
Real Estate Operation and Development |
Construction and Advisory Services |
Subtotal |
Intersegment Eliminations |
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues |
$ | 34,900,078 | $ | 68,327,960 | $ | 103,228,038 | $ | (54,129,707 | ) | $ | 49,098,331 | |||||||||||
Operating
expenses, cost of construction and services, general, administrative and other |
12,301,909 | 68,538,731 | 80,840,640 | (53,093,433 | ) | 27,747,207 | ||||||||||||||||
Depreciation
and amortization |
11,395,277 | 53,692 | 11,448,969 | | 11,448,969 | |||||||||||||||||
Operating
income (loss) |
11,202,892 | (264,463 | ) | 10,938,429 | (1,036,274 | ) | 9,902,155 | |||||||||||||||
Interest
expense |
9,228,281 | 61,083 | 9,289,364 | | 9,289,364 | |||||||||||||||||
Loan prepayment
penalty and expenses |
1,671,449 | | 1,671,449 | | 1,671,449 | |||||||||||||||||
Minority
interest |
89,087 | | 89,087 | | 89,087 |
F-25
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 10. Segment Information (Continued)
Year Ended December 31, 2004 |
Real Estate Operation and Development |
Construction and Advisory Services |
Subtotal |
Intersegment Eliminations |
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity in
earnings of unconsolidated entities |
297,901 | | 297,901 | | 297,901 | |||||||||||||||||
Limited
partners interests in Operating Partnership |
146,968 | | 146,968 | | 146,968 | |||||||||||||||||
Net income
(loss) |
$ | 837,118 | $ | (325,546 | ) | $ | 511,572 | $ | (1,036,274 | ) | $ | (524,702 | ) | |||||||||
Total
assets |
$ | 563,317,630 | $ | 17,447,341 | $ | 580,764,971 | $ | (11,010,138 | ) | $ | 569,754,833 |
Year Ended December 31, 2003 |
Real Estate Operation and Development |
Construction and Advisory Services |
Subtotal |
Intersegment Eliminations |
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues |
$ | 12,756,126 | $ | 30,563,597 | $ | 43,319,723 | $ | (15,562,222 | ) | $ | 27,757,501 | |||||||||||
Operating
expenses, cost of construction and services, general, administrative and other |
4,895,690 | 29,417,647 | 34,313,337 | (15,052,222 | ) | 19,261,115 | ||||||||||||||||
Depreciation
and amortization |
2,888,077 | 4,429 | 2,892,506 | | 2,892,506 | |||||||||||||||||
Operating
income (loss) |
4,972,359 | 1,141,521 | 6,113,880 | (510,000 | ) | 5,603,880 | ||||||||||||||||
Interest
expense |
4,144,645 | 62,568 | 4,207,213 | 4,207,213 | ||||||||||||||||||
Minority
interest |
(232,819 | ) | | (232,819 | ) | | (232,819 | ) | ||||||||||||||
Equity in loss
of unconsolidated entities |
273,118 | | 273,118 | | 273,118 | |||||||||||||||||
Net income
(loss) |
$ | 868,013 | $ | 1,078,953 | $ | 1,946,966 | $ | (510,000 | ) | $ | 1,436,966 | |||||||||||
Total
assets |
$ | 160,279,464 | $ | 13,029,371 | $ | 173,308,835 | $ | (1,973,129 | ) | $ | 171,335,706 |
Year Ended December 31, 2002 |
Real Estate Operation and Development |
Construction and Advisory Services |
Subtotal |
Intersegment Eliminations |
Total |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenues |
$ | 6,152,233 | $
26,214,727 |
$
32,366,960 |
$
(3,770,358) |
$
28,596,602 |
||||||||||||||||
Operating expenses, cost
of construction and services, general, administrative and other |
3,204,949 | 24,695,337 |
27,900,286 |
(3,729,358) |
24,170,928 |
|||||||||||||||||
Depreciation and
amortization |
1,303,164 | 2,432 |
1,305,596 |
|
1,305,596 |
|||||||||||||||||
Operating income
(loss) |
1,644,120 | 1,516,958 |
3,161,078 |
(41,000) |
3,120,078 |
|||||||||||||||||
Interest
expense |
2,067,248 | 217,389 |
2,284,637 |
|
2,284,637 |
|||||||||||||||||
Loss on disposal of fixed
assets |
| 250,382 |
250,382 |
|
250,382 |
|||||||||||||||||
Minority
interest |
84,969 | |
84,969 |
|
84,969 |
|||||||||||||||||
Equity in loss of
unconsolidated entities |
1,568,154 | |
1,568,154 |
|
1,568,154 |
|||||||||||||||||
Net income
(loss) |
$ | 1,229,995 | $ 1,049,187 |
$ 2,279,182 |
$ (41,000) |
$ 2,238,182 |
||||||||||||||||
Total
assets |
$ | 63,635,298 | $ 9,259,648 |
$ 72,894,946 |
$ (1,506,520) |
$ 71,388,426 |
F-26
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 11. Quarterly Financial Data (Unaudited)
(Continued)
The Predecessor |
The Company |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended March 31, 2004 |
Quarter Ended June 30, 2004 |
Period July 1, 2004 through August 15, 2004 |
Period August 16, 2004 through September 30, 2004 |
Quarter Ended December 31, 2004 |
||||||||||||||||||||
Total
revenue |
$ | 6,779,327 | $ | 7,851,871 | $ | 4,819,507 | $ | 7,123,917 | $ | 22,523,709 | ||||||||||||||
Operating
income |
1,693,858 | 1,771,183 | 792,777 | 1,263,169 | 4,381,168 | |||||||||||||||||||
Net income
(loss) |
331,076 | (381,462 | ) | (141,994 | ) | (1,153,797 | ) | 821,475 | ||||||||||||||||
Basic and
diluted income (loss) per share |
N/A | N/A | N/A | $ | (0.06 | ) | $ | 0.04 | ||||||||||||||||
Weighted
average Common Shares outstanding basic |
N/A | N/A | N/A | 17,800,441 | 19,148,267 | |||||||||||||||||||
diluted |
N/A | N/A | N/A | 17,800,441 | 19,277,703 |
The Predecessor |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended March 31, 2003 |
Quarter Ended June 30, 2003 |
Quarter Ended September 30, 2003 |
Quarter Ended December 31, 2003 |
||||||||||||||||
Total
revenue |
$ | 4,229,290 | $ | 6,870,157 | $ | 7,372,289 | $ | 9,285,765 | |||||||||||
Operating
income |
1,145,526 | 653,884 | 1,551,558 | 2,252,912 | |||||||||||||||
Net income
(loss) |
149,946 | (552,854 | ) | 1,529,766 | 310,108 | ||||||||||||||
Basic and
diluted income (loss) per share |
N/A | N/A | N/A | N/A | |||||||||||||||
Weighted
average Common Shares outstanding basic |
N/A | N/A | N/A | N/A | |||||||||||||||
diluted |
N/A | N/A | N/A | N/A |
Note 12. Commitments and Contingencies
F-27
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 13. Employee 401(k) Plan
Note 14. Transactions With Related Parties
Note 15. Adoption of FASB Interpretation No. 46R
F-28
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 16. Subsequent Events
|
Plaza Volente, a 156,308 square foot shopping center in Austin, Texas for an estimated cash purchase price of $36.1 million. |
|
Indian River Square, a 144,134 square foot shopping center in Vero Beach, Florida for an estimated cash purchase price of $16.4 million. |
|
Fountain Oaks a 160,598 square foot shopping center in Atlanta, Georgia for an estimated cash purchase price of $26.0 million inclusive of $13.7 million of assumed indebtedness. |
F-29
Kite Realty Group Trust and
Kite Property Group (the Predecessor)
Notes
to Consolidated and Combined Financial Statements
December 31, 2004
Note 16. Subsequent Events (Continued)
F-30
KITE REALTY GROUP TRUST
SCHEDULE III
REAL ESTATE AND
ACCUMULATED DEPRECIATION
Initial Cost |
Cost Capitalized Subsequent to Acquisition/Development |
Gross Carry Amount Close of Period |
||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Property Name |
Encumbrances |
Land |
Building & Improvements |
Land |
Building & Improvements |
Land |
Building & Improvements |
Total |
Accumulated Depreciation |
Year Built/ Renovated |
Year Acquired |
|||||||||||||||||||||||||||||||||||
Shopping
Centers |
||||||||||||||||||||||||||||||||||||||||||||||
50th &
12th |
$ | 4,695,018 | $ | 2,988,158 | $ | 2,791,140 | $ | | $ | | $ | 2,988,158 | $ | 2,791,140 | $ | 5,779,298 | $ | 32,543 | 2004 | NA | ||||||||||||||||||||||||||
176th &
Meridian |
4,265,474 | 1,900,000 | 3,067,584 | | | 1,900,000 | 3,067,584 | 4,967,584 | 31,300 | 2004 | NA | |||||||||||||||||||||||||||||||||||
82nd &
Otty |
1,586,756 | | 1,933,970 | | | | 1,933,970 | 1,933,970 | 697 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Burlington Coat
* |
| | 2,218,311 | | | | 2,218,311 | 2,218,311 | 146,736 | 1992/2000 | 2000 | |||||||||||||||||||||||||||||||||||
Cedar Hill
Village * |
| 1,331,645 | 5,409,237 | | | 1,331,645 | 5,409,237 | 6,740,882 | 94,840 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Circuit City
Plaza |
6,651,191 | 1,900,000 | 5,366,882 | | | 1,900,000 | 5,366,882 | 7,266,882 | 122,502 | 2004 | NA | |||||||||||||||||||||||||||||||||||
The
Corner |
1,926,175 | 311,217 | 4,161,910 | | 67,032 | 311,217 | 4,228,942 | 4,540,159 | 1,834,268 | 1984/2003 | 1984 | |||||||||||||||||||||||||||||||||||
Eastgate
Pavilion |
| 8,921,449 | 20,785,880 | | | 8,921,449 | 20,785,880 | 29,707,329 | 80,709 | 1995 | 2004 | |||||||||||||||||||||||||||||||||||
Glendale Mall
* |
| 2,137,550 | 29,115,064 | | | 2,137,550 | 29,115,064 | 31,252,614 | 5,834,227 | 1958/2000 | 1999 | |||||||||||||||||||||||||||||||||||
Publix at
Acworth * |
| 1,391,379 | 8,436,946 | | | 1,391,379 | 8,436,946 | 9,828,325 | 101,349 | 1997 | 2004 | |||||||||||||||||||||||||||||||||||
Shops at Eagle
Creek * |
| 8,257,760 | 6,933,825 | 200,087 | 144,778 | 8,457,847 | 7,078,603 | 15,536,450 | 432,380 | 1998 | 2003 | |||||||||||||||||||||||||||||||||||
Kings
Lake Square * |
| 4,492,000 | 7,791,052 | | 132,805 | 4,492,000 | 7,923,857 | 12,415,857 | 485,055 | 1986 | 2003 | |||||||||||||||||||||||||||||||||||
Boulevard
Crossing |
12,660,000 | 4,162,525 | 8,326,765 | | | 4,162,525 | 8,326,765 | 12,489,290 | 178,485 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Ridge
Plaza |
16,962,625 | 4,565,000 | 17,509,760 | | 863,022 | 4,565,000 | 18,372,782 | 22,937,782 | 1,115,103 | 2002 | 2003 | |||||||||||||||||||||||||||||||||||
Silver Glen
Crossings * |
| 10,747,172 | 13,989,872 | | | 10,747,172 | 13,989,872 | 24,737,044 | 472,825 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Fishers
Station |
5,465,766 | 3,692,807 | 9,660,380 | | (64,000 | ) | 3,692,807 | 9,596,380 | 13,289,187 | 2,031,166 | 1990 | 2004 | ||||||||||||||||||||||||||||||||||
Cedar Hill
Plaza |
27,264,160 | 5,734,304 | 40,008,878 | | | 5,734,304 | 40,008,878 | 45,743,182 | 592,785 | 2000 | 2004 | |||||||||||||||||||||||||||||||||||
Four Corner
Square |
2,500,000 | 4,756,990 | 6,300,029 | | | 4,756,990 | 6,300,029 | 11,057,019 | | 1995 | 2004 | |||||||||||||||||||||||||||||||||||
Wal-Mart
Plaza |
| 4,880,373 | 5,050,648 | | (12,637 | ) | 4,880,373 | 5,038,011 | 9,918,384 | 187,994 | 1970/1998 | 2004 | ||||||||||||||||||||||||||||||||||
Galleria Plaza
* |
| | 7,972,990 | | | | 7,972,990 | 7,972,990 | 136,633 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Hamilton
Crossing * |
| 5,655,189 | 10,403,797 | | | 5,655,189 | 10,403,797 | 16,058,986 | 199,415 | 1999 | 2004 | |||||||||||||||||||||||||||||||||||
Centre at
Panola |
4,438,551 | 1,985,864 | 8,365,228 | | | 1,985,864 | 8,365,228 | 10,351,092 | 80,151 | 2002 | 2004 | |||||||||||||||||||||||||||||||||||
Sunland Towne
Centre |
17,719,271 | 14,612,536 | 21,174,792 | | | 14,612,536 | 21,174,792 | 35,787,328 | 318,487 | 1996 | 2004 | |||||||||||||||||||||||||||||||||||
Waterford Lakes
* |
| 2,248,674 | 7,394,789 | | | 2,248,674 | 7,394,789 | 9,643,463 | 113,236 | 1997 | 2004 | |||||||||||||||||||||||||||||||||||
International
Speedway Square |
19,923,058 | 6,560,000 | 20,925,793 | | | 6,560,000 | 20,925,793 | 27,485,793 | 3,019,258 | 1999 | 2000 | |||||||||||||||||||||||||||||||||||
50 S.
Morton |
| 100,212 | 878,705 | | | 100,212 | 878,705 | 978,917 | 253,507 | 2000 | NA | |||||||||||||||||||||||||||||||||||
Preston
Commons |
4,652,591 | 936,000 | 2,695,739 | | 399,449 | 936,000 | 3,095,188 | 4,031,188 | 439,956 | 2002 | NA | |||||||||||||||||||||||||||||||||||
Whitehall
Pike |
9,960,453 | 3,597,857 | 6,041,940 | | 60,427 | 3,597,857 | 6,102,367 | 9,700,224 | 1,765,513 | 1998 | NA | |||||||||||||||||||||||||||||||||||
Stoney Creek
Commons * |
| 826,881 | (3,820 | ) | | 823,061 | | 823,061 | | 2000 | NA | |||||||||||||||||||||||||||||||||||
Other |
| 4,013,557 | 16,054,227 | | | 4,013,557 | 16,054,227 | 20,067,784 | 154,047 | |||||||||||||||||||||||||||||||||||||
Total
Shopping Centers |
140,671,089 | 112,707,099 | 300,766,133 | 196,267 | 1,590,876 | 112,903,366 | 302,357,009 | 415,260,375 | 20,255,167 | |||||||||||||||||||||||||||||||||||||
Commercial
Properties |
||||||||||||||||||||||||||||||||||||||||||||||
IN State Motor
Pool |
3,819,516 | | 4,268,882 | | | NA | 4,268,882 | 4,268,882 | 19,231 | 2004 | NA | |||||||||||||||||||||||||||||||||||
PEN Products
* |
| NA | 5,369,382 | NA | 201,812 | NA | 5,571,194 | 5,571,194 | 246,343 | 2003 | NA | |||||||||||||||||||||||||||||||||||
Mid America
Clinical Labs * |
| 1,100,000 | 11,695,705 | | 82,503 | 1,100,000 | 11,778,208 | 12,878,208 | 1,016,832 | 1995/2002-2003 | NA | |||||||||||||||||||||||||||||||||||
Thirty
South |
23,240,515 | 899,446 | 15,771,390 | | 64,999 | 899,446 | 15,836,389 | 16,735,835 | 1,532,182 | 1905/1929/2001 | 2001 | |||||||||||||||||||||||||||||||||||
Union Station
Parking Garage * |
| 783,627 | 2,163,598 | | 153,258 | 783,627 | 2,316,856 | 3,100,483 | 200,966 | 1986 | 2001 | |||||||||||||||||||||||||||||||||||
Total
Commercial Properties |
27,060,031 | 2,783,073 | 39,268,957 | | 502,572 | 2,783,073 | 39,771,529 | 42,554,602 | 3,015,554 |
(Continued)
F-31
KITE REALTY GROUP TRUST
SCHEDULE III
REAL ESTATE AND
ACCUMULATED DEPRECIATION (Continued)
Initial Cost |
Cost Capitalized Subsequent to Acquisition/Development |
Gross Carry Amount Close of Period |
||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Property Name |
Encumbrances |
Land |
Building & Improvements |
Land |
Building & Improvements |
Land |
Building & Improvements |
Total |
Accumulated Depreciation |
Year Built/ Renovated |
Year Acquired |
|||||||||||||||||||||||||||||||||||
Development
Properties |
||||||||||||||||||||||||||||||||||||||||||||||
Geist
Pavilion |
863,991 | 1,300,000 | 2,063,083 | (136,009 | ) | | 1,163,991 | 2,063,083 | 3,227,074 | |||||||||||||||||||||||||||||||||||||
Red Bank
Commons |
| 1,407,119 | 2,571,389 | | | 1,407,119 | 2,571,389 | 3,978,508 | ||||||||||||||||||||||||||||||||||||||
Greyhound
Commons |
| 1,861,277 | 1,101,249 | | | 1,861,277 | 1,101,249 | 2,962,526 | ||||||||||||||||||||||||||||||||||||||
Eagle Creek
II |
850,000 | 1,965,731 | 154,826 | | | 1,965,731 | 154,826 | 2,120,557 | ||||||||||||||||||||||||||||||||||||||
Eagle Creek
III |
| 942,967 | | | | 942,967 | | 942,967 | ||||||||||||||||||||||||||||||||||||||
Weston
Park |
4,213,845 | 874,594 | 760,789 | | | 874,594 | 760,789 | 1,635,383 | ||||||||||||||||||||||||||||||||||||||
Traders Point
** |
32,059,000 | 11,081,458 | 24,348,063 | | | 11,081,458 | 24,348,063 | 35,429,521 | 91,497 | 2004 | NA | |||||||||||||||||||||||||||||||||||
Traders Point
II |
2,000,000 | 1,900,000 | 2,494,192 | | | 1,900,000 | 2,494,192 | 4,394,192 | ||||||||||||||||||||||||||||||||||||||
Traders Point
III |
471,000 | | 39,573 | | | | 39,573 | 39,573 | ||||||||||||||||||||||||||||||||||||||
Martinsville
Shops |
| | 970,763 | | | | 970,763 | 970,763 | ||||||||||||||||||||||||||||||||||||||
Cool Creek
Commons ** |
14,951,660 | 6,205,921 | 12,058,303 | | | 6,205,921 | 12,058,303 | 18,264,224 | 13,074 | 2004 | NA | |||||||||||||||||||||||||||||||||||
KRG
Development |
| 1,330,100 | 224,234 | | | 1,330,100 | 224,234 | 1,554,334 | ||||||||||||||||||||||||||||||||||||||
Total
Development Properties |
55,409,496 | 28,869,167 | 46,786,464 | (136,009 | ) | | 28,733,158 | 46,786,464 | 75,519,622 | 104,571 | ||||||||||||||||||||||||||||||||||||
Land Held
for Development |
||||||||||||||||||||||||||||||||||||||||||||||
Frisco
Bridges |
| 3,502,635 | | (266,709 | ) | | 3,235,926 | | 3,235,926 | |||||||||||||||||||||||||||||||||||||
Huntington
Ave. |
| 1,100,790 | | | | 1,100,790 | | 1,100,790 | ||||||||||||||||||||||||||||||||||||||
Greyhound
III |
| 187,507 | | | | 187,507 | | 187,507 | ||||||||||||||||||||||||||||||||||||||
Spring Mill
II |
| 100,000 | | | | 100,000 | | 100,000 | ||||||||||||||||||||||||||||||||||||||
Zionsville |
| 1,600,790 | 90 | | | 1,600,790 | 90 | 1,600,880 | ||||||||||||||||||||||||||||||||||||||
Stoney Creek
Commons |
| 798,000 | | | | 798,000 | | 798,000 | ||||||||||||||||||||||||||||||||||||||
Jefferson
Morton |
| 186,000 | | | | 186,000 | | 186,000 | ||||||||||||||||||||||||||||||||||||||
Weston
Park |
| 2,556,450 | | | | 2,556,450 | | 2,556,450 | ||||||||||||||||||||||||||||||||||||||
Martinsville
Shops |
| 688,783 | | | | 688,783 | | 688,783 | ||||||||||||||||||||||||||||||||||||||
Total Land
Held for Development |
| 10,720,955 | 90 | (266,709 | ) | | 10,454,246 | 90 | 10,454,336 | | ||||||||||||||||||||||||||||||||||||
Line of credit
- - see * |
56,200,000 | | | | | | | | | |||||||||||||||||||||||||||||||||||||
Grand
Total |
$ | 279,340,616 | $ | 155,080,294 | $ | 386,821,644 | $ | (206,451 | ) | $ | 2,093,448 | $ | 154,873,843 | $ | 388,915,092 | $ | 543,788,935 | $ | 23,375,292 |
* | This property is encumbered under the Companys line of credit with Wachovia Capital Markets, LLC and Lehman Commercial Paper, Inc. Approximately $56.2 million was outstanding under this line of credit as of December 31, 2004. |
** | This property partially opened during 2004. |
F-32
Note 1. Reconciliation of Investment Properties
2004 |
2003 |
2002 |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance,
beginning of year |
$ | 152,215,128 | $ | 54,745,885 | $ | 36,460,132 | ||||||||||||
Aquisitions |
325,705,031 | 49,247,383 | | |||||||||||||||
Improvements |
67,832,176 | 48,332,045 | 19,357,865 | |||||||||||||||
Disposals |
(1,963,400 | ) | (110,185 | ) | (1,072,112 | ) | ||||||||||||
Balance, end
of year |
$ | 543,788,935 | $ | 152,215,128 | $ | 54,745,885 |
Note 2. Reconciliation of Accumulated Depreciation
2004 |
2003 |
2002 |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance,
beginning of year |
$ | 4,146,121 | $ | 2,022,087 | $ | 999,076 | ||||||||||||
Aquisitions |
11,362,675 | | | |||||||||||||||
Depreciation
and amortization expense |
8,936,159 | 2,145,696 | 1,023,011 | |||||||||||||||
Disposals |
(1,069,663 | ) | (21,662 | ) | | |||||||||||||
Balance, end
of year |
$ | 23,375,292 | $ | 4,146,121 | $ | 2,022,087 |
Buildings |
35
years |
|||||
Building
improvements |
1035
years |
|||||
Tenant
improvements |
Term of related
lease |
F-33
(b) Exhibit Index:
Exhibit No. |
Description |
Location |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
2.1 | Contract of Sale, dated April 17, 2004, between Parklane/Cedar Hill, Ltd. and Kite Capital, LLC. |
Incorporated by
reference to Exhibit 2.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 |
||||||||
2.2 | Amendment to Contract of Sale, dated April 7, 2004, between Parklane/Cedar Hill, Ltd. and Kite Capital, LLC. |
Incorporated by
reference to Exhibit 2.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 |
||||||||
2.3 | Second Amendment to Contract of Sale, dated June 30, 2004, between Parklane/Cedar Hill, Ltd. and KRG Cedar Hill Plaza, LP. |
Incorporated by
reference to Exhibit 2.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 |
||||||||
2.4 | Third Amendment to Contract of Sale, dated August 2004, between Parklane/Cedar Hill, Ltd. and KRG Cedar Hill Plaza, LP. |
Incorporated by
reference to Exhibit 2.4 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 |
||||||||
2.5 | Real
Estate Purchase Agreement, dated as of June 23, 2004, between Sunland Towne Centre Associates, Ltd., Del Sol Joint Venture No. 1 and KRG Capital,
LLC. |
Incorporated by
reference to Exhibit 2.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 21, 2004 |
||||||||
3.1 | Articles of Amendment and Restatement of Declaration of Trust of the Company |
Incorporated by
reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
3.2 | Amended and Restated Bylaws of the Company, as amended |
Filed
herewith |
||||||||
4.1 | Form
of common share certificate |
Incorporated by
reference to Exhibit 4.1 to the Kite Realty Group Trusts registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC
on August 10, 2004. |
||||||||
10.1 | Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of August 16, 2004 |
Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.2 | Agreement and Plan of Merger, dated as of April 5, 2004, by and between the Company, KRG Construction, LLC and Kite Construction,
Inc. |
Incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.3 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Construction, LLC and Kite
Construction, Inc. |
Incorporated by
reference to Exhibit 10.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.4 | Agreement and Plan of Merger, dated as of April 5, 2004, by and between the Company, KRG Development, LLC and Kite Development
Corporation |
Incorporated by
reference to Exhibit 10.4 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.5 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Development, LLC and Kite Development
Corporation |
Incorporated by
reference to Exhibit 10.5 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.6 | Agreement and Plan of Merger dated as of April 5, 2004 by and between the Company, KRG Realty Advisors, LLC and KMI Realty Advisors,
Inc. |
Incorporated by
reference to Exhibit 10.6 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
Exhibit No. |
Description |
Location |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.7 | Amendment to Agreement and Plan of Merger, dated as of August 10, 2004, by and between the Company, KRG Realty Advisors, LLC and KMI Realty
Advisors, Inc. |
Incorporated by
reference to Exhibit 10.7 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.8 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Alvin E. Kite, Jr. * |
Incorporated by
reference to Exhibit 10.8 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.9 | Employment Agreement, dated as of August 16, 2004, by and between the Company and John A. Kite * |
Incorporated by
reference to Exhibit 10.9 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.10 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Thomas K. McGowan * |
Incorporated by
reference to Exhibit 10.10 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.11 | Employment Agreement, dated as of August 16, 2004, by and between the Company and Daniel R. Sink * |
Incorporated by
reference to Exhibit 10.11 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.12 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Alvin E. Kite, Jr. * |
Incorporated by
reference to Exhibit 10.12 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.13 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and John A. Kite * |
Incorporated by
reference to Exhibit 10.13 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.14 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Thomas K. McGowan * |
Incorporated by
reference to Exhibit 10.14 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.15 | Noncompetition Agreement, dated as of August 16, 2004, by and between the Company and Daniel R. Sink * |
Incorporated by
reference to Exhibit 10.15 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.16 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Alvin E. Kite * |
Incorporated by
reference to Exhibit 10.16 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.17 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and John A. Kite * |
Incorporated by
reference to Exhibit 10.17 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.18 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Thomas K. McGowan * |
Incorporated by
reference to Exhibit 10.18 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.19 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Daniel R. Sink * |
Incorporated by
reference to Exhibit 10.19 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.20 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and William E. Bindley * |
Incorporated by
reference to Exhibit 10.20 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.21 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Michael L. Smith * |
Incorporated by
reference to Exhibit 10.21 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.22 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Eugene Golub * |
Incorporated by
reference to Exhibit 10.22 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.23 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Richard A. Cosier * |
Incorporated by
reference to Exhibit 10.23 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.24 | Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P. and Gerald L. Moss * |
Incorporated by
reference to Exhibit 10.24 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
Exhibit No. |
Description |
Location |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.25 | Contributor Indemnity Agreement, dated August 16, 2004, by and among Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite,
Thomas K. McGowan, Daniel R. Sink, George F. McMannis, IV, and Mark Jenkins * |
Incorporated by
reference to Exhibit 10.25 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.26 | Kite
Realty Group Trust 2004 Equity Incentive Plan * |
Incorporated by
reference to Exhibit 10.26 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.27 | Kite
Realty Group Trust Executive Bonus Plan * |
Incorporated by
reference to Exhibit 10.27 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.28 | Option Agreement (Tarpon Spring Plaza), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Brentwood Land Partners, LLC, Alvin
E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan |
Incorporated by
reference to Exhibit 10.28 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.29 | Option Agreement (Erskine Village), dated as of August 16, 2004, by and among Kite Realty Group, L.P., Kite South Bend, LLC, Alvin E. Kite,
Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan |
Incorporated by
reference to Exhibit 10.29 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.30 | Option Agreement (126th Street & Meridian Medical Complex), dated as of August 16, 2004, by and among Kite Realty Group, L.P.,
Kite 126th Street Medical, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan |
Incorporated by
reference to Exhibit 10.30 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.31 | Option Agreement (126th Street & Meridian II Medical Complex), dated as of August 16, 2004, by and among Kite Realty Group,
L.P., Kite 126th Street Medical II, LLC, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite and Thomas K. McGowan |
Incorporated by
reference to Exhibit 10.31 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.32 | Registration Rights Agreement, dated as of August 16, 2004, by and among the Company, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas
K. McGowan, Daniel R. Sink, George F. McMannis, Mark Jenkins, Ken Kite, David Grieve and KMI Holdings, LLC |
Incorporated by
reference to Exhibit 10.32 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.33 | Tax
Protection Agreement, dated August 16, 2004, by and among the Company, Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas
K. McGowan and C. Kenneth Kite |
Incorporated by
reference to Exhibit 10.33 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
||||||||
10.34 | Consulting Agreement, dated August 16, 2004, by and between Kite Realty Group, L.P and Paul W. Kite |
Incorporated by
reference to Exhibit 10.34 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004 |
Exhibit No. |
Description |
Location |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
10.35 | Credit Agreement, dated as of August 31, 2004, by and among Kite Realty Group, L.P., as Borrower, Kite Realty Group Trust, Wachovia Capital
Markets, LLC and Lehman Brothers Inc., as Joint Lead Arrangers and Joint Book Runners, Wachovia Bank, National Association, as Agent, Lehman Commercial
Paper Inc., as Syndication Agent, and the Financial Institutions signatory thereto, as Lenders. |
Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 7, 2004 |
||||||||
10.36 | First Amendment to Credit Agreement, dated as of December 15, 2004, by and among Kite Realty Group, L.P., Kite Realty Group Trust, the
financial institutions signatory thereto and Wachovia Bank, National Association, as Agent. |
Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 20, 2004 |
||||||||
10.37 | Contribution Agreement dated as of April 5, 2004 by and among Kite Realty Group, L.P., Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas
K. McGowan, Daniel R. Sink, George F. McMannis and Mark Jenkins |
Incorporated by
reference to Exhibit 10.2 to the Trusts registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10,
2004 |
||||||||
10.38 | Schedule of 2005 Bonus Benchmarks for Executive Officers * |
Filed
herewith |
||||||||
10.39 | Form
of Share Option Agreement under 2004 Equity Incentive Plan * |
Filed
herewith |
||||||||
10.40 | Form
of Restricted Share Agreement under 2004 Equity Incentive Plan * |
Filed
herewith |
||||||||
10.41 | Schedule of Non-Employee Trustee Fees and Other Compensation* |
Filed
herewith |
||||||||
21.1 | List
of Subsidiaries |
Filed
herewith |
||||||||
23.1 | Consent of Ernst & Young LLP |
Filed
herewith |
||||||||
31.1 | Certification of principal executive officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002. |
Filed
herewith |
||||||||
31.2 | Certification of principal financial officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002. |
Filed
herewith |
||||||||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. |
Filed
herewith |
* | Denotes a management contract or compensatory plan, contract or arrangement. |
Exhibit 3.2
KITE REALTY GROUP TRUST
FIRST AMENDED AND RESTATED BYLAWS
Kite Realty Group Trust, a Maryland real estate investment trust (the Trust) hereby amends and restates the Bylaws of the Trust, adopted as of March 29, 2004, as follows:
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Trust shall be located at such place or places as the Board of Trustees may designate.
Section 2. ADDITIONAL OFFICES. The Trust may have additional offices at such places as the Board of Trustees may from time to time determine or the business of the Trust may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All meetings of shareholders shall be held at the principal office of the Trust or at such other place within the United States as shall be set by the Board of Trustees and stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders for the election of Trustees and the transaction of any business within the powers of the Trust shall be held between April 15 and May 15 of each year, after the delivery of the annual report, referred to in Section 12 of this Article II, at a convenient location and on proper notice, on a date and at the time set by the Board of Trustees, beginning with the year 2005. Failure to hold an annual meeting does not invalidate the Trusts existence or affect any otherwise valid acts of the Trust.
Section 3. SPECIAL MEETINGS. The chairman of the board, the chief executive officer, the president or a majority of the Trustees may call special meetings of the shareholders. Special meetings of the shareholders shall be called by the chairman of the board upon the written request of shareholders entitled to cast at least a majority of all votes entitled to be cast at any such meeting. Such request shall state the purpose or purposes of the meeting and the matters proposed to be acted on thereat. Upon receipt of such request, the Trust shall inform such shareholders of the reasonably estimated cost of preparing and mailing a notice of the meeting and, upon payment of such costs to the Trust, the Trust notice to each shareholder entitled to notice of such meeting. No special meeting need be called upon the request of shareholders entitled to cast less than a majority of all votes entitled to be cast at such a meeting to consider any matter which is substantially the same as a matter voted on at any special meeting of shareholders held during the preceding 12 months. The Board of Trustees shall have the sole power to fix the record date for determining shareholders entitled to request a special meeting of shareholders and the date, time and place of the special meeting.
Section 4. NOTICE. Not less than ten nor more than 90 days before each meeting of shareholders, the secretary shall give to each shareholder entitled to vote at such meeting and to each shareholder not entitled to vote who is entitled to notice of the meeting written or printed notice stating
the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, either by mail, by presenting it to such shareholder personally or by leaving it at his or her residence or usual place of business, or by transmitting it to such shareholder by electronic mail to any electronic mail address of such shareholder or by any other electronic means. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the shareholder at his or her post office address as it appears on the records of the Trust, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Trust may be transacted at an annual meeting of shareholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of shareholders except as specifically designated in the notice.
Section 6. ORGANIZATION AND CONDUCT. At every meeting of the shareholders, the Chairman of the Board, if there be one, shall conduct the meeting or, in the case of vacancy in office or absence of the Chairman of the Board, one of the following officers present shall conduct the meeting in the order stated: the Vice Chairman of the Board, if there be one, the President, the Vice Presidents in their order of rank and seniority, or a Chairman chosen by the shareholders entitled to cast a majority of the votes which all shareholders present in person or by proxy are entitled to cast, shall act as Chairman, and the Secretary, or, in his or her absence, an assistant secretary, or in the absence of both the Secretary and assistant secretaries, a person appointed by the Chairman shall act as Secretary.
The order of business and all other matters of procedure at any meeting of shareholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to shareholders of record of the Trust, their duly authorized proxies or other such persons as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to shareholders of record of the Trust entitled to vote on such matter, their duly authorized proxies or other such persons as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) maintaining order and security at the meeting; (f) removing any shareholder or any other person who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; and (g) recessing or adjourning the meeting to a later date and time and place announced at the meeting. Unless otherwise determined by the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 7. QUORUM. At any meeting of shareholders, the presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at such meeting shall constitute a quorum; but this section shall not affect any requirement under any statute or the Declaration of Trust, as amended, restated or supplemented from time to time (the Declaration of Trust) for the vote necessary for the adoption of any measure. If, however, such quorum shall not be present at any meeting of the shareholders, the shareholders entitled to vote at such meeting, present in person or by proxy, shall have the power to adjourn the meeting from time to time to a date not more than 120 days after the original record date without a new record date and without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 8. VOTING. A plurality of all the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient to elect a Trustee. Each share may be voted for as many individuals as there are Trustees to be elected and for whose election the share is entitled to be
2
voted. A majority of the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless a higher vote is required herein or by statute or by the Declaration of Trust. Unless otherwise provided in the Declaration of Trust, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders.
Section 9. PROXIES. A shareholder may cast the votes entitled to be cast by the shares owned of record by him or her either in person or by proxy executed in writing by the shareholder or by his or her duly authorized agent in any manner permitted by law. Such proxy shall be filed with the secretary of the Trust before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.
Section 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the Trust registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such shares pursuant to a bylaw or a resolution of the governing board of such corporation or other entity or agreement of the partners of the partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such shares. Any trustee or other fiduciary may vote shares registered in his or her name as such fiduciary, either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.
The Board of Trustees may adopt by resolution a procedure by which a shareholder may certify in writing to the Trust that any shares registered in the name of the shareholder are held for the account of a specified person other than the shareholder. The resolution shall set forth the class of shareholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the share transfer books, the time after the record date or closing of the share transfer books within which the certification must be received by the Trust; and any other provisions with respect to the procedure which the Board of Trustees considers necessary or desirable. On receipt of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the shareholder of record of the specified shares in place of the shareholder who makes the certification.
Section 11. INSPECTORS. At any meeting of shareholders, the chairman of the meeting may, or upon the request of any shareholder shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting based upon their determination of the validity and effect of proxies, count all votes, report the results and perform such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the Board of Trustees in advance of the meeting or at the meeting by the chairman of the meeting.
Each report of an inspector shall be in writing and signed by him or her or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the
3
number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.
Section 12. REPORTS TO SHAREHOLDERS. The Board of Trustees shall submit to the shareholders at or before the annual meeting of shareholders a report of the business and operations of the Trust during such fiscal year, containing a balance sheet and a statement of income and surplus of the Trust, accompanied by the certification of an independent certified public accountant, and such further information as the Board of Trustees may determine is required pursuant to any law or regulation to which the Trust is subject. Within the earlier of 20 days after the annual meeting of shareholders or 120 days after the end of the fiscal year of the Trust, the Board of Trustees shall place the annual report on file at the principal office of the Trust and with any governmental agencies as may be required by law and as the Board of Trustees may deem appropriate.
Section 13. ADVANCE NOTICE OF SHAREHOLDER NOMINEES FOR TRUSTEE AND OTHER PROPOSALS BY SHAREHOLDERS.
(a) Annual Meetings of Shareholders.
(1) Nominations of persons for election to the Board of Trustees and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders only (i) pursuant to the Trusts notice of meeting, (ii) by or at the direction of the Board of Trustees or (iii) by any shareholder of the Trust who was a shareholder of record both at the time of giving of notice provided for in this Section 13(a) and at the time of the annual meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 13(a).
(2) For nominations for election to the Board of Trustees or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (iii) of paragraph (a)(1) of this Section 13, the shareholder must have given timely notice thereof in writing to the secretary of the Trust and such other business must otherwise be a proper matter for action by shareholders. To be timely, a shareholders notice must be delivered to the secretary at the principal executive office of the Trust by not later than the close of business on the 90th day prior to the first anniversary of the date of mailing of the notice for the preceding years annual meeting nor earlier than the close of business on the 120th day prior to the first anniversary of the date of mailing of the notice for the preceding years annual meeting; provided, however, that in the event that the date of the mailing of the notice for the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the mailing of the notice for the preceding years annual meeting, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of mailing of the notice for such annual meeting and not later than the close of business on the later of the 90th day prior to the date of mailing of the notice for such annual meeting or the 10th day following the day on which public announcement of the date of mailing of the notice for such meeting is first made by the Trust. In no event shall the public announcement of a postponement of an annual meeting to a later date or time commence a new time period for the giving of a shareholders notice as described above. Such shareholders notice shall set forth (i) as to each person whom the shareholder proposes to nominate for election or reelection as a trustee (A) the name, age, business address and residence address of such person, (B) the class and number of shares of beneficial interest of the Trust that are beneficially owned or owned of record by such person and (C) all other information relating to such person that is required to be disclosed in solicitations of proxies for election of Trustees in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act (including such persons written consent to being named in the proxy statement as a nominee and to serving as a trustee if elected); (ii) as to any other business that the shareholder proposes to bring before the meeting, a description in reasonable detail of the business
4
desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder (including any anticipated benefit to the shareholder therefrom) and of each beneficial owner, if any, on whose behalf the proposal is made; and (iii) as to the shareholder giving the notice and each beneficial owner, if any, on whose behalf the nomination or proposal is made, (x) the name and address of such shareholder, as they appear on the Trusts share ledger and current name and address, if different, of such beneficial owner, and (y) the class and number of shares of each class of beneficial interest of the Trust which are owned beneficially and of record by such shareholder and owned beneficially by such beneficial owner.
(3) Notwithstanding anything in this subsection(a) of this Section 13 to the contrary, in the event that the number of Trustees to be elected to the Board of Trustees is increased and there is no public announcement by the Trust of such action or specifying the size of the increased Board of Trustees at least 100 days prior to the first anniversary of the date of mailing of the notice of the preceding years annual meeting, a shareholders notice required by this Section 13(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if the notice is delivered to the secretary at the principal executive offices of the Trust not later than the close of business on the 10th day immediately following the day on which such public announcement is first made by the Trust.
(b) Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Trusts notice of meeting. Nominations of persons for election to the Board of Trustees may be made at a special meeting of shareholders at which Trustees are to be elected only (i) pursuant to the Trusts notice of meeting, (ii) by or at the direction of the Board of Trustees or (iii) provided that the Board of Trustees has determined that Trustees shall be elected at such special meeting, by any shareholder of the Trust who is a shareholder of record both at the time of giving of notice provided for in this Section 13(b) and at the time of the special meeting, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this Section 13(b). In the event the Trust calls a special meeting of shareholders for the purpose of electing one or more Trustees to the Board of Trustees, any such shareholder may nominate a person or persons (as the case may be) for election as a Trustee as specified in the Trusts notice of meeting, if the shareholders notice containing the information required by paragraph (a)(2) of this Section 13 shall be delivered to the secretary at the principal executive offices of the Trust not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and the nominees proposed by the Board of Trustees to be elected at such meeting. In no event shall the public announcement of a postponement or adjournment of a special meeting to a later date or time commence a new time period for the giving of a shareholders notice as described above.
(c) General.
(1) Upon written request by the secretary or the Board of Trustees or any committee thereof, any shareholder proposing a nominee for election as a Trustee or any proposal for other business at a meeting of shareholders shall provide, within five business days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory to the secretary or the Board of Trustees or any committee thereof, in his, her or its sole discretion, of the accuracy of any information submitted by the shareholder pursuant to this Section 13. If a shareholder fails to provide such written verification within such period, the secretary or the Board of Trustees or any committee thereof may treat the information as to which written verification was requested as not having been provided in accordance with the procedures set forth in this Section 13.
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(2) Only such persons who are nominated in accordance with the procedures set forth in this Section 13 shall be eligible to serve as Trustees, and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 13. The chairman of the meeting shall have the power and duty to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 13 and, if any proposed nomination or other business is not in compliance with this Section 13, to declare that such defective nomination or proposal be disregarded.
(3) For purposes of this Section 13, (a) the date of mailing of the notice shall mean the date of the proxy statement for the solicitation of proxies for election of Trustees and (b) public announcement shall mean disclosure (i) in a press release either transmitted to the principal securities exchange on which the Trusts common shares are traded or reported by a recognized news service or (ii) in a document publicly filed by the Trust with the United States Securities and Exchange Commission.
(4) Notwithstanding the foregoing provisions of this Section 13, a shareholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 13. Nothing in this Section 13 shall be deemed to affect any right of a shareholder to request inclusion of a proposal in, nor the right of the Trust to omit a proposal from, the Trusts proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act.
Section 14. INFORMAL ACTION BY SHAREHOLDERS. Any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting if a consent in writing, setting forth such action, is signed by each shareholder entitled to vote on the matter and any other shareholder entitled to notice of a meeting of shareholders (but not to vote thereat) has waived in writing any right to dissent from such action, and such consent and waiver are filed with the minutes of proceedings of the shareholders.
Section 15. VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any shareholder shall demand that voting be by ballot.
Section 16. CONTROL SHARE ACQUISITION ACT. Notwithstanding any other provision of the Declaration of Trust of the Trust or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (or any successor statute) shall not apply to any acquisition by any person of shares of beneficial interest of the Trust. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.
ARTICLE III
TRUSTEES
Section 1. GENERAL POWERS; QUALIFICATIONS; TRUSTEES HOLDING OVER. The business and affairs of the Trust shall be managed under the direction of its Board of Trustees. A Trustee shall be an individual at least 21 years of age who is not under legal disability. In case of failure to elect Trustees at an annual meeting of the shareholders, the Trustees holding over shall continue to direct the management of the business and affairs of the Trust until their successors are elected and qualify.
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Section 2. NUMBER AND INDEPENDENCE. At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Trustees may establish, increase or decrease the number of Trustees, subject to any limitations in the Declaration of Trust. At least a majority of the Board of Trustees shall be trustees whom the Board has determined are independent under the standards established by the Board of Trustees and in accordance with the then applicable requirements of the New York Stock Exchange. All nominations must be submitted through and approved by the Nominating and Corporate Governance Committee and follow the nominating process established by that committee for the nomination of trustees and must satisfy the standards for membership on the Board of Trustees approved by the Board of Trustees or that committee from time to time.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Trustees shall be held immediately after and at the same place as the annual meeting of shareholders, no notice other than this Bylaw being necessary. The Board of Trustees may provide, by resolution, the time and place, either within or without the State of Maryland, for the holding of regular meetings of the Board of Trustees without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Trustees may be called by or at the request of the chairman of the board, the chief executive officer or the president or by a majority of the Trustees then in office. The person or persons authorized to call special meetings of the Board of Trustees may fix any place, either within or without the State of Maryland, as the place for holding any special meeting of the Board of Trustees called by them.
Section 5. NOTICE. Notice of any special meeting shall be given by written notice delivered personally, telegraphed, electronically mailed, facsimile-transmitted or mailed or couriered to each Trustee at his or her business or residence address. Personally delivered or telegraphed notices shall be given at least two days prior to the meeting. Notice by mail shall be given at least five days prior to the meeting. Telephone, electronic mail or facsimile-transmission notice shall be given at least 24 hours prior to the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. If given by telegram, such notice shall be deemed to be given when the telegram is delivered to the telegraph company. Telephone notice shall be deemed given when the Trustee is personally given such notice in a telephone call to which he or she is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Trust by the Trustee. Facsimile-transmission notice shall be deemed given upon completion of the transmission of the message to the number given to the Trust by the Trustee and receipt of a completed answer-back indicating receipt. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Trustees need be stated in the notice, unless specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the Board of Trustees shall constitute a quorum for transaction of business at any meeting of the Board of Trustees, provided that, if less than a majority of such Trustees are present at said meeting, a majority of the Trustees present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to the Declaration of Trust or these Bylaws, the vote of a majority of a particular group of Trustees is required for action, a quorum must also include a majority of such group.
The Trustees present at a meeting which has been duly called and convened may continue to transact business until adjournment, notwithstanding the withdrawal of enough Trustees to leave less than a quorum.
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Section 7. VOTING. The action of the majority of the Trustees present at a meeting at which a quorum is present shall be the action of the Board of Trustees, unless the concurrence of a greater proportion is required for such action by applicable statute.
Section 8. TELEPHONE MEETINGS. Trustees may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 9. INFORMAL ACTION BY TRUSTEES. Any action required or permitted to be taken at any meeting of the Board of Trustees may be taken without a meeting, if a consent in writing to such action is signed by each Trustee and such written consent is filed with the minutes of proceedings of the Board of Trustees.
Section 10. ORGANIZATION. At each meeting of the Board of Trustees, the chairman of the Board of Trustees or, in the absence of the chairman, the vice chairman, if any, of the Board of Trustees, if any, shall act as Chairman. In the absence of both the chairman and vice chairman of the Board of Trustees, the chief executive officer or in the absence of the chief executive officer, the president or in the absence of the president, a director chosen by a majority of the Trustees present, shall act as Chairman. The secretary or, in his or her absence, an assistant secretary of the Trust, or in the absence of the secretary and all assistant secretaries, a person appointed by the Chairman, shall act as Secretary of the meeting.
Section 11. VACANCIES. If for any reason any or all the Trustees cease to be Trustees, such event shall not terminate the Trust, or affect these Bylaws or the powers of the remaining Trustees hereunder (even if fewer than a quorum of Trustees remain). Any vacancy (including a vacancy created by an increase in the number of Trustees) shall be filled, at any regular meeting or at any special meeting called for that purpose, by a majority of the Trustees, even if the remaining Trustees do not constitute a quorum. Any individual so elected as Trustee shall hold office for the unexpired term of the Trustee he or she is replacing and until a successor is elected and qualifies.
Section 12. COMPENSATION. Trustees shall not receive any stated salary for their services as Trustees but, by resolution of the Board of Trustees or a duly authorized committee thereof, may receive compensation per year and/or per meeting and for any service or activity they performed or engaged in as Trustees. Trustees may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Trustees or of any committee thereof; and for their expenses, if any, in connection with any service or activity performed or engaged in as Trustees; but nothing herein contained shall be construed to preclude any Trustees from serving the Trust in any other capacity and receiving compensation therefor.
Section 13. REMOVAL OF TRUSTEES. The shareholders may remove any Trustee in the manner provided in the Declaration of Trust.
Section 14. RELIANCE. Each Trustee, officer, employee and agent of the Trust shall, in the performance of his or her duties with respect to the Trust, be fully justified and protected with regard to any act or failure to act in reliance in good faith upon the books of account or other records of the Trust, upon an opinion of counsel or upon reports made to the Trust by any of its officers or employees or by the adviser, accountants, appraisers or other experts or consultants selected by the Trustees or officers of the Trust, regardless of whether such counsel or expert may also be a Trustee.
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Section 15. INTERESTED TRUSTEE TRANSACTIONS. Section 2?419 of the Maryland General Corporation Law (the MGCL) shall be available for and apply to any contract or other transaction between the Trust and any of its Trustees or between the Trust and any other trust, corporation, firm or other entity in which any of its Trustees is a trustee or director or has a material financial interest.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Trustees may appoint from among its members an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and other committees, composed of one or more Trustees, to serve at the pleasure of the Board of Trustees.
Section 2. POWERS. The Board of Trustees may delegate to committees appointed under Section 1 of this Article any of the powers of the Trustees, except as prohibited by law.
Section 3. MEETINGS. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another Trustee to act in the place of such absent member provided that such Trustee meets the requirements of such committee. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Trustees. Each committee shall keep minutes of its proceedings and shall report the same to the Board of Trustees at the next succeeding meeting, and any action by the committee shall be subject to revision and alteration by the Board of Trustees, provided that no rights of third persons shall be affected by any such revision or alteration.
Section 4. QUORUM. A majority of the members of any committee shall constitute a quorum for the transaction of business at a committee meeting, and the act of a majority present shall be the act of such committee. The Board of Trustees, or the members of a committee to which such power has been duly delegated by the Board of Trustees, may designate a chairman of any committee, and such chairman or any two members of any committee may fix the time and place of its meetings unless the Board shall otherwise provide.
Section 5. TELEPHONE MEETINGS. Members of a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 6. INFORMAL ACTION BY COMMITTEES. Any action required or permitted to be taken at any meeting of a committee of the Board of Trustees may be taken without a meeting, if a consent in writing to such action is signed by each member of the committee and such written consent is filed with the minutes of proceedings of such committee.
Section 7. VACANCIES, REMOVAL AND DISSOLUTION. Subject to the provisions hereof, the Board of Trustees shall have the power at any time to change the membership of any committee, to fill all vacancies, to designate alternate members to replace any absent or disqualified member or to dissolve any such committee.
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ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Trust shall include a president, a secretary and a treasurer and may include a chairman of the board, a vice chairman of the board, a chief executive officer, a chief operating officer, a chief financial officer, one or more vice presidents, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Trustees may from time to time appoint such other officers with such powers and duties as they shall deem necessary or desirable. The officers of the Trust shall be elected annually by the Board of Trustees at the first meeting of the Board of Trustees held after each annual meeting of shareholders, except that the president may appoint one or more vice presidents. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. In their discretion, the Trustees may leave unfilled any office. Election of an officer or agent shall not of itself create contract rights between the Trust and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Trust may be removed by the Board of Trustees if in its judgment the best interests of the Trust would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Trust may resign at any time by giving written notice of his or her resignation to the Trustees, the chairman of the board, the president or the secretary. Any resignation shall take effect at any time subsequent to the time specified therein or, if the time when it shall become effective is not specified therein, immediately upon its receipt. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Trust.
Section 3. VACANCIES. A vacancy in any office may be filled by the Board of Trustees for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Board of Trustees may designate a chief executive officer from among the elected officers. The chief executive officer shall have responsibility for implementation of the policies of the Trust, as determined by the Board of Trustees, and for the administration of the business affairs of the Trust. In the absence of the chairman of the board, the chief executive officer shall preside over the meetings of the board of Trustees and of the shareholders at which he or she shall be present.
Section 5. CHIEF OPERATING OFFICER. The Board of Trustees may designate a chief operating officer from among the elected officers. Said officer will have the responsibilities and duties as set forth by the Board of Trustees or the chief executive officer.
Section 6. CHIEF FINANCIAL OFFICER. The Board of Trustees may designate a chief financial officer from among the elected officers. Said officer will have the responsibilities and duties as set forth by the Board of Trustees or the chief executive officer.
Section 7. CHAIRMAN OF THE BOARD. The chairman of the board shall preside over the meetings of the Board of Trustees and of the shareholders at which he or she shall be present and shall in general oversee all of the business and affairs of the Trust. The chairman of the board may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or
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agent of the Trust or shall be required by law to be otherwise executed. The chairman of the board shall perform such other duties as may be assigned to him or her or such other officer or agent of the Trust by the Board of Trustees.
Section 8. PRESIDENT. In the absence of the chairman of the board and the chief executive officer, the president shall preside over the meetings of the Board of Trustees and of the shareholders at which he or she shall be present. In the absence of a designation of a chief executive officer by the Board of Trustees, the president shall be the chief executive officer. The president may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or agent of the Trust or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Trustees from time to time.
Section 9. VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to him or her by the president or by the Board of Trustees. The Board of Trustees may designate one or more vice presidents as executive vice president, as senior vice president or as vice president for particular areas of responsibility. The president may designate one or more vice presidents as vice president for particular areas of responsibility.
Section 10. SECRETARY. The secretary shall (a) keep the minutes of the proceedings of the shareholders, the Board of Trustees and committees of the Board of Trustees in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the trust records and of the seal of the Trust; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) have general charge of the share transfer books of the Trust; and (f) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or by the Board of Trustees.
Section 11. TREASURER. The treasurer shall have the custody of the funds and securities of the Trust and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Trust and shall deposit all moneys and other valuable effects in the name and to the credit of the Trust in such depositories as may be designated by the Board of Trustees.
The treasurer shall disburse the funds of the Trust as may be ordered by the Board of Trustees, taking proper vouchers for such disbursements, and shall render to the president and Board of Trustees, at the regular meetings of the Board of Trustees or whenever they may require it, an account of all his or her transactions as treasurer and of the financial condition of the Trust.
If required by the Board of Trustees, the treasurer shall give the Trust a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Trustees for the faithful performance of the duties of his or her office and for the restoration to the Trust, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his or her possession or under his or her control belonging to the Trust.
Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to
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them by the secretary or treasurer, respectively, or by the president, the chief executive officer or the Board of Trustees. The assistant treasurers shall, if required by the Board of Trustees, give bonds for the faithful performance of their duties in such sums and with such surety or sureties as shall be satisfactory to the Board of Trustees.
Section 13. SALARIES. The salaries and other compensation of the officers shall be fixed from time to time by the Board of Trustees or the president and no officer shall be prevented from receiving such salary or other compensation by reason of the fact that he or she is also a Trustee.
ARTICLE VI
CONTRACTS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Trustees or the president may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Trust and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document executed by one or more of the Trustees or by an authorized person shall be valid and binding upon the Board of Trustees and upon the Trust.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Trust shall be signed by such officer or agent of the Trust in such manner as shall from time to time be determined by the Board of Trustees.
Section 3. DEPOSITS. All funds of the Trust not otherwise employed shall be deposited from time to time to the credit of the Trust in such banks, trust companies or other depositories as the Board of Trustees may designate.
ARTICLE VII
SHARES
Section 1. CERTIFICATES. In the event that the Trust issues shares of beneficial interest evidenced by certificates, each shareholder shall be entitled to a certificate or certificates which shall evidence and certify the number of shares of each class of beneficial interests held by him or her in the Trust. Each certificate shall be signed by the chairman of the board, the chief executive officer, the president or a vice president and countersigned by the secretary or an assistant secretary or the treasurer or an assistant treasurer and may be sealed with the seal, if any, of the Trust. The signatures may be either manual or facsimile. Certificates shall be consecutively numbered; and if the Trust shall, from time to time, issue several classes of shares, each class may have its own number series. A certificate is valid and may be issued whether or not an officer who signed it is still an officer when it is issued. Each certificate representing shares which are restricted as to their transferability or voting powers, which are preferred or limited as to their dividends or as to their allocable portion of the assets upon liquidation or which are redeemable at the option of the Trust, shall have a statement of such restriction, limitation, preference or redemption provision, or a summary thereof, plainly stated on the certificate. In lieu of such statement or summary, the Trust may set forth upon the face or back of the certificate a statement that the Trust will furnish to any shareholder, upon request and without charge, a full statement of such information.
Section 2. TRANSFERS. Certificates shall be treated as negotiable and title thereto and to the shares they represent shall be transferred by delivery thereof to the same extent as those of a
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Maryland stock corporation. Upon surrender to the Trust or the transfer agent of the Trust of a share certificate duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Trust shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
The Trust shall be entitled to treat the holder of record of any share or shares as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.
Notwithstanding the foregoing, transfers of shares of beneficial interest of the Trust will be subject in all respects to the Declaration of Trust and all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board of Trustees may direct a new certificate to be issued in place of any certificate previously issued by the Trust alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing the issuance of a new certificate, an officer designated by the Board of Trustees may, in his or her discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or the owners legal representative to advertise the same in such manner as he or she shall require and/or to give bond, with sufficient surety, to the Trust to indemnify it against any loss or claim which may arise as a result of the issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board of Trustees may set, in advance, a record date for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or determining shareholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of shareholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of shareholders not less than ten days, before the date on which the meeting or particular action requiring such determination of shareholders of record is to be held or taken.
In lieu of fixing a record date, the Board of Trustees may provide that the share transfer books shall be closed for a stated period but not longer than 20 days. If the share transfer books are closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days before the date of such meeting.
If no record date is fixed and the share transfer books are not closed for the determination of shareholders, (a) the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day on which the notice of meeting is mailed or the 30th day before the meting, whichever is the closer date to the meeting; and (b) the record date for the determination of shareholders entitled to receive payment of a dividend or an allotment of any other rights shall be the close of business on the day on which the resolution of the Board of Trustees, declaring the dividend or allotment of rights, is adopted.
When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except when (i) the determination has been made through the closing of the transfer books and the stated period of closing has expired or (ii) the meeting is adjourned to a date more than 120 days after the record date fixed for the original meeting, in either of which case a new record date shall be determined as set forth herein.
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Section 5. SHARE LEDGER. The Trust shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each shareholder and the number of shares of each class held by such shareholder.
Section 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. The Board of Trustees may issue fractional shares or provide for the issuance of scrip, all on such terms and under such conditions as they may determine. Notwithstanding any other provision of the Declaration of Trust or these Bylaws, the Board of Trustees may issue units consisting of different securities of the Trust. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Trust, except that the Board of Trustees may provide that for a specified period securities of the Trust issued in such unit may be transferred to the books of the Trust only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Trustees shall have the power, from time to time, to fix the fiscal year of the Trust by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the shares of beneficial interest of the Trust may be authorized and declared by the Board of Trustees, subject to the provisions of law and the Declaration of Trust. Dividends and other distributions may be paid in cash, property or shares of the Trust, subject to the provisions of law and the Declaration of Trust.
Section 2. CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside out of any funds of the Trust available for dividends or other distributions such sum or sums as the Board of Trustees may from time to time, in their absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Trust or for such other purpose as the Board of Trustees shall determine to be in the best interest of the Trust, and the Board of Trustees may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
SEAL
Section 1. SEAL. The Board of Trustees may authorize the adoption of a seal by the Trust. The seal shall have inscribed thereon the name of the Trust and the year of its formation. The Trustees may authorize one or more duplicate seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Trust is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word (SEAL) adjacent to the signature of the person authorized to execute the document on behalf of the Trust.
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ARTICLE XI
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to time, the Trust shall indemnify (a) any Trustee or officer (including among the foregoing, for all purposes of this Article XI and without limitation, any individual who, while a Trustee or officer and at the express request of the Trust, serves or has served another real estate investment trust, corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, shareholder, partner or trustee of such real estate investment trust, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) who has been successful, on the merits or otherwise, in the defense of a proceeding to which he or she was made a party by reason of service in such capacity, against reasonable expenses incurred by him or her in connection with the proceeding, and (b) any Trustee or officer or any former Trustee or officer against any claim or liability to which he or she may become subject by reason of such status unless it is established that (i) his or her act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, (ii) he or she actually received an improper personal benefit in money, property or services or (iii) in the case of a criminal proceeding, he or she had reasonable cause to believe that his or her act or omission was unlawful. In addition, the Trust shall pay or reimburse, as incurred, in advance of final disposition of a proceeding, reasonable expenses incurred by a Trustee or officer or former Trustee or officer made a party to a proceeding by reason of such status, provided that the Trust shall have received (i) a written affirmation by the Trustee or officer of his or her good faith belief that he or she has met the applicable standard of conduct necessary for indemnification by the Trust as authorized by these Bylaws and (ii) a written undertaking by or on his or her behalf to repay the amount paid or reimbursed by the Trust if it shall ultimately be determined that the applicable standard of conduct was not met. The Trust may, with the approval of its Board of Trustees, provide such indemnification or payment or reimbursement of expenses to any Trustee, officer or shareholder or any former Trustee, officer or shareholder who served a predecessor of the Trust and to any employee or agent of the Trust or a predecessor of the Trust.
Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Declaration of Trust or these Bylaws inconsistent with this Article, shall apply to or affect in any respect the applicability of this Article with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
Any indemnification or payment or reimbursement of the expenses permitted by these Bylaws shall be furnished in accordance with the procedures provided for indemnification or payment or reimbursement of expenses, as the case may be, under Section 2-418 of the MGCL for directors of Maryland corporations. The Trust may provide to Trustees, officers, employees, agents and shareholders such other and further indemnification or payment or reimbursement of expenses, as the case may be, to the fullest extent permitted by the MGCL, as in effect from time to time, for directors of Maryland corporations.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Declaration of Trust or these Bylaws or pursuant to applicable law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting
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shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIII
AMENDMENT OF BYLAWS
The Board of Trustees shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.
* * * *
The foregoing Bylaws were adopted by the board of trustees on August 9, 2004. Section 2 of Article II and Section 1 of Article VII were amended on November 2, 2004.
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Exhibit 10.38
Kite Realty Group Trust
Schedule of 2005 Bonus Benchmarks for Executive Officers
On March 15, 2005, the Compensation Committee (the Committee), of the Board of Trustees of Kite Realty Group Trust (the Company), met and approved the establishment of benchmarks to determine 2005 bonuses for the Companys executive officers. Such bonuses will be paid in early 2006. The Companys executive officers participate in the Kite Realty Group Trust Executive Bonus Plan, filed as Exhibit 10.27 to the Companys Current Report on Form 8-K, dated August 20, 2005.
The Committee determined that 2005 annual bonuses will be based on objective and subjective criteria and both corporate and individual performance. The principal corporate performance measures will consist of:
(i) funds from operations (FFO), a widely accepted supplemental measure of REIT performance established by the National Association of Real Estate Investments Trusts (to be determined prior to impairment losses);
(ii) new development projects; and
(iii) acquisitions of properties.
The Committee will measure corporate and individual performance to determine whether an executive officer has earned a threshold, target, superior, or outperformance bonus.
The range of bonuses for each of the Companys executive officers, other than Mr. Alvin E. Kite, Jr., the Companys Chairman, expressed as a percentage of the individuals base salary, is expected to be as set forth below:
Name and Principal Position |
2005 Bonus | |
Mr. John A. Kite |
0-200% of 2005 base salary | |
President and Chief Executive Officer |
||
Mr. Thomas K. McGowan |
0-175% of 2005 base salary | |
Executive Vice President and Chief Operating Officer |
||
Mr. Daniel R. Sink |
0-125% of 2005 base salary | |
Senior Vice President and Chief Financial Officer |
The Committee determined that in the case of both Thomas K. McGowan, the Companys Executive Vice President and Chief Operating Officer and Daniel R. Sink, the Companys Senior Vice President and Chief Financial Officer, approximately 80% of their bonuses will be based on achievement of corporate goals, with the remainder of their bonus to be determined based on the achievement of individual goals. In the case of John A. Kite, the Companys President and Chief Executive Officer, the Committee determined that his bonus will be based entirely on achievement of corporate goals.
The Committee will determine the bonus for Alvin E. Kite, Jr., the Companys Chairman, separately on an annual basis.
Exhibit 10.39
Option No.: SO-__
KITE REALTY GROUP TRUST
2004 EQUITY INCENTIVE PLAN
FORM OF NONQUALIFIED SHARE OPTION AGREEMENT
Kite Realty Group Trust, a Maryland real estate investment trust (the Company), grants an option to purchase common shares of beneficial interest, $.01 par value, (the Shares) of the Company to the Optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment, and in the Companys 2004 Equity Incentive Plan (the Plan).
Grant Date: _______________________
Name of Optionee: ____________________
Optionees Social Security Number: _____-____-_____
Number of Shares Covered by Option: ________________
Option Price per Share: $___________
Vesting Start Date: ____________________
By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Optionee: |
||
(Signature) | ||
Company: |
||
(Signature) | ||
Title: | ||
Attachment
This is not a share certificate or a negotiable instrument.
2
KITE REALTY GROUP TRUST
2004 EQUITY INCENTIVE PLAN
NONQUALIFIED SHARE OPTION AGREEMENT
Nonqualified Share Option | This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. | |
Vesting | This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested Shares not less than 100 Shares, unless
the number of Shares purchased is the total number available for purchase under the option, by following the procedures set forth in the Plan and below in this Agreement.
Except as otherwise provided in any employment agreement between you and the Company, your right to purchase Shares under this option vests as to one-fifth (1/5) of the total number of Shares covered by this option, as shown on the cover sheet, on the one-year anniversary of the Vesting Start Date (Anniversary Date), provided you then continue in Service. Thereafter, for each such vesting date that you remain in Service, the number of Shares which you may purchase under this option vests at the rate of one-sixtieth (1/60) per month as of the first day of each month following the month of the Anniversary Date. The resulting aggregate number of vested Shares will be rounded to the nearest whole number, and you cannot vest in more than the number of Shares covered by this option. No additional Shares will vest after your Service has terminated for any reason. | |
Term | Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier if your Service terminates, as described below. | |
Regular Termination | If your Service terminates for any reason, other than death, Disability, Cause or a voluntary resignation without Good Reason, then your option expires at the close of business at Company headquarters on the 90th day after your termination date. | |
Termination for Cause or Resignation without Good Reason | If your Service is terminated for Cause or you voluntarily resign without Good Reason, then you immediately forfeit all rights to your option and the option immediately expires. |
3
Death | If your Service terminates because of your death, then your option shall become fully vested and will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelve month period, your estate or heirs may
exercise your option.
In addition, if you die during the 90-day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and a vested portion of your option has not yet been exercised, then your option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of your option. |
|
Disability | If your Service terminates because of your Disability, then your option shall become fully vested and will expire at the close of business at Company headquarters on the date twelve (12) months after your termination date. | |
Leaves of Absence | For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is
required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately
return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan. |
|
Notice of Exercise | When you wish to exercise this option, you must notify the Company by filing the proper Notice of Exercise form at the address given on the form. Your notice must specify how many Shares you wish to purchase (in a parcel of at least 100 Shares generally). Your
notice must also specify how your Shares should be registered (in your name only or in your and your spouses names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.
If someone else wants to exercise this option after your death, that person must prove to the Companys satisfaction that he or she is entitled to do so. |
4
Form of Payment | When you submit your notice of exercise, you must include payment of the option price for the Shares you are purchasing. Payment may be made in one (or a combination) of the following forms: | ||
| Cash, your personal check, a cashiers check, a money order or another cash equivalent acceptable to the Company. | ||
| Shares which have already been owned by you for more than six months and which are surrendered to the Company. The value of the Shares, determined as of the effective date of the option exercise, will be applied to the option price. | ||
| By delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes (if approved in advance by the Compensation Committee of the Board if you are either an executive officer or a director of the Company). | ||
Withholding Taxes | You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of Shares acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of Shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate. | ||
Transfer of Option | During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security
for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or it may be transferred upon your death by the laws of descent and distribution.
Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouses interest in your option in any other way. |
||
Retention Rights | Neither your option nor this Agreement give you the right to be retained by the Company (or any parent, Subsidiaries or Affiliates) |
5
in any capacity. The Company (and any parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason. | ||
Shareholder Rights | You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your options Shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your share certificate is issued (or an appropriate book entry has been made), except as described in the Plan. | |
Adjustments | In the event of a split, a dividend or a similar change in the Shares, the number of Shares covered by this option and the option price per Share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. | |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |
The Plan | The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. |
|
Data Privacy | In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and
business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this option, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect |
6
to non-U.S. resident Optionees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan. | ||
Consent to Electronic Delivery | The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this option grant you agree that the Company may deliver the Plan prospectus and the Companys annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Daniel R. Sink at (317) 577-5600 to request paper copies of these documents. |
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
7
Exhibit 10.40
Grant No.: _______
KITE REALTY GROUP TRUST
2004 EQUITY INCENTIVE PLAN
RESTRICTED SHARE AGREEMENT
Kite Realty Group Trust, a Maryland real estate investment trust (the Company), grants common shares of beneficial interest, $.01 par value (the Shares), of the Company to the Grantee named below, subject to the vesting conditions set forth in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment, and in the Companys 2004 Equity Incentive Plan (the Plan).
Grant Date: __________________, 200__
Name of Grantee: _________________________________________________
Grantees Social Security Number: _____-____-_____
Number of Shares Covered by Grant: ______________
Purchase Price per Share: $_____.___
By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Grantee: |
||
(Signature) | ||
Company: |
||
(Signature) | ||
Title: | ||
Attachments
This is not a share certificate or a negotiable instrument.
KITE REALTY GROUP TRUST
2004 EQUITY INCENTIVE PLAN
RESTRICTED SHARE AGREEMENT
Restricted Shares/ Nontransferability | This grant is an award of Shares in the number of Shares set forth on the cover sheet, at the Purchase Price set forth on the cover sheet, and subject to the vesting conditions described below (Restricted Shares). The purchase price for the Restricted Shares is deemed paid by your services to the Company. To the extent not yet vested, your Restricted Shares may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Restricted Shares be made subject to execution, attachment or similar process. | |
Issuance and Vesting | The Company will issue your Restricted Shares in your name as of the Grant Date.
Your right to the Shares under this Restricted Share Agreement grant vests as to the total number of Shares covered by this grant, as shown on the cover sheet, on the first anniversary of the Grant Date (an Anniversary Date), provided you then continue in Service. If, however, you are restricted from selling Shares on the Anniversary Date pursuant to the Companys policy on insider trading, your Shares that would have vested on that vesting date will vest on the first date that is during a window period in which Company insiders are not restricted from selling Shares. Your right to the Shares under this Restricted Share Agreement will become fully vested on your termination of Services due to death or disability. No additional Shares will vest after your Service has terminated for any reason. |
|
Forfeiture of Unvested Shares | In the event that your Service terminates for any reason other than death or disability, you will forfeit to the Company all of the Shares subject to this grant that have not yet vested. | |
Escrow | The certificates for the Restricted Shares shall be deposited in escrow with the Secretary of the Company to be held in accordance with the provisions of this paragraph. Each deposited certificate shall be accompanied by a duly executed Assignment Separate from Certificate in the form attached hereto as Exhibit A. The deposited certificates shall remain in escrow until such time or times as the certificates are to be released or otherwise surrendered for cancellation as discussed below. Upon delivery of the certificates to the Company, you shall be issued an instrument of deposit acknowledging the number of Shares delivered in escrow to |
2
the Secretary of the Company.
All regular cash dividends on the Shares (or other securities at the time held in escrow) shall be paid directly to you and shall not be held in escrow. However, in the event of any dividend, split, recapitalization or other change affecting the Companys outstanding Shares as a class effected without receipt of consideration or in the event of a split, a dividend or a similar change in the Shares, any new, substituted or additional securities or other property which is by reason of such transaction distributed with respect to the Shares shall be immediately delivered to the Secretary of the Company to be held in escrow hereunder, but only to the extent the Shares are at the time subject to the escrow requirements hereof. As your interest in the Shares vests, as described above, the certificates for such vested Shares shall be released from escrow and delivered to you, at your request, within 30 days of their vesting. |
||
Withholding Taxes | You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the vesting of Shares acquired under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the vesting of Shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate. | |
Section 83(b) Election | Under Section 83 of the Internal Revenue Code of 1986, as amended (the Code), the difference between the purchase price paid for the Shares and their fair market value on the date any forfeiture restrictions applicable to such Shares lapse will be reportable as ordinary income at that time. For this purpose, forfeiture restrictions include the forfeiture of unvested Shares that is described above. You may elect to be taxed at the time the Shares are acquired, rather than when such Shares cease to be subject to such forfeiture restrictions, by filing an election under Code Section 83(b) with the Internal Revenue Service within thirty (30) days after the Grant Date. You will have to make a tax payment to the extent the Purchase Price is less than the fair market value of the Shares on the Grant Date. No tax payment will have to be made to the extent the Purchase Price is at least equal to the fair market value of the shares on the Grant Date. The form for making this election is attached as Exhibit B hereto. Failure to make this filing within the thirty (30) day period will result in the recognition |
3
of ordinary income by you (in the event the fair market value of the shares as of the vesting date exceeds the purchase price) as the forfeiture restrictions lapse.
YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANYS, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF. YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY CODE SECTION 83(b) ELECTION. |
||
Retention Rights | This Agreement does not give you the right to be retained by the Company (or any parent, Subsidiaries or Affiliates) in any capacity. The Company (and any parent, Subsidiaries or Affiliates) reserves the right to terminate your Service at any time and for any reason. | |
Shareholder Rights | You have the right to vote the Restricted Shares and to receive any dividends declared or paid on such Shares. Any distributions you receive as a result of any split, dividend, combination of Shares or other similar transaction shall be deemed to be a part of the Restricted Shares and subject to the same conditions and restrictions applicable thereto. Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before your share certificate is issued. | |
Adjustments | In the event of a split, a dividend or a similar change in the Shares, the number of Shares covered by this grant may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your Restricted Shares shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. | |
Legends | All certificates representing the Shares issued in connection with this grant shall, where applicable, have endorsed thereon the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE |
4
COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE. | ||
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |
The Plan | The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this grant of Restricted Shares. Any prior agreements, commitments or negotiations concerning this grant are superseded. |
|
Data Privacy | In order to administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and
business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan. |
5
Consent to Electronic Delivery | The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant, you agree that the Company may deliver the Plan prospectus and the Companys annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact _____ at ______ to request paper copies of these documents. |
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
6
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, _____________ sells, assigns and transfers to Kite Realty Group Trust, a Maryland real estate investment trust (the Company), ____________ (__________) common shares of beneficial interest of the Company represented by Certificate No. ___ and does hereby irrevocable constitute and appoint ______________ to transfer the said shares on the books of the Company with full power of substitution in the premises.
Dated:____________, 200__
Print Name | ||
Signature |
Spouse Consent (if applicable)
___________________ (Purchasers spouse) indicates by the execution of this Assignment his or her consent to be bound by the terms herein as to his or her interests, whether as community property or otherwise, if any, in the common shares of beneficial interest of the Company.
Signature | |
INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO CAUSE THE FORFEITURE OF YOUR UNVESTED SHARES AS SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL SIGNATURES ON THE PART OF PURCHASER.
7
EXHIBIT B
ELECTION UNDER SECTION 83(b) OF
THE INTERNAL REVENUE CODE
The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:
1. | The name, address and social security number of the undersigned: |
Name: |
||
Address: |
||
Social Security No.: |
2. | Description of property with respect to which the election is being made: |
_________common shares of beneficial interest, par value $.01 per share, of Kite Realty Group Trust, a Maryland real estate investment trust (the Company).
3. | The date on which the property was transferred is ____________ __, 200__. |
4. | The taxable year to which this election relates is calendar year 200__. |
5. | Nature of restrictions to which the property is subject: |
The common shares of beneficial interest are subject to the provisions of a Restricted Share Agreement between the undersigned and the Company. The shares are subject to forfeiture under the terms of the Agreement.
6. | The fair market value of the property at the time of transfer (determined without regard to any lapse restriction) was $__________ per share, for a total of $__________. |
7. | The amount paid by taxpayer for the property was $__________. |
8. | A copy of this statement has been furnished to the Company. |
Dated: _____________, 200__
Taxpayers Signature | ||
Taxpayers Printed Name |
8
PROCEDURES FOR MAKING ELECTION
UNDER INTERNAL REVENUE CODE SECTION 83(b)
The following procedures must be followed with respect to the attached form for making an election under Internal Revenue Code section 83(b) in order for the election to be effective:1
1. You must file one copy of the completed election form with the IRS Service Center where you file your federal income tax returns within 30 days after the Grant Date of your Restricted Shares.
2. At the same time you file the election form with the IRS, you must also give a copy of the election form to the Secretary of the Company.
3. You must file another copy of the election form with your federal income tax return (generally, Form 1040) for the taxable year in which the shares are transferred to you.
9
Exhibit 10.41
KITE REALTY GROUP TRUST
Annual
Retainer |
$25,000 |
|||||
Board Meeting
Fees (telephonic and in-person) |
$1,000 |
|||||
Committe
Meeting Fees (telephonic and in-person) |
$1,000 |
|||||
Committee
Chair Annual Retainer |
Audit Committee: $10,000 Compensation Committee: $7,500 Nominating and Corporate Governance Committee: $5,000 |
|||||
Lead Trustee
Retainer |
$10,000 |
|||||
Annual
Restricted Share Awards |
Upon
initial election, each trustee receives 3,000 restricted shares that vest 1 year from date of grant. On an annual basis each year after their initial election, each trustee will receive restricted shares with a value of $15,000 that vest 1 year from the date of grant. |
Effective: August 2004
Exhibit 21.1
Kite Realty Group Trust
List of Subsidiaries
Name of Subsidiary |
Jurisdiction of Incorporation or Formation |
|||||
---|---|---|---|---|---|---|
Kite Realty
Group, L.P. |
Delaware |
|||||
KRG Management,
LLC |
Indiana |
|||||
KRG Development,
LLC (d/b/a Kite Development) |
Indiana |
|||||
KRG Construction,
LLC |
Indiana |
|||||
Kite Realty
Holding, LLC |
Indiana |
|||||
Kite Realty
Advisors, LLC (d/b/a KMI Realty Advisors) |
Indiana |
|||||
Kite Realty
Construction, LLC |
Indiana |
|||||
Kite Realty
Development, LLC |
Indiana |
|||||
Kite Coral
Springs, LLC |
Indiana |
|||||
International
Speedway Square, Ltd. |
Indiana |
|||||
Kite Daytona,
LLC |
Indiana |
|||||
KRG Daytona
Management, LLC |
Indiana |
|||||
KRG/CREC
Gainesville, LLC |
Florida |
|||||
KRG Gainesville,
LLC |
Indiana |
|||||
Kite Kings
Lake, LLC |
Indiana |
|||||
KRG Waterford
Lakes, LLC |
Indiana |
|||||
Kite Eagle Creek,
LLC |
Indiana |
|||||
KRG Panola I,
LLC |
Delaware |
|||||
KRG Panola II,
LLC |
Indiana |
|||||
Kite Acworth,
LLC |
Indiana |
|||||
Kite Silver Glen,
LLC |
Indiana |
|||||
Glendale Centre,
LLC |
Indiana |
|||||
Kite Kokomo,
LLC |
Indiana |
|||||
Noblesville
Partners, LLC |
Indiana |
|||||
Whitehall Pike,
LLC |
Indiana |
|||||
KRG Whitehall
Pike Management, LLC |
Indiana |
|||||
KRG Fishers
Station I, LLC |
Indiana |
|||||
Fishers Station
Development Company |
Indiana |
|||||
KRG Fishers
Station II, LLC |
Indiana |
|||||
KRG Hamilton
Crossing, LLC |
Indiana |
|||||
Centre
Associates, LP |
Indiana |
|||||
Corner
Associates, LP |
Indiana |
|||||
KRG Corner
Associates, LLC |
Indiana |
|||||
Jefferson Morton,
LLC |
Indiana |
|||||
Kite New Jersey,
LLC |
Indiana |
|||||
KRG Sunland,
LP |
Indiana |
|||||
KRG Sunland
Management, LLC |
Indiana |
|||||
KRG Cedar Hill
Plaza, LP |
Delaware |
|||||
KRG CHP
Management, LLC |
Delaware |
|||||
Preston Commons,
LLP |
Indiana |
|||||
KRG Texas,
LLC |
Indiana |
|||||
KRG Cedar Hill
Village, LP |
Indiana |
|||||
KRG San Antonio,
LP |
Indiana |
|||||
Kite San Antonio,
LLC |
Indiana |
|||||
KRG Galleria
Plaza, LP |
Indiana |
|||||
Kite Washington,
LLC |
Indiana |
|||||
KRG Washington
Management, LLC |
Indiana |
Name of Subsidiary |
Jurisdiction of Incorporation or Formation |
|||||
---|---|---|---|---|---|---|
Kite Shadeland,
LLC |
Indiana |
|||||
Kite Pen,
LLC |
Indiana |
|||||
Spring Mill
Medical, LLC |
Indiana |
|||||
Kite Spring Mill
Medical, LLC |
Indiana |
|||||
Kite Washington
Parking, LLC |
Indiana |
|||||
Kite McCarty
State, LLC |
Indiana |
|||||
50th
& 12th, LLC |
Indiana |
|||||
176th
& Meridian, LLC |
Indiana |
|||||
KRG Eastgate
Pavilion, LLC |
Indiana |
|||||
KRG Fox Lake
Crossing, LLC |
Indiana |
|||||
KRG Four Corner
Square, LLC |
Indiana |
|||||
82nd
& Otty |
Indiana |
|||||
Westfield One,
LLC |
Indiana |
|||||
Kite West
86th Street LLC |
Indiana |
|||||
Kite West
86th Street II, LLC |
Indiana |
|||||
Kite West
86th Street III, LLC |
Indiana |
|||||
Kite Michigan
Road, LLC |
Indiana |
|||||
Kite Eagle Creek
II |
Indiana |
|||||
KRG Eagle Creek
III |
Indiana |
|||||
Kite Greyhound,
LLC |
Indiana |
|||||
Eagle Plaza II,
LLC |
Indiana |
|||||
Ohio & 37,
LLC |
Indiana |
|||||
116th
& Olio, LLC |
Indiana |
|||||
KRG/CCA Estero,
LLC |
Florida |
|||||
KRG Estero,
LLC |
Indiana |
|||||
KRG Frisco
Bridges, LP |
Indiana |
|||||
Kite Greyhound
III, LLC |
Indiana |
|||||
Kite Spring Mill
II, LLC |
Indiana |
|||||
KRG Fox Lake
Crossing II, LLC |
Indiana |
|||||
KRG Zionsville,
LLC |
Indiana |
|||||
KRG Huntington
Avenue, LLC |
Indiana |
|||||
KRG ISS,
LLC |
Indiana |
|||||
KRG Capital,
LLC |
Indiana |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Indianapolis, Indiana
March 30, 2005
Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
I, John A. Kite, certify that:
1. |
I have reviewed this annual report on Form 10-K of Kite Realty Group Trust; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Trustees (or persons performing equivalent functions): |
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ JOHN A. KITE
John A. Kite
Chief
Executive Officer and President
Exhibit 31.2
Certification of Principal Executive Officer
Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
I, Daniel R. Sink, certify that:
1. |
I have reviewed this annual report on Form 10-K of Kite Realty Group Trust; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Trustees (or persons performing equivalent functions): |
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ DANIEL R. SINK
Daniel R. Sink
Chief Financial Officer
Exhibit 32.1
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to U.S.C Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
1. |
The Annual Report on Form 10-K of the Company for the year ended December 31, 2004 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and |
2. |
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |