(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2013
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission File Number: 001-32268
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Kite Realty Group Trust
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(Exact Name of Registrant as Specified in its Charter)
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Maryland
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11-3715772
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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30 S. Meridian Street, Suite 1100
Indianapolis, Indiana
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46204
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(Address of principal executive offices)
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(Zip code)
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Telephone: (317) 577-5600
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(Registrant’s telephone number, including area code)
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Not Applicable
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(Former name, former address and former fiscal year, if changed since last report)
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Yes x
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No o
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Yes x
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No o
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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Smaller reporting company
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o
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||||||
(Do not check if a smaller reporting company)
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Yes o
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No x
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Page
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Part I.
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Item 1.
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3
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4
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Consolidated Statement of Shareholders’ Equity for the Nine Months Ended September 30, 2013
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5
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6
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7
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Item 2.
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17
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18
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Item 3.
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33
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Item 4.
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34
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Part II.
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Item 1.
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34
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Item 1A.
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34
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Item 2.
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34
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Item 3.
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34
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Item 4.
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34
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Item 5.
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35
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Item 6.
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35
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36
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September 30,
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December 31,
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|||||||
2013
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2012
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|||||||
Assets:
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||||||||
Investment properties, at cost:
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||||||||
Land
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$ | 291,903,083 | $ | 239,690,837 | ||||
Land held for development
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56,078,478 | 34,878,300 | ||||||
Buildings and improvements
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1,062,256,323 | 892,508,729 | ||||||
Furniture, equipment and other
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4,872,339 | 4,419,918 | ||||||
Construction in progress
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112,921,957 | 223,135,354 | ||||||
1,528,032,180 | 1,394,633,138 | |||||||
Less: accumulated depreciation
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(220,782,063 | ) | (194,297,531 | ) | ||||
Net real estate investments
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1,307,250,117 | 1,200,335,607 | ||||||
Cash and cash equivalents
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12,130,048 | 12,482,701 | ||||||
Tenant receivables, including accrued straight-line rent of $13,698,484 and
$12,189,449, respectively, net of allowance for uncollectible accounts
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22,373,621 | 21,210,754 | ||||||
Other receivables
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5,937,729 | 4,946,219 | ||||||
Escrow and other deposits
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11,389,473 | 12,960,488 | ||||||
Deferred costs, net
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41,187,441 | 35,322,792 | ||||||
Prepaid and other assets
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4,018,249 | 1,398,344 | ||||||
Total Assets
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$ | 1,404,286,678 | $ | 1,288,656,905 | ||||
Liabilities and Equity:
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||||||||
Mortgage and other indebtedness
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$ | 743,984,742 | $ | 699,908,768 | ||||
Accounts payable and accrued expenses
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50,637,642 | 54,187,172 | ||||||
Deferred revenue and other liabilities
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18,217,210 | 20,269,501 | ||||||
Total Liabilities
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812,839,594 | 774,365,441 | ||||||
Commitments and contingencies
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||||||||
Redeemable noncontrolling interests in Operating Partnership
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40,114,022 | 37,669,803 | ||||||
Equity:
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||||||||
Kite Realty Group Trust Shareholders' Equity:
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||||||||
Preferred Shares, $.01 par value, 40,000,000 shares authorized, 4,100,000
shares issued and outstanding at September 30, 2013 and
December 31, 2012, respectively
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102,500,000 | 102,500,000 | ||||||
Common Shares, $.01 par value, 200,000,000 shares authorized,
93,856,152 shares and 77,728,697 shares issued and outstanding at
September 30, 2013 and December 31, 2012, respectively
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938,562 | 777,287 | ||||||
Additional paid in capital and other
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608,200,732 | 513,111,877 | ||||||
Accumulated other comprehensive loss
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(228,163 | ) | (5,258,543 | ) | ||||
Accumulated deficit
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(163,621,202 | ) | (138,044,264 | ) | ||||
Total Kite Realty Group Trust Shareholders' Equity
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547,789,929 | 473,086,357 | ||||||
Noncontrolling Interests
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3,543,133 | 3,535,304 | ||||||
Total Equity
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551,333,062 | 476,621,661 | ||||||
Total Liabilities and Equity
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$ | 1,404,286,678 | $ | 1,288,656,905 | ||||
Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||||||
2013
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2012
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2013
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2012
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Revenue:
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||||||||||||||||
Minimum rent
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$ | 23,845,218 | $ | 18,571,977 | $ | 67,215,216 | $ | 54,263,303 | ||||||||
Tenant reimbursements
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6,257,937 | 4,897,578 | 17,350,746 | 14,170,945 | ||||||||||||
Other property related revenue
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2,568,468 | 857,493 | 9,300,135 | 2,937,042 | ||||||||||||
Total revenue
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32,671,623 | 24,327,048 | 93,866,097 | 71,371,290 | ||||||||||||
Expenses:
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||||||||||||||||
Property operating
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5,448,738 | 3,997,658 | 15,582,301 | 12,278,320 | ||||||||||||
Real estate taxes
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3,724,116 | 3,180,390 | 10,684,894 | 9,458,334 | ||||||||||||
General, administrative, and other
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2,114,828 | 1,645,048 | 6,069,063 | 5,255,804 | ||||||||||||
Acquisition costs
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153,314 | 108,169 | 566,826 | 179,102 | ||||||||||||
Litigation charge
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— | — | — | 1,289,446 | ||||||||||||
Depreciation and amortization
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15,393,620 | 10,831,282 | 40,626,179 | 29,435,053 | ||||||||||||
Total expenses
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26,834,616 | 19,762,547 | 73,529,263 | 57,896,059 | ||||||||||||
Operating income
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5,837,007 | 4,564,501 | 20,336,834 | 13,475,231 | ||||||||||||
Interest expense
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(7,600,413 | ) | (6,048,866 | ) | (20,988,919 | ) | (17,871,086 | ) | ||||||||
Income tax (expense) benefit of taxable REIT subsidiary
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(30,596 | ) | 13,385 | (106,477 | ) | 5,995 | ||||||||||
Other (expense) income, net
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(47,013 | ) | 99,914 | (39,150 | ) | 98,207 | ||||||||||
Loss from continuing operations
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(1,841,015 | ) | (1,371,066 | ) | (797,712 | ) | (4,291,653 | ) | ||||||||
Discontinued operations:
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||||||||||||||||
Discontinued operations, excluding impairment charge
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1,353,827 | 200,073 | 484,907 | 643,681 | ||||||||||||
Impairment charge
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— | — | (5,371,427 | ) | — | |||||||||||
Gain on debt extinguishment
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1,241,724 | — | 1,241,724 | — | ||||||||||||
Gain (loss) on sale of operating property
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486,540 | (65,312 | ) | 486,540 | 5,180,568 | |||||||||||
Income (loss) from discontinued operations
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3,082,091 | 134,761 | (3,158,256 | ) | 5,824,249 | |||||||||||
Consolidated net income (loss)
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1,241,076 | (1,236,305 | ) | (3,955,968 | ) | 1,532,596 | ||||||||||
Net loss (income) attributable to noncontrolling interests
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15,174 | 312,208 | 651,327 | (1,513,591 | ) | |||||||||||
Net income (loss) attributable to Kite Realty Group Trust
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$ | 1,256,250 | $ | (924,097 | ) | $ | (3,304,641 | ) | $ | 19,005 | ||||||
Dividends on preferred shares
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(2,114,063 | ) | (2,114,063 | ) | (6,342,188 | ) | (5,805,939 | ) | ||||||||
Net loss attributable to common shareholders
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$ | (857,813 | ) | $ | (3,038,160 | ) | $ | (9,646,829 | ) | $ | (5,786,934 | ) | ||||
Net loss per common share - basic & diluted:
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||||||||||||||||
Loss from continuing operations attributable to Kite Realty
Group Trust common shareholders
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$ | (0.04 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.14 | ) | ||||
Income (loss) from discontinued operations attributable
to Kite Realty Group Trust common shareholders
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0.03 | 0.00 | (0.03 | ) | 0.05 | |||||||||||
Net loss attributable to Kite Realty Group Trust common shareholders
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$ | (0.01 | ) | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.09 | ) | ||||
Weighted average common shares outstanding - basic and diluted
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93,803,896 | 64,780,540 | 87,626,746 | 64,171,770 | ||||||||||||
Dividends declared per common share
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$ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 | ||||||||
Net loss attributable to Kite Realty Group Trust common shareholders:
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||||||||||||||||
Loss from continuing operations
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$ | (3,733,405 | ) | $ | (3,159,546 | ) | $ | (6,712,809 | ) | $ | (9,131,407 | ) | ||||
Income (loss) from discontinued operations
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2,875,592 | 121,386 | (2,934,020 | ) | 3,344,473 | |||||||||||
Net loss attributable to Kite Realty Group Trust common shareholders
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$ | (857,813 | ) | $ | (3,038,160 | ) | $ | (9,646,829 | ) | $ | (5,786,934 | ) | ||||
Consolidated net income (loss)
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$ | 1,241,076 | $ | (1,236,305 | ) | $ | (3,955,968 | ) | $ | 1,532,596 | ||||||
Change in fair value of derivatives
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(1,107,065 | ) | (1,442,038 | ) | 5,469,929 | (4,473,848 | ) | |||||||||
Total comprehensive income (loss)
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134,011 | (2,678,343 | ) | 1,513,961 | (2,941,252 | ) | ||||||||||
Comprehensive loss (income) attributable to noncontrolling interests
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89,290 | 373,155 | 211,778 | (1,125,031 | ) | |||||||||||
Comprehensive income (loss) attributable to Kite Realty Group Trust
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$ | 223,301 | $ | (2,305,188 | ) | $ | 1,725,739 | $ | (4,066,283 | ) | ||||||
Accumulated
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||||||||||||||||||||||||||||||||
Other
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Preferred Shares
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Common Shares
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Additional
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Comprehensive
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Accumulated
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||||||||||||||||||||||||||||
Shares
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Amount
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Shares
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Amount
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Paid-in Capital
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Loss
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Deficit
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Total
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|||||||||||||||||||||||||
Balances, December 31, 2012
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4,100,000 | $ | 102,500,000 | 77,728,697 | $ | 777,287 | $ | 513,111,877 | $ | (5,258,543 | ) | $ | (138,044,264 | ) | $ | 473,086,357 | ||||||||||||||||
Common shares issued under employee share purchase plan
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— | — | 2,828 | 29 | 16,401 | — | — | 16,430 | ||||||||||||||||||||||||
Common share issuance, net of offering costs
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— | — | 15,525,000 | 155,250 | 97,012,855 | — | — | 97,168,105 | ||||||||||||||||||||||||
Stock compensation activity
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— | — | 587,627 | 5,876 | 1,752,129 | — | — | 1,758,005 | ||||||||||||||||||||||||
Other comprehensive income
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— | — | — | — | — | 5,030,380 | — | 5,030,380 | ||||||||||||||||||||||||
Distributions declared to common
shareholders
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— | — | — | — | — | — | (15,930,109 | ) | (15,930,109 | ) | ||||||||||||||||||||||
Distributions to preferred
shareholders
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— | — | — | — | — | — | (6,342,188 | ) | (6,342,188 | ) | ||||||||||||||||||||||
Net loss attributable to Kite
Realty Group Trust
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— | — | — | — | — | — | (3,304,641 | ) | (3,304,641 | ) | ||||||||||||||||||||||
Exchange of redeemable
noncontrolling interests for
common shares
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— | — | 12,000 | 120 | 72,480 | — | — | 72,600 | ||||||||||||||||||||||||
Adjustment to redeemable
noncontrolling interests -
Operating Partnership
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— | — | — | — | (3,765,010 | ) | — | — | (3,765,010 | ) | ||||||||||||||||||||||
Balances, September 30, 2013
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4,100,000 | $ | 102,500,000 | 93,856,152 | $ | 938,562 | $ | 608,200,732 | $ | (228,163 | ) | $ | (163,621,202 | ) | $ | 547,789,929 | ||||||||||||||||
Nine Months Ended September 30,
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||||||||
2013
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2012
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|||||||
Cash flows from operating activities:
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||||||||
Consolidated net (loss) income
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$ | (3,955,968 | ) | $ | 1,532,596 | |||
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities:
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||||||||
Straight-line rent
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(2,538,835 | ) | (1,772,028 | ) | ||||
Depreciation and amortization
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43,312,825 | 33,395,223 | ||||||
Impairment charge
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5,371,427 | — | ||||||
Gain on debt extinguishment
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(1,241,724 | ) | — | |||||
Gain on sale of operating property
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(486,540 | ) | (5,180,568 | ) | ||||
Provision for credit losses
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254,736 | 602,159 | ||||||
Compensation expense for equity awards
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1,044,077 | 416,122 | ||||||
Amortization of debt fair value adjustment
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(125,010 | ) | (70,996 | ) | ||||
Amortization of in-place lease liabilities
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(1,911,729 | ) | (1,419,081 | ) | ||||
Changes in assets and liabilities:
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||||||||
Tenant receivables
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542,407 | (109,708 | ) | |||||
Deferred costs and other assets
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(11,028,702 | ) | (6,503,262 | ) | ||||
Accounts payable, accrued expenses, deferred revenue and other liabilities
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7,782,545 | (180,121 | ) | |||||
Net cash provided by operating activities
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37,019,509 | 20,710,336 | ||||||
Cash flows from investing activities:
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||||||||
Acquisitions of interests in properties
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(102,684,600 | ) | (27,921,162 | ) | ||||
Capital expenditures, net
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(75,077,145 | ) | (68,798,572 | ) | ||||
Net proceeds from operating property sale
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7,292,460 | 61,763,940 | ||||||
Change in construction payables
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(12,969,522 | ) | 18,657,339 | |||||
Distributions from unconsolidated entities
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— | 283,525 | ||||||
Contributions to unconsolidated entities
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— | (150,000 | ) | |||||
Net cash used in investing activities
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(183,438,807 | ) | (16,164,930 | ) | ||||
Cash flows from financing activities:
|
||||||||
Common share issuance proceeds, net of issuance costs
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97,184,535 | 3,014,368 | ||||||
Preferred share issuance proceeds, net of issuance costs
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— | 31,320,296 | ||||||
Loan proceeds
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290,071,122 | 223,586,699 | ||||||
Loan transaction costs
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(1,942,290 | ) | (2,056,982 | ) | ||||
Loan payments
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(216,675,303 | ) | (240,360,736 | ) | ||||
Distributions paid – common shareholders
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(14,962,446 | ) | (11,502,460 | ) | ||||
Distributions paid - preferred shareholders
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(6,342,188 | ) | (5,582,500 | ) | ||||
Distributions paid – redeemable noncontrolling interests
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(1,184,864 | ) | (1,409,430 | ) | ||||
Distributions to noncontrolling interests in properties
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(81,921 | ) | (1,663,483 | ) | ||||
Net cash provided by (used in) financing activities
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146,066,645 | (4,654,228 | ) | |||||
Net change in cash and cash equivalents
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(352,653 | ) | (108,822 | ) | ||||
Cash and cash equivalents, beginning of period
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12,482,701 | 10,042,450 | ||||||
Cash and cash equivalents, end of period
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$ | 12,130,048 | $ | 9,933,628 | ||||
Non-cash investing and financing activities
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||||||||
Assumption of mortgage upon acquisition of 12th Street Plaza including fair market value of debt premium of $193,291
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— | $ | 8,086,135 | |||||
Extinguishment of mortgage upon transfer of Kedron Village operating property to lender.
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$ | 29,194,834 | $ | — | ||||
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·
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the Company’s ability to refinance debt and sell the property without the consent of any other partner or owner;
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·
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the inability of any other partner or owner to replace the Company as manager of the property; or
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·
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being the primary beneficiary of a VIE. The primary beneficiary is defined as the entity that has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.
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2013
|
2012
|
|||||||
Noncontrolling interests balance January 1
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$ | 3,535,304 | $ | 4,250,485 | ||||
Net income allocable to noncontrolling interests,
excluding redeemable noncontrolling interests
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89,750 | 2,196,634 | ||||||
Distributions to noncontrolling interests
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(81,921 | ) | (1,663,483 | ) | ||||
Noncontrolling interests balance at September 30
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$ | 3,543,133 | $ | 4,783,636 | ||||
2013
|
2012
|
|||||||
Redeemable noncontrolling interests balance January 1
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$ | 37,669,803 | $ | 41,836,613 | ||||
Net loss allocable to redeemable noncontrolling interests
|
(741,078 | ) | (683,044 | ) | ||||
Distributions declared to redeemable noncontrolling interests
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(1,188,677 | ) | (1,343,387 | ) | ||||
Other comprehensive income (loss) allocable to redeemable
noncontrolling interests 1
|
439,549 | (388,560 | ) | |||||
Exchange of redeemable noncontrolling interest for
common stock
|
(72,600 | ) | (5,817,306 | ) | ||||
Adjustment to redeemable noncontrolling interests -
operating partnership and other
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4,007,025 | 778,782 | ||||||
Redeemable noncontrolling interests balance at September 30
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$ | 40,114,022 | $ | 34,383,098 | ||||
____________________
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1
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Represents the noncontrolling interests’ share of the changes in the fair value of derivative instruments accounted for as cash flow hedges (see Note 7).
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2013
|
2012
|
|||||||
Accumulated comprehensive loss balance at January 1
|
$ | (455,896 | ) | $ | (187,885 | ) | ||
Other comprehensive income (loss) allocable to redeemable
noncontrolling interests 1
|
439,549 | (388,560 | ) | |||||
Accumulated comprehensive loss balance at September 30
|
$ | (16,347 | ) | $ | (576,445 | ) | ||
____________________
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|
1
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Represents the noncontrolling interests’ share of the changes in the fair value of derivative instruments accounted for as cash flow hedges (see Note 7).
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Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Company’s weighted average basic interest in
Operating Partnership
|
93.3 | % | 90.0 | % | 92.9 | % | 89.4 | % | ||||||||
Limited partners' redeemable noncontrolling
weighted average basic interest in Operating
Partnership
|
6.7 | % | 10.0 | % | 7.1 | % | 10.6 | % | ||||||||
Balance at
|
||||||||
September 30,
2013
|
December 31,
2012
|
|||||||
Unsecured revolving credit facility
|
$ | 35,699,783 | $ | 94,624,200 | ||||
Unsecured term loan
|
230,000,000 | 125,000,000 | ||||||
Notes payable secured by properties under construction -
variable rate
|
128,863,488 | 72,156,149 | ||||||
Mortgage notes payable - fixed rate
|
297,834,722 | 338,765,294 | ||||||
Mortgage notes payable - variable rate
|
51,520,040 | 69,171,405 | ||||||
Net premiums on acquired debt
|
66,709 | 191,720 | ||||||
Total mortgage and other indebtedness
|
$ | 743,984,742 | $ | 699,908,768 | ||||
Amount
|
Weighted Average Maturity (Years)
|
Weighted Average Interest Rate
|
Percentage of Total
|
|||||||||||||
Fixed rate debt
|
$ | 297,834,722 | 4.3 | 5.78 | % | 40 | % | |||||||||
Floating rate debt (hedged to fixed)
|
254,827,249 | 5.0 | 3.46 | % | 34 | % | ||||||||||
Total fixed rate debt, considering hedges
|
552,661,971 | 4.6 | 4.71 | % | 74 | % | ||||||||||
Notes payable secured by properties under construction - variable rate
|
128,863,488 | 1.4 | 2.38 | % | 17 | % | ||||||||||
Other variable rate debt
|
51,520,040 | 2.5 | 2.52 | % | 7 | % | ||||||||||
Corporate unsecured variable rate debt
|
265,699,783 | 5.3 | 2.00 | % | 36 | % | ||||||||||
Floating rate debt (hedged to fixed)
|
(254,827,249 | ) | -5.0 | -2.17 | % | -34 | % | |||||||||
Total variable rate debt, considering hedges
|
191,256,062 | 2.3 | 2.17 | % | 26 | % | ||||||||||
Net premiums on acquired debt
|
66,709 | N/A | N/A | N/A | ||||||||||||
Total debt
|
$ | 743,984,742 | 4.0 | 4.06 | % | 100 | % | |||||||||
·
|
In August, proceeds of $105 million from the expansion of the amended Term Loan were received. The Company utilized $101.9 million to pay down the Company’s unsecured revolving credit facility. The remaining proceeds of $3.1 million were utilized to fund loan costs of the amended Term Loan and redevelopment and development costs;
|
·
|
Pay downs totaling $74.2 million were made on the unsecured revolving credit facility using a portion of the proceeds of the common share offering during the second quarter;
|
·
|
In January, a draw of $11.6 million was made on the unsecured revolving credit facility to fund the acquisition of Shoppes of Eastwood in Orlando, Florida (see Note 10);
|
·
|
In the second quarter, draws of $21.0 million and $39.0 million were made on the unsecured revolving credit facility to fund the acquisition of Cool Springs Market and Castleton Crossing (see Note 10);
|
·
|
In August, a draw of $17.0 million was made on the unsecured revolving credit facility to fund the acquisition of Toringdon Market (see Note 10);
|
·
|
In June, a draw of $7.6 million was made on the unsecured revolving credit facility to fund the payoff of the loan secured by 12th Street Plaza;
|
·
|
In August, a draw of $14.0 million was made on the unsecured revolving credit facility to fund the payoff of the loan secured by Ridge Plaza;
|
·
|
In September, a pay down of $7.5 million was made on the unsecured revolving credit facility using the proceeds of the sale of Cedar Hill Village operating property (see Note 9);
|
·
|
Draws totaling $12.5 million were made on the unsecured revolving credit facility to fund redevelopment and tenant improvement costs at various properties throughout the period;
|
·
|
Draws were made on construction loans related to the Delray Marketplace, Holly Springs – Phase I, Four Corner Square, Rangeline Crossing, and Zionsville Walgreens developments totaling $57.3 million throughout the period; and
|
·
|
Scheduled principal payments were made on indebtedness totaling $4.9 million.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net loss attributable to Kite Realty Group Trust common shareholders
|
$ | (857,813 | ) | $ | (3,038,160 | ) | $ | (9,646,829 | ) | $ | (5,786,934 | ) | ||||
Other comprehensive (loss) income allocable to Kite Realty Group Trust1
|
(1,032,946 | ) | (1,381,091 | ) | 5,030,380 | (4,085,288 | ) | |||||||||
Comprehensive loss attributable to Kite Realty Group Trust common shareholders
|
$ | (1,890,759 | ) | $ | (4,419,251 | ) | $ | (4,616,449 | ) | $ | (9,872,222 | ) | ||||
____________________
|
|
1
|
Reflects the Company’s share of the net change in the fair value of derivative instruments accounted for as cash flow hedges.
|
·
|
Gateway Shopping Center in Marysville, Washington in February;
|
·
|
South Elgin Commons in South Elgin, Illinois in June;
|
·
|
50 S. Morton near Indianapolis, Indiana in July;
|
·
|
Coral Springs Plaza in Fort Lauderdale, Florida in September;
|
·
|
Pen Products in Indianapolis, Indiana in October;
|
·
|
Indiana State Motor Pool in Indianapolis, Indiana in October;
|
·
|
Sandifur Plaza in Pasco, Washington in November;
|
·
|
Zionsville Shops near Indianapolis, Indiana in November; and
|
·
|
Preston Commons in Dallas, Texas in December.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Rental income
|
$ | 191,568 | $ | 1,785,910 | $ | 2,054,962 | $ | 7,054,275 | ||||||||
Expenses:
|
||||||||||||||||
Property operating
|
30,644 | 280,872 | 260,158 | 967,640 | ||||||||||||
Real estate taxes
|
(4,474 | ) | 225,157 | 209,876 | 1,054,571 | |||||||||||
Depreciation and amortization
|
67,124 | 546,541 | 763,919 | 2,495,348 | ||||||||||||
Total expenses, excluding impairment charge
|
93,294 | 1,052,570 | 1,233,953 | 4,517,559 | ||||||||||||
Operating income
|
98,274 | 733,340 | 821,009 | 2,536,716 | ||||||||||||
Interest expense
|
1,255,553 | (533,267 | ) | (336,102 | ) | (1,893,035 | ) | |||||||||
Income from discontinued operations, excluding impairment charge
|
1,353,827 | 200,073 | 484,907 | 643,681 | ||||||||||||
Impairment charge
|
— | — | (5,371,427 | ) | — | |||||||||||
Gain on debt extinguishment
|
1,241,724 | — | 1,241,724 | — | ||||||||||||
Gain (loss) on sale of operating properties, net of tax expense
|
486,540 | (65,312 | ) | 486,540 | 5,180,568 | |||||||||||
Total income from discontinued operations
|
$ | 3,082,091 | $ | 134,761 | $ | (3,158,256 | ) | $ | 5,824,249 | |||||||
Income (loss) from discontinued operations attributable to Kite Realty Group Trust common shareholders
|
$ | 2,875,592 | $ | 121,386 | $ | (2,934,020 | ) | $ | 3,344,473 | |||||||
Income (loss) from discontinued operations attributable to noncontrolling interests
|
206,499 | 13,375 | (224,236 | ) | 2,479,776 | |||||||||||
Total income (loss) from discontinued operations
|
$ | 3,082,091 | $ | 134,761 | $ | (3,158,256 | ) | $ | 5,824,249 | |||||||
·
|
national and local economic, business, real estate and other market conditions, particularly in light of low growth in the U.S. economy;
|
·
|
financing risks, including the availability of and costs associated with sources of liquidity;
|
·
|
the Company’s ability to refinance, or extend the maturity dates of, its indebtedness;
|
·
|
the level and volatility of interest rates;
|
·
|
the financial stability of tenants, including their ability to pay rent and the risk of tenant bankruptcies;
|
·
|
the competitive environment in which the Company operates;
|
·
|
acquisition, disposition, development and joint venture risks;
|
·
|
property ownership and management risks;
|
·
|
the Company’s ability to maintain its status as a real estate investment trust (“REIT”) for federal income tax purposes;
|
·
|
potential environmental and other liabilities;
|
·
|
impairment in the value of real estate property the Company owns;
|
·
|
risks related to the geographical concentration of our properties in Indiana, Florida, Texas, and North Carolina;
|
·
|
other factors affecting the real estate industry generally; and
|
·
|
other uncertainties and factors identified in this Quarterly Report on Form 10-Q 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, including, in particular, the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
|
Property Name
|
MSA
|
Economic Occupancy Date1
|
Owned GLA
|
||||
Cobblestone Plaza2
|
Ft. Lauderdale, FL
|
March 2009
|
133,214
|
||||
DePauw University Bookstore & Café
|
Greencastle, IN
|
September 2012
|
11,974
|
||||
Zionsville Walgreens
|
Indianapolis, IN
|
September 2012
|
14,550
|
||||
Delray Marketplace
|
Delray Beach, FL
|
January 2013
|
255,554
|
||||
Holly Springs Towne Center – Phase I
|
Raleigh, NC
|
March 2013
|
204,936
|
1
|
Represents the date on which we started receiving rental payments under tenant leases or ground leases at the property or the tenant took possession of the property, whichever was earlier.
|
2
|
Construction of this property was completed in phases. The Economic Occupancy Date indicated for this property refers to its initial phase.
|
Property Name
|
MSA
|
Acquisition Date
|
Acquisition Costs (Millions)
|
Owned GLA
|
||||||
Cove Center
|
Stuart, FL
|
June 2012
|
$
|
22.1
|
155,063
|
|||||
12th Street Plaza
|
Vero Beach, FL
|
July 2012
|
15.2
|
138,268
|
||||||
Publix at Woodruff
|
Greenville, SC
|
December 2012
|
9.1
|
68,055
|
||||||
Shoppes at Plaza Green
|
Greenville, SC
|
December 2012
|
28.8
|
194,807
|
||||||
Shoppes of Eastwood
|
Orlando, FL
|
January 2013
|
11.6
|
69,037
|
||||||
Cool Springs Market
|
Nashville, TN
|
April 2013
|
37.6
|
223,912
|
||||||
Castleton Crossing
|
Indianapolis, IN
|
May 2013
|
39.0
|
277,812
|
||||||
Toringdon Market
|
Charlotte, NC
|
August 2013
|
15.9
|
60,464
|
·
|
Gateway Shopping Center near Seattle, Washington in February 2012;
|
·
|
South Elgin Commons near Chicago, Illinois in June 2012;
|
·
|
50 South Morton near Indianapolis, Indiana in July 2012;
|
·
|
Coral Springs Plaza in Fort Lauderdale, Florida in September 2012;
|
·
|
Pen Products in Indianapolis, Indiana in October 2012;
|
·
|
Indiana State Motor Pool in Indianapolis, Indiana in October 2012;
|
·
|
Zionsville Shops near Indianapolis, Indiana in November 2012;
|
·
|
Sandifur Plaza in Pasco, Washington in November 2012; and
|
·
|
Preston Commons and an adjacent land parcel in Dallas, Texas in December 2012.
|
·
|
Cedar Hill Village in Dallas, Texas in September 2013.
|
Property Name
|
MSA
|
Transition to
Redevelopment Status
|
Transition from
Redevelopment Status1
|
Owned GLA
|
||||
Courthouse Shadows
|
Naples, Florida
|
September 2008
|
Pending
|
134,867
|
||||
Four Corner Square2
|
Maple Valley, Washington
|
September 2008
|
Pending
|
108,523
|
||||
Bolton Plaza3
|
Jacksonville, Florida
|
June 2008
|
Pending
|
155,637
|
||||
Oleander Place
|
Wilmington, North Carolina
|
March 2011
|
December 2012
|
45,530
|
||||
Rangeline Crossing
|
Carmel, Indiana
|
June 2012
|
June 2013
|
74,583
|
||||
Gainesville Plaza
|
Gainesville, Florida
|
June 2013
|
Pending
|
177,826
|
||||
King’s Lake Square4
|
Naples, Florida
|
July 2013
|
Pending
|
88,153
|
____________________
|
|
1
|
Transition date represents the date the property was transferred from our operating portfolio to our redevelopment projects.
|
2
|
This property is currently a redevelopment under construction. This $27.5 million project partially opened in the 1st quarter of 2013 and is currently 91% leased or committed.
|
3
|
This property is currently a redevelopment under construction. The L.A. Fitness portion of this $10.3 million project is scheduled to open in the first half of 2014 and the entire project is currently 89% leased or committed.
|
4
|
This property is currently a redevelopment under construction. The expanded Publix grocery store is scheduled to open in the first half of 2014 and the entire project is currently 88% leased.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2013
|
2012
|
% Change
|
2013
|
2012
|
% Change
|
|||||||||||
Number of properties at period end1
|
47
|
47
|
47
|
47
|
||||||||||||
Leased percentage at period-end
|
95.8%
|
93.6%
|
95.8%
|
93.6%
|
||||||||||||
Occupied percentage at period-end
|
92.1%
|
90.6%
|
92.1%
|
90.6%
|
||||||||||||
Net operating income – same properties (47 properties)2
|
$
|
14,859,022
|
$
|
14,159,890
|
4.9
|
%
|
$
|
45,145,377
|
$
|
43,054,766
|
4.9
|
%
|
||||
Reconciliation to Most Directly Comparable GAAP Measure:
|
||||||||||||||||
Net operating income – same properties
|
$
|
14,859,022
|
$
|
14,159,890
|
$
|
45,145,377
|
$
|
43,054,766
|
||||||||
Net operating income – non-same properties
|
8,639,747
|
3,002,495
|
22,453,525
|
6,579,870
|
||||||||||||
Other (expense) income, net
|
(77,609
|
)
|
99,914
|
(145,627
|
)
|
104,202
|
||||||||||
General, administrative and acquisition expenses
|
(2,268,142
|
)
|
(1,753,217
|
)
|
(6,635,889
|
)
|
(5,434,906
|
)
|
||||||||
Litigation charge
|
─
|
─
|
─
|
(1,289,446
|
)
|
|||||||||||
Impairment charge
|
─
|
─
|
(5,371,427
|
)
|
─
|
|||||||||||
Depreciation expense
|
(15,393,620
|
)
|
(10,831,282
|
)
|
(40,626,179
|
)
|
(29,435,053
|
)
|
||||||||
Interest expense
|
(7,600,413
|
)
|
(6,048,866
|
)
|
(20,988,919
|
)
|
(17,871,086
|
)
|
||||||||
Discontinued operations, excluding impairment charge
|
1,353,827
|
200,073
|
484,907
|
643,681
|
||||||||||||
Gain on debt extinguishment
|
1,241,724
|
─
|
1,241,724
|
─
|
||||||||||||
Gain (loss) on sale of operating properties
|
486,540
|
(65,312
|
)
|
486,540
|
5,180,568
|
|||||||||||
Net loss (income) attributable to noncontrolling interests
|
15,174
|
312,208
|
651,327
|
(1,513,591
|
)
|
|||||||||||
Dividends on preferred shares
|
(2,114,063
|
)
|
(2,114,063
|
)
|
(6,342,188
|
)
|
(5,805,939
|
)
|
||||||||
Net loss attributable to common shareholders
|
$
|
(857,813
|
)
|
$
|
(3,038,160
|
)
|
$
|
(9,646,829
|
)
|
$
|
(5,786,934
|
)
|
1
|
Same Property analysis excludes operating properties in redevelopment.
|
2
|
Excludes net gains from outlot sales, straight-line rent revenue, bad debt expense, lease termination fees amortization of lease intangibles and significant prior period expense recoveries and adjustments, if any.
|
2013
|
2012
|
Net change 2012 to 2013
|
||||||||||
Revenue:
|
||||||||||||
Rental income (including tenant reimbursements)
|
$ | 30,103,155 | $ | 23,469,555 | $ | 6,633,600 | ||||||
Other property related revenue
|
2,568,468 | 857,493 | 1,710,975 | |||||||||
Total revenue
|
32,671,623 | 24,327,048 | 8,344,575 | |||||||||
Expenses:
|
||||||||||||
Property operating
|
5,448,738 | 3,997,658 | 1,451,080 | |||||||||
Real estate taxes
|
3,724,116 | 3,180,390 | 543,726 | |||||||||
General, administrative, and other
|
2,114,828 | 1,645,048 | 469,780 | |||||||||
Acquisition costs
|
153,314 | 108,169 | 45,145 | |||||||||
Depreciation and amortization
|
15,393,620 | 10,831,282 | 4,562,338 | |||||||||
Total Expenses
|
26,834,616 | 19,762,547 | 7,072,069 | |||||||||
Operating income
|
5,837,007 | 4,564,501 | 1,272,506 | |||||||||
Interest expense
|
(7,600,413 | ) | (6,048,866 | ) | (1,551,547 | ) | ||||||
Income tax (expense) benefit of taxable REIT subsidiary
|
(30,596 | ) | 13,385 | (43,981 | ) | |||||||
Other (expense) income, net
|
(47,013 | ) | 99,914 | (146,927 | ) | |||||||
Loss from continuing operations
|
(1,841,015 | ) | (1,371,066 | ) | (469,949 | ) | ||||||
Discontinued operations:
|
||||||||||||
Discontinued operations
|
1,353,827 | 200,073 | 1,153,754 | |||||||||
Gain on debt extinguishment
|
1,241,724 | — | 1,241,724 | |||||||||
Gain (loss) on sale of operating property
|
486,540 | (65,312 | ) | 551,852 | ||||||||
Income from discontinued operations
|
3,082,091 | 134,761 | 2,947,330 | |||||||||
Consolidated net income (loss)
|
1,241,076 | (1,236,305 | ) | 2,477,381 | ||||||||
Net loss attributable to noncontrolling interests
|
15,174 | 312,208 | (297,034 | ) | ||||||||
Net income (loss) attributable to Kite Realty Group
Trust
|
1,256,250 | (924,097 | ) | 2,180,347 | ||||||||
Dividends on preferred shares
|
(2,114,063 | ) | (2,114,063 | ) | - | |||||||
Net loss attributable to common shareholders
|
$ | (857,813 | ) | $ | (3,038,160 | ) | $ | 2,180,347 | ||||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 2,097,534 | ||
Properties acquired during 2012 and 2013
|
3,539,761 | |||
Properties under redevelopment during 2012 and/or 2013
|
413,185 | |||
Properties fully operational during 2012 and 2013 and other
|
583,120 | |||
Total
|
$ | 6,633,600 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 527,630 | ||
Properties acquired during 2012 and 2013
|
415,395 | |||
Properties under redevelopment during 2012 and/or 2013
|
67,640 | |||
Properties fully operational during 2012 and 2013 and other
|
440,415 | |||
Total
|
$ | 1,451,080 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 66,834 | ||
Properties acquired during 2012 and 2013
|
416,916 | |||
Properties under redevelopment during 2012 and/or 2013
|
(16,418 | ) | ||
Properties fully operational during 2012 and 2013 and other
|
76,394 | |||
Total
|
$ | 543,726 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 922,671 | ||
Properties acquired during 2012 and 2013
|
2,242,373 | |||
Properties under redevelopment during 2012 and/or 2013
|
823,535 | |||
Properties fully operational during 2012 and 2013 and other
|
573,759 | |||
Total
|
$ | 4,562,338 | ||
·
|
A decrease of $0.6 million mainly due to accelerated depreciation during the third quarter of 2012 related to the demolition of a portion of the Four Corner Square redevelopment.A redevelopment plan for this property was finalized during the first quarter of 2012, resulting in a reduction of theuseful lives of certain assets that were demolished.
|
·
|
An increase of $0.9 million related to tenants opening at recently completed development and redevelopmentproperties including Delray Marketplace and Holly Springs Towne Center.
|
·
|
An increase of $2.2 million related to 2012 and 2013 acquisitions.
|
·
|
An increase of $2.5 million mainly due to accelerated depreciation related to the demolition of a portion of the King’s Lake Square redevelopment. A redevelopment plan for this property was finalized during the third quarter of 2013, resulting in a reduction of the useful lives of certain assets that were demolished.
|
·
|
A decrease of $1.1 million mainly due to accelerated depreciation related to the demolition of a portion of the Rangeline Crossing redevelopment. A redevelopment plan for this property was finalized during the second quarter of 2012, resulting in a reduction of the useful lives of certain assets that were demolished.
|
2013
|
2012
|
Net change 2012 to 2013
|
||||||||||
Revenue:
|
||||||||||||
Rental income (including tenant reimbursements)
|
$ | 84,565,962 | $ | 68,434,248 | $ | 16,131,714 | ||||||
Other property related revenue
|
9,300,135 | 2,937,042 | 6,363,093 | |||||||||
Total revenue
|
93,866,097 | 71,371,290 | 22,494,807 | |||||||||
Expenses:
|
||||||||||||
Property operating
|
15,582,301 | 12,278,320 | 3,303,981 | |||||||||
Real estate taxes
|
10,684,894 | 9,458,334 | 1,226,560 | |||||||||
General, administrative, and other
|
6,069,063 | 5,255,804 | 813,259 | |||||||||
Acquisition costs
|
566,826 | 179,102 | 387,724 | |||||||||
Litigation charge
|
— | 1,289,446 | (1,289,446 | ) | ||||||||
Depreciation and amortization
|
40,626,179 | 29,435,053 | 11,191,126 | |||||||||
Total Expenses
|
73,529,263 | 57,896,059 | 15,633,204 | |||||||||
Operating income
|
20,336,834 | 13,475,231 | 6,861,603 | |||||||||
Interest expense
|
(20,988,919 | ) | (17,871,086 | ) | (3,117,833 | ) | ||||||
Income tax (expense) benefit of taxable REIT subsidiary
|
(106,477 | ) | 5,995 | (112,472 | ) | |||||||
Other income (expense), net
|
(39,150 | ) | 98,207 | (137,357 | ) | |||||||
Loss from continuing operations
|
(797,712 | ) | (4,291,653 | ) | 3,493,941 | |||||||
Discontinued operations:
|
||||||||||||
Discontinued operations, excluding impairment charge
|
484,907 | 643,681 | (158,774 | ) | ||||||||
Impairment charge
|
(5,371,427 | ) | — | (5,371,427 | ) | |||||||
Gain on debt extinguishment
|
1,241,724 | — | 1,241,734 | |||||||||
Gain on sale of operating properties, net of tax expense
|
486,540 | 5,180,568 | (4,694,028 | ) | ||||||||
(Loss) income from discontinued operations
|
(3,158,256 | ) | 5,824,249 | (5,974,037 | ) | |||||||
Consolidated net (loss) income
|
(3,955,968 | ) | 1,532,596 | (5,488,564 | ) | |||||||
Net loss (income) attributable to noncontrolling interests
|
651,327 | (1,513,591 | ) | 2,164,918 | ||||||||
Net (loss) income attributable to Kite Realty Group
Trust
|
(3,304,641 | ) | 19,005 | (3,323,646 | ) | |||||||
Dividends on preferred shares
|
(6,342,188 | ) | (5,805,939 | ) | (536,249 | ) | ||||||
Net loss attributable to common shareholders
|
$ | (9,646,829 | ) | $ | (5,786,934 | ) | $ | (3,859,895 | ) | |||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially
operational in 2012 and/or 2013
|
$ | 4,612,175 | ||
Properties acquired during 2012 and 2013
|
9,065,244 | |||
Properties under redevelopment during 2012 and/or 2013
|
643,040 | |||
Properties fully operational during 2012 and 2013 and other
|
1,811,255 | |||
Total
|
$ | 16,131,714 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 1,276,569 | ||
Properties acquired during 2012 and 2013
|
1,097,643 | |||
Properties under redevelopment during 2012 and/or 2013
|
86,404 | |||
Properties fully operational during 2012 and 2013 and other
|
843,365 | |||
Total
|
$ | 3,303,981 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 105,048 | ||
Properties acquired during 2012 and 2013
|
1,013,921 | |||
Properties under redevelopment during 2012 and/or 2013
|
(14,253 | ) | ||
Properties fully operational during 2012 and 2013 and other
|
121,844 | |||
Total
|
$ | 1,226,560 | ||
Net change 2012 to 2013
|
||||
Development properties that became operational or were partially operational in 2012 and/or 2013
|
$ | 2,096,327 | ||
Properties acquired during 2012 and 2013
|
6,179,099 | |||
Properties under redevelopment during 2012 and/or 2013
|
1,192,640 | |||
Properties fully operational during 2012 and 2013 and other
|
1,723,060 | |||
Total
|
$ | 11,191,126 | ||
·
|
A decrease of $1.7 million mainly due to accelerated depreciation during 2012 related to the demolition of a portion of the Four Corner Square redevelopment.A redevelopment plan for this property was finalized during the first quarter of 2012, resulting in a reduction of theuseful lives of certain assets that were demolished.
|
·
|
A decrease of $2.0 million mainly due to accelerated depreciation during 2012 related to the demolition of a portion of the Rangeline Crossing development. A redevelopment plan for the property was finalized during the first quarter of 2012, resulting in a reduction of the useful lives of certain assets that were scheduled to be demolished.
|
·
|
An increase of $2.0 million related to tenants opening at recently completed development and redevelopmentproperties including Delray Marketplace and Holly Springs Towne Center.
|
·
|
An increase of $6.2 million related to 2012 and 2013 acquisitions.
|
·
|
An increase of $2.5 million mainly due to accelerated depreciation related to the demolition of a portion of the King’s Lake Square redevelopment. A redevelopment plan for this property was finalized during the third quarter of 2013, resulting in a reduction of the useful lives of certain assets that were demolished.
|
·
|
An increase of $2.3 million mainly due to accelerated depreciation related to the demolition of a portion of the Bolton Plaza redevelopment. A redevelopment plan for this property was finalized during the first quarter of 2013, resulting in a reduction of the useful lives of certain assets that were demolished.
|
Amounts due during the three months ended, excluding scheduled principal payments:
|
||||||||||||||||||||
December 31,
2013
|
March 31,
2014
|
June 30,
2014
|
September 30,
2014
|
Total
|
||||||||||||||||
Mortgage Debt - Fixed Rate 1
|
$ | — | $ | — | $ | 20,137,874 | $ | — | $ | 20,137,874 | ||||||||||
Mortgage Debt - Variable Rate
|
— | — | 6,920,850 | — | 6,920,850 | |||||||||||||||
Construction Loans
|
13,604,000 | — | — | — | 13,604,000 | |||||||||||||||
Total
|
$ | 13,604,000 | $ | — | $ | 27,058,724 | $ | — | $ | 40,662,724 | ||||||||||
(1)
|
Subsequent to September 30, 2013, this loan was paid off utilizing a draw on the Company’s unsecured revolving credit facility.
|
Year to Date – September 30, 2013
|
Cumulative – September 30, 2013
|
|||||||
Under Construction - Developments1
|
$ | 42,175,768 | $ | 195,141,000 | ||||
Pending Construction - Developments
|
517,182 | 16,450,000 | ||||||
Under Construction - Redevelopments
|
9,305,031 | 31,927,000 | ||||||
Pending Construction - Redevelopments
|
483,995 | 608,000 | ||||||
Total for Development Activity
|
52,481,976 | 244,126,000 | ||||||
Recently Completed Developments2
|
9,431,462 | N/A | ||||||
Miscellaneous Other Activity, net
|
5,268,151 | N/A | ||||||
Recurring Operating Capital Expenditures (Primarily Tenant Improvement Payments)
|
7,895,556 | N/A | ||||||
Total
|
$ | 75,077,145 | $ | 244,126,000 |
____________________
|
||||||||
1
|
Cumulative capital expenditures excludes $4.2 million of leasing costs included in deferred costs, net on the consolidated balance sheet.
|
|||||||
2
|
This classification includes Rangeline Crossing, Rivers Edge, Oleander Place and Zionsville Walgreens
|
Annual Principal Payments
|
Term Maturity
|
Total
|
|||||||||
2013
|
$
|
1,310,104
|
$
|
13,604,000
|
$
|
14,914,104
|
|||||
2014
|
4,891,438
|
103,177,904
|
108,069,342
|
||||||||
2015
|
4,679,104
|
94,882,593
|
99,561,697
|
||||||||
2016
|
3,857,652
|
129,347,112
|
133,204,764
|
||||||||
2017
|
2,668,907
|
46,090,597
|
48,759,504
|
||||||||
Thereafter
|
8,955,765
|
330,452,857
|
339,408,622
|
||||||||
$
|
26,362,970
|
$
|
717,555,063
|
$
|
743,918,033
|
||||||
Unamortized Premiums
|
66,709
|
||||||||||
Total
|
$
|
743,984,742
|
·
|
Net proceeds of $61.8 million related to the sales of the Gateway Shopping Center, South Elgin Commons, and Coral Springs operating properties in 2012 compared to net proceeds of $7.3 million related to the sale of Cedar Hill Village in September 2013;
|
·
|
Acquisition of Shoppes of Eastwood, Cool Springs Market, Castleton Crossing, and Toringdon Market in 2013 for net cash outflow of $102.7 million while the Company acquired Cove Center and 12th Street Plaza for $27.9 million in the nine months ended September 30, 2012; and
|
·
|
Increase in capital expenditures, net plus the decrease in construction payables of $37.9 million as construction was ongoing at Delray Marketplace, Four Corner Square, Rangeline Crossing, Holly Springs Towne Center, and Parkside Town Commons.
|
·
|
In April and May, 15,525,000 common shares were issued for net proceeds of $97.2 million. A portion of these proceeds were initially utilized to repay $74.2 million of outstanding indebtedness under the Company’s unsecured revolving credit facility;
|
·
|
In August 2013, proceeds of $105 million from the expansion of the amended Term Loan were received. The Company utilized $101.9 million to pay down the Company’s unsecured revolving credit facility. The remaining proceeds of $3.1 million were utilized to fund loan costs of the amended Term Loan and redevelopment and development costs;
|
·
|
Draws totaling $88.6 million were made on the unsecured revolving credit facility that were primarily utilized to fund the acquisitions of Shoppes of Eastwood, Cool Springs Market, Castleton Crossing, and Toringdon Market;
|
·
|
Draws totaling $12.5 million were made on the unsecured revolving credit facility that were primarily utilized to fund redevelopment and tenant improvement costs for new anchor tenants;
|
·
|
Draws of $57.3 million were made on construction loans related to Delray Marketplace, Holly Springs Towne Center, Four Corner Square, Rangeline Crossing, and Zionsville Walgreens to fund development and redevelopment activity;
|
·
|
Distributions to common shareholders and operating partnership unitholders of $16.1 million; and
|
·
|
Distributions to preferred shareholders of $6.3 million.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Consolidated net income (loss)
|
$ | 1,241,076 | $ | (1,236,305 | ) | $ | (3,955,968 | ) | $ | 1,532,596 | ||||||
Less dividends on preferred shares
|
(2,114,063 | ) | (2,114,063 | ) | (6,342,188 | ) | (5,805,939 | ) | ||||||||
Less net income attributable to noncontrolling interests in properties
|
(27,978 | ) | (35,228 | ) | (89,750 | ) | (111,642 | ) | ||||||||
Less (gain) loss on sale of operating properties
|
(486,540 | ) | 65,312 | (486,540 | ) | (5,180,568 | ) | |||||||||
Add impairment charge
|
— | — | 5,371,427 | — | ||||||||||||
Add depreciation and amortization, net of noncontrolling
interests
|
15,379,237 | 11,257,277 | 41,019,039 | 31,581,636 | ||||||||||||
Funds From Operations of the Kite Portfolio1
|
13,991,732 | 7,936,993 | 35,516,020 | 22,016,083 | ||||||||||||
Less redeemable noncontrolling interests in Funds From Operations
|
(942,811 | ) | (799,648 | ) | (2,526,288 | ) | (2,324,421 | ) | ||||||||
Funds From Operations allocable to the Company1
|
$ | 13,048,921 | $ | 7,137,345 | $ | 32,989,732 | $ | 19,691,662 | ||||||||
Funds From Operations of the Kite Portfolio 1
|
$ | 13,991,732 | $ | 7,936,993 | $ | 35,516,020 | $ | 22,016,083 | ||||||||
Add back: litigation charge
|
— | — | — | 1,289,446 | ||||||||||||
Less: gain on debt extinguishment
|
(1,241,724 | ) | — | (1,241,724 | ) | |||||||||||
Add back: accelerated amortization of deferred financing fees
|
317,057 | — | 488,629 | 500,028 | ||||||||||||
Funds From Operations of the Kite Portfolio, as adjusted 1
|
$ | 13,067,065 | $ | 7,936,993 | $ | 34,762,925 | $ | 23,805,557 | ||||||||
____________________
|
|
1
|
“Funds From Operations of the Kite Portfolio” measures 100% of the operating performance of our Operating Partnership’s real estate properties and subsidiaries in which the Company owns an interest. “Funds From Operations allocable to the Company” reflects a reduction for the redeemable noncontrolling weighted average diluted interest in the Operating Partnership.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit No.
|
Description
|
Location
|
||
10.1
|
Second Amendment to Term Loan Agreement, dated as of August 21, 2013, by and among the Operating Partnership, the Company, certain subsidiaries of the Operating Partnership party thereto, KeyBank National Association, as Administrative Agent, and the other lenders party thereto.
|
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 27, 2013
|
||
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
|
||
101.INS
|
XBRL Instance Document
|
Filed herewith
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed herewith
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith
|
KITE REALTY GROUP TRUST
|
||
November 6, 2013
|
By:
|
/s/ John A. Kite
|
(Date)
|
John A. Kite
|
|
Chairman and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
November 6, 2013
|
By:
|
/s/ Daniel R. Sink
|
(Date)
|
Daniel R. Sink
|
|
Chief Financial Officer
|
||
(Principal Financial Officer and
|
||
Principal Accounting Officer)
|
Exhibit No.
|
Description
|
Location
|
||
10.1
|
Second Amendment to Term Loan Agreement, dated as of August 21, 2013, by and among the Operating Partnership, the Company, certain subsidiaries of the Operating Partnership party thereto, KeyBank National Association, as Administrative Agent, and the other lenders party thereto.
|
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 27, 2013
|
||
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
|
||
101.INS
|
XBRL Instance Document
|
Filed herewith
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed herewith
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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 registrant’s 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s 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
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the 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 registrant’s 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 registrant’s internal control over financial reporting.
|
Date: November 6, 2013
|
||
By:
|
/s/ John A. Kite
|
|
John A. Kite
|
||
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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 registrant’s 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s 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
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the 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 registrant’s 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 registrant’s internal control over financial reporting.
|
Date: November 6, 2013
|
||
By:
|
/s/ Daniel R. Sink
|
|
Daniel R. Sink
|
||
Chief Financial Officer
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2013 (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.
|
Date: November 6, 2013
|
By:
|
/s/ John A. Kite
|
John A. Kite
|
||
Chairman and Chief Executive Officer
|
Date: November 6, 2013
|
By:
|
/s/ Daniel R. Sink
|
Daniel R. Sink
|
||
Chief Financial Officer
|
Note 10 - Property Acquisitions
|
9 Months Ended |
---|---|
Sep. 30, 2013
|
|
Disclosure Text Block Supplement [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Note 10. Property Acquisitions During 2012 and the first nine months of 2013, the Company acquired eight operating properties. In connection with these acquisitions, the Company made preliminary allocations of the purchase price of the properties primarily to the fair value of tangible assets (land, building, and improvements) as well as to intangibles and to debt assumed, where appropriate. Estimated purchase price allocations are subject to revision within the measurement period, not to exceed one year. In August 2013, the Company acquired Toringdon Market in Charlotte, North Carolina for a purchase price of $15.9 million. Toringdon Market is an unencumbered shopping center anchored by Earth Fare. In May 2013, the Company acquired Castleton Crossing in Indianapolis, Indiana for a purchase price of $39.0 million. Castleton Crossing is an unencumbered shopping center anchored by TJ Maxx, HomeGoods, Burlington Coat Factory and Shoe Carnival. In April 2013, the Company acquired Cool Springs Market in Franklin, Tennessee (Nashville MSA) for a purchase price of $37.6 million. Cool Springs Market is an unencumbered shopping center anchored by Dick’s Sporting Goods, Marshall’s, JoAnn Fabrics, Staples, and a non-owned Kroger. In January 2013, the Company acquired Shoppes of Eastwood in Orlando, Florida for a purchase price of $11.6 million. Shoppes of Eastwood is an unencumbered shopping center anchored by Publix Super Market. In December 2012, the Company acquired the Shoppes at Plaza Green and Publix at Woodruff for $28.8 million and $9.1 million, respectively. Both of these properties are unencumbered and located in Greenville, South Carolina. In July 2012, the Company acquired 12th Street Plaza in Vero Beach, Florida for a purchase price of $15.2 million. 12th Street Plaza is a shopping center anchored by Publix Super Market and Stein Mart. The Company assumed a $7.9 million mortgage with a fixed interest rate of 5.67% as part of the acquisition that was paid off in June 2013. In June 2012, the Company acquired Cove Center in Stuart, Florida for a purchase price of $22.1 million. Cove Center is an unencumbered shopping center anchored by Publix Super Market and Beall’s Department Store. |
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