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Kite Realty Buying $307 Million Retail Portfolio

Deal Spans Nine Shopping Centers Totaling 2 Million Sq. Ft. Across Four States
November 8, 2013
Kite Realty Group Trust (NYSE: KRG) is significantly expanding its retail property portfolio in four states with a deal to acquire nine properties totaling approximately two million square feet for $307 million in cash.

The Indianapolis-based retail REIT is funding the purchase through net proceeds from a common share offering as well as cash on hand, the expected proceeds from the sale of two retail properties Kite is currently marketing for sale, and borrowings under its unsecured revolving credit facility.

Two of the nine properties being acquired are in Birmingham, AL, marking Kite's first foray into that market. The other seven properties are located in markets where the REIT owns other properties, and include Houston, Orlando, Tampa, Punta Gorda, FL and Athens, GA. Kite said the portfolio was 93.2% leased to more than 250 tenants as of the end of the third quarter.

The off-market acquisition aligns with Kite's strategy to reduce its leverage by purchasing high-quality retail properties at below replacement cost. Kite valued the transaction at approximately $150 per square foot, a price which it believes is a significant discount to replacement cost.

The purchase is set to be finalized in late 2013 or early 2014 once customary closing conditions are met.

OWNED SF/ % of Total
Colonial Promenade Beechwood
Athens, GA
442,217/ 95%
Fresh Market, TJ Maxx, Stein Mart, Georgia Theatre, Body Plex Fitness, Chico’s, Jos. A. Bank, Ann Taylor Loft, Coldwater Creek, Talbot’s
Colonial Promenade Lakewood
Lakewood, FL
196,870/ 83.5%
Winn Dixie, Stein Mart, Chase Bank
Colonial Promenade Northdale
Tampa, FL
176,917/ 94.3%
TJ Maxx, Beall’s, Sweetbay Supermarket (non-owned)
Colonial Pinnacle At Kingwood Commons
Houston, TX
164,366/ 98.1%
Randall’s, Petco, Chico’s, Talbot’s, The Children’s Place, Jos. A. Bank, Ann Taylor
Hunter's Creek*
Orlando, FL
119,729/ 96.2%
Colonial Promenade Burnt Store
Punta Gorda, FL
95,023/ 75.5%
Publix, Home Depot (non-owned)
Colonial Promenade Trussville Phases I & II
Birmingham, AL
446,484/ 95.4%
Wal-Mart, Regal Cinema, Marshall’s, Petsmart, Sam’s Club (non-owned), Kohl’s (non-owned)
Portofino Plaza
Houston, TX
372,506/ 94.6%
Sports Authority, Stein Mart, Michael’s, DSW, Old Navy, Conn’s Appliances, PetSmart
Colonial Shoppes Clay
Birmingham, AL
66,165/ 94.7%

*Excludes 107,806 square feet of currently owned GLA that is under contract to be sold to a tenant at the property for approximately $3.25 million, contract will be assumed by Kite Realty.

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