Kite Realty Group Trust Q4 FY2025 earnings call

• Fourth quarter concluded year of outstanding execution with leased volume at record high. - Entered two joint ventures with GIC totaling approx $1,000,000,000 of gross asset value. - Sold approx $6,222,000,000 of noncore assets, reducing power center ABR percentage by 400 basis points and increasing exposure to neighborhood grocery, life and mixed use assets. - Allocated proceeds to $300,000,000 of stock buybacks at discount to consensus NAV. - Development at One Loudoun with 86,000 sq ft retail, 33,000 sq ft office, 169 hotel rooms, 429 multifamily units; retail portion 65% leased. - Acquired landmark property in Legacy West, which has been outperforming underwriting. - Sold 13 properties and two land parcels in 2025 for approx $622,000,000, shedding 21 watchlist anchor boxes.

Leased nearly 5,000,000 square feet of space, with new leasing volume being the highest annual volume in company history. Leased rate increased by 120 basis points sequentially driven by anchor tenants. Small shop lease rate increased 50 basis points sequentially and 110 basis points year over year. Embedded rent bumps for the portfolio are 180 basis points, nearly 25 basis point increase from 2024. Same property NOI growth for full year 2025 was 2.9%, 100 basis points above original guidance. Signed-not-open pipeline grew to $37,000,000 of NOI in fourth quarter, with about 70% expected to come online in 2026.

• 2026 NAREIT and core FFO per share guidance ranges between $2.06 and $2.12. - Midpoint assumptions: same property NOI growth of 2.75%, bad debt reserve of 100 basis points of total revenues, interest expense net of interest income of $121,000,000, approx $110,000,000 of 1031 acquisitions in first half, approx $115,000,000 of noncore asset sales later in 2026. - Same property NOI cadence in 2026 will be lower growth in first half, acceleration in back half and into 2027. - Interest expense a $0.03 tailwind in 2026 due to lower line of credit balances and higher capitalized interest. - Recurring but unpredictable items a $0.04 headwind in 2026 guidance. - Timing of dispositions and proceeds deployment a $0.02 headwind in 2026.

Q: Touch on noncore dispositions assumed in guidance, expectations on pricing and if mostly power centers?

A: John says can assume similar to 2025, not giving too much color on cap rates but market is healthy.

Q: On 1031 acquisitions, type of product looking at?

A: Heath says continuing to move away from larger format centers to neighborhood grocery and lifestyle mixed use, also related to tax harvesting.

Q: Key swing factors for guidance range and S&O pipeline timing?

A: Heath says same store factors like bad debt, RCDs, rent commencement, retention, overage; recurring/unpredictable items like term fees, land sales; timing of transactional activity. Thomas talks about RCD tools to improve.

Q: Update on City Center disposition and cash deployment?

A: Heath says $115,000,000 of dispositions in process, City Center still actively in process with weighted average transaction date August; proceeds deployment includes debt reduction, share repurchases, etc.

Q: Broader acquisition environment and appetite?

A: John says market active, actively underwriting deals, looking for things to add value and with better embedded rent growth.

Q: Bad debt expectations and watchlist tenants?

A: Heath says typical run rate 75 - 100 basis points of revenue, 100 basis points for 2026 mostly due to The Container Store; John says it's early, variables involved.

Q: Flow through from same property NOI to FFO growth and share repurchases?

A: Heath says recurring/unpredictable items and noncash items limiting flow through; John says still believe stock buybacks are beneficial as below consensus NAV.

Q: S&O pipeline location and impact on sales?

A: Heath says sold assets had $1,600,000 of signed-not-open NOI, SNO pipeline increased, expects elevated pipeline.

Q: Ontario land entitlement process and Carillon land sale?

A: Thomas says Ontario entitlement process well underway, lengthy into 2027; John says Carillon land sale pursued, takes time.

Q: Dispositions impact on earnings disruption and larger format centers?

A: John says analyzing to minimize disruption, focus on reducing larger format center exposure to improve embedded rent growth.

Q: Net capital allocation activity timing and 2027 earnings growth?

A: Heath says timing dilutive to 2026 due to buybacks, 1031 acquisitions, etc.; John says too early to say 2027 but considering potential additional dispositions.

Q: City Center disposition dollar amount and second bucket of dispositions?

A: Heath says City Center disposition in mid fifties, potential second bucket similar to 2025 in type of product.

Q: Anchor leasing terms and redevelopment?

A: John says improving deal terms, focus on embedded rent growth, backdrop of business is strong.