KRG

• Portfolio Transformation (Project Elevate): • Over the 18 months ending Q2 2026, Project Elevate has focused on pruning lower-growth non-core assets to upgrade portfolio quality, growth profile, and cash flow resilience • Since the start of 2025, the firm has sold 22 non-core assets for nearly $1 billion, eliminating 58 at-risk tenant locations covering over 1 million square feet and reducing ABR exposure to at-risk tenants by more than 200 basis points • Grocery-anchored, lifestyle, and mixed-use assets now represent a larger share of the portfolio, with discount stores comprising 1/3 of the firm's top 15 tenant list, and 4 watch list tenants have fully rolled off the top 25 tenant list • Total proceeds from dispositions and asset interest sales since Q1 2025 are approximately $1.1 billion, with an additional $225 million of non-core tax loss sales expected by end-2026, bringing total projected proceeds to ~$1.3 billion

• Capital Allocation: • Disposition proceeds have been redeployed to higher-conviction, higher risk-adjusted return opportunities: since Q1 2025, the firm has acquired ~$612 million of faster-growing assets, repurchased $475 million of common shares, funded $250 million of equity for the Legacy West development, and paid a $31 million special dividend • In Q2 2026, the firm acquired two high-quality neighborhood centers (Founders Square in Naples and Chastain Market in Atlanta) for $136 million via 1031 like-kind exchanges, and repurchased 2.8 million common shares for $75 million at an average price of $27.48 per share (well below consensus net asset value) • The firm expects total projected capital sources to exceed uses by $240 million, which will be held for balance sheet strength and future opportunistic deployment

• Operational Performance: • Q2 2026 core FFO per share was $0.52, and NAREIT FFO per share was $0.53 • The firm executed 128 new and renewal leases totaling ~1 million square feet, with blended cash spreads of 15.9% and 28.4% on comparable new leases • ABR per square foot climbed to $23.41, up 2.3% sequentially and 6.3% year-over-year; embedded rent growth increased to 185 basis points, up nearly 30 basis points since the start of 2024 • The sign-but-not-open pipeline increased to ~$37 million of NOI, representing a 350 basis point spread between leased and occupied rates

• Development & Balance Sheet: • The firm commenced the second phase of 429-unit luxury multifamily development at One Loudoun, structured via a tax-free joint venture recapitalization that reduced the firm's existing ownership stake to fund most of its equity contribution for the new phase, with deliveries starting in 2026 • As of Q2 end, net debt to EBITDA was 5.1x, near the low end of the firm's long-term target range; total liquidity exceeds $1.2 billion

• Full-year 2026 same-property NOI growth guidance was raised 50 basis points at the midpoint, to a new range of 3% to 4%, reflecting better-than-expected organic operational outperformance in the first half of 2026
• Full-year 2026 core FFO and NAREIT FFO guidance is maintained at $2.06 to $2.12 per share; the 2 cent drag to 2026 core FFO comes from delayed deployment of held disposition proceeds, not underlying portfolio weakness
• Full-year 2026 guidance assumes a 90 basis point bad debt reserve as a percentage of total revenue at the midpoint, with a 100 basis point assumed bad debt rate for the second half of 2026
• Midpoint full-year 2026 net interest expense (excluding unconsolidated joint ventures) is projected at $114.7 million, a ~$7 million sequential decline driven by higher interest income from held 1031 proceeds and deconsolidation of the One Loudoun joint venture
• 2026 guidance assumes approximately $225 million of remaining non-core tax loss asset sales and $110 million of additional 1031 acquisitions by year-end
• Capitalized interest for the One Loudoun second phase development is expected to step up starting in 2027

Kite Realty Group is a diversified retail real estate firm focused on three primary portfolio segments: grocery-anchored neighborhood centers, lifestyle centers, and mixed-use developments. As of Q2 2026, the firm does not report separate segment-level absolute revenue figures, but discloses the following portfolio composition and performance: Since the start of 2023, the weighted average base rent (ABR) contribution from lifestyle, mixed-use, and neighborhood centers increased by 900 basis points, while the ABR contribution from underperforming power and large-format community centers decreased by 900 basis points. Overall portfolio same-property net operating income (NOI) grew 3.7% in Q2 2026, with overall lease rate reaching 94.8% (up 150 basis points year-over-year), and anchor lease rate improving 210 basis points year-over-year.

• Lower-growth non-core assets with high concentrations of at-risk watch list tenants pose long-term risks to consistent earnings and represent latent claims on the firm's capital, which motivated the large-scale dispositions under Project Elevate
• Future macroeconomic and industry cycles could create stress for retail tenants, even in the current healthy operating environment, creating downside risk for portfolio performance
• The current aggressive transaction market for high-quality retail assets may limit the availability of accretive acquisition opportunities that meet the firm's 8-9% unlevered IRR hurdle rate
• Holding undeployed capital from dispositions creates modest near-term dilution to FFO per share until the capital is redeployed

Q: How much of the improved same-store NOI growth outlook comes from completed dispositions versus organic operational upside?

A: Dispositions contributed only 3 basis points to 2026 same-store NOI growth, a modest impact. While sold non-core assets had lower ABR and slower growth that would detract from long-term same-store performance, they were not dilutive to 2026 same-store results.

Q: What is the cap rate spread between the non-core assets you sell and the higher-quality assets you acquire via 1031 recycling?

A: Sold lower-growth large-format assets typically transact at low to mid 7% cap rates, while acquired high-quality neighborhood/lifestyle assets trade closer to low 6% cap rates. The firm prioritizes hitting an 8-9% unlevered IRR target over cap rate spread alone, as there are many moving parts to each transaction.

Q: Your occupancy is still ~250 basis points below historic highs; what is the outlook for further occupancy gains, and how long will large-scale Project Elevate dispositions continue into 2027?

A: Demand for space remains strong, supply is limited, and the portfolio is higher quality, so there is clear opportunity to push occupancy back toward historic highs, with small shop occupancy already at prior peak levels. The heavy lifting of Project Elevate is complete; remaining 2026 activity is just tax loss harvesting and 1031 transactions, and 2027 will return to the historical pace of small annual buy/sell activity. The modest 2026 FFO dilution from held cash will not continue into 2027.

Q: How do you balance selling assets with weaker tenants that could be re-leased to stronger operators versus holding them for potential upside?

A: The decision to sell is focused on long-term portfolio resilience, not just short-term upside. At-risk tenants not only threaten future earnings consistency but also represent potential future claims on the firm's capital. The firm made the choice to accept short-term transaction shuffle for long-term portfolio quality, positioning the portfolio to grow through future economic cycles.