Kite Realty Group Trust Reports Fourth Quarter and Full Year 2008 Results

Business Wire, Feb 18, 2009

Operating Portfolio

As of December 31, 2008, the Company owned interests in 52 retail operating properties totaling approximately 8.4 million square feet. The owned gross leasable area ("GLA") in the Company's retail operating portfolio was 91.2% leased as of December 31, 2008, compared to 91.9% leased as of the end of the prior quarter. This decrease is partially attributable to the sale of Silver Glen Crossing in the fourth quarter.

In addition, the Company owns three commercial operating properties totaling 499,221 square feet. As of December 31, 2008, the owned net rentable area of the commercial operating portfolio was 96.5% leased, compared to 97.8% at the end of the prior quarter. This decrease is primarily attributable to the sale of Spring Mill Medical I which was 100% leased at the time of sale. For the combined retail and commercial operating portfolio, the leased percentage was 91.7% as of December 31, 2008, compared to 92.5% at the end of the prior quarter.

On a same property basis, the leased percentage of 49 total operating properties was 92.3% at December 31, 2008 and 94.2% at December 31, 2007. Same property net operating income for these properties decreased 1.2% in the fourth quarter of 2008 and remained flat for the full year 2008 compared to the same periods of the prior year.

Development Activities

As of December 31, 2008, the Company owned interests in three retail properties in the current development pipeline that are expected to total approximately 674,000 square feet. Approximately 368,000 square feet are anticipated to be owned directly by the Company or through various joint ventures. The remaining square footage will be owned by anchor tenants. The total estimated cost of these projects is approximately $91 million, of which approximately $48 million had been incurred as of December 31, 2008. Approximately 73% of the owned GLA at properties in the development pipeline is currently leased or under negotiation with prospective tenants. The Company also has five properties under redevelopment representing a total of 520,000 square feet.

Leasing Activities

During the fourth quarter of 2008, the Company executed 18 new leases and 15 renewals for 173,000 square feet of GLA in our development and operating portfolios. A total of 13 leases for 105,000 square feet of previously unoccupied space were executed with initial rental rates approximately 51% above the operating portfolio average. The Company executed 20 new leases and renewals in previously occupied space. These leases represent a 4% cash increase over the previous rent.

For the twelve months ended December 31, 2008, the Company executed 58 new leases and 26 renewals for 525,000 square feet of GLA in our development and operating portfolios. A total of 45 leases for 413,000 square feet of previously unoccupied space were executed with initial rental rates approximately 52% above the operating portfolio average. The Company executed 39 new leases and renewals in previously occupied space. These leases represent a 6% cash increase over the previous rent.