SECTOR: Real Estate SECTOR: Real Estate COMPANY: Kite Realty Group (KRG) COMPANY: Kite Realty Group (KRG) SR. ANALYSTS: KESHAV AGNIHOTRI AND STEFAN BELL SECTOR HEAD: ASHWIN TELEKUNTLA JR. ANALYSTS: Mariam Avila, Spencer Morris, Anand Pariikh, Austen Rabbie, Dejvi Shehu Inna Shulman, Alex Staikos
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SECTOR: Real Estate COMPANY: Kite Realty Group (KRG)
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SECTOR: Real EstateSECTOR: Real EstateCOMPANY: Kite Realty Group (KRG)COMPANY: Kite Realty Group (KRG)
Industry Definition• Retail Real Estate Investment Trusts that engage in the
acquisition, development and operation of shopping centers. These REITS have their primary operations in the continental United States and manage investment funds that own and operate numerous retail properties such as regional shopping centers, megaplex theaters, and restaurants. Revenue generation stems from leasing properties and earning management fees.
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Industry Breakdown
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By Market Capitalization
Revenue Generation
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Long Term
Contracts
Long Term
Contracts
Kite Realty Group (KRG) Trends and Opportunities
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Company Snapshot
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EV $921.39M
Market Cap $319.41M
EBITDA $63.14M
Beta 1.80
Trends: Consumer Spending
• Purchases up 4.1% in the last 12 months • 1% increase through Jan. and Feb. 2011 alone
• Consumer Debt has fallen for 7 straight quarters
• Down 7% from peak in 2008
• Holiday Season Sales up 5% in 2010
• U.S. Unemployment at lowest since April 2009
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Trends: Diversified Big Box Anchors
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•Top performers in recessionary periods
•Big box stores (e.g. Wal-Mart, Target) provide long-term stability
•Brand recognition lures customers to smaller adjacent stores
U.S. Census BureauIbisworld.com
Opportunities: Land Holdings
Portfolio Expansion of 17.4%• Depressed property values have lowered development costs
• 2007: $126/sq. ft.• 2010: $71/sq. ft.
• Occupancy rate consistent at 92.5%• Retail Stability rate: 90%• Industry average: 87%
• Majority of ongoing developments are preleased• 2010: 92.1% Preleased• 2009: 73.1% Preleased