Kite Realty Group Trust (NYSE:KRG) Q4 2023 Earnings Call Transcript

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Linda Tsai: And then it seems like you had a lot of momentum in leasing and occupancy gains this quarter. Was there any pull forward demand away from 1Q, or does that leasing volume that’s elevated to continue?

John Kite: No, I mean it’s – we had a lot of box deals in the quarter, and we’ve always talked about, I think we did 10 right in the quarter. The quarter before was all shops, not all shops. But if you look at, that’s why the numbers, when you look at our TI spend, move around a little bit, because each quarter is a little different. But I don’t feel like we’re pulling forward. I think that the demand is strong. Tom, you want to.

Tom McGowan: Yes, we see no change in demand, and I think it’s pretty incredible that we signed 26 boxes in the year. That is a significant number that we were able to pulled off, and that’s over 0.5 million square feet. So if you look at our pipeline moving forward, it’s as healthy as it was last year at this time. So the engines are still roaring [ph] to make sure we get back to some of our historical high levels.

John Kite: I think even beyond just the sheer number of deals that we’re doing, Linda, and again, I keep talking about the way we look at this, and we get one opportunity to re-lease these Bed Bath spaces. You get one opportunity, and we are very selective about what we’re doing there. We’re not just looking to slap someone in the box so we can say we’ve done 15 of the 20 or whatever the heck the number is. That’s why I called out the kind of tenants that we’ve done business with that are going into these boxes. Right. The Whole Foods, The Trader Joe’s, the Homesense, Sierra’s, guys like that, and other people that we’re negotiating with right now that are more grocers and more high quality people. So the value creation there is really excellent, and that’s why we’re plotting away. But we’re very excited about what we’re getting done.

Linda Tsai: One last one. What’s the mark-to-market on the $48 million in expiring ABR in 2024?

John Kite: Well, I think if you look at the mark-to-market, actually, I would look even beyond that. And if you look at over the next five years, this year’s role is pretty low. It’s like less than 10%, I think, in terms of expirations. But then it ramps up. And if you look at that five year period and you take an average over that five year period and you compare it not to our current ABR, but the ABR over the trailing 12 months, there’s real opportunity to mark-to-market there. So I would really kind of focus on that. I think the near term is kind of a – we’ll be fine and there is some mark-to-market. But as you go out over the next five years, there was real opportunity there with elevated expirations.

Linda Tsai: Thank you.

John Kite: Thank you.

Operator: Thank you. There are no further questions at this time. I’d like to turn the call back over to John Kite for any closing remarks.

John Kite: Okay. Well, thanks, everybody for joining us. And for those of you who are going to be with us in Naples next week, we look forward to it. The weather looks good. Thank you.

Operator: Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone have a great day.

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