Kite Realty takes big write-off, dragging down quarterly results

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Kite Realty Group Trust reported a 70 percent drop in funds from operations for the quarter ended Sept. 30, after the Indianapolis-based developer wrote off the entire book value of a Dallas strip center.

Kite took the $5.4-million write-down on Galleria Plaza after it determined cash flows would not justify the cost of a ground lease and of capital expenditures to maintain the center, which has Atlanta Bread Co. as an anchor. The move will add $700,000 to the company's annual cash flow. There is no mortgage on the property.

Excluding special items, Kite would have reported $8.2 million, or 12 cents per diluted share, in funds from operations for the quarter. The results match consensus analyst expectations but fall short of the $12 million, or 32 cents per share, the company reported during the same period in 2008. The lower per-share numbers are due in part to dilution from the issuance of new shares.

The company reported a net loss of $3.4 million for the quarter on revenue of $25.9 million, which compares with a profit of $2.9 million on revenue of $34.3 million during the same period last year. Kite officials blamed the fall on a $4.7 million drop in construction activity and less income from the sale of land parcels.

Kite said it has satisfied all of its debt maturities for 2009, and has cash and available credit of $102 million.

Kite owns 51 retail properties with about 8 million total square feet of space, and four commercial properties that add another 500,000 square feet.


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  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

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  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.