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Kite Realty Group reports lower funds from operations

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Kite Realty Group Trust’s funds from operations in the second quarter fell to $7.5 million, or 11 cents per share, compared to $8.9 million, or 15 cents per share, for the second quarter of 2009, the Indianapolis-based developer said Wednesday.

Funds from operations, or FFO, is a common performance figure used by real estate investment trusts to define cash flow from their operations.

The company’s performance met the expectation of analysts.

Kite's loss of $4 million in the second quarter resulted from a $3.5 million non-cash depreciation charge related to the redevelopment of three properties, as well as decreased construction activity and lower profits on land and outlet sales.

Kite reported a profit of $300,000 in the year-ago period and a loss of $1.1 million in the previous quarter.

Second-quarter revenue fell nearly 21 percent, to $24.8 million.

“We are again pleased with the momentum of our leasing efforts during the quarter as we increased our retail leased percentage by 100 basis points and signed several new anchor tenant leases,” CEO John A. Kite said in a prepared statement. “We continue to look for select growth opportunities while maintaining our focus on liquidity and the balance sheet.”

Occupancy in its 51 retail centers was 91 percent, up slightly from 90 percent in the previous quarter.

Kite signed or renewed 39 leases in the second quarter totaling 216,200 square feet. The amount included 35,000 square feet from a new anchor lease for Nordstrom Rack to replace an Office Depot at Rivers Edge in Indianapolis.

Rental rates for the 16 lease renewals were 0.4 percent below previous rents.

Company shares closed Wednesday at $4.98 each, after reaching $5.97 in late April.
 

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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