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Kite sells 3 area buildings in dealmaking blitz

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Kite Realty Group Trust Inc. announced Thursday that it sold three buildings in the Indianapolis area and bought properties in South Carolina and Florida during a busy fiscal fourth quarter.

The Indianapolis-based real estate investment trust also reported a loss for the fourth quarter ended Dec. 31 of $6.5 million, or 9 cents per share, on revenue of $26.7 million. That compares to a profit of $3.1 million, or 5 cents per share, on revenue of $24.6 million during the fourth quarter of 2011.

Kite blamed the loss primarily on its buyout, at a discount, of a partner in a shopping center development in North Carolina.

The local property sales included the Zionsville Place retail center along State Road 334 west of Ford Road, and the Indiana State Motor Pool and Pen Products commercial properties, which total 201,000 square feet. Together with the sale of two out-of-state retail buildings, the sales generated proceeds of $20.7 million.

Also during the quarter, Kite closed on an $18.4 million construction loan for its Rangeline Crossing redevelopment in Carmel at the corner of 116th Street and Rangeline Road. The project will be anchored by an Earth Fare grocery store.

Kite said it took an $8 million non-cash charge on its buyout of a partner in the development of a lifestyle center called Parkside Town Commons in North Carolina. The decrease also is a function of lower gains from the sale of properties in 2012, compared to 2011.

The company spent more than $50 million during the quarter to buy two shopping centers in South Carolina and another in Florida. It began construction on its Parkside Town Commons project, selling a parcel to Target, which will anchor the center, and inking a lease deal with a supermarket tenant.

Kite reported third-quarter funds from operations, or FFO, of $8.5 million, or 10 cents per share, compared with $8.6 million, or 12 cents per share, in the same quarter a year earlier. Funds from operations is a common measure of REIT performance.

The company, which owns interests in 54 retail properties totaling 8.4 million square feet, said the properties were 94.2-percent leased as of Dec. 31, compared with 93.3 percent at the end of the fourth quarter in 2011.

During the quarter, Kite completed a public offering of 12.1 million common shares at a price of $5.20 per share, generating proceeds of approximately $60 million. Kite said it used proceeds to repay borrowings and fund acquisitions and redevelopment costs.

Kite shares gained a penny Thursday prior to the earnings release, closing at $6.20 each.

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. 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.

  4. If you only knew....

  5. 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.

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