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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. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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