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.