Q4 2021 Kite Realty Group Trust Earnings Call

February 15, 2022

[music].

Thank you for standing by and welcome to Kite Realty Group Trust fourth quarter earnings Conference call. At this time, all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone please be advised.

Today's conference May be recorded should you require any further assistance. Please press star zero I would now like to hand, the conference over to your host senior Vice President corporate marketing and communication Bryan Mccarthy. Please go ahead.

Actual results may differ materially from these statements for more information about the factors that can adversely affect the company's results. Please see our SEC filings, including our most recent 10-K.

Today's remarks also include certain non-GAAP financial measures. Please refer to yesterday's earnings press release available on our website for reconciliation of these non-GAAP performance measures to our GAAP financial results.

On the call with me today from Kite Realty Group are chairman and Chief Executive Officer, John Kite, President and Chief Operating Officer, Tom Mcgowan Executive Vice President and Chief Financial Officer Heath Fear Senior Vice President and Chief Accounting Officer, Dave fuel.

And senior Vice President capital markets, and Investor Relations, Jason Colton.

I will now turn the call over to John .

Thanks, Brian and thank you everyone for joining us today, while we've certainly been looking forward to this call today for quite some time.

<unk> is our first opportunity to truly quantify and articulate the benefits of our highly accretive merger.

We closed on the transaction in late October and since then have been working tirelessly to complete the integration and implement <unk> culture and operating philosophy across the combined organization.

The timing of the merger was impeccable and <unk> was positioned perfectly to take advantage of the opportunity.

It has now become clear that the merger is even better than we anticipated.

Today, I'm going to speak about three horizons of opportunity for <unk>.

Those opportunities that are immediately in front of us.

Those that will cultivate over the next 18 to 24 months and those that will materialize over the long term.

The most immediate benefit of the merger of course is the significant earnings accretion.

Set forth in our press release, we are providing 2022 2022 full year <unk> as adjusted guidance of $1 69 to $1 75.

Keith will give additional color as to the underlying assumptions.

As mentioned in our press release, the midpoint of our guidance represents a 33% increase over <unk> full year 2020 <unk> per share.

While we've only owned the legacy RPI assets since October 22nd we.

<unk> jumped headfirst into attacking operational efficiencies with an intense focus as always on our leasing efforts.

Against the backdrop of strong demand from a deep and diverse set of retailers <unk> is experiencing significant leasing momentum across all of our open air product types. In fact, we're noticing that national retailers are now looking more intently for space across the open air spectrum, which.

<unk> nicely.

With our high quality and well located properties.

These positive trends are readily evidenced in our fourth quarter and full year leasing results.

During the fourth quarter <unk> leased over 900000 square feet at a very strong 12, 9% blended cash spread on comparable new and renewal leases.

The blended spread on our fourth quarter comparable non option renewals was 10, 2%.

This is a strong indicator of where market rents are headed for the <unk> portfolio.

For the full year care G leased over $2 6 million square feet at blended cash spreads on a comparable deals of 10, 7% as.

As a reminder, those leasing statistics, including the leasing activity from the legacy <unk> portfolio are since October 22nd.

If we include the active the activity from the legacy RPI assets for all of 2021.

We leased over $5 1 million square feet for the combined portfolio.

Based on this progress our retail lease percentage stands at 93, 4% up 220 basis points over last year.

And yet we still have significant upside.

The portfolio has signed not open NOI of approximately $33 million, which will primarily come online during the back half of 2022 and the first half of 2023.

This bodes extremely well for our growth trajectory going into 2023 as the rents from all of these leases will be fully annualized.

The good news is.

Is that the $33 million of signed not open NOI represents about half of the near term leasing related NOI opportunity.

As detailed in our investor presentation leasing our active developments and the balance of the portfolio to pre pandemic levels, which is very achievable in the current environment.

Would equate to an additional $34 million of NOI coming online over the next few years over and above the $33 million of signed not open NOI.

Our increased scale and improved balance sheet represent a host of immediate opportunities, including the potential for lower debt costs increased liquidity in our stock and enhanced relevance with our tenants and vendors.

We are marching toward completing the active development projects detailed in our supplemental.

It's important to note.

We reevaluated every in process legacy RP AI project.

Solely on a forward looking basis.

Based on <unk> underwritten incremental NOI related to the active developments, we are anticipating very solid returns.

We're meticulously reviewing the land bank also disclosed in our Investor deck, and addition to multitude of other opportunities embedded with within the <unk> portfolio.

We have learned over the years that each project is unique and requires a customized approach in order to achieve the best risk.

Risk adjusted returns.

Sometimes that means bringing in an experienced JV partner or monetizing the land.

For example, during the quarter, we entered into an agreement with Republic Airways to develop a new $200 million corporate campus.

On an outdated retail locations owned by <unk> in Carmel, Indiana.

We knew the highest and best use of the land was no longer retail.

Therefore, we sold a portion of the land to Republic for approximately $7 million and will serve as the master developer of their campus.

<unk> will not only receive a sizable development fee, but also a profit component.

All the while putting zero care GE capital at risk.

Cash from this development will be recycled into an income producing investment.

A big win for <unk> on a site that was not generating any NOI.

This is one of several examples detailed in our investor presentation, where care G. Creatively creatively generated high risk adjusted returns for our shareholders.

I am very optimistic about the long term outlook.

It should come as no surprise and in the near term, we will be spending a significant amount of capital on leasing looks.

Looking beyond the next few years, we begin to generate substantial additional free cash flow.

While also naturally deleveraging.

We're setting up to be in a very liquid and favorable position with a net debt to EBITDA in the low to mid five times.

Can't predict the macro environment I am confident we will be ready to respond aggressively regardless.

Before I turn the call to Heath, it's important to note all of the great opportunities that I just outlined are ancillary benefits of the merger.

We did this deal because we love the real estate and saw significant upside potential period.

Having been in this business for over 30 years, having visited nearly every every legacy RPI asset I can unequivocally tell you that the quality of our portfolio improved by virtue of the merger.

When I see what's happened in the private market valuations over the past six months I couldnt be happier with respect to the timing of our transaction.

We doubled down on the amount of GLA that we have in our warmer cheaper markets. These markets continue to benefit from household and employer migration, which is a trend we don't see changing anytime soon.

We have we are a sector, leading presence with over 60% of our ABR in these markets, 40% alone being in Texas and Florida.

The merger also provided <unk> with a new or enhanced scale in key gateway markets, such as Washington, DC, New York and Seattle. These world class cultural educational health and lifestyle hubs have endured the test of time and are home to many of the opportunities that we discussed.

In summary.

There's nothing better than owning high quality assets and high quality places as.

As the world opens back up I encourage each one of you to join US on our property tour and see the quality firsthand.

And as always I want to thank the entire <unk> team for their hard work and dedication.

<unk> is nothing without our tremendous people I can't emphasize enough how excited I am about what we've accomplished as a team but more importantly, what we will accomplish together in the future I'll now turn the call to Heath to provide more color on the quarterly results.

Thanks, John and good morning, everyone.

I want to echo John's excitement and confidence in the path that lies ahead.

Opportunity in front of us is absolutely energizing.

On the immigration front, our substantial efforts to date have enabled the combined organization to operate at a high level and truly embrace our internal model of one team one focus.

Before I discuss <unk> fourth quarter results.

Please keep in mind that there are bit clunky by virtue of the fact that we closed the merger on October 20 <unk>.

While the results are from the combined portfolios. We only have two months in nine days of contribution from the legacy <unk> assets.

For the fourth quarter <unk> generated 43, <unk> per share as compared to NAREIT, our as adjusted <unk> results add back in the $76 million of merger related costs and deduct the $400000 of net prior period activity.

For the full year.

<unk> generated $1 <unk> per share as compared to NAREIT, our as adjusted <unk> adds back in the $87 million of merger related costs and deduct the $3 7 million of prior period activities.

Our same property growth for the fourth quarter and full year of seven 2% and six 1% respectively. These results were primarily driven by a reduction in bad debt as compared to the prior year periods.

Absent the net contribution from prior period activities, the fourth quarter and the full year same property NOI growth of six 8% and four 3% respectively. These metrics these metrics and a host of others are set forth on the new summary page in our revised supplemental we hope you like the changes.

Our balance sheet and liquidity profile not only remains solid the continue to improve our net debt to EBITDA was six times down from six one times last quarter.

Adding in $33 million of signed but not open NOI from the combined portfolio, our net debt to EBITDA would be five six times.

We are in a great position to not only weather any storm.

Also take advantage of any opportunities that present themselves.

As John alluded to earlier, we're providing <unk> as adjusted guidance of $1 69 to $1 75 per share.

The variance from NAREIT <unk> is approximately <unk> <unk>, which represents our estimate of $4 million of nonrecurring merger related costs.

Furthermore, the accounting adjustments related to the legacy RPI below market leases and above market debt contribute an incremental <unk> <unk> per share to our 2022 guidance. This is a good indicator of our future ability to drive rents and reduce borrowing costs additional assumptions.

At the midpoint include neutral impact from any transactional activity and bad debt of one 5% of total revenues.

As you all know providing same property NOI growth is a SKU proposition for the sector given all the noise over the past few years.

Especially tricky right. After a merger of two companies that approach the potential pandemic credit loss from different perspectives.

To avoid any confusion, we're assuming same property NOI growth of 2% at the midpoint, excluding the net impact of prior period adjustments.

Estimated 2% same property growth is primarily driven by occupancy gains and contract contractual rent bumps.

Last week <unk> declared a dividend of <unk> 20 per share for the first quarter. This represents a 5% sequential increase and an 18% year over year increase the dividend will be paid on or about April 15th to shareholders of record as of April eight.

One last thought before turning the call over for Q&A.

In our press release, we touted the anticipated 33% growth of our 2022 <unk> per share as compared to our 2020 <unk> per share.

I think another compelling comparison is to look at our original 2020 <unk> guidance of $1 50 per share at the midpoint like our peers. We gave this guidance before the pandemic set in and it reflected <unk> run rate after selling over half a billion of assets in connection with project focus.

Our 2022 per share guidance represents a 15% increase over our original 2020 per share guidance at the midpoint.

During the course of 2021 many of you asked when will your earnings returned to pre pandemic levels.

On a per share basis, not only returned to pre pandemic levels, but we tacked on another 15% just another testament to the compelling accretion and synergies associated with our well timed merger.

Thank you to everyone for joining the call today operator. This concludes our prepared remarks. Please open the line for questions.

Yes.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of.

Floris van <unk> of Compass point your line is open.

Thanks, guys for taking my question I, just wanted to delve into this six below market lease adjustments.

More.

How should the market think about that is that just is that a one off event is that just mean that you guys bought these things.

RPI assets cheaply or how should investors think about that.

That adjustment in your view.

I think they should really look at the upside here.

A positive mark based on the below market rents on the leases and we're getting a positive mark based on the above market debt that means that we've got embedded growth pursuant to an independent third party that looked at our leases and that we should be able to borrow money at rates that are that are tighter than the debt that we assumed so I think yes, it's <unk>, but I think.

Ultimately at the end of the day. These are two very very positive things that show you again, it's one of the positive benefits of the merger we get we've got a great portfolio with great upside.

Great maybe if I just follow up in.

Yeah, maybe John if I can get your views on this as well.

Obviously, we estimated the yield that it.

At the time of the transaction was six 8% your stock prices fall a little bit so close to the time of the completion was at probably risen by almost 100 basis points to seven eight cap rates have clearly come down in the market.

What what would you estimate this portfolio would trade at in todays markets in light of the Donohue Shriver portfolio.

Portfolio transaction rumored yield and some of the other things and maybe if you can comment a little bit on.

On your own implied cap rates, which presumably will go up as a result of this transaction and the fact that you are writing these leases to market major NOI goes up although you are your <unk> a little bit lower.

Clearly that has an impact on your on your share price and your value. If you could John if you could maybe comment a little bit on.

The evolution of cap rates, and particularly when it relates to <unk>.

Hi, Floris I'm going to unpack that question.

Sure.

It's a heavy suitcase you just laid out there.

But look bottom line.

First of all.

It's great to be on the call, it's great to get the opportunity to finally be able to really show people how great of a transaction. This really was an <unk>.

We've been doing this a really long time and.

It's one of the best transactions I've ever seen so that's pretty simple.

In terms of your question about cap rates and cap rate compression between when we first started working on this deal and now you got to remember that.

That's almost a year when we first engaged in conversations in April of last year.

Cap rates have easily compressed 100 to 200 basis points across the spectrum.

If we were doing this deal today that would just be a whole different ball game.

I think the cap rate would obviously be significant significantly lower that goes without question.

You mentioned you've been on top of a lot of these trades I mean, everything we're looking at everything that's happening in the market with the wall of capital that is really pressing into retail right now across the board.

Multiple multiple transactions are trading in the fours.

It's pretty hard to get something that you like that's north of five.

Even just thinking about buying something at a 5% used to be okay. I could buy anything I wanted you can't.

So the reality is.

We met what we said when we set our timing was impeccable, but it wasn't by accident.

We said when you go back to the beginning of Covid.

<unk> is the first quarter call during code that we have during the Covid initial COVID-19 issue and we said we'd come out of it stronger we knew we would and we did come out stronger and we took advantage of an incredible opportunity to put together two great companies that now makes one really really good company that's top five in the space and.

Per your question is trading at a significant discount for whatever reason.

You asked me my view of our NAV look we we put components out there for you guys to do the work that makes it.

Reasonably easy we don't throw NAV is around very lightly, but if you just look at the consensus NAV from.

The 12 or 13 analysts that cover us just under $25. The last time. It was updated I think it probably goes up from there I think last time I looked you were around 27. So look most smart people would value the company between say, 25% and $29. So.

That's not me, saying and it's out there people have those numbers out there I wouldnt argue with the higher end of that.

But you know were out were out to prove and perform and Thats. What we do we will proven perform.

But.

I could go on.

It's just a great deal.

Thanks, John .

I will.

Maybe if I can if I can talk about the I know that.

You've laid out your guidance for 'twenty, two but it appears that in.

That's based on on.

Relatively muted NOI growth are you stealing a page of David Simons book and coming out with.

Numbers that you think Youll U.

You could surpass.

Later on this year.

Well.

Try not to steal from David I'll make a habit of not doing that but I would say.

I feel like our guidance that we put out as conservative I think it's appropriately conservative in the beginning of the year.

Although we're feeling pretty robust right now about our views and.

Covid still exists so we have to the reason that we used a one 5%.

Bad debt.

Kind of.

Number is that that smart to do in the beginning of the year historically pre COVID-19 .

That number would range between 75 bps and one so we believe that's conservative but reasonable because you never know what's around the corner right now in the beginning of the year. So yes, when I look at the guidance that we laid out and how he laid it out on the call and I look at the levers that we have as a larger organization.

I would be disappointed if we werent at the top end or better.

Floris I'll just add when you said muted, 2% NOI growth two things.

One.

<unk> signed but not opened NOI. It comes on as Jonathan in the back half of the year. So we're really setting up tremendously well for 2000.

And 23, so also again when you're thinking about our same store guidance, you've got to think about it in terms of the.

Bad debt assumption right, that's one 5% in a normal year prior to frequently where we're running 75% to 100. So again, we added and what we thought was an appropriate amount.

Again Covid has not gone so we feel like this is a pretty conservative.

Guidance and we aim to outperform it.

Thanks Scott.

Thank you.

Thank you. Our next question comes from Todd Thomas of Keybanc Capital markets. Your line is open.

Hi, Thanks.

John You commented in your prepared remarks that it's clear that the RPI merger is better than expected can you just talk a little bit about what specifically.

Has trended better than expected.

How the RPI portfolio is tracking versus plan and maybe put some context around that comment in some detail around either occupancy gains our leasing activity.

Or whether it's sort of some of the added benefits you mentioned around discussions with retailers vendors et cetera.

I think it's all the above Todd I mean, let's start with NOI higher than we thought it was going to be so that's a good place to be so revenues higher expenses or where we kind of thought they would be which creates a better NOI.

Picture and again I think we've been reasonably conservative as we pointed out already.

When you look at the fourth quarter and you look at our leasing spreads.

Sector, leading spreads at a basically 13%.

The combined company from October 22nd on I think there was people there may have been some concern around that particular topic that we have shown.

Unnecessary concern.

Quality of the assets, we talked about that early on but you look at the metrics that the combined company has compared to the top five peers and.

It's another way to triangulate why we should be trading at a much higher price than we are right now.

So.

The metrics Todd in terms of you look at you look at demographics, you look at Super Zips, you look at ABR.

You just look at the quality that is you can kind of discern from a metric it's all there.

The leasing activity as.

As we mentioned when you look at the combined leasing activity. If you would've had both companies for the year is a tremendous number over two 5 million square feet.

And just.

We think that we're looking at is better than we originally underwrote I don't know how else to say that.

Yes, the only one I would add Todd is the active development pipeline I think when we when we got into this we obviously didn't understand what always was contained and how it would be dealt with but this active development pipeline is very manageable. When you go through each one of these properties and you look at $105 million.

That is yet to be spent and we have our arms around that already we understand the execution.

We feel comfortable there and look forward to the upside of that.

Of that component as well.

Okay.

Okay. That's helpful and then.

Yes.

You had focused previously.

Previously on increasing exposure to leases with fixed cam over the years that helped drive.

Margins higher.

<unk> recoveries the expense recovery ratios came came in a little bit with the integration of the RPI portfolio.

This quarter are there plans to rollout fixed cam across.

The RPI portfolio and are there opportunities you see.

Relative to the roughly 72% NOI margin today to get back to a higher level.

How much upside do you think there could be over time and whats the timeframe to do that.

Yes first of all there is no RPI portfolio is just one portfolio right that we've talked about one team one focus it means a lot to us.

But yes, obviously, bringing in the new properties none of them.

We are on fixed Cam. So when you look at the combination obviously, it's going to reduce our exposure to fixed cam.

It took it takes time Todd it took five years, probably for that fixed Cam initiative to really get to the point, where it was north of 50% of our portfolio and began to really pay benefits.

We will do the same thing here and we are doing the same thing as of this every real estate Committee meeting that we have right now.

There was obviously deals that were in progress pre closing that were done that would be not fixed cam, but outside of that it would be an aberration to not have fixed cam and I would say that when you look at our margins and our recovery ratios. We were just way above the peer set I mean, we're still.

Now even in the combined numbers at the top end of the peer set.

But we'll we'll drive that home I mean, thats one of the things that we talked about that we do that's a grind we grind out we push hard to get that done. So it will take some time, but we definitely feel good about the ability to improve that over the next few.

New year's and Todd to just put some numbers around that every 25 basis point improvement in NOI margin is one share of <unk>. So again as John said, we see what happened to our margins. We view this as a long term opportunity.

Okay and Heath just for you on the balance sheet, the mortgage debt maturing through.

The balance of 'twenty, two I guess really it looks like April of 'twenty three.

Should we assume like like Aon that theyre, mostly repaid at maturity with cash on hand or are you looking to refinance any of those.

Yes, hi.

As you remember, we did that exchangeable deal last year with the goal of paying off the 2022 mortgages.

And the reason why we didn't pay them off right away. It was because the opened a par period is 90 days before the maturity date. So we're actually getting a yield maintenance savings by paying them off 90 days ahead. So when you're modeling the payoff of the 2022 mortgages just assume we're paying them off at par.

90 days ahead of their maturity.

Okay got it and Thats cash on hand, and $125 million in short term deposits.

Correct Okay.

Got it alright, thank you.

Thank you.

Thank you. Our next question comes from Alexander Goldfarb of Piper Sandler Your question. Please.

Hey.

Good morning, good morning out there.

So just a question going back to sort of the guidance and you referenced the <unk> from accounting benefit.

How much has market rent growth.

Impacted the numbers. So when you look back sort of six months ago, when you're penciling the deal versus now how much benefit is from the overall market growing I mean, obviously, it's a good thing right, but just sort of curious for how much change has happened subsequent to you underwriting this deal.

Both in actual market rent growth versus also what you found as you went through the RPI and we're busy.

Binding it with <unk>.

Legacy K R J.

Yes, Alex.

I do think Thats a factor in the sense that I mean, just look at our spreads right.

You look at a 13% blended spread Q4, which is the combined company that would tell you right there that.

As you have said previously that people underestimated lack of supply right. We're talking about the demand equation, but we forget about equilibrium and how that plays a factor in all of economics.

And so the supply side was low.

So we're able to.

Most often drive pretty strong rents and thats. The other reason that we pointed to.

Over 10% spreads on a cash basis, and our non option renewals right and as you know the non option renewals are the opportunity for a tenant to say look I can just walk away from this lease I don't have an option.

<unk>.

And it's the flip side is true for US we can just say walk away and in that case, we've got a 10% cash spread plus with almost no no ti associated with that so that's huge margin. So I think.

It's just a it's a play out of what the Big picture. It looks like right now which is that we're in the right business at the right time.

But John can you give some sort of perspective on how much market rent has grown in the past six months.

Yes, I mean beyond the spreads Alex it's hard for me to.

I can tell you. The spreads you can see you can see that the leases we signed in terms of new leases in Q4 were over $25 a square foot. So I mean look I can't give you more than that outside of our own portfolio, because I don't I'm not sure what people are doing outside of our portfolio, but if we.

I mean look if we're growing rents.

On a cash basis nor.

North of 10, like we have been for a while it's pretty damn good environment Alex.

Other indicators I'd say another indicator of where the market rents are going is I cant remember being a real estate committee and having more deals where we have multiple options for our space. So when youre in a situation, where obviously you can you can pick pick the player and you can drive rents. It's something we haven't seen for a very long time and again to the beginning of your question Thats why there was a pause.

Positive mark to market.

On RPI rents right and again I think when we announced the deal not sure people would have guessed that one.

Alright, then leads to the follow up which is.

The supply side.

Obviously in the.

Basically since probably O. Four we haven't really had any new supply and discussed before that was driven either by rooftops or massive retailer Rollouts do you see anything in the inkling that would either.

Forebode supply or.

Or even if the rents pencil to make supply work or where we stand now there is not enough retailer demand. In addition, theres not enough of a spread between.

Construction costs somewhat.

<unk> would have to be to even contemplate supply in a meaningful way.

Look I think all of those factors are part of what's kept.

New supply.

In a reasonable place you also have to remember.

Talked about four but.

Would say Alex when you went from four probably owe 128.

<unk> seven six years of a lot of construction and a lot of stuff that shouldn't have been built in the first place. It takes a long time for that to go away and Thats. What has been playing out. This is an obviously a very long time, but you also have a lot of people that were in that merchant building kind of retail business.

Or just gone.

So people like us that have been doing this for a really long time, we expect to get high returns for this stuff as Tom said.

And what we underwrote. So I think I think the dynamics are there that would keep a lid on this for a while it doesn't mean that at some point someone who's whatever.

28 years old doesn't know what the Hell I'm talking about and build some spec I mean, it happens, but it's very limited.

You have no offense to the 28 year olds.

I mean, it that way.

Got it thank you.

You got to think outside the box and if you look at if you look at a handful of our properties. We are out getting tax increment financing and lowering basis, some properties and being creative working with municipalities to get the returns that we get so we know whatever we're going to do we're going to have.

To look outside the box be creative to make things work.

No that's a good point and John to your point, we were all 2008.

At the time so.

The experiences of mistakes that last.

Thank you.

Thank you. Our next question comes from Katy Mcconnell of Citi. Please go ahead.

Thank you good morning, everyone.

Just wanted to follow up on some of the non core drivers within your guidance.

Coming down yes.

Thank you Tien tsin.

Just wondering if you can comment on what you're assuming for total straight line rent in 2000.

Thank you and then on G&A.

Alright.

Good run rate or are you expecting further synergies from the merger.

Yes.

Yes, so on a straight line.

You look at what we have in our 2022 model and you deduct RPI is run rate straight line in <unk> run rate straight line prior to the merger the differences around <unk> positive. However that upside is split between the merger accounting that you just discussed and also new leases coming on line, so again <unk>, but split between those two items.

And then I'm sorry, what was the second part of your question Katy.

Yes.

On the G&A as the fourth quarter as the fourth quarter a good a good run rate on the G&A, but listen there's a lot of noise in the fourth quarter on the G&A, there's temporary employees et cetera, there is merger related expenses.

So I would say thats not a good run rate I will tell you that the G&A savings that we articulated on the last call those are still intact and the timing of those are still intact I think going across the.

The year I think on a quarterly basis Youll see G&A and again this is going be elevated by merger costs et cetera, you're going to see G&A somewhere around I don't know 12.

12% to 13 a quarter.

Yes.

$1 million a quarter.

Okay. Thanks.

And then now that you've broken out the office lease expirations separately can you just speak to the 22%.

Hires this year and how much of that you could potentially get back and just what the leasing environment.

Yes, we did we did have an outsized number in terms of the percentage of ABR, though would be that would be expiring or coming due I will tell you they really come through two specific properties.

One one is reisterstown and one is for them.

And in terms of working with the team we are going to be in a position that real estate Committee next week to handle about 150000 square feet of that which is very positive and the forum. We're continuing to work on them. So we do not have any great concern even though there is no question that <unk>.

92% range was up was a high number in terms of rolling leases. So we have a we have our arms around it or where lease stuff in our office components not including.

Active developments of close to 93% so it's a big charge for us as we as we push forward and we're going to be paying a lot of attention to.

To the office portfolio.

The only thing I would add to that Kt is when you look at when you look at it in totality against our total NOI, it's still a pretty small number. So I mean, I guess, it's cleaner to have it broken out like that but it's not a number that is particularly scary at all.

Thanks, everyone.

Thank you.

Hi.

Thank you. Our next question comes from Anthony Powell of Barclays. Your question. Please.

Hi, Good morning, I think John you mentioned that Youre seeing increased retail interest across the opening of our spectrum. Maybe you could go into more detail on that point what are you seeing in the appropriate anchored mixed use power standards and whatnot.

Yeah, Andrew Thank you I mean, I think what we're seeing is that youre seeing.

The retailers that obviously.

They're doing well so the backdrop of a lot of this is theyre doing well they've come out of Covid with the with just the vigor and an excitement about the business.

They figured out their business from a margin perspective, they know that they are that the physical retail environment is the profitable outlet for them. So they're trying to push as much of that into the stores as they can.

And what I meant by that was if you look at it if you look at a tenant like.

Our Lulu lemon or you look at a tenant like sephora or you look at a tenant like west Elm.

I think those are tenants that would be lifestyle type tenants only or maybe they would go in mixed use but we're doing deals with those guys right now in grocery anchored centers and community centers and power centers.

A lot of the brands.

Look at Adidas I mean.

We could go on and on with the brands.

That are doing that.

But the great thing for US is that we're well represented across.

These kind of five food groups the community centers and neighborhood centers mixed use power and lifestyle that said Anthony we're still predominantly community and neighborhood right. I mean, that's like almost 60% of our revenue is community and neighborhood. So the other stuffs supplements, it which gets us in front of people.

And then they realize damn I want to look at this whole portfolio right I want I want an opportunity to sit down with <unk> and look at the whole thing. So that's what I meant by that and it's just it's just great for our team right now.

Got it thanks, maybe I'm a bad debt the one 5% for this year is that what you're actually seeing here in mid February is that kind of what the actual number of delinquent tenants in the portfolio right now.

No I would tell you.

Over the course of 2021. It was one 5% however that was front weighted and as the year improved into the fourth quarter. It was more like 75% to 100, so that was not.

Saw a tremendous amount of wash out of the weaker tenants during COVID-19 , but as John mentioned, we're not out of this thing yet right. So we put in a number that we felt comfortable with and that we fully intend to show the world not take a drastic turn to outperform.

Got it so assuming there's no major tolling setbacks.

To assume even though your guidance is we didnt have that you should probably exit the year closer to that in that normal range is that fair.

Yes, I mean, I would say, we're entering the year feeling like that will be there I think we guided to something at the midpoint that was conservative because.

Last summer. We also felt the same way and things change a little bit I highly doubt, we'll go down that path that we did last summer where it got worse. After the fact, but that's why when you sit down at the beginning of the year and you are going through all your numbers.

Do something like that Anthony but now we're entering in the year, well well below the one and a half.

Alright, thank you.

Thank you.

Thank you. Our next question comes from Wes Golladay of Baird. Your line is open.

Everyone can you talk about your expectations for leasing this year can you achieved a $5 million volume again are you going to pivot more to small shop and then lastly can you talk about where you're seeing on the tenant churn environment.

Well, let me start with that and then Tom can get into it too look RJ when you look at 2022.

When you look at 2022 and you look at 2023.

That's what we are talking about we still 2023 actually looks good as well so.

I think entering the year, we still had this disproportional impact from the original Stein Mart fallout in the boxes that we had.

And so that's why our spread.

Between leased and occupied as pretty significant which is frankly, just a lot of upside.

So when we we like to pick up we don't we don't guide to specific percentages on leasing because of all the inputs and ebbs and flows, but but I would say within the next 24 months.

We would anticipate that we'll be back very close to where we were on a leased percentage, which will put our <unk> per share well above where we are today. So I think it's really going in the right direction. Tom do you want to and I'll talk about the boxes. This real quickly because they're obviously huge drivers of lease percentage.

And if you take a look at what we have accomplished in the last year. We executed 27 deals 27 boxes with a spread of 12%, but more importantly return on capital of 29% the.

The remaining 36 boxes that we have actually have a lower ABR at about $11 85. So once again, we feel like there's great spread potential there, but more importantly.

Our pipeline through that 36 were planning on putting a significant dent in that number.

So we're looking for a big year of leasing without question. We've got this new combined team and everyone is going to drive to the finish line I can assure you that the wassa.

I'll add one more thing if you look at where our lease rate was at the end of 2019 and where it is at the end of 2021, we.

We have one of the highest spreads.

There is another 270 basis points of opportunity just to get us back to where we were in 2019. So in addition to my comments I said, Hey, listen who are <unk> <unk> per share is already 15% over where it was pre pandemic. We also have the largest upside in terms of leasing lots in front of us.

Got it and then want to go back to that market commentary a question I guess was the original expectation for the RPI portfolio to have.

And maybe an above market rent when you acquired the assets and then just based on the S. Four it looks like there's going to be a headwind to earnings this year on the pro forma and then it looks like maybe market rent got stronger or you've got a better handle the apogee software upside in them is that what was going on.

No I wouldn't say that we initially.

Look our position that we thought that there was any above market rent maybe we.

Just kind of assumed it would be neutral.

But as we got into it.

We looked at.

Obviously again, we got a third party involved and we looked at it more deep more granularly and Thats when you come up with the fact that you've got some positive rent marks but in terms of S. Four im guessing they were straight line rent involved in some of that as well.

But bottom line is as I said.

Last one I was kind of given my overall comment to why we did this deal we knew there was upside right.

We had upside from a leasing perspective from an operational perspective from a people perspective.

Real estate.

Why I said, what I said at the end I mean, we saw this opportunity and you've got to remember, it's pretty easy to look back right now and go Oh, well Gee that was easy that was a good deal well guess what it was a little different last April when we first started talking about this.

And we have positioned the company to be one of the few that could even do it right.

So I think people got to look at their lens and kind of think back to what it was like and then maybe give us a little credit for little foresight on a hell of a deal.

Yes, you definitely got the cap rate compression tailwind since then so congratulations.

Thank you.

Yes.

Thank you. Our next question comes from Linda Tsai of Jefferies. Your line is open.

Hi, good morning.

Same store guidance of 2% range of 1% to three what's the balance of revenue growth versus expense growth.

The balance of revenue growth.

The beta drivers as I said in my in my comments, we're basically.

Occupancy and rent bumps. So in terms of the expense growth I think thats again, where we're going to be trying to improve our margins over time, but I don't think youre going to see a huge pick up immediately over the course of the year, it's going to be heavily weighted toward the revenues.

And then Linda the other thing to remember there is obviously that includes the one 5% bad debt. So correct Thats your range really in that sense that if.

If we were if we were trending to more what we have been historically, it's probably closer to the 3% that it is the 2%.

Got it and then what is economic occupancy declined 30 bps.

Yes that was in the same store pool.

Again, thats only the historical <unk> portfolio, because we didn't have the RPI portfolio in that and honestly that 30 basis points was one deal. It was a burlington that had vacated at one of our assets and listen that's one of the things of having a very small denominator was we don't have anymore is that one deal can do some violence to your numbers.

But you also saw that the lease rate was up 30%. So I think that's the that's the number that we care more about.

So and also that Burlington.

Sorry, It was the office depot that left Thats now being backfill with a Burlington. So it's one one anchor deal a 30000 square feet moved to move the needle that much that's the right trade off.

I will take that long.

And then just on the new cash spreads being so strong can you just talk about what's driving that and to the extent that that's repeatable.

Yes, I mean look Glen and like we talked about.

Really it's just everything.

It's the real estate as the environment.

It's the fact that we're still back filling old Stein Mart.

As a chunk of that that we talked about last year, we had more exposure than anybody else to that particular tenant, but the positive of that was that particular tenant paid single digit rents.

So that's a factor I mean look as I said.

We are sector, leading at 13% blended spreads will that moderate over time, when we fill up those boxes I am sure. It comes down a little bit but the reality is as long as we're generating.

Near or above these double digit spreads were in a very healthy environment with limited supply.

No.

I feel I feel pretty good about our chances of being able to outperform.

Thanks.

Thank you.

Again to ask a question. Please press star one on your Touchtone telephone again Thats Star one on your Touchtone telephone to ask a question.

Our next question comes from Chris Lucas of capital One. Please go ahead.

Hey, good morning, everybody, just kind of going back to the tenant retention.

And that was asked earlier I guess, just kind of curious does maybe how that would how you are.

Seeing that this year compared to sort of pre COVID-19 levels, and then sort of as an add on to that are you seeing anchors come to you at a rate that is higher than we saw previously for early.

Exercise of renewals.

Hey, Chris Yeah, I mean I think.

I think we're the retention is kind of back to where it was pre COVID-19 in the sense that we're a little over 80% probably 83 I don't have in front of me a little over 80.

On retention.

And that's kind of where we like to be I mean remember some of this.

The retention that we.

Some of the loss is by our choice right in terms of rollovers that we don't.

If someone has a non option renewal, we may not renew them right. So a little over 80% is a good place to be and it's where we were historically.

In terms of early renewals, yes, I mean, we definitely have those conversations and again with our more meaningful portfolio that we have today more impactful to the retailer.

<unk>.

That puts us in a position where.

<unk>.

We're going to hear a lot more from them.

On the on the front end.

Allow us a lot of that.

I will just relate to where they sit in the market. Currently we feel like we have a strong market rent and they want to come in and work with us on a 10 year deal versus a five or always well until listen to that but it is going to come down the basic economics.

Okay. Thank you guys and then Heath just on the same store guidance and you had mentioned I think.

Your prepared comments that obviously you guys had a different approach to that debt on P&I.

How does that factor or is it all into your same store.

Items, and if it doesn't sort of.

Where should we be thinking about that number coming in from prior periods.

2000.

Yes, so in terms of prior period stuff in 2020 to Chris We don't have a lot we have about $18 million of call it that.

The good news bucket about $7 million of that is a tenant that vacated so those are just some various levels of collections and another $11 million or from tenants that haven't vacated.

So there may be some some good news from from prior periods, but we didn't have any of that in our guidance and in terms of how I'm thinking about the same store in the bad debt assumption like John said of year to go head back to historical bad debt run rate of 75 to 100 basis points that 2% number is really a 3% number so again, it's a factor of really.

The conservatism.

Assumption this year, so and also again as I mentioned before it's a factor of the 33 million coming online, it's very weighted to the back half of 2022, I think a lot of our peers are actually having there.

But that spread happening in the first half and again. This is all setting us up still very nicely for 2023.

Okay. Thank you guys.

Thank you bye.

Thank you. Our next question comes from Craig Schmidt of Bank of America. Please go ahead.

Thank you.

Regarding leasing volumes.

Do you anticipate that Kate can maintain above average leasing volumes in 'twenty two.

And.

Or do you think that total listen all you might come out of it.

Well again again.

We're not guiding to the specific leasing volumes, but I do.

Obviously, we do think that it's going to continue not just in 'twenty two but in 'twenty three as Heath pointed out a second ago.

With deals that we're working on.

In terms of as we pointed out in our Investor presentation. We've got the development pipeline, that's leasing up that Tom talked about and then getting back to where we were pre COVID-19 .

I think I think the pipeline is definitely going to remain strong I think our spreads will remain.

Strong so the leasing volume is a reflection of the quality and the quantity of deals that are out there right now so yes, I think it will continue.

The only other thing I'll add Craig is you have two teams now that have been put together and theres a lot of energy behind these groups.

Set them up to be successful. So we're already seeing the benefits of that in this new focus.

And then the kite culture or expecting big things as we keep pushing forward. The only thing I'd add to that Craig is I wouldn't I wouldn't really focus on quarterly volumes.

It happens over a year I wouldn't I know people write about quarterly leasing numbers, just kind of a meaningless number amongst what we're really doing this plays out over a longer time.

Is this just.

Change in approach from the retailers that they want more bricks and mortar locations.

To have such an elevated.

Period of leasing.

In your mind for three years.

It would seem as though you'd need to have a sea change in terms of your approach to the business.

Yes look I think it's what we all talk about with all the companies have been talking about for a little while now which is that there is one profitable way to sell retail product it's in a physical store.

Other stuff is marketing.

It doesn't make money.

Now I will say buy online pickup in store change the game and.

Curbside pickup change the game.

You see all of our big retailers.

For the most part are involved in that spectrum and they know that they want to drive people to the store because the margins are much higher than if they ship it from a warehouse to Timbuktu.

Which in today's world is very expensive to do so I think it's a realization and it's a rebirth of the market.

And again open air retail has really been a huge beneficiary of those changes.

And then again.

Again going back to why we did the deal that we did we did the deal that we did because we knew that was happening. We knew this was awesome real estate and we knew there was a lot of upside and now we just laid that out today for everyone to see.

And we're just getting started with that.

Great and then.

What do you think your estimated annual redevelopment spend will be I think you have.

<unk> five.

Current accident, but.

What maybe an annual target.

Yes, we're not really putting out those annual targets, it's really more that's really more internal discipline.

If we put out targets people chase them. So we don't want to do deals just because we put out a target we do deals because we get high adjusted risk risk adjusted returns.

Tom was talking about the $105 million that's actually.

That's the active development pipeline.

That includes a little bit of redevelopment a little bit of new development.

$100 million of spend for a company with a balance sheet, that's almost $8 billion.

Pretty small.

So we will be opportunistic there Craig we're going to find opportunistic deals that throw off the returns that they experienced players like us need to.

To justify doing a deal versus allocating capital somewhere else. So we'll do it.

We mentioned that we had that 105, we also mentioned that we have an embedded land bank and it's true that a bank.

We might monetize that in one or two or three different forms and.

And that's why we laid out the the examples that we put in our investor presentation of the different ways of doing development, which lower risk and increase returns vis vis joint ventures sales.

100% ownership it just depends on the deal and again, we've been doing this for a long time and have seen lots of cycles have seen lots of things that go right and lots of things that go wrong. So I think we're the right stewards for that particular pipeline.

Great. Thank you.

Thank you.

Thank you at this time I'd like to turn the call back over to John Kite for closing remarks, Sir.

Okay. Thank you very much to everyone for joining today I hope you can hear if not see our enthusiasm that we have going forward for the next several years.

For this great company.

And we will see a lot of you in the next couple of weeks in person really looking forward the opportunity to further discuss thanks and everybody have a great great day.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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Thank you.

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Today's conference maybe recorded should you require any further assistance. Please press star Zero I would now like to hand, the conference over to your host senior Vice President corporate marketing and Communications Bryan Mccarthy. Please go ahead.

Thank you and good morning, everyone welcome to Kite Realty group's fourth quarter earnings call. Some of today's comments contain forward looking statements that are based on assumptions of future events and are subject to inherent risks and uncertainties actual results may differ materially from these statements for more information about the factors that can adversely.

Affect the Companys results, please see our SEC filings, including our most recent 10-K. Today's remarks also include certain non-GAAP financial measures. Please refer to yesterday's earnings press release available on our website for reconciliation of these non-GAAP performance measures to our GAAP financial results.

<unk> and senior Vice President capital markets, and Investor Relations, Jason Colton.

I will now turn the call over to John .

Thanks, Brian and thank you everyone for joining us today, while we've certainly been looking forward to this call today for quite some time.

Today is our first opportunity to truly quantify and articulate the benefits of our highly accretive merger.

The timing of the merger was impeccable <unk> was positioned perfectly to take advantage of the opportunity.

It has now become clear that the merger is even better than we anticipated.

Today Im going to speak about three horizons of opportunity for <unk>.

Those opportunities that are immediately in front of us.

That will cultivate over the next 18 to 24 months and those that will materialize over the long term.

The most immediate benefit of the merger of course is the significant earnings accretion.

Fourth in our press release, we are providing 2022 2022 full year <unk> as adjusted guidance of $1 69 to $1 75 Heath will give additional color as to the underlying assumptions.

As mentioned in our press release, the midpoint of our guidance represents a 33% increase over <unk> full year 2020 <unk> per share.

While we've only owned the legacy RPI assets since October 22nd.

We quickly jumped headfirst into attacking operational efficiencies with an intense focus as always on our leasing efforts.

Against the backdrop of strong demand from a deep and diverse set of retailers <unk> is experiencing significant leasing momentum across all of our open air product types and in fact, we're noticing that national retailers are now looking more intently for space across the open air spectrum, which dovetail.

<unk> nicely.

With our high quality and well located properties.

These positive trends are readily evidenced in our fourth quarter and full year leasing results.

During the fourth quarter <unk> leased over 900000 square feet at a very strong 12, 9% blended cash spread on comparable new and renewal leases.

The blended spread on our fourth quarter comparable non option renewals was 10, 2%. This is a strong indicator of where market rents are headed for the <unk> portfolio.

For the full year care G leased over two 6 million square feet at blended cash spreads on a comparable deals of 10, 7%.

As a reminder, those leasing statistics, including our leasing activity from the legacy RPI portfolio are since October 22nd.

If we include the active the activity from the legacy RPI assets for all of 2021.

We leased over $5 1 million square feet for the combined portfolio.

Based on this progress our retail lease percentage stands at 93, 4% up 220 basis points over last year and yet we still have significant upside.

The portfolio has signed not open NOI of approximately $33 million.

Which will primarily come online during the back half of 2022 and the first half of 2023.

This bodes extremely well for our growth trajectory going into 2023 as the rents from all of these leases will be fully annualized.

Good news.

Is that the $33 million of signed not open NOI represents about half of the near term leasing related NOI opportunity as.

As detailed in our investor presentation leasing our active developments and the balance of the portfolio to pre pandemic levels, which is very achievable in the current environment.

Would equate to an additional $34 million of NOI coming online over the next few years over and above the $33 million of signed not open NOI.

Our increased scale and improved balance sheet represent a host of immediate opportunities.

<unk> the potential for lower debt costs increased liquidity in our stock and enhanced relevance with our tenants and vendors.

We're marching toward completing the active development projects detailed in our supplemental.

It's important to note we reevaluated every in process legacy RPE AI.

<unk>.

Solely on a forward looking basis.

Based on <unk> underwritten incremental NOI related to the active developments, we are anticipating very solid returns.

Where in particular through reviewing the land bank also disclosed in our Investor deck, and addition to multitude of other opportunities embedded with within the <unk> portfolio.

We have learned over the years that each project is unique and requires a customized approach in order to achieve the best risk.

Risk adjusted returns.

Sometimes that means bringing in an experienced JV partner or monetizing the land.

For example, during the quarter, we entered into an agreement with Republic Airways to develop a new $200 million corporate campus.

On an outdated retail locations owned by <unk> in Carmel, Indiana.

We knew the highest and best use of the land was no longer retail.

Therefore, we sold a portion of the land to Republic for approximately $7 million and will serve as the master developer of their campus.

<unk> will not only receive a sizable development fee, but also a profit component.

All the while putting zero <unk> capital at risk.

Cash from this development will be recycled into an income producing investment.

A big win for <unk> on a site that was not generating any NOI.

This is one of several examples detailed in our investor presentation, where care G. Creatively creatively generated high risk adjusted returns for our shareholders.

I am very optimistic about the long term outlook.

It should come as no surprise that in the near term, we will be spending a significant amount of capital on leasing looks.

Looking beyond the next few years, we begin to generate substantial additional free cash flow while also naturally deleveraging.

We're setting up to be in a very liquid and favorable position with a net debt to EBITDA in the low to mid five times, while I can't predict the macro environment I am confident we will be ready to respond aggressively regardless.

Before I turn the call to Heath, it's important that I note all the great opportunities that I just outlined are ancillary benefits of the merger.

We did this deal because we love the real estate and saw significant upside potential period.

Having been in this business for over 30 years, having visited nearly every every legacy RPI asset I can unequivocally tell you that the quality of our portfolio improved by virtue of the merger.

When I see what's happened in the private market valuations over the past six months I couldnt be happier with respect to the timing of our transaction.

We have we are a sector, leading presence with over 60% of our ABR in these markets, 40% alone being in Texas and Florida.

The merger also provided <unk> with a new or enhanced scale in key gateway markets, such as Washington, DC, New York and Seattle.

These world class cultural educational health and lifestyle hubs have endured the test of time and are home to many of the opportunities that we discussed.

In summary, there is none.

Nothing better than owning high quality assets and high quality places as.

As the world opens back up I encourage each one of you to join US on our property tour and see the quality firsthand.

And as always I want to thank the entire <unk> team for their hard work and dedication.

<unk> is nothing without our tremendous people I can't emphasize enough how excited I am about what we've accomplished as a team but more importantly, what we will accomplish together in the future.

I will now turn the call to Heath to provide more color on the quarterly results.

Thanks, John and good morning, everyone.

I want to echo John's excitement and confidence in the path that lies ahead the opportunity in front of US is absolutely energizing.

On the integration front, our substantial efforts to date have enabled the combined organization to operate at a high level and truly embraced our internal model of one team one focus.

Before I discuss <unk> fourth quarter results.

Please keep in mind that there is a bit clunky by virtue of the fact that we closed the merger on October 22nd.

While the results are from the combined portfolios. We only have two months in nine days of contribution from the legacy <unk> assets.

Although for the full year.

<unk> generated $1 <unk> per share as compared to NAREIT, our as adjusted <unk> adds back in the $87 million of merger related costs and deduct the $3 7 million of prior period activities are.

Our same property growth for the fourth quarter and full year of seven 2% and six 1% respectively.

These results were primarily driven by a reduction in bad debt as compared to the prior year periods.

Our balance sheet and liquidity profile not only remains solid the continue to improve our net debt to EBITDA was six times down from six one times last quarter and $33 million of signed but not open NOI from the combined portfolio, our net debt to EBITDA would be five six times.

We are in a great position to not only weather any storm.

So take advantage of any opportunities that present themselves.

As John alluded to earlier, we're providing <unk> as adjusted guidance of $1 69 to $1 75 per share.

Variance from NAREIT <unk> is approximately <unk>, which represents our estimate of $4 million of nonrecurring merger related costs.

The midpoint include neutral impact from any transactional activity and bad debt of one 5% of total revenues.

As you all know providing same property NOI growth is a SKU proposition for the sector given all the noise over the past few years. It is especially tricky right. After a merger of two companies that approach to potential pandemic credit loss from different perspectives.

In order to avoid any confusion, we're assuming same property NOI growth of 2% at the midpoint, excluding the net impact of prior period adjustments. This estimated 2% same property growth is primarily driven by occupancy gains and contract contractual rent bumps.

One last thought before turning the call over for Q&A.

In our press release, we touted the anticipated 33% growth of our 2022 <unk> per share as compared to our 2020 <unk> per share.

I think another compelling comparison is to look at our original 2020 <unk> guidance of $1 50 per share at the midpoint like our peers. We gave this guidance before the pandemic set in and it reflected <unk> run rate after selling over a half a billion of assets in connection with project focus.

Our 2022 per share guidance represents a 15% increase over our original 2020 <unk> per share guidance at the midpoint.

During the course of 2021 many of you asked when will your earnings returned to pre pandemic levels.

On a per share basis, not only returned to pre pandemic levels, but we tacked on another 15% just another testament to the compelling accretion and synergies associated with our well timed merger.

Thank you to everyone for joining the call today operator. This concludes our prepared remarks. Please open the line for questions.

Yes.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of Floris Van <unk> of Compass point. Your line is open.

Thanks, guys for taking my question I, just wanted to delve into this six.

Below market lease.

Adjustments a bit more.

Uh huh.

How should the market think about that is that just is that a one off event is that just mean that you guys bought these things.

RPI assets cheaply or how should investors think about.

That adjustment in your view.

I think they should really look at the upside here and we're getting a positive mark based on the below market rents on the leases and we're getting a positive mark based on the above market debt that means that we've got embedded growth pursuant to an independent third party that looked at our leases and that we should be able to borrow money at rates that are that are tighter than the month that we assume.

So I think yes, it's <unk>, but I think ultimately at the end of the day. These are two very very positive things that show you again, it's one of the positive benefits of the merger we get we've got a great portfolio with great upside.

Great maybe if I just follow up in.

Yeah, maybe John if I can get your your views on this as well.

Obviously, we estimated the yield that it.

The time of the transaction was six 8% your stock prices fall a little bit closer to the time of the completion was at probably risen by almost 100 basis points to seven eight cap rates have clearly come down in the market.

<unk>.

What what would you estimate this portfolio would trade at in today's market in light of the Donohue Shriver.

Portfolio transaction rumored yield and some of the other things and maybe if you can comment a little bit on <unk>.

Clearly that has an impact on your on your share price and your value. If you could John if you could maybe comment a little bit on.

The.

<unk> of cap rates, and particularly when it relates to <unk>.

Hi, Floris I'm going to unpack that question.

It's a heavy suitcase you just laid out there.

But look bottom line.

First of all it's.

It's great to be on the call, it's great to get the opportunity to finally be able to really show people how great of a transaction. This really was and we've been doing this a really long time and it's.

It's one of the best transactions I've ever seen so that's pretty simple.

In terms of your question about cap rates and cap rate compression between when we first started working on this deal and now you got to remember that that's almost a year. When we first engaged in conversations in April of last year cap rates of easily compressed 100 to 200 basis points across the <unk>.

Spectrum.

If we were doing this deal today than it would just be a whole different ball game.

I think the cap rate would obviously be significantly significantly lower thats goes without question.

You mentioned you've been on top of a lot of these trades I mean, everything we're looking at everything thats happening in the market with the wall of capital that is really pressing into retail right now across the board.

I mean multiple multiple transactions are trading in the fours.

It's pretty hard to get something that you like that's north of five.

Even just thinking about buying something at a 5% used to be okay. I could buy anything I wanted you can't.

So the reality is.

We met what we said when we set our timing was impactful, but it wasn't by accident.

We said when you go back to the beginning of Covid I believe it was the first quarter call. During code that we have during the Covid initial COVID-19 issue.

We said we'd come out of it stronger we knew we would and we did come out stronger and we took advantage of an incredible opportunity to put together two great companies that now makes one really really good company. That's top five in the space and per your question is trading at a significant discount for whatever reason.

You asked me my view of of cap of our NAV look.

We put components out there for you guys to do the work that makes it.

Reasonably easy we don't throw NAV is around very lightly, but if you just look at the consensus NAV from.

From the 12 or 13 analysts that cover us just under $25. The last time. It was updated I think it probably goes up from there I think last time I looked you were around 27. So look most smart people would value the company between say, 25% and $29. So.

That's not me, saying and it's out there people have those numbers out there I wouldnt argue with the higher end of that.

But we are out to prove and perform and Thats, what we do we will proven perform.

But.

I could go on.

It's just a great deal.

Thanks, John .

I will.

Maybe if I can if I can talk about the I know that.

You've laid out your guidance for 'twenty, two but it appears that end.

That's based on.

Relatively muted NOI growth are you stealing a page of David times book and coming out with.

Numbers that you think you will you.

You could surpass.

Later on this year.

Well I try not to steal from David I make a habit of not doing that but I would say.

I feel like our guidance that we put out as conservative I think it's appropriately conservative in the beginning of the year.

Although we are feeling pretty robust right now about our views and co.

Covid still exists so we have to the reason that we used a one 5%.

Bad debt.

Kind of.

Number is that that smart to do in the beginning of the year historically pre COVID-19 .

I would be disappointed if we werent at the top end or better.

Florida I will just add when you said muted, 2% NOI growth two things.

Number one are signed but not open NOI. It comes on as Jonathan in the back half of the year, So really setting up tremendously well for 2000.

And 23, so and I would also again when we're thinking about our same store guidance you got to think about it in terms of the bad debt assumption right. That's one 5% in a normal year prior to propeller, where we're running 75% to 100. So again, we added and what we thought was an appropriate amount to against Covid has not gone. So we feel like this is a pretty conservative.

<unk>.

Guidance and we aim to outperform it.

Thanks Scott.

Hugh.

Thank you. Our next question comes from Todd Thomas of Keybanc Capital markets. Your line is open.

Hi, Thanks.

John You commented in your prepared remarks that it's clear that the RPI merger is better than expected can you just talk a little bit about what specifically.

Has trended better than expected.

Now how the RPI portfolio is tracking versus plan and maybe put some context around that comment in some detail around either occupancy gains our leasing activity.

Or whether it's sort of some of the added benefits you mentioned around discussions with retailers vendors et cetera.

I think it's all of the above Todd I mean, let's start with NOI higher than we thought it was going to be so that's a good place to be so revenues higher expenses or where we kind of thought they would be which creates a better NOI.

Picture and again I think we've been reasonably conservative as we pointed out already.

When you look at the fourth quarter and you look at our leasing spreads.

Sector, leading spreads at a basically 13%.

That's the combined company from October 22nd on I think there was.

There may have been some concern around that particular topic that we have shown.

Unnecessary concern.

Quality of the assets, we talked about that early on but you look at the metrics that the combined company has compared to the top five peers.

And.

It's another way to triangulate why we should be trading at.

A much higher price than we are right now.

So.

The metrics Todd in terms of you look at you look at demographics, you look at Super Zips, you look at ABR.

You just look at the quality that is you can kind of discern from a metric it's all there.

The leasing activity as.

As we mentioned when you look at the combined leasing activity. If you would've had both companies for the year is a tremendous number over $2 5 million square feet.

And just.

We think that we're looking at is better than we originally underwrote I don't know how else to say that.

Yes, the only one I would add Todd is the active development pipeline I think when we when we got into this we obviously didn't understand what all was was contained and how it would be dealt with but this active development pipeline is very manageable. When you go through each one of these properties and you're looking at $105 million.

That is yet to be spent we have our arms around that already we understand the execution.

So we feel comfortable there and look forward to the upside of that.

That component as well.

Okay.

Okay. That's helpful and then.

Yes.

You had focused previously.

Previously on increasing exposure to leases with fixed cam over the years that helped drive.

Our margins higher.

<unk> recoveries the expense recovery ratios came came in a little bit with the integration of the RPI portfolio.

This quarter are there plans to rollout fixed cam across.

The RPI portfolio and are there opportunities you see.

Relative to the roughly 72% NOI margin today to get back to a higher level.

How much upside do you think there could be over time and whats the timeframe to do that.

Yes first of all there is no RPI portfolio is just one portfolio rate that we've talked about one team one focus it means a lot to us.

But yes, obviously, bringing in the new properties none of them.

We are on fixed Cam. So when you look at the combination obviously, it's going to reduce our exposure to fixed cam.

It took it takes time Todd it took five years, probably for that fixed Cam initiative to really get to the point, where it was north of 50% of our portfolio and began to really pay benefits.

We will do the same thing here and we are doing the same thing as of this every real estate Committee meeting that we have right now.

There was obviously deals that were in progress pre closing that were done that would be not fixed cam but outside of that.

Would be an aberration and not have fixed cam and I would say that when you look at our margins and our recovery ratios. We were just way above the peer set I mean, we're still now even in the combined numbers at the top end of the peer set.

But we'll we'll drive that home I mean, thats one of the things that we talked about that we do we thats a grind we grind that out we push hard to get that done. So it will take some time, but we definitely feel good about the ability to improve that over the next.

A few years and Todd to just put some numbers around that every 25 basis point improvement in NOI margin is one share of <unk>. So again as John said, we see what happened to our margins. We view this as a long term opportunity.

Okay and he is just for you on the balance sheet the mortgage debt maturing through.

The balance of 'twenty, two I guess really it looks like April of 'twenty three.

Should we assume like like beyond that they're mostly repaid at maturity with cash on hand or are you looking to refinance any of those yet.

Yes, so as you remember we did that exchangeable deal last year with the goal of paying off the 2022 mortgages.

Andy days ahead of their maturity.

Okay got it and Thats cash on hand, and $125 million in short term deposits correct correct. Okay.

Got it alright, thank you.

Thank you.

Thank you. Our next question comes from Alexander Goldfarb of Piper Sandler Your question. Please.

Hey.

Good morning, good morning out there.

So just a question going back to sort of the guidance and you referenced the <unk> from accounting benefit how much has market rent growth.

Impacted the numbers. So when you look back sort of six months ago. When you are penciling the deal versus now how much benefit is from the overall market growing I mean, obviously, it's a good thing right, but just sort of curious for how much change has happened subsequent to you underwriting this deal.

Yes, both in actual market rent growth versus also what you found as you went through the RPI and we're busy.

Combining it with <unk>.

Legacy K R J.

Yes, Alex.

I do think Thats a factor in the sense that I mean, just look at our spreads right.

You look at a 13% blended spread Q4, which is the combined company that would tell you right there that.

As you have said previously that people underestimated lack of supply right. We're talking about the demand equation, but we forget about equilibrium and how that plays a factor in all of economics.

And so the supply side was low.

So we're able to.

Most often drive pretty strong rents and thats. The other reason that we pointed to.

<unk>.

And then the flip side is true for US we can just say walk away and in that case, we have gotten a 10% cash spread plus with almost no no ti associated with that so that's huge margin. So I think.

It's just a it's a play out of what the Big picture. It looks like right now which is that we're in the right business at the right time.

But John can you give some sort of perspective on how much market rent has grown in the past six months.

Yes, I mean beyond the spreads Alex it's hard for me to I can.

Can tell you the spreads you can see you can see that the leases we signed in terms of new leases in Q4 were over $25 a square foot. So I mean look I.

I can't give you more than that outside of our own portfolio, because I don't I'm not sure what people are doing outside of our portfolio, but if we can I mean look if we're growing rents.

On a cash basis.

North of 10 like we have been for a while it's pretty damn good environment, Alex and I also think about other indicator I would say the other indicated where the market rents are going is I cant remember being a real estate committee and having more deals where we have multiple options for our space. So wondering a situation where obviously you can you can pick pick the player and you can drive.

It's something we haven't seen for a very long time and again to the beginning of your question Thats why there was a part of the positive mark to market.

On RPI rents right and again I think when we announced the deal not sure people would have guessed that one.

Okay.

It leads to the follow up which is on the supply side.

Obviously in the.

Basically since probably O. Four we haven't really had any new supply in the stuff before that was driven either by rooftops or massive retailer rollouts.

Do you see anything in the inkling that would either.

For both supply or.

Or even if the rents.

Pencil to make supply work or where we stand now there is not enough retailer demand. In addition, theres not enough of a spread between construction.

Construction costs and what they are.

Rents would have to be to even contemplate supply in a meaningful way.

And when I look I think all of those factors are part of what's kept.

New supply.

In a reasonable place you also have to remember.

You talked about <unk>, four but I would say Alex when you went from four probably owe 128.

<unk> seven six years of a lot of construction and a lot of stuff that shouldn't have been built in the first place. It takes a long time for that to go away and that's what has been playing out. This is an obviously a very long time, but you also have a lot of people that were in that merchant building kind of retail business.

That are just gone.

So people like us that have been doing this for a really long time, we expect to get high returns for this stuff as Tom said.

And what we underwrote. So I think I think the dynamics are there that would keep a lid on this for a while it doesn't mean that at some point someone who's whatever.

28 years old doesn't know what the Hell I'm talking about and build some spec I mean, it happens, but it's very limited.

You have no offense to the 28 year olds.

That way I mean.

But I think you got to think outside the box and if you look at if you look at a handful of our properties. We are out getting tax increment financing and lowering basis from properties and being creative working with municipalities to get the returns that we get so we know.

We're going to do we're going to have to look outside the box be creative to make things work.

No. That's a good point John to your point, we are all 28 and.

At the time so.

That's right.

The experiences of mistakes last.

Thank you.

Thank you. Our next question comes from Katy Mcconnell of Citi. Please go ahead.

Thanks, Good morning, everyone I just wanted to follow up on some of the non core drivers within your guidance to better understand where you're coming in.

Thank you Tien tsin.

Just wondering if you can comment on what you estimate the total straight line rent in 2022, and then on G&A.

Alright.

Good run rate or are you expecting further synergies from the merger.

Yes.

Yes, so on a straight line.

You look at what we have in our 2022 model and you deduct RPI is run rate straight line and <unk> run rates straight line prior to the merger the differences around <unk> positive. However that upside is split between the merger accounting that you just discussed and also new leases coming on line, so again <unk>, but split between those two items.

And then I'm sorry, what was the second part of your question Katy.

Okay.

On the G&A as the fourth quarter as the fourth quarter a good a good run rate on the G&A, but listen there's a lot of noise in the fourth quarter on the G&A. There is temporary employees et cetera, theres merger related expenses.

So I would say that's not a good run rate I will tell you that the G&A savings that we articulated on the last call, though those are still intact and the timing of those are still intact.

Going across the.

The year I think on a quarterly basis Youll see G&A and again this is going be elevated by merger costs et cetera, you're going to see G&A somewhere around I don't know 12.

12% to 13 a quarter.

Yes.

$1 million a quarter.

Okay. Thanks.

And then now that you've broken out the office lease expirations separately can you just speak to the 22%.

Buyers this year and how much of that you could potentially get back and just what the leasing environment.

Yes, we did we did have an outsized number in terms of percentage of ABR, though would be that would be expiring or come into I will tell you. They really come through two specific properties.

One one is rice or town and one is for them.

And in terms of working with the team we are going to be in a position of real estate Committee next week to handle about 150000 square feet of that which is very positive in that forum, we're continuing to work on it. So we do not have any great concern even though there is no question that <unk>.

92% range was a high number in terms of rolling leases. So we have a we have our arms around it or lease stuff in our office components not including.

Active developments of close to 93% so it's a big charge for us as we.

As we push forward and we're going to be paying a lot of attention to.

For the office portfolio.

The only thing I would add to that Acadia is when you look at when you look at it in totality against our total NOI, it's still a pretty small number. So I mean, I guess, it's cleaner to have it broken out like that but it's not a number that is particularly scary at all.

Thanks, everyone.

Thank you.

Hi.

Thank you. Our next question comes from Anthony Powell of Barclays. Your question. Please.

Hi, Good morning, I think John you mentioned that Youre seeing increased retail interest across the opening our spectrum, maybe you could go into more detail on that point what are you seeing in the appropriate anchored mixed use power standards and whatnot.

Yeah, Anthony Thank you I mean, I think what we're seeing is that youre seeing.

The retailers obviously.

They're doing well so the backdrop of a lot of this is theyre doing well they've come out of Covid with the with just the vigor and an excitement about the business.

And what I meant by that was if you look at if you look at a tenant like.

Our Lulu lemon or you look at a tenant like sephora or you look at it sounded like West Elm you might think those are tenants that would be lifestyle type tenants only or maybe they would go in mixed use but we're doing deals with those guys right now in grocery anchored centers and community centers and power centers.

A lot of the brands I mean, you look at Adidas.

We could go on and on with the brands.

That are doing that.

But the great thing for US is that we're well represented across.

These kind of five food groups, the community centers and neighborhood centers mixed use power and lifestyle that said.

Anthony we're still predominantly community and neighborhood right I mean, that's like almost 60% of our revenue is community and neighborhood. So the other stuffs supplements, it which gets us in front of people and then they realize damn I want to look at this whole portfolio right I want I want an opportunity to sit down with <unk> and <unk>.

At the whole thing so that's what I meant by that and it's just it's just great for our team right now.

No I would tell you for the for the course of 2021. It was one 5%. However that was front weighted then as the year improved into the fourth quarter. It was more like 75% to 100.

Our run rate most recently, but again, we thought it was a conservative number and again, we're not we don't have any reason to believe that we're going to suffer that kind of credit loss. Our watch list right now is smaller than it's ever been and you saw a tremendous amount of wash out of the weaker tenants during COVID-19 , but as John mentioned, we're not out of this thing yet right. So we put in a number there that we felt comfortable.

With and that we fully intend to show the world not take a drastic turn outperform.

Got it so assuming there's no major tolling setbacks safe to assume even though your guidance is one and a half that you should probably exit the year closer to that in that normal range is that fair.

Yes.

I would say, we're entering the year feeling like that will be there I think we guided to something at the midpoint that was conservative because.

Half.

Thank you.

Thank you. Our next question comes from Wes Golladay of Baird. Your line is open.

Well, let me start with that and then Tom can get into it too look RJ when you look at 2022.

Wes when you look at 2022 and you look at 2023, that's what we are talking about we still 2023 actually looks good as well so.

Think entering the year, we still had this disproportional impact from the original Stein Mart fallout in the boxes that we had.

And so that's why our spread.

<unk> leased and occupied as pretty significant which is frankly, just a lot of upside. So when would we like to pick up we don't we don't guide to specific percentages on leasing because of all the inputs and ebbs and flows, but but I would say within the next 24 months.

We would we would anticipate there will be back very close to where we were on a leased percentage, which will put our <unk> per share well above where we are today. So I think it's really going in the right direction. Tom do you want to and I'll talk about the box business real quickly because they're obviously huge drivers of lease percentage.

And if you take a look at what we have accomplished in the last year, we executed 27 deals 27 boxes with a spread of 12%, but more importantly.

Return on capital of 29%.

The remaining 36 boxes that we have actually have a lower APR at about $11 85. So once again, we feel like there's great spread potential there, but more importantly.

Our pipeline through that 36 or planning on putting a significant dent in that number.

So we're looking for a big year of leasing without question. We've got this new combined team and everyone is going to drive to the SaaS line I can assure you that the Wassa I'll add one more thing if you look at where our lease rate was at the end of 2019, where it is at the end of 2021.

We have one of the highest spreads.

There is another 270 basis points of opportunity just to get us back to where we were in 2019. So in addition to my commentary said, Hey, listen who are <unk> <unk> per share is already 15% over where it was pre pandemic. We also have the largest upside in terms of leasing lots in front of us.

Got it and then want to go back to that market commentary a question I guess, what the original expectation for the RPI portfolio to have.

No I wouldn't say that we initially took.

Took a position that we thought that there was any above market rent maybe we.

Just kind of assumed it would be neutral.

But as we got into it.

We looked at it.

Obviously again, we got a third party involved and we looked at it more deep more granularly.

And that's when you come up with the fact that you've got some positive rent marks but in terms of us for I am guessing they were straight line rent involved in some of that as well.

But bottom line is as I said.

Last one I was kind of given my overall comment to why we did this deal we knew there was upside right.

New we had upside from a leasing perspective from an operational perspective from a people perspective.

Real estate.

And we have positioned the company to be one of the few that could even do it right.

So I think people got to look at their lens and kind of think back to what it was like and then maybe give us a little credit for little foresight on a hell of a deal.

Yes, you definitely got the cap rate compression tailwind since then so congratulations.

Thank you.

Right.

Yes.

Thank you. Our next question comes from Linda Tsai of Jefferies. Your line is open.

Hi, good morning on the same store guidance of 2% range of 1% to three.

The balance of revenue growth versus expense growth.

The balance of revenue growth.

The beta drivers as I said in my in my comments, we're basically.

And then Linda the other thing to remember there is obviously that includes the one 5% bad debt so correct.

Is your range really in the sense that.

If we were if we were trending to more what we had been historically, it's probably closer to the 3% that it is the 2%.

Got it and then what is economic occupancy declined 30 bps.

Yes that was in the same store pool.

Again, thats only the historical K R. G portfolio, because we didn't have the RPI portfolio in that and honestly that 30 basis points was one deal. It was a burlington that had vacated at one of our assets and listen that is one of the things of having a very small denominator was we don't have anymore is that one deal can do some violence to your numbers.

But you also saw that the lease rate was up 30%. So I think that's the that's the number that we care more about.

And also that Burlington Im sorry, it was the office depot that left Thats now being backfill with a Burlington. So it's one one anchor deal a 30000 square feet moved to move the needle that much that's the right trade off.

We'll take that like that.

And then just on the new cash spreads being so strong can you just talk about what's driving that and to the extent that that's repeatable.

Yes, I mean look Glen and like we talked about.

Really it's just everything it is it's the real estate, it's the environment.

It's the fact that we're still back filling old Stein Mart.

There is a chunk of that that we talked about last year, we had more exposure than anybody else to that particular tenant, but the positive of that was that particular tenant paid single digit rents.

So that's a factor I mean look as I said.

We are sector, leading at 13% blended spreads will that moderate.

Over time, when we fill up those boxes I am sure it comes down a little bit but the reality is as long as we're.

Generating.

Near or above the double digit spreads were in a very healthy environment with limited supply. So I feel I feel pretty good about our chances of being able to outperform.

Thanks.

Thank you.

Again to ask a question. Please press star one on your Touchtone telephone again star one on your Touchtone telephone to ask a question.

Our next question comes from Chris Lucas of capital One. Please go ahead.

Hey, good morning, everybody just kind of going back to the tenant retention question that was asked earlier I guess just kind of curious does maybe how that would how you are.

Seeing that this year compared to sort of pre COVID-19 levels, and then sort of as an add on to that are you seeing anchors come to you at a rate that is higher than we saw previously for early.

Exercise of renewals.

A Chris yes.

We're the retention is kind of back to where it was pre COVID-19 in the sense that were.

A little over 80%, probably 83 I don't have in front of me a little over 80.

On retention.

That's kind of where we like to be I mean remember some of this.

Some of the retention that we some of the loss is by our choice right in terms of rollovers that we don't.

If someone has a non option renewal, we may not renew them right. So a little over 80 is a good place to be and it's where we were historically in terms of early renewals, yes, I mean, we definitely have those conversations and again with our more meaningful portfolio that we have today more impactful to the retail.

<unk>.

I think that that puts us in a position where.

Sure.

We're going to hear a lot more from them.

On the front end.

Allow us a lot of that will just relate to where they sit in the market. Currently we feel like we have a strong market rent and they want to come in and work with us on a 10 year deal versus a five or always well until listen to that but it's going to come down the basic economics.

Okay. Thank you guys and then Heath just on the same store guidance and you had mentioned I think in your prepared comments that obviously you guys had a different approach to that debt and RPI.

How does that factor or is it all into your same store guidance and if it doesn't sort of.

Where should we be thinking about that number coming in from prior periods.

For 2000.

Yes.

In terms of prior period stuff in 2022, Chris We don't have a lot we have about $18 million of call. It. The good news bucket about $7 million of that is a tenant that vacated so those are just some various levels of collections and another $11 million or from tenants that haven't vacated.

The conservatism in our <unk>.

But that spread happening in the first half and again. This is all setting us up very nicely for 2023.

Okay. Thank you guys.

Thank you bye.

Thank you. Our next question comes from Craig Schmidt of Bank of America. Please go ahead.

Thank you.

Regarding leasing volumes.

Do you anticipate that Kate can maintain above average leasing volumes in 'twenty two.

<unk>.

Where do you think that total leasing volume might come out of that.

Well again again, Craig we're not guiding to the specific leasing volumes, but I do.

Obviously, we do think that it's going to continue not just in 'twenty two but in 'twenty three as Heath pointed out a second ago.

With deals that we're working on.

In terms of as we pointed out in our investor presentation.

We've got the development pipeline, that's leasing up that Tom talked about and then getting back to where we were pre COVID-19 .

I think I think the pipeline is definitely going to remain strong I think our spreads will remain <unk>.

<unk>. So the leasing volume is a reflection of the quality and the quantity of deals that are out there right now so yes, I think it will continue.

One other thing I'll add Craig is you have two teams now that have been put together and there is a lot of energy behind these groups.

We've set them up to be successful. So we're already seeing the benefits of that in this new focus.

And then the kite culture or expecting big things as we keep pushing forward.

The thing I would add to that Craig is I wouldn't I wouldn't really focus on quarterly volumes.

It happens over a year I wouldn't I know people write about our quarterly leasing numbers, just kind of a meaningless number amongst the what we're really doing this plays out over a longer time.

Is this just.

The change in approach from the retailers that they want more bricks and mortar locations.

I mean.

Such an elevated.

Period of leasing.

In your mind for three years you.

It would seem as though you'd need to have a sea change in terms of your approach to the business.

The other stuff is marketing.

It doesn't make money.

Now I will say buy online pickup in store change the game.

And.

Curbside pickup changed the game.

You see all of our big retailers.

For the most part are involved in that spectrum and they know that they want to drive people to the store because the margins are much higher than if they ship it from a warehouse to Timbuktu.

Which in today's world is very expensive to do so I think it's a realization and it's a rebirth of the market.

And again open air retail has really been a huge beneficiary of those changes.

And then again.

And we're just getting started with that.

Great and then.

What do you think your estimated annual redevelopment spend will be I think you have 105.

Excellent.

Or maybe an annual target.

Yes, we're not really putting out those annual targets, it's really more that's really more internal discipline.

We put out targets people chase them. So we don't want to do deals just because we put out a target we do deals because we get high adjusted risk adjusted returns.

Tom was talking about $105 million that's actually.

That's the active development pipeline.

<unk>.

That includes a little bit of a redevelopment and a little bit of new development.

$100 million of spend for a company with a balance sheet, that's almost $8 billion I mean, it's pretty small.

So we'll be opportunistic there Craig we're going to find opportunistic deals.

That throw off the returns that that experienced players like us need.

To justify doing a deal versus allocating capital somewhere else.

So we will do it we mentioned that we had that 105. We also mentioned that we have an embedded land bank and it's true that a bank.

We might monetize that in one or two or three different forms.

And that's why we laid out the the examples that we put in our investor presentation of the different ways of doing development, which lower risk and increase returns vis vis joint ventures sales.

Great. Thank you.

Thank you.

Thank you at this time I would like to turn the call back over to John Kite for closing remarks, Sir.

Okay. Thank you very much to everyone for joining today I hope you can hear if not see our enthusiasm that we have going forward for the next several years.

For this great company.

And we will see a lot of you in the next couple of weeks in person really looking forward the opportunity to further discuss thanks and everybody have a great great day.

This concludes today's conference call. Thank you for participating you may now disconnect.

Q4 2021 Kite Realty Group Trust Earnings Call

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