Q2 2024 Kite Realty Group Trust Earnings Call

Operator: Thank you for standing by, and welcome to Kite Realty Group Trust's second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Bryan McCarthy, Senior Vice President, Corporate Development and Investor Relations. Please go ahead, sir.

Operator: Thank you for standing by, and welcome to Kite Realty Group Trust 2nd quarter 2024 earnings conference call. At this time, all participants are in listening-only mode. After the speaker's presentation, there will be a question-and-answer session. The answer question during the session, you'll need to press star 11 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded.

Speaker Change: Thank you for standing by and welcome to Kite Realty Group Trust's second quarter 2024 earnings conference call.

Speaker Change: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star-one-one on your telephone.

If your question has been answered, and you'd like to remove yourself from the queue, simply press star 1 1 again.

Bryan McCarthy: And now I'd like to introduce your host for today's program, Bryan McCarthy, Senior Vice President, Corporate Development and Investor Relations.

Speaker Change: As a reminder, today's program is being recorded.

Speaker Change: And now I'd like to introduce your host for today's program, Bryan McCarthy, Senior Vice President, Corporate Development and Investor Relations. Please go ahead, sir.

Bryan McCarthy: Please go ahead, sir.

Bryan McCarthy: Thank you, and good afternoon, everyone. Welcome to Kite Realty Group 2nd 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 made it from material 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 Form 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.

Bryan McCarthy: Thank you and good afternoon, everyone. Welcome to Kite Realty Group's second quarter earnings call. Some of today's comments contain forward-looking statements that are based on assumptions about future events and are subject to inherent risks and uncertainty. The 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 Form 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 a reconciliation of these non-GAAP performance measures to our GAAP financial results.

Bryan McCarthy: Thank you and good afternoon everyone. Welcome to Kite Realty Group's second 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.

Speaker Change: Actual results may differ materially from these statements.

Speaker Change: For more information about the factors that can adversely affect the company's results.

Speaker Change: Please see our FCC filings, including our most recent Form 10-K .

Speaker Change: 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.

Bryan McCarthy: On the call with me today from Kite Realty Group, our Chairman, Chief Executive Officer, John Kite, President and Chief Operating Officer, Tom McGowan, Executive Vice President and Chief Financial Officer, Keith Fear, Senior Vice President and Chief Accounting Officer, Dave Buehl, and Senior Vice President, Capital Markets and Investor Relations, Tyler Henshaw. Given the number of participants on the call, we kindly ask that you limit yourself to one question and one follow-up. If you have additional questions, we ask that you please rejoin the queue.

Bryan McCarthy: 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 Buell, and Senior Vice President, Capital Markets and Investor Relations, Tyler Henshaw. Given the number of participants on the call, we kindly ask that you limit yourself to one question and one follow-up. If you have additional questions, we ask that you please rejoin the queue. I will now turn the call over to John.

Speaker Change: 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

Speaker Change: Executive Vice President and Chief Financial Officer, Heath Fear. Senior Vice President and Chief Accounting Officer, Dave Buhl. And Senior Vice President, Capital Markets and Investor Relations, Tyler Henshaw.

John A. Kite: Bryan, KRG delivered another quarter of operational outperformance while achieving the lowest leverage levels in our history. Heath will walk you through the details of our quarterly results and increased 2024 guidance. I'll focus on our formidable balance sheet and the continued demand for space in our high-quality portfolio. In the second quarter, S&P upgraded KRG's credit rating to BBB, marking the third positive revision from the rating agencies in 2024.

Speaker Change: Given the number of participants on the call, we kindly ask that you limit yourself to one question and one follow-up. If you have additional questions, we ask that you please rejoin the queue. I will now turn the call over to John .

John Kite: I will now turn the call over to John.

John Kite: Thanks, Brian. KRG delivered another quarter of operational outperformance while achieving the lowest leverage levels in our history. Keith will walk you through the details of our quarterly results and increased 2024 guidance.

John: Thanks, Bryan. KRG delivered another quarter of operational outperformance while achieving the lowest leverage levels in our history.

John: Heath will walk you through the details of our quarterly results and increased 2024 guidance. I'll focus on our formidable balance sheet and the continued demand for space in our high-quality portfolio.

John Kite: I'll focus on our formidable balance sheet and the continued demand for space in our high-quality portfolio. In the second quarter, S&P upgraded KRG's credit rating to triple B, marking the third positive revision from the rating agencies in 2024. While we're pleased with the improvements in our ratings, we are confident that our balance sheet warrants an even higher rating and a more attractive cost of debt. With net debt to EBITDAQ of 4.8 times, nearly 1.3 billion of available liquidity, and 4.9 times debt service coverage ratio, we have one of the best credit profiles in our sector.

John: In the second quarter, S&P upgraded KRG's credit rating to BBB, marking the third positive revision from the rating agencies in 2024.

John A. Kite: While we're pleased with the improvements in our ratings, we are confident that our balance sheet warrants an even higher rating and a more attractive cost of debt. With a net debt to EBITDA of 4.8 times, nearly $1.3 billion of available liquidity, and a 4.9 times debt service coverage ratio, we have one of the best credit profiles in our sector. Our leverage is currently below our long-term target of low to mid five times net debt to EBITDA, which is remarkable considering the current level of our leasing spend.

John: While we're pleased with the improvements in our ratings, we are confident that our balance sheet warrants an even higher rating and a more attractive cost of debt.

John: With net debt to EBITDA of 4.8 times, nearly $1.3 billion of available liquidity, and 4.9 times debt service coverage ratio, we have one of the best credit profiles in our sector.

John Kite: Our leverage is currently below our long-term target of low to mid-five times net debt to EBITDAQ, which is remarkable considering the current level of our leasing spend. We are poised for growth with a significant amount of dry powder that will increase as rent commences on our large, sign-not-open pipeline, and as our elevated leasing spend subsides over the next 18 to 24 months. We've consistently communicated our clear path to outsized AFFO growth and significant free cash flow, and that time is rapidly approaching. As we believe they are the best parameter for the market market opportunity in our portfolio, to put this in context, over the past two and a half years, the spread on non-option renewals has averaged 12.1% as compared to an average of 2.6% in 2018 and 2019.

Our leverage is currently below our long-term target of low to mid-five times net debt to EBITDA, which is remarkable considering the current level of our leasing spend.

John A. Kite: We are poised for growth with a significant amount of dry powder that will increase as rent commences on our large sign not open pipeline and as our elevated leasing spend subsides over the next 18 to 24 months. We've consistently communicated our clear path to outsized AFFO growth and significant free cash flow, and that time is rapidly approaching.

John: We are poised for growth with a significant amount of dry powder that will increase as rent commences on our large sign-not-open pipeline and as our elevated leasing spend subsides over the next 18 to 24 months.

We've consistently communicated our clear path to outsized AFFO growth and significant free cash flow and that time is rapidly approaching.

John A. Kite: Operationally, our lease rate increased by 80 basis points sequentially, while generating 15.6% comparable blended cash spreads, highlighted by a 14.3% non-option renewal spread. As a reminder, we report non-optional renewal spreads, as we believe they are the best barometer for the mark-to-market opportunity in our portfolio. To put this in context, over the past two and a half years, the spread on non-option renewals has averaged 12.1%, as compared to an average of 2.6% in 2018 and 2019.

John: Operationally, our lease rate increased by 80 basis points sequentially, while generating 15.6% comparable blended cash spreads, highlighted by 14.3% non-option renewal spreads.

John: As a reminder, we report non-optional renewal spreads, as we believe they are the best barometer for the mark-to-market opportunity in our portfolio. To put this in context,

John A. Kite: The stark increase in non-option renewal spreads demonstrates the demand for space and the pricing power in our portfolio. The sequential increase in our lease rate was primarily driven by eight anchor leases executed in the second quarter at 47% comparable cash spreads and 46% returns on capital. On the Smallstop side, we continue to successfully drive higher embedded growth. For new and non-option renewal leases signed in the first quarter and first two quarters of 2024, the average annual growth was 3.4%. And 70% of these leases had fixed rent bumps greater than or equal to 4%. As a reminder, two years ago, only 3% of small shop leases had fixed rent bumps greater than or equal to 4%.

John Kite: The sequential increase in our lease rate was primarily driven by 8 anchor leases executed in the second quarter at 47% comparable cash spreads and 46% returns on capital. On the small soft side, we continue to successfully drive higher embedded growth for new and non-option renewal leases signed in the first quarter, first two quarters of 2024. The average annual growth was 3.4%, and 70% of these leases had fixed rent bumps greater than or equal to 4%. As a reminder, two years ago, only 3% of small shop leases had fixed rent bumps greater than or equal to 4%.

John: And 46% returns on capital on the small shop side, we continue to successfully drive higher embedded growth for new and non option renewal leases signed in the first quarter first two quarters of 2024, the average annual growth was three 4%.

John: 70% of these leases at fixed rent bumps greater than or equal to 4%.

As a reminder, two years ago, only 3% of small shop leases had fixed rent bumps greater than or equal to 4%.

John Kite: We remain committed to improving the credit quality, merchandising mix, and our long-term embedded growth profile to generating more sustainable stream of cash flows to drive outsized long-term returns. Our sign-on-open pipeline grew by $3 million to $35.3 million, driven by $9.7 million of NOI from new leases, offset by $6.7 million of commenced NOI. This past quarter, the spread between leased and occupied grew to 320 basis points, and we expect this spread to remain elevated for the foreseeable future, as compared to our historical average of 150 to 200 basis points. As we mentioned on our last call, we expect occupancy to be a significant contributor to NOI growth over the next two years.

John A. Kite: We remain committed to improving the credit quality, the merchandising mix, and our long-term embedded growth profile to generate a more sustainable stream of cash flows to drive outside long-term return. Our sign not open pipeline grew by three million this quarter to $35.3 million, driven by 9.7 million of NOI from new leases, offset by 6.7 million of commenced NOI. This past quarter, the spread between leased and occupied properties grew to 320 basis points.

John: We remain committed to improving the credit quality merchandising mix and our long term embedded growth profile to generate a more sustainable stream of cash flows to drive outsized long term returns.

John: Our signed not open pipeline grew by $3 million this quarter to $35 $3 million driven by $9 $7 million of NOI from new leases offset by $6 7 million of cash.

John: Commenced NOI.

John: This past quarter, the spread between leased and occupied grew to 320 basis points.

John A. Kite: And we expect this spread to remain elevated for the foreseeable future, as compared to our historical average of 150 to 200 basis points. As we mentioned on our last call, we expect occupancy to be a significant contributor to NOI growth over the next two years. On the transactional front, we sold Ashland and Roosevelt in Chicago in the Chicago MSA for approximately $31 million. Consistent with our desire to transact in pods, we are under contract to acquire a grocery anchorage center in the southeast that is expected to close in the third quarter.

John: And we expect this spread to remain elevated for the foreseeable future as compared to our historical average of 150 to 200 basis points as.

John: As we mentioned on our last call, we expect occupancy to be a significant contributor to NOI growth over the next two years.

John Kite: On the transactional front, we sold Ashland and Roosevelt in the Chicago MSA for approximately $31 million. Consistent with our desire to transact in pods, we are under contract to acquire a grocery-anchored center in the southeast that is expected to close in the third quarter. Over the past several months, we've seen a sharp increase in the number of high-quality shopping centers on the market, and a corresponding increase in the number of qualified buyers. As the competition for quality assets heats up, we are seeing cap rates compress real time, which further highlights the disconnect between private market pricing and public market valuations are in particular.

John: On the transactional front, we sold Ashland and Roosevelt in Chicago in the Chicago MSA for approximately $31 million consistent with our desire to transact in pods. We are under contract to acquire a grocery anchored center in the southeast that is expected to close in the third quarter over the past several.

John A. Kite: Over the past several months, we've seen a sharp increase in the number of high-quality shopping centers on the market and a corresponding increase in the number of qualified buyers. As the competition for quality assets heats up, we are seeing cap rates compress in real time, which further highlights the disconnect between private market pricing and public market valuations, ours in particular.

John: Months, we've seen a sharp increase in the number of high quality shopping centers on the market and a corresponding increase in the number of qualified buyers.

John: As the competition for quality assets heats up we are seeing cap rates compressed real time.

John: Which further highlights the disconnect between private market pricing and public market valuations ours in particular.

John Kite: While the strength of our balance sheet affords a very opportunistic posture, we will remain disciplined with respect to allocating our capital in a way that earns the best risk-adjusted return.

John A. Kite: While the strength of our balance sheet affords a very opportunistic posture, we will remain disciplined with respect to allocating our capital in a way that earns the best risk-adjusted return. Our Board of Trustees has authorized an 8.3% year-over-year increase in our dividend to accommodate our increasing levels of taxable income. As occupancy and NOI ramp up over the next few years, we anticipate our dividend to follow suit. For many of our long-term investors, the dividend is a critical aspect of REIT investment.

John: While the strength of our balance sheet affords a very opportunistic posture, we will remain disciplined with respect to allocating our capital in a way that earn the best risk adjusted return.

John Kite: Our Board of Trustees has authorized an 8.3% year-over-year increase in our dividend to accommodate our increasing levels of taxable income. As occupancy and NOI ramp up over the next few years, we anticipate our dividend to follow suit. For many of our long-term investors, the dividend is a critical aspect of re-investing. And with the strength of our balance sheet, KRG's dividend is an extremely attractive risk-adjusted yield. KRG has once again produced outstanding results and positioned the balance sheet in the operating platform for consistent outperformance.

John: Our board of Trustees has authorized an eight 3% year over year increase in our dividend to accommodate our increasing levels of taxable income.

John: As occupancy and NOI ramp up over the next few years, we anticipate our dividend to follow suit.

John: For many of our long term investors the dividend is a critical aspect of REIT investing and with the.

John A. Kite: And with the strength of our balance sheet, KRG's dividend is an extremely attractive risk-adjusted yield. KRG has once again produced outstanding results and positioned the balance sheet for consistent outperformance. Thank you, as always, to our incredible team for their hard work and dedication. I'll now turn the call over to Heath, who will walk you through the details of the results and our 2024 guidance.

Speaker Change: <unk> of our balance sheet care Ge's dividend is an extremely attractive risk adjusted yield.

John: <unk> has once again produced outstanding results and position the balance sheet and the operating platform for consistent outperformance.

John Kite: Thank you, as always, to our incredible team for their hard work and dedication.

Speaker Change: Thank you as always to our incredible team for their hard work dedication.

Heath Fear: I'll now turn the call to Heath, who will walk you through the details of the results in our 2024 guidance.

Speaker Change: Now I'll turn the call to Heath, who will walk you through the details of the results and our 2024 guidance. Thank you and good afternoon before we delve into our quarterly results and updated guidance, let's take a moment to recap. The first two chapters of our 424 series and give you a preview into the final two chapters set in D. C in Las Vegas, the initial events.

Heath R. Fear: Thank you and good afternoon. Before we delve into our quarterly results and updated guidance, let's take a moment to recap the first two chapters of our 4 in 24 series and give you a preview of the final two chapters set in D.C. and Las Vegas. The initial events were a resounding success with an overwhelmingly positive response. In Naples, Florida, we showcased our top-tier property management team, providing an in-depth look at their structure, hands-on operating philosophy, and the grind-it-out culture responsible for our best-in-class NOI margins and recovery ratio.

Heath Fear: Thank you and good afternoon. Before we delve into our quarterly results and updated guidance, let's take a moment to recap the first two chapters of our 424 series and give you a preview into the final two chapters set in DC and Las Vegas. The initial events were over resounding success with an overwhelmingly positive response. In Naples, Florida, we showcased our top-tier property management team, providing an in-depth look at their structure, hands-on operating philosophy, and the grinded-out culture responsible for our best-in-class NOI margins and recovery ratios. We explored the remarkable transformation of the Naples market and towards several smaller high-quality grocery-ancred assets that are representative of a large segment of our portfolio.

Heath: A resounding success with an overwhelmingly positive response in Naples, Florida, we showcased our top tier property management team, providing an in depth look at their structure has an operating philosophy and grind it out culture responsible for our best in class NOI margins and recovery ratios.

Heath R. Fear: We explored the remarkable transformation of the Naples market and toward several smaller, high-quality grocery-anchored assets that are representative of a large segment of our portfolio. In May, we ventured west to Dallas, touring the newly renovated shops at Legacy East, Prestonwood Place, and South Lake Town Square.

Speaker Change: We explored the remarkable transformation of the Naples market and towards several smaller high quality grocery anchored assets that are representative of a large segment of our portfolio in may we've entered west to Dallas.

Heath Fear: In May, we ventured west to Dallas, touring the newly renovated shops at Legacy East, Prestonwood Place, and South Lake Town Square. South Lake is a premier, open-air, mixed-use, lifestyle center that generates approximately $30 million in annualized NOI, making it KRG's largest NOI contributor. Our season-leason team used South Lake as an example of our proactive approach to merchandising that has allowed us to attract brands such as Eritzia, Thierry, Nike, Dakotis, Johnny L. and Beory. This September, we're heading northeast to our third chapter featuring our second powerhouse mixed-use project. One loud and generates approximately $22 million in annualized NOI, making it KRG's second largest contributor.

Speaker Change: The newly renovated shops at legacy East Crestwood place and Southlake Town Square South Lake as a premier open air mixed use lifestyle center that generates approximately $30 million in annualized NOI, making a <unk> largest NOI contributor are seasoned leasing team use southlake as an example of our pro <unk>.

Heath R. Fear: Southlake is a premier open-air mixed-use lifestyle center that generates approximately $30 million in annualized NOI, making it KRG's largest NOI contributor. Our seasoned leasing team uses Southlake as an example of our proactive approach to merchandising that has allowed us to attract brands such as Aritzia, Verity, Nike, Dakotas, Johnny O, and Diori. This September, we're heading northeast for our third chapter, featuring our second powerhouse mixed-use project. One Loudoun generates approximately $22 million in annual NOI, making it KRG's second largest contributor.

Speaker Change: Active approach to merchandising that has allowed us to attract brands such as Auryxia charity Nike the coldest Johnny I'll end the Ari.

Speaker Change: This September we are heading northeast, where our third chapter featuring our second powerhouse mixed use project, one loud and generates approximately $22 million annualized NOI, making a <unk> second largest contributor our development team is eager to share our vision for our multi use expansion on a portion of the 40 acres of adjacent land.

Heath Fear: Our development team is eager to share our vision for a multi-use expansion on a portion of the 40 acres of adjacent land currently zoned for over 1,700 residential units and nearly two million square feet of commercial space. The demand for additional retail, lodging, and residential uses positions one loud and to rival South Lake as the most dominant asset in the KRG lineup. When assessing the quality of our portfolio, it's important to remember that these two assets are responsible for over 9% of our total NOI, and we expect that number to grow. Our final chapter will align with the Navy conference in Las Vegas.

Heath R. Fear: Our development team is eager to share our vision for a multi-use expansion on a portion of the 40 acres of adjacent land currently zoned for over 1,700 residential units and nearly 2 million square feet of commercial space. The demand for additional retail, lodging, and residential uses positions One Loudoun to rival Southlake as the most dominant asset in the Carriagee lineup. When assessing the quality of our portfolio, it's important to remember that these two assets are responsible for over 9% of our total NOI, and we expect that number to grow.

Speaker Change: Currently zoned for over 1700 residential units and nearly 2 million square feet of commercial space.

Speaker Change: The demand for additional retail lodging and residential users positions, one loudoun to rival South Lake as the most dominant asset in the <unk> lineup.

Speaker Change: When assessing the quality of our portfolio. It is important to remember that these two assets are responsible for over 9% of our total NOI and we expect that number to grow.

Heath R. Fear: Our final chapter will align with the Navy Conference in Las Vegas. We hope many of you will take the opportunity to experience the vibrancy of Las Vegas beyond the Strip. During this session, we'll illustrate how the themes from the first three chapters influence our capital allocation decisions and provide a glimpse into our long-term vision for CARESI's future. We're thrilled about the upcoming half of 4-in-24, and invite you to visit our website for previous presentations and event details.

Speaker Change: Our final chapter will align with the Navy conference in Las Vegas, We hope many of you will take the opportunity to experience the vibrancy of Las Vegas beyond the strip. During this session. We will illustrate how the themes from the first three chapters influence our capital allocation decisions and provide a glimpse into our long term vision for <unk> future worked through.

Heath Fear: We hope many of you will take the opportunity to experience the vibrancy of Las Vegas beyond the Strip. During this session, we will illustrate how the themes from the first three chapters influence our capital allocation decisions and provide a glimpse into our long-term vision for KRG's future. Work thrilled about the upcoming half of 4 and 24, and invite you to visit our website for previous presentations and event details.

Speaker Change: And about the upcoming half of four in 'twenty, four and invite you to visit our website for previous presentations and event details turning to our results for the second quarter of 2024, <unk> earned <unk> 53, a NAREIT <unk> per share, which was <unk> <unk> higher than consensus same property NOI grew one 8% bolstered by a 200.

Heath Fear: Turning to our results. For the second quarter of 2024, KRG earned 53 cents of FFO for share, which was three cents higher than consensus. Same property NOI grew 1.8 percent, bolstered by a 210 basis point increase in minimum rent and a 60 basis point increase in net recoveries, offset by 90 basis points of bad debt relative to the comparable period. Based on the second quarter outperformance and our revised outlook for the balance of the year, we are increasing our 2024 FFO guidance by one cent at the midpoint to a range of $2.04 to $2.08. At the midpoint, we assume a full year same property in a wide growth assumption of 2.5% and a full year bad debt assumption of 75 basis points of total revenues.

Heath R. Fear: Turning to our results, for the second quarter of 2024, CARESI earned 53 cents of NAREIT FFO per share, which was 3 cents higher than consensus. Same property NOI grew 1.8%, bolstered by a 210 basis point increase in minimum rent and a 60 basis point increase in net recoveries, offset by 90 basis points of bad debt relative to the comparable period. Based on the second quarter outperformance and our revised outlook for the balance of the year, we are increasing our 2024 FFO guidance by one cent at the midpoint to a range of $2.04 to $2.08.

Speaker Change: 10 basis point increase in minimum rent and a 60 basis point increase in net recoveries offset by 90 basis points of bad debt relative to the comparable period.

Speaker Change: Based on our second quarter outperformance and our revised outlook for the balance of the year. We are increasing our 2024 <unk> guidance by <unk> <unk> at the midpoint to a range of $2 <unk> to $2 eight.

Heath R. Fear: At the midpoint, we assume a full year same property NOI growth assumption of 2.5% and a full year bad debt assumption of 75 basis points of total revenue. This represents a 50 basis point improvement in same property NOI growth and a five basis point bad debt improvement as compared to previous guidance. The improvement in the full-year bad debt component is a function of combining the actual bad debt we have experienced due to date, which was approximately 50 basis points of total revenues, with the continued assumption of 100 basis points of bad debt for the back half of the year.

Speaker Change: At the midpoint, we assume a full year same property NOI growth assumption of two 5% and our full year bad debt assumption of 75 basis points of total revenues.

Heath Fear: This represents a 50 basis point improvement in same property and a wide growth and a five basis point bad debt improvement as compared to previous guidance. The improvement in the full year bad debt component is a function that combining the actual bad debt we experienced you today, which was approximately 50 basis points of total revenues.

Speaker Change: This represents a 50 basis point improvement in same property NOI growth and a five basis point bad debt improvement as compared to previous guidance. The improvement in the full year bad debt component is a function of combining the actual bad debt, we experienced year to date, which was approximately 50 basis points of total revenues.

Heath Fear: What would the continued assumption of 100 basis points of bad debt for the back half of the year? Based on the comparable periods in 2023 and the activation of our sign out open pipeline, we expect same property and a wide growth to moderate in the third quarter and sharply accelerate into the fourth quarter. Subsequent to quarter end, we paid up our only remaining maturity for 2024, looking forward to our 2025 maturities. You're poised to tap the unsecured markets when the time is right. Based on secondary trading, we anticipate significant improvement in our credit spread as compared to the levels we achieved last January.

Speaker Change: They continue with the assumption of 100 basis points of bad debt for the back half of the year based on the comparable periods in 2023, and the activation of our signed not open pipeline. We expect same property NOI growth to moderate in the third quarter and sharply accelerate into the fourth quarter.

Heath R. Fear: Based on the comparable periods in 2023 and the activation of our signed out open pipeline, we expect same property NOI growth to moderate in the third quarter and sharply accelerate into the fourth quarter. Subsequent to quarter end, we paid off our only remaining maturity for 2024.

Speaker Change: Subsequent to quarter end we.

Speaker Change: We paid off our only remaining maturity for 2020 for looking forward to our 2025 maturities are poised to tap the unsecured markets. When the time is right based on secondary trading we anticipate significant improvement in our credit spread as compared to the levels. We achieved last January.

Heath R. Fear: Looking forward to our 2025 maturities, you're poised to tap the unsecured markets when the time is right. Based on secondary trading, we anticipate significant improvement in our credit spread as compared to the levels we achieved last January. As mentioned last quarter, we are experiencing a complete overhaul in our cost of debt and resulting weighted cost of capital. Balance sheets are often viewed through a defensive lens, and in that vein, our $1.3 billion of available liquidity can satisfy all of our debt maturities through 2026.

Heath Fear: As mentioned last quarter, we are experiencing a complete overhaul in our cost of debt and resulting way to cost the capital. Balance sheets are often viewed through a defensive lens, and in that vein, our $1.3 billion of available liquidity can satisfy all of our debt maturities through 2026.

Speaker Change: As mentioned last quarter, we are experiencing a complete overhaul in our cost of debt and resulting weighted cost of capital balance sheets are often viewed through a defensive lens and in that vein are $1 $3 billion of available liquidity can satisfy all of our debt maturities through 2026.

Heath Fear: CAREGE's balance sheet, however, has reached a level where it deserves to be viewed beyond just weathering the storm. Not only do we have tremendous optionality to deploy capital, we have completely altered the risk adjuster profile of the company. Coupled with the anticipated ramp up in our AFFO, cash flow, and dividends, we believe the current entry point into CAREGE represents a compelling investment opportunity.

Heath R. Fear: KRG's balance sheet, however, has reached a level where it deserves to be viewed beyond just weathering the storm. Not only do we have tremendous optionality to deploy capital, but we have completely altered the risk-adjusted profile of the company. Coupled with the anticipated ramp-up in our AFFO, cash flow, and dividends, we believe the current entry point into KRG represents a compelling investment opportunity. Thank you to the entire KRG team for another spectacular quarter. And we're looking forward to seeing many of you in D.C. and Las Vegas. Thank you for joining us on the call today. Operator, this concludes our prepared remarks. Please open the line for questions.

Speaker Change: <unk> balance sheet. However has reached the level, where it deserves to be viewed beyond just weathering. The storm not only do we have tremendous optionality to deploy capital we have completely altered the risk adjusted profile of the company coupled with the anticipated ramp up in our <unk> cash flow and dividends. We believe the current entry point into <unk>.

Speaker Change: <unk> represents a compelling investment opportunity. Thank.

Heath Fear: Thank you to the entire CAREGE team for another spectacular quarter, and we're looking forward to seeing many of you in DC and Las Vegas. Thank you for joining the call today, Operator. This concludes our prepared remarks.

Speaker Change: Thank you to the entire <unk> team for another spectacular quarter and we're looking forward to seeing many of you in D. C. In Las Vegas. Thank you for joining the call today. Operator. This concludes our prepared remarks. Please open the line for questions.

Operator: Please open the line for questions.

Operator: Certainly, and our first question for today comes from the line of Jeffrey Spector from B of A Securities. Your question, please.

Andrew Rio: Certainly, and our first question for today comes from a line of Jeff Respector from B of A Securities. Your question, please.

Speaker Change: Certainly and our first question for today comes from the line of Jeffrey Spector from Bofa Securities. Your question. Please.

Andrew Real: Hi, this is Andrew Real, on behalf of Jeff. Thanks for taking our questions. So just on the balance sheet, like you mentioned, you received the rating upgrade at S&P and took net leverage down to an all-time low at 4.8 times. Sounds like that's below your target. Can you talk a bit more about whether your appetite to lever up to fund growth has changed at all now that your credit profile is a bit stronger? And then I think you priced your tenure in January at $170 over. Where do you think you could price one today?

Andrew Rio: Hi, this is Andrew Rio on for Jeff. Thanks for taking our questions. So just on the balance sheet, like you mentioned, you received the rating upgrade at S&P, took net leverage down to an all-time low at 4.8 times. Sounds like that's below your target.

Andrew <unk>: Hi, This is Andrew <unk> on for Geoff Thanks for taking our questions.

Andrew <unk>: So just on the balance sheet.

Andrew <unk>: Like you mentioned you received a rating upgrade at S&P took net leverage down to an all time low at four eight times. It sounds like that's below your target can you talk a bit more about your appetite to lever up to fund growth has changed at all now that your credit profile is a bit stronger and then I think you price. Your tenure at January at 170 over where do you think you could price one today.

John Kite: Can you talk a bit more about if your appetite to lever up to fun growth has changed at all. Now that your credit profile is a bit stronger. And then I think you priced your tenure at January at 170 over. Where do you think you could price one today?

John Kite: Well, I'll take the first half of your question, and he can get to the second half. But in terms of the strength of the balance sheet and what opportunities that provides us going forward. And would we be interested in increasing leverage if the right opportunity arose. I think he's point was that with the balance sheet that we have today, that we've worked extremely hard to get to 4.8 times net debt debita. And when we look out over our projections over the next three years, our leverage remains at those levels and lower. So, in terms of just operating the business.

John A. Kite: Well, I'll take the first half of your question, and Heath can go on to the second half. But in terms of, you know, the strength of the balance sheet and what, you know, kind of opportunities that provides us going forward? And would we be interested in increasing leverage if the right opportunity arose? You know, I think Heath's point was that, with the balance sheet that we have today, we've worked extremely hard to get to, you know, 4.8 times net debt to EBITDA. And when we look out over our projections for the next three years, you know, our leverage remains at those levels and lower. So, in terms of just operating the business,

Andrew <unk>: Well I'll take the first half of your question and Heath can get to the second half but in terms of.

Speaker Change: The strength of the balance sheet, and what kind of what opportunities that provides us going forward.

Speaker Change: And would we be interested in increasing leverage if the right opportunity arose I think pace point was that with the balance sheet that we have today that we've worked extremely hard to get to four eight times net debt to EBITDA and when we look out over our projections over the next three years.

Speaker Change: Our leverage remains at those levels and lower so in terms of just operating the business. So that does in fact.

Heath Fear: So that does, in fact, accord us quite a bit of flexibility as we look forward. And we do think we will be able to lean into that and find future opportunities. And, you know, if we take the leverage to the mid fives or low fives, we're still extremely low-levered. And that could generate significant growth in the right kind of interest rate environment. So right now, we're not doing that right now. We're blocking and tackling and spending significant capital on leasing space and generating free cash flow. But certainly down the road with the right opportunity. And again, the right environment, we're definitely poised to take advantage of that.

Speaker Change: CT us quite a bit of flexibility as we look forward and we do think we will be able to lean into that and.

Speaker Change: Find future opportunities and if we take the leverage to the mid fives or low fives, where it's still extremely low levered and that could generate significant growth in the right kind of interest rate environment. So right now we're not doing that right now.

Speaker Change: Blocking and tackling and spending significant capital on leasing space in generating free cash flow.

John A. Kite: So, that does, in fact, give us quite a bit of flexibility as we look forward. And we do think we will be able to lean into that and find future opportunities. But, certainly down the road, with the right opportunity and, again, the right environment, we're definitely poised to take advantage of that. Heath, do you want to hit the...

Speaker Change: But certainly down the road with the right opportunity and again the right environment.

Heath: We're definitely poised to take advantage of that Heath do you want to hit the.

Heath Fear: Heath, you want to hit the, yeah, on the spreads is the 155 basis points plus or minus 10 basis points, I think is our current indicative price.

Heath R. Fear: Yeah, on the spreads, it'd be 145 basis points plus or minus 10 basis points, which I think is our current indicative price.

Heath: Spreads it would be a 145 basis points, plus or minus 10 basis points I think is our current indicative pricing.

Andrew Real: Okay, thank you. And for the follow-up on the Ashland and Roosevelt disposition, I was just hoping for a little more color on the rationale and maybe the cap rate on the sale.

Heath Fear: Thank you.

Speaker Change: Okay. Thank you.

Andrew Rio: And just for the follow-up on the Ashland and Roosevelt disposition, I'm just hoping for a little more color on the rationale and maybe to caprate on the sale.

Speaker Change: Just for the follow up on the Ashland and Roosevelt disposition I'm, just hoping for a little more color on the rationale and maybe the cap rate on the sale.

John Kite: Sure, I mean, rationale wise, you know, we viewed the asset as not a core asset for us any longer. You know, it was in the near west side of Chicago, didn't really fit the profile for where we want to be going forward.

John A. Kite: Sure. I mean, rationale-wise, you know, we viewed the asset as not a core asset for us any longer, you know, it was on the near-west side of Chicago, didn't really fit the profile for where we want to be going forward. So it's simply that and the opportunity to find a buyer at an attractive price. And as we said on the call, you know, being able to redeploy the capital, which is our intention, into the southeast, into a grocery-anchored center.

Speaker Change: Sure I mean rationale wise, we viewed the asset is not a core asset for us any longer.

Speaker Change: It was in the near West side of Chicago didn't really fit the profile for where we want to be going forward.

John Kite: So it's simply that. And the opportunity to find a buyer at an attractive price. And as we said on the call, you know, being able to redeploy the capital, which is our intention, into the southeast into a grocery anchored center, that made a lot of sense for us. You know, I can only say on, on caprate that, you know, we were able to deploy the money in a, in a creative way. So that's a real goal of ours all the time. And as we mentioned in the pre-prepared remarks, bottom line is, you know, cap rates have definitely moved down rapidly in the last, you know, couple of months.

Speaker Change: So it's simply that.

Speaker Change: And the opportunity to find a buyer at an attractive price.

Speaker Change: And as we said on the call being able to redeploy the capital, which is our intention into the southeast into a grocery anchored center.

John A. Kite: That made a lot of sense for us. You know, I can only say on CapRate that we were able to deploy the money in an accretive way. So that's a real goal of ours all the time. And as we mentioned in the pre-prepared remarks, the bottom line is, you know, cap rates have definitely moved down rapidly in the last couple months. And most of the things that, you know, we see transacting, you know, are kind of in the five, mid-high fives, low sixes. And, you know, so that's why we're doing very little right now other than, you know, pairing trade.

Speaker Change: That made a lot of sense for us.

<unk>.

Speaker Change: I can only say on cap rate that we were able to deploy the money in an accretive way.

Speaker Change: So that's a real goal of ours, all the time and as we mentioned in the pre prepared remarks bottom line is <unk>.

Speaker Change: Cap rates have definitely moved down rapidly in the last couple of months.

Andrew Rio: And most of the things that, you know, we see transacting, you know, are kind of in the five mid, mid high fives, low sixes. And, you know, so that's why we're, you know, doing very little right now other than, you know, pairing trades. Okay, great.

Speaker Change: And most of the things that we see transacting.

Speaker Change: Or kind of in the five mid mid to high fives low sixes.

Speaker Change: And so that's why we're doing very little right now other than pairing traits.

Andrew Real: Okay, great. Thanks for the time.

Andrew Rio: Thanks for the time. Thanks.

Speaker Change: Okay, great. Thanks for the time.

Operator: Thank you. And our next question comes from the line of Todd Thomas from KeyBank Capital Markets. Your question, please.

Tara: Thank you. And our next question comes from the line of Todd Thomas from KeyBank Capital Markets.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: And our next question comes from the line of Todd Thomas from Keybanc Capital markets. Your question. Please.

Tara: Your question, please.

Intara Nagjadoori: Hi, this is Intara Nagjadoori on behalf of Todd Thomas. Just a quick one for me. So with regard to the increase in same store growth, I know a piece of that is related to lower bad debt, but what are the other drivers? Is it better retention, earlier commencement? What led to the 50 basis point upward revision?

Heath Fear: Hi, this is Tara, an actuary on for Todd Thomas. Just a quick one for me. So, with regard to the increase in the same store growth, I know a piece of that is related to lower bad debt. But what are the other drivers that better retention, earlier commencement, what led to the 50 basis point upper revision? Yeah, it's lower bad debt, higher retention, and the removal of the acid that we help for sale. So those are the three things that contributed to the increase in the same store print. Okay.

Speaker Change: Hi, This is <unk> on for Todd Thomas.

Speaker Change: Just a quick one from me so with regards to the increase in your same store growth I know a piece of that is related to lower bad debt, but what are the other drivers is it better retention earlier commencement.

Speaker Change: Q does 50 basis point upward revision.

Heath R. Fear: Yeah, it's lower bad debt, higher retention, and the removal of the asset that we held for sale. So those are the three things that contributed to the increase in same store sales.

Speaker Change: Yes, its lower bad debt higher retention and the removal of the asset that we held for sale. So those are the three things that contributed to the increase in the same store print.

Heath R. Fear: Okay, and then another one for me, I know that there have been a couple of lists floating around with store closures, and it looks like you had two Stop and Shops on the Ahold closing list. Would you be able to provide an update regarding the status of those two locations and what the potential timeline looks like for those to close or any backfill opportunities that you have? Yeah, so for me

Heath Fear: And then another one for me. I know that there have been a couple of lists floating around with store closures. And it looks like you had to stop and shops on the a hold closing list. So, would you be able to provide an update regarding the status of those two locations and what the potential timeline looks like for those to close or any back so opportunities that you have? Yeah, so from a backfill perspective, there's quite a big going on right now in terms of interested parties. So it's early to tell exactly where we'll end up, but we do have activity on both locations.

Speaker Change: Okay and then another one for me I know that there have been a couple of less floating around with historic closures and it looks like you had to stop and shops on the closing.

Speaker Change: Closing with so would you be able to provide an update regarding the status of those two locations and what's the potential timeline looks like for those to close.

Speaker Change: Any backfill opportunities that you have.

Heath R. Fear: Yeah, so from a backfill perspective, there's quite a bit going on right now in terms of interested parties. So it's early to tell exactly where we'll end up, but we do have activity on both locations. So we'll be able to provide further color later.

Speaker Change: Yes, so from a backfill perspective, there's quite a bit going on right now in terms of interested parties. So it's early to tell exactly where we'll end up but we do have activity on both locations.

Tara: So we'll be able to provide further color later. Okay, thank you.

Speaker Change: So we will be able to provide further color later.

Speaker Change: Okay. Thank you.

RJ Milligan: Thank you. And our next question comes from the line of RJ Milligan from Raymond James. Your question, please.

Operator: Thank you. And our next question comes from the line of R.J. Milligan from Raymond James. Your question, please.

Speaker Change: Thank you.

Speaker Change: And our next question comes from the line of RJ Milligan from Raymond James Your question. Please.

R.J. Milligan: Hey, good afternoon, guys. John, I wanted to go back to your comments on the spread between leased and occupied. It went up in the quarter, and your comments were that you expected it to remain elevated. I'm just curious, shouldn't that start to close, or when should we expect it to start closing?

RJ Milligan: Hey, good afternoon, guys. John, I wanted to go back to your comments on the spread between least and occupied. It went up in the quarter, and your comments were that you expected to remain elevated.

RJ Milligan: Hey, good afternoon guys.

RJ Milligan: John I wanted to go back to your comments on the spread between leased and occupied.

RJ Milligan: It went up in the quarter and your comments were that you expect it to remain elevated I'm just curious.

John Kite: I'm just curious; shouldn't that start to close, or when should we expect that to start? close. Yeah, I mean, when I say remain elevated, RJ, I mean, remain elevated over the next say three quarters or so relative to our historical, but it will be declining. You know, so I think it'll be coming down and probably gets down to in the 250 basis point range, you know, by the end next year, depending on timing of things. So again, I mean, yes, it will be declining, but you know, we continue to lease new space. It takes time to open, which is why we highlighted, you know, the growth and gave you actually what commenced, you know, what came online and what occupied and what was leased.

RJ Milligan: That's start to close or when should we expect that to start to close.

John A. Kite: Yeah, I mean, when I say remain elevated, RJ, I mean remain elevated over the next, say, three quarters or so relative to our historical average. But it will be declining, you know, so I think it'll be coming down and probably get down to in the 250 basis point range. You know, by the end of next year, depending on the timing of things. So, again, I mean, yes, it will be declining, but, you know, we continue to lease new space.

RJ Milligan: Yes.

Speaker Change: Say remain elevated RJ I mean will remain elevated over the next say three quarters or so relative to our historical.

Speaker Change: But it will be declining.

Speaker Change: So I think it will be coming down.

Speaker Change: And probably gets down to the 250 basis point range.

Speaker Change: By the end of next year, depending on timing of things.

Speaker Change: So again, I mean, yes, it will be declining but.

Speaker Change: We continue to lease new space. It takes time to open which is why we highlighted the growth.

John A. Kite: It takes time to open, which is why we highlighted, you know, the growth and gave you actually what commenced, you know, what came online, and what was occupied and what was leased. So yeah, I do believe it will begin coming down, but it's gonna be a bit before it gets down to that kind of historical norm.

Speaker Change: And gave you actually what commenced in what way.

Speaker Change: What came online and what occupied.

John Kite: So, yeah, I do believe it would begin coming down, but it's going to be a bit before it gets down to that kind of historical norm.

Speaker Change: And what was leased.

Speaker Change: So yes, I do believe it will begin coming down, but it's going to be a bit before it gets down to that kind of a historical norm.

John Kite: And so is that sort of tied to your comments about leasing costs remaining elevated for the next 18 to 24 months, which I think implies, you know, potentially spilling into the first half of 2026. And I'm just curious, is that the tail end of the leasing that we're doing today, or what's why I think previously you'd said that, you know, those leasing costs were remaining elevated for 2425, and it seems like it's maybe going into these six. So I'm just curious what's driving that. Well, I think some of that's just timing of pushing stuff, you know, quarter by quarter. But yes, it does tie to that.

John A. Kite: And so is that sort of tied to your comments about leasing costs remaining elevated for the next 18 to 24 months, which I think implies, you know, potentially spilling into the first half of 2026. And I'm just curious, is that the tail end of the leasing that you're doing today? Or why I think previously you said that, you know, those leasing costs would remain elevated for 24, 25, but it seems like it's maybe going into 26. I'm just curious what's driving that. Well, I think some of that's just timing of pushing stuff, you know, quarter by quarter. But yes, it does tie to that.

Speaker Change: And so it does.

Speaker Change: That sort of tie to your comments about leasing costs remaining elevated for the next 18 to 24 months, which I think implies potentially spilling into the first half of 2026 and I'm. Just curious is that is at the tail end of the leasing that we're doing today or whats.

Speaker Change: Why.

Speaker Change: Previously you had.

Speaker Change: Leasing costs would remain elevated for $24 25, and it seems like it's maybe going on six I'm just curious what's driving that well I think I think some of that is just timing of pushing stuff.

Speaker Change: No.

Speaker Change: Quarter by quarter, but yes, it does tie to that but if you look at where we are right. Now I mean were still a 130 basis points below where we were total total lease percentage, where we were in the fourth quarter of 2019. So we grew 80 basis points sequentially.

John A. Kite: But if you look at where we are right now, I mean, we're still 130 basis points below where we were total, you know, total lease percentage where we were in the fourth quarter of 2019. So, you know, we grew 80 basis points sequentially, but we still have 130 basis points to go. It's kind of a quarter by quarter thing in terms of timing.

John Kite: But if you look at, you know, where we are right now, I mean, we're still 130 basis points below where we were total, you know, total lease percentage, where we were in the fourth quarter of 2019. So, you know, we grew 80 basis points sequentially, but we still have 130 basis points to go. It's kind of a quarter-by-quarter thing in terms of timing. But I mean, the positive here is that, as I said, we've been pretty clear about the leasing spend, you know, over the next couple of years. And if you, honestly, if you look at, if you just kind of go from 2023 to where we think we're going to be at the end of 2025, that's $300 million of spend on TI and LC. You know, we spend $100 million probably over that same period in development, redevelopment. We're going to pay, you know, probably close to $700 million in dividends over that period of time.

Speaker Change: But we still have 130 basis points to go is kind of a quarter by quarter thing in terms of timing, but the positive here is that as I said, we've been pretty clear about the leasing spend.

John A. Kite: But I mean, the positive here is that, as I said, we've been pretty clear about the leasing spend over the next couple of years. And if you honestly, if you just kind of go from 2023 to where we think we're going to be at the end of 2025, that's $300 million of spend on TI and LC. You know, we probably spent $100 million over that same period in development and redevelopment.

Speaker Change: Over the next couple of years and honestly if you look at if you just kind of go from 2023 to where we think we're going to be at the end of 2025, that's $300 million of spend on Ti and LC, we spent $100 million probably over that.

Speaker Change: Same period and development redevelopment.

John A. Kite: We're going to pay, you know, probably close to $700 million in dividends over that period of time, so-called a billion dollars between 2023 and 2025, and our net debt to EBITDA is 4.8 times, and we'll remain in kind of that low range 5, you know, between the high 4 and the low 5. So we're generating a large amount of cash. That's what I'm trying to say. And the growth is, you know, acquiring itself through each one of those quarters, if that makes sense.

Speaker Change: You're going to pay.

Speaker Change: Probably close to $700 million in dividends over that period of time, so called $1 billion between 23% and 25% and our net debt to EBITDA is four eight times and we will remain in kind of that low range $5 between high for low five so we're generating a large amount of cash.

John Kite: So, called a billion dollars between 23 and 25. And aren't that the EBITDAs 4.8 times? And we'll remain in kind of that low range five, you know, between high four and low five. So, we're generating a large amount of cash; that's what I'm trying to say. And the growth is, you know, is acquiring itself through each one of those quarters, if that makes sense. RJ also mentioned, you know, Johnson, we're 130 basis points back to the sort of high watermark in 2019. In this leasing environment, we feel very confident that we could push that even higher.

Speaker Change: So what I'm trying to say.

Speaker Change: And the growth is.

Speaker Change: Acquiring itself through each one of those quarters, if that makes sense or are they also mentioned and as John said were 130 basis points back to sort of a high watermark.

Heath R. Fear: RJ, I'll also mention, you know, John said we were 130 basis points back to sort of the high watermark in 2019. In this leasing environment, we feel very confident that we can push that even higher. So to the extent the leasing spend is elevated beyond that sort of early 26th century, that just means we're driving the occupancy higher and higher and higher. So, you know, as long as demand is there, we're feeling very, very good about what's coming down the pike in the next two years.

Speaker Change: In 2019, and this leasing environment, we feel very confident that we can push that even higher so to the extent the leasing.

John Kite: So, to the extent the leasing spend is elevated beyond that sort of, you know, early 26, you know, that just means we're driving about the occupancy higher and higher and higher. So, you know, as long as the demand is there, we're feeling very, very good about what's coming down the pipe the next two years. The only other little bit to add there, you know, remember a lot of this leasing is happening on the anchor front. You know, that's where we had to catch up a lot, RJ. And in general, you know, it just hasn't changed that it takes...

Speaker Change: Spend is elevated beyond that sort of early 2006 that just means we're driving that the occupancy higher and higher and higher. So it allows the demand is there we're feeling very very good about what's coming down the pike in the next two years, the only other little bit to add there remember a lot of this.

Heath R. Fear: The only other little bit to add there, you know, remember a lot of this... Leasing is happening on the anchor front, you know, that's where we had to catch up a lot, RJ, and in general, you know, it just hasn't changed that it takes, you know, 18 to 24 months from lease sign to opening. That's just what it takes. So that's also a part of that.

Speaker Change: Leasing is happening on the anchor front, that's where a lot well, that's where we had to catch up a lot RJ and in general.

RJ Milligan: Hasnt changed that it takes.

John Kite: Thanks. You know, 18 to 24 months from least sign to open it. That's just what it takes. So, that's also a part of that.

Speaker Change: 18 to 24 months from lease signed to opening that's just what it takes.

Speaker Change: So that's also a part of that.

RJ Milligan: That's helpful and just one follow up.

John A. Kite: That's helpful. And just one follow-up. Heath, maybe you could just give, dig into the guidance for slowing sensor NMI growth in the third quarter and then accelerating into the fourth quarter. Just curious what the components are of that.

Speaker Change: That's helpful and just one follow up here, maybe you could just dig into the guidance for slowing same store NOI growth in the third quarter and then accelerating in the fourth quarter I'm just curious what the components are of that.

Heath Fear: Heath, maybe you could just dig into the guidance for slowing things around a wide growth on the third quarter and then accelerating in the fourth quarter, just curious with what the components are of that.

Heath R. Fear: Yeah, so in the third quarter, first of all, we had a strong comp last year. It was 4.7 percent, St. Sorrento Y.

Heath R. Fear: Yeah, so in the third quarter,

Heath Fear: Yeah, so in third quarter, first of all, we had a strong comp last year with 4.7%. Thanks to Rhino Y. We still had in the third quarter, a month of bad math and beyond last year as well. And we had a really large prior period collections in the third quarter last year of $1 million. So that's really why we're sort of moderating into the third quarter and then accelerating to the fourth quarter. Number one, easier comp at 2.8% last year. No bad death and beyond rent. That was in the fourth quarter last year. And you know, we're turning on the SNL.

Speaker Change: Yes, so in the third quarter first of all we had a strong comp last year was four 7% same store NOI.

Speaker Change: We still had in the third quarter, a month of bed Bath <unk> beyond last year as well and we had a really large prior period collections in the third quarter last year of $1 million. So that's really why we're sort of moderating into the into the third quarter and then accelerating into the fourth quarter number one easier comp at two 8% last year.

Heath R. Fear: We still had in the third quarter a month of bed, bath, and beyond last year as well. And we had a really large prior period collections in the third quarter last year of $1 million. So that's really why we're sort of moderating into the third quarter and then accelerating to the fourth quarter, number one, easier comp at 2.8 percent last year. No bed, bath, and beyond rent.

Heath R. Fear: That was in the fourth quarter last year. And we're turning on the S&O. So that's the biggest piece of what's happening in the fourth quarter. And like I said in my comments, you're going to see us sharply accelerate into the fourth quarter and into 25 and 26.

Speaker Change: No bad debt and beyond rent that was in the fourth quarter of last year and we're turning on the SNL alright. So that's that's the biggest piece of what's happening in the fourth quarter and like I said in my comments youre going to see us sharply accelerate into our into the fourth quarter and into 'twenty five 'twenty six.

Heath Fear: Right. So, that’s that’s the biggest piece of what’s happening in the fourth quarter. And like, you know, we're turning on the SNL. Right. So that's, that's the biggest piece of what's happening in the fourth quarter. And like, you know, we're turning on the SNL. Right. So that's, that's the biggest piece of what's happening in the fourth quarter.

Heath Fear: Like I said in my comments, you're going to see us, you know, sharply accelerate into the fourth quarter and into 25 and 26.

RJ Milligan: Thanks.

RJ Milligan: That's it for me.

Speaker Change: Thanks, guys that's it for me.

Craig Millman: Thanks, RJ.

RJ Milligan: Thanks RJ.

Craig Millman: Thank you. And our next question comes to the line of Craig Millman from City.

Operator: Thank you. And our next question comes from the line of Craig Mailman from Citi. Your question, please.

Speaker Change: Thank you and our next question comes from line of Craig Millman from Citi. Your question. Please.

Craig Millman: Your question, please. And again, again, John, just go back to your comments about, you know, Catholics, compressing real time. You said, you know, made high. Mid-high fives, most sixes. I mean, is it just been a one-to-one move with the 10 year, or are you seeing or expecting to see kind of compression above and beyond that, giving kind of the views on rent growth here or debt spreads. Like what's your view?

Craig Allen Mailman: Hey, good afternoon. John, just going back to your comments about, you know, cap rates compressing in real time, and you said, you know, mid-high, mid-to-high fives, low sixes. I mean, has it just been a one-to-one move with the 10-year, or are you seeing or expecting to see kind of compression above and beyond that, given the views on rent growth here or debt spreads? Like, what's your view? And are there more non-core assets you can sell into this, even if it's a bit diluted in the near term? Maybe, you know, from an AFFO perspective or CapEx perspective, it's the right thing to do long term for quality accretion.

Craig Allen Mailman: Hey, good afternoon.

Craig Allen Mailman: John just going back to your comments about <unk>.

Craig Allen Mailman: Cap rates compressing in real time, and you said mid high.

Craig Allen Mailman: Mid to high fives low sixes I mean is it just been a one to one move with the 10 year or are you seeing or expecting to see kind of compression above and beyond that.

Speaker Change: Given kind of the views on rent growth here or debt spreads like what's your view.

John Kite: And are there more non-core assets that you can sell into this, even if it's a bit diluted in the near term. Maybe, you know, from an AFO perspective or Cat X perspective. It's the right thing to do long term for kind of quality accretions. Sure.

Speaker Change: And are there more noncore assets you can sell into this even if it's a bit dilutive in the near term maybe from an <unk> perspective or Capex perspective.

Speaker Change: It's the right thing to do long term for kind of quality accretion.

John A. Kite: Sure. I think the first part of your question, I mean, clearly, as we sit here today, that the 10 years around four weren't that long ago; it was around five. That's pretty significant compression in terms of medium-term to long-term, you know, yield expectations. So that's a factor, no doubt. We still have an inverted curve, so that probably slows things down a little bit. And my personal belief is that it's not going to be inverted for too much longer.

Speaker Change: Sure.

John Kite: I think on the first part of your question. I mean, clearly, as we sit here today that the 10 years around four wasn't that long ago, was around five. That's pretty significant compression in terms of medium term to long term, you know, yield expectations. So that's a factor. No doubt. We still have an inverted curve. So that probably slows things, slows things down a little bit. And I, my personal belief is that that's not going to be inverted for too much longer. So I think that's definitely a factor. Also stability. There's been a lot more stability in the market.

Speaker Change: I think on the first part of your question I mean clearly as.

Speaker Change: As we sit here today, the 10 years around four wasn't that long ago. It was around 5% that's pretty significant compression in terms of medium term to long term.

Speaker Change: Yield expectations. So that's a factor no doubt.

Speaker Change: We still have an inverted curve, so that probably slows things slows things down a little bit my personal belief is that <unk>.

Speaker Change: It's not going to be inverted for too much longer. So I think that's definitely a factor also stability there's been a lot more stability in the market. There's a lot there.

John A. Kite: So I think that's definitely a factor. Also, there's been a lot more stability in the market. There's a lot, you know; there's quite a bit of available financing. There's a lot of cash. So a lot of these are cash buyers. Yeah, so it's a combination of all those things. And then the realization that the product is strong. And you know, when you look at these things, you're looking at them when you're underwriting where you're going to put your capital, you're underwriting seven-year, 10-year IRRs, and you're looking at growth rates, and you're looking at alternative investments, and then also the risk-adjusted nature of that yield.

John Kite: There's a lot; you know, there's quite a bit of available financing. There's a lot of cash. So a lot of these are cash buyers. Yeah. So it's a combination of all those things. And then the realization that the product is strong. And, you know, when you look at these things, you're looking at them when you're underwriting where you're going to put your capital. You're underwriting seven year, 10 years, you know, IRRs and you're looking at growth rates. And you're looking at alternative investments. And, and then also the risk-adjusted nature of that yield. And this screen's very well.

Speaker Change: There is quite a bit of available financing.

Speaker Change: There's a lot of cash so a lot of these are cash buyers.

Speaker Change: So it's a combination of all those things and then the realization that the product is strong.

Speaker Change: And when you look at these things Youre looking at them when Youre underwriting where youre going to put your capital Youre underwriting seven year 10 years, IRR and Youre looking at growth rates and you are looking at alternative investments.

Speaker Change: And then also the risk adjusted nature of that yield and the screens very well and I think a lot of people will figure that out in the last few months, so that being said.

John A. Kite: And this screens very well. And I think a lot of people have figured that out in the last few months. So that being said, you know, will we think that will?

John Kite: And I think a lot of people have figured that out in the last few months. So that being said, you know, will that I think I think that we think that will continue.

Speaker Change: Well that I think I think that we think that will continue.

John Kite: And then what was the second part of your question?

Speaker Change: And then what was the second part of your question.

John Kite: Just, you know, are there more non-core assets to sell? Yeah, that would be a little bit FFO, a little bit long-term, the right move from a half-expert's perspective, or just, you know, have you look at it? Sure.

John A. Kite: Just, you know, are there more non-core assets to sell that could be a little bit more efficient?

Speaker Change: Are there more noncore assets to sell so it'd be a little bit <unk> dilutive, but long term the right move from a capex perspective, we're just however, you look at it.

John A. Kite: Sure. I mean, we've always said that, you know, our desire on the acquisition disposition front has been to maintain a pretty balanced approach and try to transact in what we call these pods, which we've been able to do. So it's been, you know, very, it's kind of been a non-event as it relates to AFFO and FFO, etc. That being said, there's no doubt that there is a much brighter light shining on our space right now.

John Kite: I mean, we've always said that, you know, our desire on, you know, the acquisition just position front has been to maintain a pretty balanced approach and try to try to transact in what we call these pods, which we've been able to do. So it's been, you know, very, it's kind of been a non-event as it relates to AFFO and FFO, etc. That being said, there's no doubt that there is a much brighter light shining on our space right now. So certainly we are always looking at the quality of the portfolio, the growth profile of the portfolio, and we could, and we could easily lean into that a little more, and we're always underwriting each individual deal, so it's absolutely a possibility.

Speaker Change: Sure I mean, we've always said that our desire on the acquisition disposition front as it is.

Speaker Change: Then to maintain a pretty balanced approach and try to try to transact in that what we call. These pods, which we've been able to do.

Speaker Change: So it's been very it's kind of been a non event as it relates to <unk> and <unk> et cetera that being said there is no doubt that there is a much brighter light shining on our space right. Now. So certainly we are always looking at the quality of the portfolio the growth profile of the portfolio.

John A. Kite: So certainly, we are always looking at the quality of the portfolio, the growth profile of the portfolio, and we could easily lean into that a little more, and we're always underwriting each individual deal. So it's absolutely a possibility.

And we could and we could easily lean into that a little more and we're always underwriting each individual deal. So it's absolutely a possibility.

Heath Fear: Okay, and then just for Heath, you know, as we look out the snow pipeline, you have kind of the comments here on page six. It looks strong, right? Leasing still going well, renews going well. As we think about, you know, potential headwinds in 25 to AFFO growth kind of accelerating here, you know, Tom talked a little about the two Stop and Shops, but are there any other watchless tenants or kind of things we should think about that could on the margin be a bigger headwind than maybe anticipated, or you know, is the trajectory still looking like an acceleration year over year?

Heath R. Fear: And then just for Heath, you know, as we look out the snow pipeline, you have kind of the commencements here on page six. It looks strong, right? Leasing is still going well, renewals are going well. As we think about, you know, potential headwinds in 25 to AFO growth kind of accelerating here. I know, you know, Tom talked a little about the two stops and shops, but are there any other watchlist tenants or kind of things we should think about that could, on the margin, be a bigger headwind than maybe anticipated? Or, you know, is the trajectory still looking like an acceleration year over year?

Speaker Change: Okay, and then just for Heath as we look out the snow pipeline you have the kind of the Commencements here on page six it looks strong leasing still going well renewals going well as we think about you know.

Heath: Potential headwinds.

Heath: And 25 to <unk> growth kind of accelerating here I know Tom talked a little about the to stop and shops, but are there any other watch list tenants or kind of.

Speaker Change: Things, we should think about that could on the margin, yes, a bigger headwind than maybe anticipated or.

Speaker Change: Is the trajectory still looking.

Speaker Change: Like an acceleration year over year.

Heath R. Fear: I think the trajectory still looks like an acceleration, Craig. I mean, when you look at the watch list... and our relative exposure to the tenants on everyone's list. We feel pretty good that whatever's happening next year will likely fit into our general bad debt bucket, you know, of 75 to 100 basis points of total revenue. So we're not looking out to next year thinking there's something that's going to be putting pressure on our AFFO, except for obviously what we discussed, which was the elevated leasing spend.

Heath Fear: I think the trajectory still looks like an acceleration, Craig. I mean, when you look at the watch list and our relative exposure to the tenants on everyone's list, we feel pretty good that whatever's happening next year will likely fit into our general debt bucket, you know, of, you know, called 75 to 100 basis points of total revenue. So we're not looking out for next year thinking there's something that's going to be putting pressure on our AFFO, except for obviously what we discussed, which was the elevated leasing spend. But also important to know is John said that despite this elevated spend, we're still kicking off free cash flow this year and next year, and really ramping up in 2026.

Craig Allen Mailman: I think the territory is still let's say an acceleration Craig I mean, when you look at the at the watch list.

Craig Allen Mailman: And our relative exposure to the tenants on everyones list we.

Craig Allen Mailman: We feel pretty good that whatever's happening next year will likely fit into our general bad debt bucket.

Craig Allen Mailman: Call. It 75 to 100 basis points of total revenues. So we're not looking out to next year thinking there is something that's going to be putting pressure on our <unk>, except for obviously, what we discussed which was was.

Craig Allen Mailman: The elevated leasing spend but also important to note as Jon said that despite this elevated spend we're still kicking off free cash flow this year and next year.

Heath R. Fear: But also important to note, as John said, that despite this elevated spend, we're still kicking off free cash flow this year and next year and really ramping it up in 2026. So, you know, at this leverage level, and this high leasing spend, and we're still deleveraging, it's just an amazing sort of flywheel that we have happening here at the company, and again, I look forward to moving into next year. Yeah, I mean, the only thing I would add to that, Craig, is that.

Craig Allen Mailman: And really ramping up in 2026 so.

Heath Fear: So, you know, at this leverage level, you know, and this high leasing spend, and we're still delivering, it's just it's an amazing sort of flywheel that we have happening here at the company.

Craig Allen Mailman: At this leverage level.

Speaker Change: This high this high leasing spend and we're still deleveraging, it's an amazing sort of flywheel that we have happening here at the company and.

John Kite: And again, look forward to moving into next year. Yeah, I mean, the only thing I would add to that, Craig, is that there's always, you know, there's always going to be a particular retailer that's going to have an issue. So that's always, that's been since the start of time. That's not going to change. The difference today is that after, you know, post-COVID, the strength of these retailers' balance sheets tremendously changed, and the majority of the ones with very weak balance sheets and very weak operating platforms didn't make it through. So we're, you know, things got accelerated rapidly, and now we're in a place where sure, are there a few people struggling?

Speaker Change: Again look forward to moving into next year, Yes, I mean, the only thing I would add to that Craig is that there's always there's always going to be a particular retailer that's going to have an issue. So that's.

John A. Kite: The only thing I would add to that, Craig, is that there's always, you know, there's always going to be a particular retailer that's going to have an issue. So, that's been going on since the start of time.

Speaker Change: That's been since the start of the time, that's not going to change the difference today is that <unk>.

John A. Kite: That's not going to change. The difference today is that, after, you know, post-COVID, the strength of these retailers' balance sheets has tremendously changed, and the majority of the ones with very weak balance sheets and very weak operating platforms didn't make it through. So, we're, you know, things got accelerated rapidly, and now we're in a place where, sure, are there a few people struggling? Of course there

Speaker Change: After post Covid the strength of these retailers balance sheets tremendously changed.

Speaker Change: The majority of the ones, who was very weak balance sheets, and very weak operating platforms didn't make it through so.

Speaker Change: Things got accelerated rapidly and now we're in a place where sure are there are a few people struggling of course there are.

John Kite: Of course there are. That being said, the portfolio can withstand it so much better than, you know, the past. I mean, Bed Bath's a prime example. You just look across the universe and all of the major landlords and how quickly they've released that space. I mean, he said a minute ago that we still had Bed Bath in the portfolio in the third quarter of last year. And we've already, you know, leased over two-thirds of them. So it's really strong.

John A. Kite: That being said, the portfolio can withstand it so much better than, you know, the past. I mean, Bed Bath's a prime example. You just look across the universe and all of the major landlords and how quickly they've leased that space. I mean, Heath said a minute ago that we still had Bed Bath in the portfolio in the third quarter of last year. And we've already, you know, leased over two-thirds of them. So it's, it's really strong.

Speaker Change: That being said the portfolio can withstand it so much better than the past I mean bed Bath a Prime example, you just look across.

Speaker Change: The universe and are all of the major landlords and how quickly they've leased that space.

Speaker Change: He said a minute ago, we still had bed bath in the portfolio in the third quarter of last year.

Speaker Change: And we've already.

Speaker Change: At least over two thirds of them. So it's really strong.

Nikita Pili: Thank you.

Speaker Change: Great. Thank you.

Craig Allen Mailman: Thank you. And our next question comes from the line of Nikita Bailey from J.P. Morgan. Your question, please.

Speaker Change: Thank you.

Nikita Pili: And our next question comes from the line of Nikita Pili from JP Morgan. Your question, please.

Speaker Change: And our next question comes from the line of Nick <unk> from Jpmorgan. Your question. Please.

Operator: Good afternoon, guys. Given the recent McDonald's earnings release, and it looks like there's maybe some potential cracks in consumer spending, are you seeing any of that at all flow to your centers? And are any retailers on that front maybe a little bit more hesitant to spend today versus the past?

Nikita Pili: Thank you, guys.

Speaker Change: Hey, good afternoon guys.

John Kite: Given the recent McDonald's earnings release, and it looks like there's maybe some potential cracks in the consumer spending, are you seeing any of that at all flow to your centers on any retailers or not from maybe a little bit more hesitant to expend today versus the past? No, not. I mean, at this point, we are not. And as I said a minute ago, you know, the retailers that we deal with, they're, you know, particularly the large national retailers are, you know, have quite well financed strong balance sheets. And, you know, obviously there's going to be ebbs and flows in the consumer, but they're looking out over seven, 10-year periods when they underwrite our stores, the larger guys.

Given the recent Mcdonald's earnings release, and it looks like there is maybe some potential crops and consumer spending are you seeing any of that at all flow through to your centers any retailers will not maybe a little bit more hesitant to expend today versus.

Speaker Change: In the past.

John A. Kite: No, no, I mean, at this point, we are not. And as I said a minute ago, the retailers that we deal with, they're, particularly the large national retailers, have quite well-financed, strong balance sheets. And, you know, obviously, there's going to be ebbs and flows in the consumer, but they're looking out over 7, 10 year periods when they underwrite our stores, the larger guys. And as far as the smaller guys, there's so much; there's such strong demand.

Speaker Change: No no I mean at this point, we are not and as I said a minute ago. The retailers that we deal with there, particularly the large national retailers are.

Speaker Change: Quite well financed strong balance sheets.

Speaker Change: And <unk>.

Speaker Change: Obviously, theres going to be ebbs and flows in the consumer but theyre looking out over seven to 10 year periods when they underwrite our stores the larger guys and as far as the smaller guys. Theres summit. There is such strong demand we have multiple players for each individual.

John Kite: And as far as the smaller guys, there's such strong demand; we have multiple players for each individual vacancy opportunity we have. So at this point, we don't see that. And in fact, if you look at the composition of our portfolio, the strength of our demographics, the strength and the types of retailers that, you know, we have as tenants, they can handle, you know, any kind of disruption. And frankly, it might create more opportunities for us.

Speaker Change: Vacancy opportunity we have so at this point, we don't see that.

John A. Kite: We have multiple players for each individual vacancy opportunity we have. So, at this point, we don't see that. And, in fact, if you look at the composition of our portfolio, the strength of our demographics, the strength and the types of retailers that we have as tenants, they can handle any kind of disruption. And, frankly, it might create more opportunities for us.

Speaker Change: And in fact, if you look at the composition of our portfolio the strength of our demographics the strength and the types of retailers that we have as tenants. They can handle any kind of disruption and frankly, it might create more opportunities for us.

John A. Kite: Got it. Let me just one other question on Bed Bath & Beyond since you mentioned it just now. What's your expectation of when those release boxes will actually come online and start paying rent?

Nikita Pili: Got it.

Nikita Pili: Let me just want to question bedbats since he mentioned it just now.

Speaker Change: Got it let me just one other question on bed Bath since you mentioned it just now what's your expectation of when those released boxes will actually come online and start paying rent.

John Kite: What's your expectation of when those released boxes will actually come online and start paying rent? They're coming on; some of them are coming on this year, some of them are coming on into 2025. So again, back after this year, it into 25, the ones that we've signed so far in the john, so we've all, but I think four of them are addressed. So once those get signed, we'll probably see those come on in late 25 or 26. Yeah, we should be able to move through them by the end of this year.

Heath R. Fear: They're coming on. Some of them are coming on this year. Some of them are coming in 2025. So again, back after this year and into 2025, the ones that we've signed so far, like John said, we've all but I think four of them are addressed. So once those get signed, we'll probably see those come on in late 25 or 26. Yeah, we should be able to move through them by the end of this year.

Speaker Change: Theyre coming on some of them are coming on this year some of them are coming on at the 225. So.

Speaker Change: Again back half of this year and into 'twenty five the ones that we've signed so far and like John said, we've all but I think four of them are addressed.

John: Once once those get sign off obviously those come on in late 'twenty five 'twenty six.

John: Yes, we should be able to move through them by the end of this year.

Speaker Change: Got it.

Dori Kesten: Thank you.

Operator: Thank you. And our next question comes from the line of Dori Kesten from Wells Fargo Securities. Your question, please.

Speaker Change: Thank you and our next question comes from the line of Dori Kesten from Wells Fargo Securities. Your question. Please.

Dori Kesten: And our next question comes from the line of Dory Kestin from Wells Fargo Securities. Your question, please. Thanks. Good afternoon. We appreciate your disclosure on the small shop front bumps showing about 91% of new leases, achieving bumps over 3% today. Is there any consistent themes that you can see about those that aren't surpassing a 3%? Is it like a category retailer, maybe location within the center? No, not really, Dory. It's really case by case, and obviously, you know, we're breaking new ground when you get to 4% in terms of what's been able to have been achieved from a sector perspective.

Dori Lynn Kesten: Thanks, good afternoon. We appreciate your disclosure on the small shop rent bumps, showing about 91% of new leases achieving bumps over 3% to date. Are there any consistent themes that you can see about those that aren't surpassing the 3%? Is it like a category of retailer, maybe location within the center?

Dori Lynn Kesten: Thanks, Good afternoon.

Dori Lynn Kesten: We appreciate your disclosure on the small shop rent bumps showing about 91% of Nielsen Thanksgiving bumps over 3%.

Speaker Change: Sir any consistent theme that you can see about those that arent, surpassing 30% is it a category killer maybe location in the center.

John A. Kite: No, not really, Dori. It's really case-by-case, and obviously, you know, we're breaking new ground when you get to 4% in terms of what's been able to be achieved from a sector perspective, so it takes time, but, you know, when you're getting 70% there, the other 30%, you know, we just have to keep pushing, a large national player like Starbucks, whoever. So there's individual dynamics in these deals. But I think the point we're trying to make is, and I think people sometimes have forgotten that over 50% of our revenue comes from this small shop area.

Speaker Change: No not really dory, it's really case by case.

Speaker Change: Obviously.

Speaker Change: We're breaking new ground when you get to 4% in terms of what's been able to have been achieved from a sector perspective. So it takes time, but when you're getting 70% there. The other 30%. We just have to keep pushing and frankly. It also it might have something to do with an individual deal.

John Kite: So it takes time, but you know, when you're getting 70% there, the other 30%, you know, we just have to keep pushing and frankly, it also, it might have something to do with an individual. Or a credit profile, or perhaps it's, you know, dealing with a large national player like a Starbucks, whoever. So there's individual dynamics on these deals, but I think the point we're trying to make is, and I think people sometimes have forgotten that over 50% of our revenue comes from the small shop area. And, you know, they're just, they're just is very little space available.

Bill: Bill or a credit profile or perhaps it's dealing with.

Bill: A large national player like a Starbucks whoever so theres individual dynamics on these deals, but I think the point, we're trying to make is and I think people sometimes they have to have forgotten that it's over 50% of our revenue comes from this small shop area and.

John A. Kite: And there just is very little space available, so we just keep driving that, and we have a little bit more leverage there, obviously, than we do on the anchor side. So that's the point we're trying to make.

Bill: They're just they're just as very little space available. So we just keep driving that and we have a little bit more leverage there obviously than we do on the anchor side. So that's the point, we're trying to make.

John Kite: So we just keep driving that, and we have a little bit more leverage there, obviously, than we do on the acre side. So that's the point we're trying to make.

Dori Lynn Kesten: Okay, and then not to take the excitement away from your DC event, but could you provide any general sense of your total investment spend likely at One Loudoun and then just expectations around when you might start generating returns from the project?

Dori Kesten: Okay, and then not to take excitement away from your DC event, but could you provide any general sense in your total investment spend likely at one loud end and then just expectations around when you may start generating returns from that project?

Bill: Okay.

Speaker Change: And then not not to take excitement away from your DC event, but can you provide any general trends and your total investment than likely at one Loudoun.

Speaker Change: The expectations around when you might start generating returns from that project.

Heath R. Fear: Dori, I'm going to ask you to attend our event in DC, and we'll give you some details about the STEMNet. You know, listen; we've got an exciting vision. We're going to activate a portion of that adjacent land. You know, we will have some range of numbers and some range of returns that we're anticipating achieving there, but we don't want to front run it right now. So we'll see you in, hopefully, see you in September. Yeah.

John Kite: Dori, I'm going to ask you to attend our event, and we'll give you some details around the spend then. You know, listen, we've got an exciting vision. We're going to activate a portion of that adjacent land; you know, we will have some range of numbers and some range of returns that we're anticipating on achieving it, but we don't want to frontrun it right now.

Speaker Change: Sorry, I'm going to ask you to attend our event.

Speaker Change: To give you some details around the spend that list.

Speaker Change: Listen.

Speaker Change: We've got an exciting vision, we're going to activate a portion of that adjacent land.

Speaker Change: We will have some range of numbers in some range of returns that we're anticipating on.

Speaker Change: Achieving that but we don't want to front run it right now so we will see you and hopefully see you in September.

John Kite: So we'll see you in hopefully see you in September. Yeah, but we'll have plenty to talk about and drawings and perspectives of how this will ultimately play out. So be plenty for all of you to take in on the trip.

John A. Kite: Yeah, but we'll have plenty to talk about and drawings and perspectives of how this will ultimately play out, so there'll be plenty for all of you to take in on the trip.

Speaker Change: Plenty to talk about.

Drawings on.

Speaker Change: Perspectives of how this will ultimately play out so be it.

Plenty for all of you to take an omnichannel.

Dori Kesten: All right. I will see you there.

Dori Lynn Kesten: All right, I will see you there. Thanks.

Speaker Change: Alright, I will see you there.

Dori Kesten: Thanks. Super.

Heath R. Fear: Super. Thanks, Dori. Thank you.

Sue: Thanks Sue.

Dori Kesten: Thanks, Dori.

Operator: Thank you. This does conclude the question-and-answer session of today's program.

Sue: Thanks, Tom Thank you.

John A. Kite: Thank you. This does conclude the question and answer session for today's program. I'd like to hand the program back to John Kite for any further remarks.

Speaker Change: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to John Kite for any further remarks.

John Kite: I'd like to hand the program back to John Kite for any further remarks. Hey, well, we appreciate those that dialed in.

John A. Kite: Okay, well, we appreciate those that dialed in. Thank you, and we look forward to seeing you soon.

John A. Kite: Okay, well, we appreciate those that dialed in thank you and look forward to seeing you soon.

John Kite: Thank you and look forward to seeing you soon.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

John A. Kite: Okay.

John A. Kite: [music].