Kite Realty Group Trust

Good day and welcome to the second quarter 2025 Kite Realty Group Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Brian McCarthy, Senior Vice President of Corporate Communications. Please go ahead.

Thank you, and good morning, 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. 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 reconciliation of these non-GAAP performance measures to our GAAP financial results. On the call with me today from Kite Realty Group are Chairman and Chief Executive Officer John Kite, President and Chief Operating Officer Tom McGowan, Executive Vice President and Chief Financial Officer Keith Feer, 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. Now, I'll turn the call over to John.

Thanks, Brian, and thanks, everyone, for joining today. The KRG team delivered another strong quarter, highlighted by our sound operational performance and excellent execution on the transactional front. Demand for space in our high-quality centers remains healthy, evidenced by our consistently solid leasing results. Lended cash leasing spreads in the second quarter were 17%. which is our highest quarterly blended spread in the past five years. Our ability to grow rents organically demonstrates the mark-to-market potential embedded within our portfolio. Leasing spreads for non-option renewals were almost 20% in the second quarter and 16% over the last 12 months. New leasing volume more than doubled sequentially, largely driven by 11 new anchor leases executed in the second quarter. Our anchor leasing activity included two new grocery leases with Whole Foods and Trader Joe's, alongside new leases with apparel, home furnishing, and fitness tenants. While our lease rate declined sequentially due to the impact from recent bankruptcies, based on the depth of demand in our leasing pipeline, we will gladly trade the short-term earnings disruption for the opportunity to upgrade our tenancy and bolster the durability of our cash flows. We continue to make great progress in backfilling space with well-capitalized retailers. And to date, over 80% of the boxes that we recaptured as a result of the recent bankruptcies are leased or in active negotiations. Our small shop lease rate increased 30 basis points sequentially and 80 basis points year over year. In addition to pushing occupancy, we continue to have success elevating our long-term growth profiles. Embedded escalators on our new and non-option renewal small shop leases were 3.4% for the first half of 2025. Activity this quarter included leases with Aloe Yoga, Lilly Pulitzer, Buck Mason, Sweetgreen, and Shake Shack. The consistent gains in our small shop lease rate are a result of our team's disciplined approach that prioritizes credit quality, strong starting rents, and higher embedded escalators, and most importantly, a compelling merchandising mix. At the midpoint, we are increasing our NAREIT and core FFO per share guidance by a penny and our same-store NOI assumption by 25 basis points. Our core FFO per share guidance now implies a 2.5% year-over-year growth despite the temporary disruption from anchor bankruptcy. At the midpoint of our 2025 guidance, our post-merger core FFO CAGR since 2022 stands at 4.1%. Our business is strong and will continue to improve as we lease space at attractive returns and enhance our long-term embedded growth profile. In recent quarters, we've alluded to an uptick in our capital recycling efforts to reshape the composition of our portfolio and reduce exposure to at-risk tenants. Through the first half of 2025, we've taken significant steps in executing our long-term portfolio vision. In a joint venture with GIC, we acquired Legacy West, an iconic asset that further solidifies our position as a prominent owner of lifestyle and mixed use assets and expands our relationship with high caliber retail brands. Subsequently, we expanded our strategic partnership with GIC by contributing three assets to a second joint venture, which includes three larger format community and power centers in Port St. Lucie, Florida, and the Dallas MSA. Our strategic partnerships with GIC now comprise over a billion dollars of gross asset value, with the potential to grow the relationship as additional opportunities arise. In addition to the JVs, we've sold three non-core assets year to date, Stony Creek Commons in the Indianapolis MSA and LA Fitness Anchored Center. Fullerton Metro Center in the Los Angeles MSA, an asset that presented an opportunity to monetize our limited exposure to California at attractive pricing and relocate the proceeds into target markets. And Humblewood Shopping Center in the Houston MSA, where the adjacent owner made an unsolicited offer and the sale reduced our exposure to at-risk tenants. These transactions immediately improve the quality of our portfolio, are accretive to earnings, and have a modest impact on our net debt to EBITDA. As we move forward, we will remain active in refining our portfolio by reducing exposure to at-risk tenants while increasing our focus on smaller format grocery anchored centers and select lifestyle and mixed-use assets. Our second quarter results inclusive of the highest blended spreads in five years, growing our strategic partnership with GIC to over a billion. Three non-core asset sales and an opportunistic bond issuance are the product of a dedicated team focused on executing our strategic initiatives. As always, we strive to produce strong results and deliver long-term value for all our stakeholders. Before turning the call to Heath, I wanted to thank our tenants and team members at Eastgate Crossing in Chapel Hill, North Carolina for their continued partnership as we work toward quickly reopening the shopping center. Eastgate suffered flooding as a result of historic amount of rainfall caused by Tropical Storm Chantal. Fortunately, the company has comprehensive flood insurance with coverage as well in excess of estimated damages. So now I'll turn the call over to Heath to discuss Q2 results.