Kite Realty Group Trust

Thank you for standing by and welcome to the Kite Realty Group's second quarter 2026 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 Marketing and Communication. Please go ahead, sir.

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. 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 today'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, President and Chief Financial Officer Heath Fear, Senior Vice President and Chief Accounting Officer Adam Jaworski, and Senior Vice President Capital Markets and Investor Relations Tyler Henshaw. Given the number of participants on the call, we ask that you limit yourself to one and some additional questions, we ask that you please rejoin the queue. I'll now turn the call to John.

All right. Thanks, Bryan, and hello, everyone, and thanks for joining us today. Halfway through 2026, KRG's tenant demand remains healthy, our sign not open pipeline remains elevated, and the fundamentals underpinning our portfolio have never been more durable. The financial strength and flexibility we created has become one of our most valuable strategic assets. Over the past 18 months, our capital allocation initiatives collectively referred to internally as Project Elevate have focused on pruning lower growth non-core assets to enhance the quality, growth profile, and resilience of our portfolio and cash flows. We have redeployed the resulting capital into higher conviction opportunities that offer the most attractive risk-adjusted returns while also investing meaningfully in our organization through strategic additions across the platform, all aimed at improving our long-term growth. Since the start of 2025, we've sold 22 non-core assets for nearly $1 billion. With each disposition, we reduced our exposure to lower growth formats and at-risk anchors, while concentrating the portfolio in grocery anchored, lifestyle, and mixed-use assets. As detailed on page six of our investor presentation, we've grown our weighted ABR in lifestyle, mixed-use, and neighborhood centers by 900 basis points since the start of 2023, matched by a 900 basis point reduction are all listed in power and large format community centers during the same period. Our portfolio enhancement is reflected in our tenant base, which we have strengthened from both ends. Our top tenant roster is increasingly concentrated in durable, high credit operators. Brochures now represent a third of our top 15 tenant list. Just as telling, four watch list tenants have rolled off our top 25 list entirely. By virtue of the dispositions related to Project Elevate, we eliminated 58 at-risk tenant locations representing over 1 million square feet and more than 200 basis points of ABR. Tenants like these carry a cost on both sides of the ledger. They put the consistency of our earnings at risk, and each one is a potential claim on our capital. We've been equally disciplined about where we put our capital to use. During the quarter, we acquired two high-quality neighborhood centers, Founders Square in Naples and Chastain Market, a Trader Joe's anchor center in Atlanta, for $136 million through 1031 exchanges. That brings our acquisitions since the start of 2025 to approximately $612 million, all of it recycled into faster-growing assets. When our stock trades at a discounted net asset value, buying it back is among the most accretive uses of capital available to us. And we acted decisively during the quarter, purchasing approximately 2.8 million common shares at an average price of $27.48 per share for approximately $75 million. Across 2025 and 2026, we have now repurchased 19.6 million shares for approximately $475 million at an average price of $24.20, well inside consensus NAV. Our reshape portfolio is performing. Same property NOI grew 3.7% in the second quarter. We executed 128 new and renewal leases, totaling approximately 1 million square feet with blended cash spreads of 15.9%. including 28.4% on comparable new leases. Our lease rate reached 94.8% up 150 basis points year over year led by a 210 basis point improvement in our anchor lease rate. ABR per square foot climbed to $23.41 up 2.3% sequentially and 6.3% year over year. Our embedded rent growth climbed to 185 basis points, up nearly 30 basis points since the start of 2024. And our sign not open pipeline increased to approximately $37 million of NOI, representing a 350 basis point spread between our leased and occupied rates. We also continue to unlock embedded value across our mixed use platform. This quarter, we commenced the second phase of Luxury Multifamily at One Loudon, a 429-unit development within our existing residential joint venture that will begin delivering in 2029, the latest example of the self-funding growth built into our portfolio. Given the strength of the first half, we're raising our full-year same-property NOI guidance by 50 basis points at the midpoint to a range of 3% to 4%. We are maintaining our FFO guidance as we prioritize flexibility and optionality over the immediate redeployment of proceeds generated through Project Elevate. In the near term, our focus is on further strengthening and fortifying our balance sheet, reducing leverage, enhancing liquidity, and maintaining dry powder for attractive investment opportunities. While the heavy lifting on Project Elevate is behind us, We still have some work to do. Our guidance continues to assume a meaningful amount of gross transactional activity remaining in 2026, split between the sale of non-core assets associated with tax losses and 1031 acquisitions, which Heath will detail in a moment. Simply put, KRG has never been in a stronger position. We have a higher quality portfolio, a more durable growth profile, and one of the best balance sheets in the business and a team that executes with discipline and urgency. I want to thank the entire KRG team for getting us here and having the energy and conviction it takes to keep raising the bar. Turn it over to Heath.