Kite Realty Group Trust (NYSE: KRG), a premier owner and operator
of high-quality open-air, grocery-anchored shopping centers,
announced today the completion of its previously announced merger
with Retail Properties of America, Inc. (NYSE: RPAI), a first-class
owner and operator of high-quality open-air and mixed-use shopping
centers, whereby RPAI merged into a subsidiary of KRG, with KRG
continuing as the surviving public company. The combined
high-quality, open-air portfolio is a mixture of predominantly
necessity-based, grocery-anchored neighborhood and community
centers, combined with vibrant mixed-use assets. The merger serves
to more than double KRG’s presence in high-growth warmer and
cheaper markets, while also introducing and enhancing KRG’s
presence in strategic gateway markets. The merger is not only
expected to be immediately FFO and NAV accretive, but the combined
company has additional opportunities to further increase
shareholder value including optimizing NOI margins, leasing of
pandemic-related vacancy, lowering the company’s cost of capital,
and completing select developments. The combined company will
continue to be led by KRG Chairman and CEO John A. Kite and the KRG
executive team.
“We are thrilled to announce the
successful completion of the transformational merger with RPAI,
creating a top 5 open-air shopping center REIT” said John A. Kite,
Chairman and CEO. “The resulting open-air portfolio has a
productive mix of properties predominantly located in high-growth
warmer and cheaper markets, while also increasing our presence in
strategic gateway markets. The merger will generate immediate
earnings accretion and will drive further long-term value to our
shareholders. We have already completed significant steps in our
integration and are well-positioned to continue capitalizing on the
strong leasing environment. While the financial and operational
synergies are extremely compelling, we are most passionate about
the quality of the underlying real estate.”
The completion of the transaction follows the
satisfaction of all conditions to the closing of the merger,
including receipt of approvals of the merger by KRG shareholders
and RPAI stockholders. The common shares of the combined company
continue to trade under the symbol “KRG” on the NYSE. As of the
effective time of the merger, each share of RPAI’s common stock was
cancelled and converted into the right to receive 0.623 KRG common
shares, plus cash in lieu of fractional shares, pursuant to the
merger agreement, and RPAI’s common stock will no longer trade on
the NYSE.
BofA Securities, Inc. acted as lead financial
advisor to KRG, with KeyBanc Capital Markets Inc. also acting as
financial advisor to KRG. Hogan Lovells US LLP acted as legal
advisor to KRG. Citigroup Global Markets Inc. acted as exclusive
financial advisor and Goodwin Procter LLP acted as legal advisor to
RPAI.
About Kite Realty Group Trust
Kite Realty Group Trust (NYSE: KRG) is a real
estate investment trust (REIT) headquartered in Indianapolis, IN
that is one of the largest publicly traded owners and operators of
open-air shopping centers and mixed-use assets. The company’s
primarily grocery-anchored portfolio is located in high-growth
warmer and cheaper markets and select strategic gateway markets.
The combination of necessity-based grocery-anchored neighborhood
and community centers, along with vibrant mixed-use assets makes
the KRG portfolio an ideal mix for both retailers and consumers.
Publicly listed since 2004, KRG has nearly 60 years of experience
in developing, constructing and operating real estate. Using
operational, investment, development, and redevelopment expertise,
KRG continuously optimizes its portfolio to maximize value and
return to shareholders. As of September 30, 2021, proforma for the
merger, the company owned interests in 185 U.S. open-air shopping
centers and mixed-use assets, comprising over 30 million square
feet of gross leasable space. For more information, please visit
kiterealty.com.
Connect with
KRG: LinkedIn | Twitter | Instagram | Facebook
Safe Harbor
This release, together with other statements and
information publicly disseminated by us, contains certain
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such statements
are based on assumptions and expectations that may not be realized
and are inherently subject to risks, uncertainties and other
factors, many of which cannot be predicted with accuracy and some
of which might not even be anticipated. Future events and actual
results, performance, transactions or achievements, financial or
otherwise, may differ materially from the results, performance,
transactions or achievements, financial or otherwise, expressed or
implied by the forward-looking statements.
Currently, one of the most significant factors
that could cause actual outcomes to differ materially from our
forward-looking statements is the potential adverse effect of the
current pandemic of the novel coronavirus, or COVID-19, including
possible resurgences and mutations, on the financial condition,
results of operations, cash flows and performance of the Company
and its tenants, the real estate market and the global economy and
financial markets. The effects of COVID-19 have caused and may
continue to cause many of our tenants to close stores, reduce hours
or significantly limit service, making it difficult for them to
meet their rent obligations, and therefore has and will continue to
impact us significantly for the foreseeable future. COVID-19 has
impacted us significantly, and the extent to which it will continue
to impact us and our tenants will depend on future developments,
which are highly uncertain and cannot be predicted with confidence,
including the scope, severity and duration of the pandemic, the
continued speed of the vaccine distribution, the efficacy of
vaccines, including against variants of COVID-19, acceptance and
availability of vaccines, the actions taken to contain the pandemic
or mitigate its impact, and the direct and indirect economic
effects of the pandemic and containment measures, among others.
Moreover, investors are cautioned to interpret many of the risks
identified under the section titled “Risk Factors” in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020 as
being heightened as a result of the ongoing and numerous adverse
impacts of the COVID-19 pandemic.
Additional risks, uncertainties and other
factors that might cause such differences, some of which could be
material, include but are not limited to: risks associated with
acquisitions generally, including the integration of the Company’s
and RPAI’s businesses and the ability to achieve expected synergies
or costs savings; the risk that disruptions caused by or relating
to the merger will harm the Company’s business, including current
plans and operations; national and local economic, business,
real estate and other market conditions, particularly in connection
with low or negative growth in the U.S. economy as well as economic
uncertainty; financing risks, including the availability of, and
costs associated with, sources of liquidity; the Company’s ability
to refinance, or extend the maturity dates of, the Company’s
indebtedness; the level and volatility of interest rates; the
financial stability of tenants, including their ability to pay rent
or request rent concessions, and the risk of tenant insolvency and
bankruptcy; the competitive environment in which the Company
operates, including potential oversupplies of and reduction in
demand for rental space; acquisition, disposition, development and
joint venture risks; property ownership and management risks,
including the relative illiquidity of real estate investments,
periodic costs to repair, renovate and re-lease spaces, operating
costs and expenses, vacancies or the inability to rent space on
favorable terms or at all; the Company’s ability to maintain the
Company’s status as a real estate investment trust for U.S. federal
income tax purposes; potential environmental and other liabilities;
impairment in the value of real estate property the Company owns;
the attractiveness of our properties to tenants, the actual and
perceived impact of e-commerce on the value of shopping center
assets and changing demographics and customer traffic patterns;
risks related to our current geographical concentration of the
Company’s properties in Texas, Florida, New York, Maryland,
Virginia and North Carolina; civil unrest, acts of terrorism or
war, acts of God, climate change, epidemics, pandemics (including
COVID-19), natural disasters and severe weather conditions such as
hurricanes, tropical storms, tornadoes, earthquakes, droughts,
floods and fires, including such events or conditions that may
result in underinsured or uninsured losses or other increased costs
and expenses; changes in laws and government regulations including
governmental orders affecting the use of the Company’s properties
or the ability of its tenants to operate, and the costs of
complying with such changed laws and government regulations;
possible short-term or long-term changes in consumer behavior due
to COVID-19 and the fear of future pandemics; insurance costs and
coverage; risks associated with cybersecurity attacks and the loss
of confidential information and other business disruptions; other
factors affecting the real estate industry generally; and other
risks identified in reports the Company files with the Securities
and Exchange Commission or in other documents that it publicly
disseminates, including, in particular, the section titled “Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2020, and in the Company’s quarterly
reports on Form 10-Q. The Company undertakes no obligation to
publicly update or revise these forward-looking statements, whether
as a result of new information, future events or otherwise.
This release also includes certain
forward-looking non-GAAP information. Due to high variability and
difficulty in making accurate forecasts and projections of some of
the information excluded from these estimates, together with some
of the excluded information not being ascertainable or accessible,
the Company is unable to quantify certain amounts that would be
required to be included in the most directly comparable GAAP
financial measures without unreasonable efforts.
Contact Information: Kite Realty Group
TrustJason ColtonSVP, Capital Markets & Investor
Relations317.713.2762jcolton@kiterealty.com
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