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UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-K

(Mark One)
  
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year endedDecember 31, 2020
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from ___________to___________
 Commission File Number:001-33268Kite Realty Group Trust
Commission File Number:333-202666-01Kite Realty Group, L.P.

Kite Realty Group Trust
Kite Realty Group, L.P.
(Exact name of registrant as specified in its charter)
MarylandKite Realty Group Trust11-3715772
DelawareKite Realty Group, L.P.20-1453863
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
30 S. Meridian StreetSuite 1100IndianapolisIndiana46204
(Address of principal executive offices)(Zip code)
Telephone317577-5600
(Registrant’s telephone number, including area code)
  
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per common shareKRGNew York Stock Exchange
 
Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Kite Realty Group TrustYesxNo  oKite Realty Group, L.P. YesxNo  o
 
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
 
Kite Realty Group TrustYes   oNoxKite Realty Group, L.P. Yes   oNox
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Kite Realty Group TrustYesxNo  oKite Realty Group, L.P. YesxNo  o
 
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Kite Realty Group TrustYesxNo  oKite Realty Group, L.P. YesxNo  o
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Kite Realty Group Trust:
Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller reporting company
Emerging growth company
 
Kite Realty Group, L.P.:
Large accelerated fileroAccelerated fileroNon-accelerated filerxSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act) o
Kite Realty Group TrustYes   No xKite Realty Group, L.P. Yes   No  x
 
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of the last business day of the Registrant’s most recently completed second quarter was $1.0 billion based upon the closing price on the New York Stock Exchange on such date. 
 
The number of Common Shares outstanding as of February 16, 2021 was 84,292,270 ($.01 par value).
  
Documents Incorporated by Reference
 
Portions of the definitive Proxy Statement relating to the Registrant’s Annual Meeting of Shareholders, scheduled to be held on May 12, 2021, to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K as indicated herein.



EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the year ended December 31, 2020 of Kite Realty Group Trust, Kite Realty Group, L.P. and its subsidiaries. Unless stated otherwise or the context otherwise requires, references to “Kite Realty Group Trust” or the “Parent Company” mean Kite Realty Group Trust, and references to the “Operating Partnership” mean Kite Realty Group, L.P. and its consolidated subsidiaries. The terms “Company,” “we,” “us,” and “our” refer to the Parent Company and the Operating Partnership collectively, and those entities owned or controlled by the Parent Company and/or the Operating Partnership.

The Operating Partnership is engaged in the ownership, operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States. The Parent Company is the sole general partner of the Operating Partnership and as of December 31, 2020 owned approximately 97.1% of the common partnership interests in the Operating Partnership (“General Partner Units”). The remaining 2.9% of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) are owned by the limited partners.

We believe combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report benefits investors by:
enhancing investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminating duplicative disclosure and providing a more streamlined and readable presentation of information because a substantial portion of the Company’s disclosure applies to both the Parent Company and the Operating Partnership; and
creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. The Parent Company has no material assets or liabilities other than its investment in the Operating Partnership. The Parent Company issues public equity from time to time but does not have any indebtedness as all debt is incurred by the Operating Partnership. In addition, the Parent Company currently does not nor does it intend to guarantee any debt of the Operating Partnership. The Operating Partnership has numerous wholly-owned subsidiaries, and it also owns interests in certain joint ventures. These subsidiaries and joint ventures own and operate retail shopping centers and other real estate assets. The Operating Partnership is structured as a partnership with no publicly-traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for General Partner Units, the Operating Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.

Shareholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. In order to highlight this and other differences between the Parent Company and the Operating Partnership, there are separate sections in this report, as applicable, that separately discuss the Parent Company and the Operating Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.




KITE REALTY GROUP TRUST AND KITE REALTY GROUP, L.P. AND SUBSIDIARIES
Annual Report on Form 10-K
For the Fiscal Year Ended
December 31, 2020  
 
TABLE OF CONTENTS 
  Page
   
   
Item No.  
   
Part I  
   
1
1A.
1B.
2
3
4
   
Part II  
   
5
6
7
7A.
8
9
9A.
9B.
   
Part III  
   
10
11
12
13
14
   
Part IV  
   
15
1672
   




Forward-Looking Statements

This Annual Report on Form 10-K, 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 and Section 21E of the Securities Exchange Act of 1934. 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 significantly from our forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus ("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 speed and effectiveness of vaccine and treatment developments and distribution pipeline, 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.

Additional risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: 
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;
our ability to refinance, or extend the maturity dates of, our 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 or bankruptcies;
the competitive environment in which we operate, including potential oversupplies 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;
our ability to maintain our 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 we own;
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 the geographical concentration of our properties in Florida, Indiana, Texas, North Carolina, and Nevada;
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 our properties or the ability of our 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;
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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 this Annual Report on Form 10-K and, in other reports we file from time to time with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.
We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
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PART I
  
ITEM 1. BUSINESS
  
Unless the context suggests otherwise, references to “we,” “us,” “our” or the “Company” refer to Kite Realty Group Trust and our business and operations conducted through our directly or indirectly owned subsidiaries, including Kite Realty Group, L.P., our operating partnership (the “Operating Partnership”). 
 
Overview
  
Kite Realty Group Trust is a publicly-held real estate investment trust which, through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States.  We derive revenues primarily from activities associated with the collection of contractual rents and reimbursement payments from tenants at our properties.  Our operating results therefore depend materially on, among other things, the ability of our tenants to make required lease payments, the health and resilience of the United States retail sector, interest rate volatility, job growth and real estate market and overall economic conditions.

As of December 31, 2020, we owned interests in 90 operating and redevelopment properties totaling approximately 17.3 million square feet. We also owned two development projects under construction as of this date.  Our retail operating portfolio was 91.2% leased to a diversified retail tenant base, with no single retail tenant accounting for more than 2.5% of our total annualized base rent. In the aggregate, our largest 25 tenants accounted for 33.3% of our annualized base rent.  See Item 2, “Properties” for a list of our top 25 tenants by annualized base rent.  

Impact of COVID-19

Since first being reported in December 2019, the novel strain of coronavirus (COVID-19) has spread globally. In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and how it impacts the Company's tenants and business partners. Certain segments of retailers and the Company experienced disruption during 2020, and, going forward, the potential adverse effect of the COVID-19 pandemic, 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, global economy, and financial markets, and the extent of such effects, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

The following operating trends, combined with macroeconomic trends such as a global economic slowdown or recession, reduced consumer spending and increased unemployment, lead us to believe that our operating results will continue to be significantly affected by COVID-19:

As of December 31, 2020, over 98% of our tenants have reopened. However, many of these retailers are operating at a lower capacity than normal due to COVID-19. Store closures or the inability to return to full capacity, particularly if for an extended period, increase the risk of business failures and lease defaults.
As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and 92% of rent billings for the period from April 1, 2020 through December 31, 2020.
Many of our tenants have taken on additional debt as a result of COVID-19, including loans administered by the Small Business Administration. To the extent this debt is not forgiven, the increased debt load may hamper their ability to continue to operate and to pay rent, which could cause the Company to realize decreased cash flow and increased vacancies at its properties.

Starting in March 2020 and continuing through January 2021, the Company received rent relief requests from a significant proportion of its tenants. Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic; the Company and its legal advisers generally disagree with these legal arguments. The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant's financial strength, the tenant's operating history, potential co-tenancy impacts, the tenant's contribution to the shopping center in which it operates, the Company's assessment of the tenant's long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors.

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As a result of this evaluation, the Company has agreed to defer rent for approximately 375 of its tenants subject to certain conditions. The Company had deferred the collection of $6.1 million of rental income that remained outstanding as of December 31, 2020. To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company's operating and capital uses.

We have taken various steps to mitigate the impact of COVID-19 on our liquidity, including deferrals of certain planned capital expenditures for 2020. In March 2020, we borrowed $300 million on the unsecured revolving credit facility (the "Credit Facility") as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. Subsequent to the initial borrowing, we have repaid the $300 million of borrowings.

As of December 31, 2020, we have approximately $43.6 million of cash on hand, $523.2 million of remaining availability under our Credit Facility (based on the unencumbered pool allocated thereto), and no debt maturities until 2022.

The effects of COVID-19 have triggered a global and domestic economic recession, and if the recession continues well beyond the lifting of government restrictions related to COVID-19, many of our tenants could face financial distress. Historically, economic indicators such as GDP growth, consumer confidence and employment are correlated with demand for certain of our tenants’ products and services. These conditions could increase the number of our tenants that are unable to meet their lease obligations to us and could limit the demand for our space from new tenants.

We expect the significance of the COVID-19 pandemic, including the extent of its effects on our business, financial performance and condition, operating results and cash flows and the economic slowdown, to be dictated by, among other things, the duration of the COVID-19 pandemic, including possible resurgences and mutations, the success of efforts to contain it, the success of efforts to find and distribute effective drugs or vaccines and the impact of actions taken in response. These uncertainties make it difficult to predict operating results for our business for 2021.

Significant 2020 Activities
 
Even in the face of the COVID-19 pandemic, the Company continued to perform at a high level including as follows:

Operating Activities
The Company realized net loss attributable to common shareholders of $16.2 million;
The Company generated Funds From Operations, as defined by NAREIT, of $108.7 million and Funds From Operations, as adjusted for severance charges, of $112.0 million;
Same Property Net Operating Income ("Same Property NOI") decreased by 6.6% in 2020 compared to 2019 as a result of the impact of COVID-19;
As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and 92% of rent billings for the period from April 1, 2020 through December 31, 2020.
We executed new and renewal leases on 215 individual spaces for approximately 1.5 million square feet of retail space, achieving a blended cash leasing spread of 7.0% and blended GAAP leasing spread of 14.5% for comparable leases; and
Our operating portfolio annual base rent ("ABR") per square foot as of December 31, 2020 was $18.42, an increase of $0.59 (or 3.3%) from the end of the prior year.

Financing and Capital Activities. 
 
 In 2020, we were able to utilize our strong balance sheet, financial flexibility and liquidity to handle the adversity and deliver strong results in the midst of the disruption caused by the COVID-19 pandemic. The Company had the following key investment highlights:

Acquired Eastgate Crossing in Chapel Hill, North Carolina for $65.5 million; and

5


Commenced construction on two development projects, consisting of approximately $12.6 million of capital commitments, that are anticipated to produce an average cash yield between 14.0% and 15.0%.

Through the COVID-19 pandemic, we paid $0.4495 in dividends in 2020 and were one of the few open-air peers to continuously pay a dividend.    

We ended the year with approximately $566.9 million of combined cash and borrowing capacity on our Credit Facility.

We have no debt scheduled to mature through December 31, 2021, and a debt service coverage ratio of 2.9x as of December 31, 2020.  We have been assigned investment grade corporate credit ratings from two nationally recognized credit rating agencies. These ratings were unchanged during 2020.

Business Objectives and Strategies
  
Our primary business objectives are to increase the cash flow and value of our properties, achieve sustainable long-term growth and maximize shareholder value primarily through the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers.  We invest in properties with well-located real estate and strong demographics, and we use our leasing and management strategies to improve the long-term values and economic returns of our properties.  We believe that certain of our properties represent attractive opportunities for profitable redevelopment, renovation, and expansion. 
 
We seek to implement our business objectives through the following strategies, each of which is more completely described in the sections that follow:  
Operating Strategy: Maximizing the internal growth in revenue from our operating properties by leasing and re-leasing to a strong and diverse group of retail tenants at increasing rental rates, when possible, and redeveloping or renovating certain properties to make them more attractive to existing and prospective tenants and consumers;
Financing and Capital Preservation Strategy: Maintaining a strong balance sheet with flexibility to fund our operating and investment activities.  Funding sources include the public equity and debt markets, an existing revolving Credit Facility with $25 million outstanding, new secured debt, internally generated funds, proceeds from selling land and properties that no longer fit our strategy, and potential strategic joint ventures; and
Growth Strategy: Prudently using available cash flow, targeted asset recycling, equity, and debt capital to selectively acquire additional retail properties and redevelop or renovate our existing properties where we believe that investment returns would meet or exceed internal benchmarks.

Operating Strategy. Our primary operating strategy is to maximize our rental rates, our returns on invested capital, and occupancy levels by attracting and retaining a strong and diverse tenant base. Most of our properties are located in regional and neighborhood trade areas with attractive demographics, which allows us to maximize returns on invested capital, occupancy and rental rates. We seek to implement our operating strategy by, among other things:  
increasing rental rates upon the renewal of expiring leases or re-leasing space to new tenants while minimizing vacancy to the extent possible;
maximizing the occupancy of our operating portfolio;
minimizing tenant turnover;
maintaining leasing and property management strategies that maximize rent growth and cost recovery;
maintaining a diverse tenant mix that limits our exposure to the financial condition of any one tenant or category of retail tenants;
maintaining and improving the physical appearance, condition, layout and design of our properties and other improvements located on our properties to enhance our ability to attract customers;
implementing offensive and defensive strategies against e-commerce competition;
6


actively managing properties to minimize overhead and operating costs;
maintaining strong tenant and retailer relationships in order to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-leasing space to new tenants; and
taking advantage of under-utilized land or existing square footage, reconfiguring properties for more profitable use, and adding ancillary income sources to existing facilities.

We successfully executed our operating strategy in 2020 in a number of ways, as best evidenced in leading our peer group in rent collection rates, based upon publicly reported information by each peer as of February 19, 2021. Additionally, our leasing process continues to perform at a high level as evidence by the execution of 215 new and renewal leases for approximately 1.5 million square feet. We have placed significant emphasis on maintaining a strong and diverse retail tenant mix, which has resulted in no tenant accounting for more than 2.5% of our annualized base rent. See Item 2, “Properties” for a list of our top tenants by gross leasable area ("GLA") and annualized base rent.
 
Financing and Capital Preservation Strategy. We finance our acquisition, development, and redevelopment activities seeking to use the most advantageous sources of capital available to us at the time.  These sources may include the reinvestment of cash flows generated by operations, the sale of common or preferred shares through public offerings or private placements, the reinvestment of net proceeds from the disposition of assets, the incurrence of additional indebtedness through secured or unsecured borrowings, and entering into real estate joint ventures. 
 
Our primary financing and capital preservation strategy is to maintain a strong balance sheet and enhance our flexibility to fund operating and investment activities in the most cost-effective way. We consider a number of factors when evaluating the amount and type of additional indebtedness we may elect to incur.  Among these factors are the construction costs or purchase prices of properties to be developed or acquired, the estimated market value of our properties and the Company as a whole upon consummation of the financing, and the ability to generate durable cash flow to cover expected debt service. 
 
Maintaining a strong balance sheet continues to be one of our top priorities.  We maintain an investment grade credit rating that we expect will continue to enable us to opportunistically access the public unsecured bond market and will allow us to lower our cost of capital and provide greater flexibility in managing the acquisition and disposition of assets in our operating portfolio.

We intend to continue implementing our financing and capital strategies in a number of ways, which may include one or more of the following actions:  
prudently managing our balance sheet, including maintaining sufficient availability under our Credit Facility so that we have additional capacity to fund our development and redevelopment projects and pay down maturing debt if refinancing that debt is not desired or practical;
extending the scheduled maturity dates of and/or refinancing our near-term mortgage, construction and other indebtedness;
expanding our unencumbered asset pool;
raising additional capital through the issuance of common shares, preferred shares or other securities;
managing our exposure to interest rate increases on our variable-rate debt through the selective use of fixed rate hedging transactions;
issuing unsecured bonds in the public markets, and securing property-specific long-term non-recourse financing; and
entering into joint venture arrangements in order to access less expensive capital and mitigate risk.

Growth Strategy. Our growth strategy includes the selective deployment of financial resources to projects that are expected to generate investment returns that meet or exceed our internal benchmarks. We implement our growth strategy in a number of ways, including:  
continually evaluating our operating properties for redevelopment and renovation opportunities that we believe will make them more attractive for leasing to new tenants, right-sizing of anchor spaces while increasing rental rates, and re-leasing spaces to existing tenants at increased rental rates;
7


disposing of selected assets that no longer meet our long-term investment criteria and recycling the net proceeds into properties that provide attractive returns and rent growth potential in targeted markets or using the proceeds to repay debt, thereby reducing our leverage; and
selectively pursuing the acquisition of retail operating properties, portfolios and companies in markets with strong demographics.

In evaluating opportunities for potential acquisition, development, redevelopment and disposition, we consider a number of factors, including:  
the expected returns and related risks associated with the investments relative to our weighted cost of capital to make such investments;
the current and projected cash flow and market value of the property and the potential to increase cash flow and market value if the property were to be successfully re-leased or redeveloped;
the price being offered for the property, the current and projected operating performance of the property, the tax consequences of the transaction, and other related factors;
opportunities for strengthening the tenant mix at our properties through the placement of anchor tenants such as grocers, value retailers, pet supply stores, hardware stores, or sporting goods retailers, as well as further enhancing a diverse tenant mix that includes restaurants, specialty shops, and other essential retailers that provide staple goods to the community and offer a high level of convenience;
the configuration of the property, including ease of access, availability of parking, visibility, and the demographics of the surrounding area; and
the level of success of existing properties in the same or nearby markets.

Competition 
 
The United States commercial real estate market continues to be highly competitive. We face competition from other REITs, including other retail REITs, and other owner-operators engaged in the ownership, leasing, acquisition, and development of shopping centers as well as from numerous local, regional and national real estate developers and owners in each of our markets.  Some of these competitors may have greater capital resources than we do, although we do not believe that any single competitor or group of competitors is dominant in any of the markets in which we own properties. 
 
We face significant competition in our efforts to lease available space to prospective tenants at our operating, development and redevelopment properties. The nature of the competition for tenants varies based on the characteristics of each local market in which we own properties. We believe that the principal competitive factors in attracting tenants in our market areas are location, demographics, rental rates, the presence of anchor stores, competitor shopping centers in the same geographic area and the maintenance, appearance, access and traffic patterns of our properties.  There can be no assurance in the future that we will be able to compete successfully with our competitors in our development, acquisition and leasing activities. 
 
Government Regulation
 
We and our properties are subject to a variety of federal, state, and local environmental, health, safety and similar laws, including: 
 
Americans with Disabilities Act and Other Regulations. Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA"), to the extent that such properties are public accommodations as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in orders requiring us to spend substantial sums to cure violations, pay attorneys' fees, or pay other amounts. The obligation to make readily accessible accommodations is an ongoing one, and we will continue to assess our properties and make alterations as appropriate in this respect. In addition, our properties are subject to fire and safety regulations, building codes and other land use regulations.

8


Affordable Care Act. We may be subject to excise taxes under the employer mandate provisions of the Affordable Care Act ("ACA") if we (i) do not offer health care coverage to substantially all of our full-time employees and their dependents or (ii) do not offer health care coverage that meets the ACA's affordability and minimum value standards. The excise tax is based on the number of full-time employees. We do not anticipate being subject to a penalty under the ACA; however, even in the event that we are, any such penalty would be less than $0.3 million, as we had 113 full-time employees as of December 31, 2020. 
 
Environmental Regulations. Some properties in our portfolio contain, may have contained or are adjacent to or near other properties that have contained or currently contain underground storage tanks for petroleum products or other hazardous or toxic substances. These storage tanks may have released, or have the potential to release, such substances into the environment. 
 
In addition, some of our properties have tenants which may use hazardous or toxic substances in the routine course of their businesses. In general, these tenants have covenanted in their leases with us to use these substances, if any, in compliance with all environmental laws and have agreed to indemnify us for any damages we may suffer as a result of their use of such substances. However, these lease provisions may not fully protect us in the event that a tenant becomes insolvent. Finally, certain of our properties have contained asbestos-containing building materials ("ACBM"), and other properties may have contained such materials based on the date of its construction. Environmental laws require that ACBM be properly managed and maintained, and fines and penalties may be imposed on building owners or operators for failure to comply with these requirements. The laws also may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers.

Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results operations, and management does not believe they will in the future. In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past. However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future. 
 
With environmental sustainability becoming a national priority, we have continued to demonstrate our strong commitment to be a responsible corporate citizen through resource reduction and employee training that have resulted in reductions of energy consumption, waste and improved maintenance cycles. 

COVID-19 Regulations. As discussed in this Annual Report on Form 10-K, during the COVID-19 pandemic, our properties and our tenants have been subject to public health regulations and control measures, including states of emergency, mandatory quarantines, "shelter in place" orders, border closures, restrictions on types of businesses that may continue to operate, "social distancing" guidelines and other travel and gathering restrictions and practices, that have significantly impacted our business, see page 11 of Item 1A. "Risk Factors" for further information.
 

Insurance 
 
We carry comprehensive liability, fire, extended coverage, and rental loss insurance that covers all properties in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage, geographic locations of our assets and industry practice. Certain risks such as loss from riots, war or acts of God, and, in some cases, flooding are not insurable or the cost to insure over these events is costs prohibitive; and therefore, we do not carry insurance for these losses. Some of our policies, such as those covering losses due to terrorism and floods, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. 
 
Offices 
 
Our principal executive office is located at 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204. Our telephone number is (317) 577-5600. 







9


Human Capital 
 
As of December 31, 2020, we had 113 full-time employees. The majority of these employees were based at our Indianapolis, Indiana headquarters. We believe our employees are the most important part of our business. We are committed to providing a work environment that attracts, develops and retains high-performing individuals and that treats employees with dignity and respect.


When attracting, developing and retaining talent, we seek individuals who hold varied experiences and viewpoints and embody our core values to create an inclusive and diverse culture and workplace that allows each employee to do their best work and drive our collective success. We focus on leadership development at every level of the organization. We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company and then provide effective feedback on their performance towards goals to ensure their growth.

We believe a commitment to our employees’ learning and development through training, educational opportunities and mentorship is critical to our ability to continue to innovate. Through performance plans, talent recognition and individual development planning, along with reward packages, we advance our talent pool and create a sustainable and long-term enterprise.

We seek to foster a corporate culture where our many stakeholders, including our employees, engage in the topic of community development and collaborate to extend resources towards the advancement of this principle. In furtherance of this commitment, we partner with and support local charitable organizations that we believe are contributing to the growth and development of the community. In recent years, our employees have donated and coordinated substantial fundraising and have spent many hours volunteering to support a variety of charities with which we partner.

The health, safety and well-being of our employees are always top priorities, and we believe our actions in response to COVID-19 were appropriate and in accordance with state and local health and safety laws. Among other things, we adopted remote working and flexible scheduling arrangements and implemented additional health and safety measures for employees working in our offices.
 
Environmental, Social and Governance Matters

The Company strives to be a responsible corporate citizen, and we recognize the importance that environmental, social, and governance ("ESG") initiatives play in our ability to generate long-term, sustainable returns. To assist us in setting and meeting ESG goals, we have formed a cross-functional task force ("ESG Task Force") to review ESG issues that are important to investors and regularly report to the Board of Trustees on ESG efforts. The ESG Task Force is led by our Chief Executive Officer and includes members from our asset management, employee experience, investor relations, marketing, internal audit, and legal groups.

In 2020, the ESG Task Force issued our ESG Policy and Corporate Citizenship Report, which we have published on our website. The Company has undertaken multiple projects to make its operations more efficient and to reduce energy and water consumption, including installing LED lighting at various parking lots, solar panels at three properties, and electric-vehicle charging stations at six properties, and implementing smart meters and other initiatives aimed at water conservation, recycling and waste diversion at our properties. Recent business initiatives encourage tenants to adopt green leases, also known as “high-performance” or “energy-aligned” leases, to equitably align the costs and benefits of energy and water efficiency investments for building owners and tenants, based on principles and best practices from the Green Lease Leaders Reference Guide by the Institute for Market Transformation and the U.S. Department of Energy. The Company also has partnered with One Tree Planted, a non-profit organization committed to reforestation, to plant new trees in 2020. We also are evaluating potential actions that might reduce our carbon footprint or otherwise mitigate our environmental impact.

As described above, we are highly committed to our employees, and our policies are designed to promote fairness, equal opportunities, diversity, well-being and professional development within the Company. Our corporate governance structure, led by our Board of Trustees, closely aligns our interests with those of our shareholders, as further described in our annual Proxy Statement.




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Segment Reporting 
 
Our primary business is the ownership and operation of neighborhood and community shopping centers. We do not distinguish or group our operations on a geographical basis, or any other basis, when measuring performance. Accordingly, we have one operating segment, which also serves as our reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States ("GAAP").  
 
Available Information
  
Our Internet website address is www.kiterealty.com. You can obtain on our website, free of charge, a copy of our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. 
 
Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our Board of Trustees—the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. Copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and our committee charters are also available from us in print and free of charge to any shareholder upon request. Any person wishing to obtain such copies in print should contact our Investor Relations department by mail at our principal executive office.

The Securities and Exchange Commission maintains a website (http://www.sec.gov) that contains reports, proxy statements, information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission.




ITEM 1A. RISK FACTORS 
 
The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by our management from time to time. These factors, among others, may have a material adverse effect on our business, financial condition, operating results and cash flows, including our ability to make distributions to our shareholders, and you should carefully consider them. It is not possible to predict or identify all such factors. You should not consider this list to be a complete statement of all potential risks or uncertainties. Past performance should not be considered an indication of future performance. 
 
We have separated the risks into three categories:
  
risks related to our operations;
risks related to our organization and structure; and
risks related to tax matters.

RISKS RELATED TO OUR OPERATIONS 

Our business, financial condition, performance, and value are subject to risks and conditions associated with real estate assets and the real estate industry.

Our primary business is the ownership and operation of neighborhood and community shopping centers and other real estate assets. Our business, financial condition, results of operations, cash flow, per share trading price of our common shares, ability to satisfy debt service obligations, and ability to make distributions to shareholders are subject to, and could be materially and adversely affected by, risks associated with owning and operating such real estate assets including events and conditions that are beyond our control, such as periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur. See the risk factors described in “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.
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The COVID-19 pandemic is currently having a significant adverse impact on our business, financial performance and condition, operating results and cash flows, and future outbreaks of highly infectious or contagious disease or other public health crises could have similar adverse effects on our business. Further, the COVID-19 pandemic has caused severe disruptions in the U.S. and global economy and financial markets and could potentially create widespread business continuity issues of a magnitude and duration not yet known.

Since first being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The COVID-19 pandemic has had, and a future outbreak of highly infectious or contagious disease or other public health crisis, could similarly have, significant repercussions across local, regional, national and global economies and financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting a wide variety of control measures including states of emergency, mandatory quarantines, “shelter in place” orders, border closures, restrictions on types of businesses that may continue to operate, “social distancing” guidelines and other travel and gathering restrictions and practices that may significantly impact our business. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, with a particularly adverse effect on many of our tenants. A number of our tenants have announced temporary closures of their stores, reduced hours or significantly limited services, and requested rent deferral or rent abatement during this pandemic. Many economists predict that the outbreak will trigger, or has already triggered, a period of United States and global economic slowdown or recession.

The COVID-19 pandemic has disrupted our business and has had a significant adverse effect, and could continue to significantly adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows. The economic slowdown or recession could continue to significantly adversely affect our business, financial performance and condition even as some government restrictions related to COVID-19 are lifted or phased out and stores reopen. Additional factors that have already and/or may in the future negatively impact our ability to operate successfully during or following the COVID-19 pandemic or a similar event, or that could otherwise significantly adversely impact and disrupt our business, financial performance and condition, operating results and cash flows, include, among others:
the inability of our tenants to meet their lease obligations to us due to (i) continuing or increased closures of stores at our properties resulting from government or tenant actions related to the pandemic; or (ii) local, regional or national economic conditions, including high unemployment and reduced consumer discretionary spending, caused by the pandemic (for example, as of February 11, 2021, approximately 5% of our billed base rent and recoveries for the fourth quarter were uncollected);
liquidity issues resulting from (i) reduced cash flow from operations due to the pandemic, (ii) the impact that lower operating results could have on the financial covenants in our debt agreements, and (iii) difficulty in our accessing debt and equity capital on attractive terms, or at all, and severe disruptions or instability in the global financial markets or deteriorations in credit and financing conditions;
our increased indebtedness and decreased operating revenues, which could increase our risk of default on our loans;
an acceleration of changes in consumer behavior in favor of e-commerce over certain of our tenants’ stores due to responses to the pandemic and concerns about contracting COVID-19 or other highly infectious or contagious diseases;
business continuity disruptions and a deterioration in the ability of us or our tenants to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants’ efficient operations;
issues related to personnel management and remote working, including increased cybersecurity risk and other technology and communication issues and increased costs and other disruptions in the event that our employees become unable to work as a result of health issues related to COVID-19;
the scaling back or delay of a significant amount of planned capital expenditures, including planned redevelopment projects, which could adversely affect the value of our properties;
reduction or elimination of quarterly dividends; and
continued volatility of our share price.

The significance, extent and duration of the impacts caused by the COVID-19 pandemic on our business, financial performance and condition, operating results and cash flows and those of our tenants, remains highly uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, including possible resurgences and mutations, the extent and effectiveness of the containment measures and other actions taken, the success of efforts to find and distribute drugs or vaccines and the responses of the overall economy, the financial markets and the population, particularly in areas in which we operate,
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once the current containment measures are lifted. Additional closures by our tenants of their stores, the continuing ability of our tenants to meet their lease obligations and/or the possibility of tenants filing for bankruptcy protection would reduce our cash flows, which would impact our ability to continue paying dividends to our shareholders at expected levels or at all. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. As a result, we cannot provide an estimate of the overall impact of the COVID-19 pandemic on our business or when, or if, we will be able to resume normal operations. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial performance and condition, operating results and cash flows.

Ongoing challenging conditions in the United States and global economies and the challenges facing our retail tenants and non-owned anchor tenants, including bankruptcies, financial instability and consolidations, may have a material adverse effect on our business, financial performance and condition, operating results and cash flows. 
 
We derive the majority of our revenue from retail tenants who lease space from us at our properties, and our ability to generate cash from operations is dependent on the rents that we are able to charge and collect. Over the past several years, sustained weakness in certain sectors of the U.S. economy has resulted in the bankruptcy or weakened financial condition of a number of retailers, increased store closures, and reduced demand and rental rates for certain retail space. For example, Stein Mart, Ascena, and Tailored Brands have filed for bankruptcy during 2020, and several other retailers, including Bed Bath & Beyond, Office Depot, and Party City, recently announced multiple store closings. Additionally, in the event our tenants are involved in mergers or acquisitions or undertake other restructurings, such tenants may choose to consolidate, downsize or relocate their operations. These events, or other similar events with other retailers, and other economic conditions are beyond our control and could affect the overall economy as well as specific properties in our portfolio, including the following (any of which could have a material adverse effect on our business, financial performance and condition, operating results and cash flows):

Collections. Tenants may have difficulty paying their rent obligations when due as they struggle to sell goods and services to consumers, or they may request rent deferrals, reductions or abatements, which could adversely affect our results of operations and cash flows.

Leasing. Tenants may delay or cancel lease commencements, decline to extend or renew leases upon expiration, close stores or declare bankruptcy. Any of these actions could result in the termination of the tenant’s leases with us and the related loss of rental income. Also, lease terminations or failure of a major tenant or non-owned anchor to occupy the premises could result in lease terminations or reductions in rent by other tenants in the same shopping centers because of contractual co-tenancy termination or rent reduction rights contained in some leases.

Re-leasing. We may be unable to re-lease vacated space at attractive rents or at all. In some cases, it may take extended periods of time to re-lease a space, particularly one previously occupied by a major tenant or non-owned anchor. The occurrence of any of the situations described above, particularly if it involves a substantial tenant or a non-owned anchor with ground leases in multiple locations, could have a material adverse effect on our results of operations and cash flows.

Tenant bankruptcies could present difficulties for our business to collect rent or make claims against a tenant in bankruptcy.

A bankruptcy filing by one of our tenants or a lease guarantor would legally prohibit us from collecting pre-bankruptcy debts, or unpaid rent, from that tenant or the lease guarantor, unless we receive an order from the bankruptcy court permitting us to do so. Such bankruptcies could delay, reduce, or ultimately preclude collection of amounts owed to us. A tenant in bankruptcy may attempt to renegotiate the lease or request significant rent concessions. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages, including pre-bankruptcy balances. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. There are restrictions under bankruptcy laws that limit the amount of the claim we can make for future rent under a lease if the lease is rejected. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold from a tenant in bankruptcy, which would result in a reduction in our cash flow and in the amount of cash available for distribution to our shareholders and could have a material adverse effect on our results of operations.

The expansion of e-commerce may impact our tenants and our business. 
 
The prominence of e-commerce continues to increase and its growth is likely to continue or accelerate in the future, which could result in an adverse impact on some of our tenants and affect decisions made by current and prospective tenants in
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leasing space or operating their businesses, including reduction of the size or number of their retail locations in the future. We cannot predict with certainty how the growth in e-commerce will impact the demand for space at our properties or the revenue generated at our properties in the future. Although we continue to aggressively respond to these trends, including by entering into or renewing leases with tenants whose businesses are either more resistant to or are synergistic with, e-commerce (such as services, restaurant, grocery, specialty, essential retailers and value retailers that have benefitted from omni-channel consumer trends), the risks associated with e-commerce could have a material adverse effect on the business outlook and financial results of our present and future tenants, which in turn could have a material adverse effect on our cash flow and results of operations.
 
Our business is significantly influenced by demand for retail space generally, a decrease in which may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.

Because our portfolio of properties consists primarily of community and neighborhood shopping centers, a decrease in the demand for retail space, due to the economic factors discussed above elsewhere in this Annual Report on Form 10-K or otherwise, may have a greater adverse effect on our business, financial condition, results of operations, cash flow, common share trading price, and ability to satisfy our debt service obligations and to pay distributions to our shareholders than if we owned a more diversified real estate property portfolio.

We face significant competition, which may impact our rental rates, leasing terms and capital improvements. 
 
We compete for tenants with numerous developers, owners and operators of retail shopping centers, regional malls, and outlet malls, including institutional investors, other REITs, and other owner-operators. As of December 31, 2020, leases representing 8.0% of our total annualized base rent were scheduled to expire in 2021.  Our competitors may have greater capital resources or be willing to offer lower rental rates or more favorable terms for tenants, such as substantial rent reductions or abatements, tenant improvements, other improvements, early termination rights, which may pressure us to reduce our rental rates, undertake unexpected capital improvements or offer other terms less favorable to us, which could adversely affect our financial condition, results of operations, cash flow, trading price of our common shares and ability to satisfy our debt service obligations and to pay distributions to our shareholders. Additionally, if retailers or consumers perceive that shopping at other venues, online or by phone is more convenient, cost-effective or otherwise more attractive, our revenues and results of operations also may suffer. 

Because of our geographic concentrations, a prolonged economic downturn in certain states and regions could materially and adversely affect our financial condition and results of operations. 
 
The specific markets in which we operate may face challenging economic conditions that could persist into the future.  In particular, as of December 31, 2020, rents from our owned square footage in the states of Florida, Indiana, Texas, North Carolina, and Nevada comprised 26%, 15%, 14%, 11%, and 11% of our base rent, respectively.  This level of concentration could expose us to greater economic risks than if we owned properties in more geographic regions. Adverse economic or real estate trends in Florida, Indiana, Texas, North Carolina, and Nevada, or the surrounding regions, or any decrease in demand for retail space resulting from the local regulatory environment, business climate or fiscal problems in these states, could materially and adversely affect our financial condition, results of operations, cash flow, the trading price of our common shares and our ability to satisfy our debt service obligations and to pay distributions to our shareholders. 
 
We depend on external financings to fulfill our capital needs, and disruptions in the financial markets could affect our ability to obtain financing on reasonable terms, or at all, and have other material adverse effects on our business. 
 
Partly because of the distribution requirements of being a REIT, we may not be able to fund all future capital needs, including capital for property development, redevelopment and acquisitions, with income from operations, and we rely on external financings to fulfill our capital needs. Disruptions in the financial markets generally, or relating to the real estate industry specifically, may adversely affect our ability to obtain debt financing on favorable terms or at all, which could impact our ability to acquire or develop properties when strategic opportunities exist, satisfy our principal and interest obligations or make distributions to shareholders.  These disruptions could impact the overall amount of equity and debt financing available, lower loan to value ratios, cause a tightening of lender underwriting standards and terms and cause higher interest rate spreads. As a result, we may be unable to refinance or extend our existing indebtedness on favorable terms or at all. We do not have any debt scheduled to mature through December 31, 2021. If we are not successful in refinancing our outstanding debt when it becomes due, we may have to dispose of properties on disadvantageous terms, which could adversely affect our ability to service other debt and to meet our other obligations. While we currently have sufficient capacity under our Credit Facility and operating cash flows to retire outstanding debt maturing through 2025 in the event we are not able to refinance such debt when it becomes due, our Credit Facility has a maturity date in April 2022 (which may be extended for two additional periods of six
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months subject to certain conditions), and there can be no assurance that the Credit Facility will remain outstanding or be renewed through 2025 or that our operating cash flows will continue to provide sufficient liquidity to retire any or all of our outstanding debt during this period or beyond.  If economic conditions deteriorate in any of our markets, we may have to seek less attractive, alternative sources of financing and adjust our business plan accordingly.
 
Some of our real estate assets have been subject to impairment charges and others may be subject to impairment charges in the future, which may negatively affect our net income. 
 
Our long-lived assets, primarily real estate held for investment, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable through future operations. In 2019, we recorded impairment charges totaling $37.7 million related to a reduction in the expected holding period of certain operating properties, which impairment charges negatively affected our net income for the applicable periods. There can be no assurances that we will not take additional charges in the future related to the impairment of our assets, which could result in an immediate negative adjustment to net income and have a material adverse effect on our results of operations in the period in which the charge is taken. Management reviews operational and development projects, land parcels and intangible assets on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We evaluate whether there are any indicators, including poor operating performance or deteriorating general market conditions, that the carrying value of our real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. As part of this evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. This review for possible impairment requires certain assumptions, estimates, and significant judgment. Our estimated cash flows are based on several key assumptions, including projected net operating income, anticipated hold period, expected capital expenditures, and the capitalization rate used to estimate the property's residual value. These key assumptions are subjective in nature and could differ materially from actual results if the property was disposed. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss, and such loss could be material to our financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over estimated fair value. If the above-described negative indicators are not identified during our period property evaluations, management will not assess the recoverability of a property's carrying value. 
 
The estimation of the fair value of real estate assets is highly subjective, involving a significant degree of management judgment regarding various inputs, and is typically determined through comparable sales information and other market data if available or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach, which involve a significant degree of management judgment regarding various inputs.
  
We had $1.17 billion of consolidated indebtedness outstanding as of December 31, 2020, which may have a material adverse effect on our financial condition and results of operations and reduce our ability to incur additional indebtedness to fund our growth. 
 
Required repayments of debt and related interest charges, along with any applicable prepayment premium, may materially adversely affect our operating performance. We had $1.17 billion of consolidated outstanding indebtedness as of December 31, 2020.  At December 31, 2020, $330.1 million of our debt bore interest at variable rates ($80.1 million when reduced by $250.0 million of fixed interest rate swaps). Interest rates are currently low relative to historical levels and may increase significantly in the future. If our interest expense increased significantly, it could materially adversely affect our results of operations. For example, if market rates of interest on our variable rate debt outstanding, net of cash flow hedges, as of December 31, 2020 increased by 1%, the increase in interest expense on our unhedged variable rate debt would decrease future cash flows by approximately $0.8 million annually. 
 
We may incur additional debt in connection with various development and redevelopment projects and may incur additional debt upon the future acquisition of operating properties. Our organizational documents do not limit the amount of indebtedness that we may incur. We may borrow new funds to develop or acquire properties. In addition, we may increase our mortgage debt by obtaining loans secured by some or all of the real estate properties we develop or acquire. We also may borrow funds if necessary to satisfy the requirement that we distribute to shareholders at least 90% of our annual “REIT taxable income” (determined before the deduction of dividends paid and excluding net capital gains) or otherwise as is necessary or advisable to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes or otherwise avoid paying taxes that can be eliminated through distributions to our shareholders. 
 
Our substantial debt could materially and adversely affect our business in other ways, including by, among other things:
 
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requiring us to use a substantial portion of our funds from operations to pay principal and interest, which reduces the amount available for distributions;
placing us at a competitive disadvantage compared to our competitors that have less debt;
making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and
limiting our ability to borrow more money for operating or capital needs or to finance development and acquisitions in the future.

Agreements with lenders supporting our Credit Facility and various other loan agreements contain acceleration features and other covenants that restrict our operating and acquisition activities. 
 
Our Credit Facility and various other debt agreements contain certain Events of Default which include, but are not limited to, failure to make principal or interest payments when due, failure to perform or observe any term, covenant or condition contained in the agreements, failure to maintain certain financial and operating ratios and other criteria, misrepresentations, acceleration of other material indebtedness and bankruptcy proceedings.  In the event of a default under any of these agreements, the lender would have various rights including, but not limited to, the ability to require the acceleration of the payment of all principal and interest due and/or to terminate the agreements and, to the extent such debt is secured, to foreclose on the properties.  The declaration of a default and/or the acceleration of the amount due under any such credit agreement could have a material adverse effect on our business, limit our ability to make distributions to our shareholders, and prevent us from obtaining additional funds needed to address cash shortfalls or pursue growth opportunities.

The agreements relating to our Credit Facility, unsecured term loan and seven-year unsecured term loan contain provisions providing that any “Event of Default” under one of these facilities or loans will constitute an “Event of Default” under the other facility or loan. In addition, these agreements relating to our Credit Facility, unsecured term loan and seven-year unsecured term loan, as well as the agreement relating to our senior unsecured notes, include a provision providing that any payment default under an agreement relating to any material indebtedness will constitute an “Event of Default” thereunder. These provisions could allow the lending institutions to accelerate the amount due under the loans.  Our Credit Facility also contains certain coverage ratios and limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These restrictions or any acceleration or payment may have a material adverse effect on our cash flow, financial condition and results of operations.  We were in compliance with all applicable covenants under the agreements relating to our Credit Facility, seven-year unsecured term loan, and senior unsecured notes as of December 31, 2020, although there can be no assurance that we will continue to remain in compliance in the future.
 
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. 
 
A significant amount of our indebtedness is secured by our real estate assets, which if we fail to make required mortgage payments, could be subject to foreclosure by the lender or the holder of the mortgage, resulting in the loss of our investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but we would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code of 1986, as amended (the "Code"). If any of our properties are foreclosed on due to a default, our ability to pay cash distributions to our shareholders and our earnings will be limited, and due to cross-collateralization or cross-default provisions, a default under one mortgage loan could result in a default on other indebtedness and cause us to lose other better performing properties, which could materially and adversely affect our financial condition and results of operations. 
 
We are subject to risks associated with hedging agreement, including potential performance failures by counterparties and termination costs.
 
We use a combination of interest rate protection agreements, including interest rate swaps, to manage risk associated with interest rate volatility. This may expose us to additional risks, including a risk that the counterparty to a hedging arrangement may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial effect on our results of operations or financial condition. Further, should we choose to terminate
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a hedging agreement, there could be significant costs and cash requirements involved to fulfill our initial obligation under such agreement. 
 
We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates.

As of December 31, 2020, we had approximately $330.1 million of debt outstanding that was indexed to the London Interbank Offered Rate (“LIBOR”). In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, or the exact time when LIBOR rates will cease to be published or supported. If a published U.S. dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows.
 
Our current and any future joint ventures, and the value and performance of such investments, could be adversely affected by the structure and terms thereof and the activities of our joint venture partners.
 
As of December 31, 2020, we owned interests in two of our operating properties through consolidated joint ventures and interests in four properties through unconsolidated joint ventures, and in the future, we may seek to co-invest with third parties through other joint ventures.  Our joint ventures and the value and performance of such investments may involve risks not present with respect to our wholly owned properties, including shared decision-making authority with our joint venture partners, restrictions on the ability to sell our interests in the joint ventures without the other partners' consent, potential conflicts of interest or other disputes between us and our partners (including potential litigation or arbitration), potential losses or increased costs or expenses arising from actions taken in respect of the joint ventures, and potential impacts on our ability to qualify as a REIT.
  
Our future developments, redevelopments and acquisitions may not yield the returns we expect or may result in dilution in shareholder value. 
 
As of December 31, 2020, we have two development projects under construction and two redevelopment opportunities currently in the planning stage, including de-leasing space and evaluating development plans and costs with potential tenants and partners. Some of these plans include non-retail uses, such as multifamily housing. New development and redevelopment projects and property acquisitions are subject to a number of risks, including abandonment of a project after expending resources on due diligence, feasibility or other upfront costs, construction delays or cost overruns, unknown risks, integration issues, tenant termination or withdrawal rights, and failure to obtain governmental permits or other third-party approvals. In deciding whether to acquire, develop, or redevelop a particular property, we make certain assumptions regarding the expected future performance of that property, and our financial performance may be materially and adversely affected, or in the case of an unsuccessful redevelopment project, our entire investment could be at risk for loss, or an impairment charge could occur. In addition, the issuance of equity securities as consideration for any significant acquisitions could be dilutive to our shareholders.
 
To the extent that we pursue acquisitions in the future, we may not be successful in acquiring desirable operating properties or identifying development and redevelopment projects that meet our investment criteria, both of which may impede our growth. 
 
From time to time, consistent with our business strategy, we evaluate the market and may acquire properties when we believe strategic opportunities exist. When we pursue acquisitions, we may face competition from other real estate investors with substantial capital, including other REITs and institutional investment funds, which could limit our ability to acquire properties, increase the purchase price we are required to pay, reducing the return to our shareholders, and we may agree to material restrictions or limitations in the acquisition agreements. Additionally, we may not be successful in identifying suitable real estate properties or other assets that meet our development or redevelopment criteria, or we may fail to complete developments, redevelopments, acquisitions or investments on satisfactory terms. These factors and any others could impede our growth and adversely affect our financial condition and results of operations.
 
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We may not be able to sell properties when appropriate or on terms favorable to us and could, under certain circumstances, be required to pay a 100% "prohibited transaction" penalty tax related to the properties we sell. 
 
Real estate property investments generally cannot be sold quickly. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties, and we cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future.  Before a property can be sold, we may need to make expenditures to correct defects or to make improvements. We may not have funds available to correct such defects or to make such improvements, and if we cannot do so, we might not be able to sell the property or might be required to sell the property on unfavorable terms. We may not be able to dispose of any of the properties on terms favorable to us or at all, and each individual sale will depend on, among other things, economic and market conditions, individual asset characteristics and the availability of potential buyers and favorable financing terms at the time. Further, we will incur marketing expenses and other transaction costs in connection with dispositions, and the process of marketing and selling a large pool of properties may distract the attention of our personnel from the operation of our business.
 
Also, the tax laws applicable to REITs impose a 100% penalty tax on any net income from “prohibited transactions.” In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. The need to avoid prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell. Therefore, we may be unable to adjust our portfolio mix promptly in response to market conditions, which may adversely affect our financial position. In addition, we will be subject to income taxes on gains from the sale of any properties owned by any taxable REIT subsidiary ("TRS). 
 
Uninsured losses or losses in excess of insurance coverage could materially and adversely affect our cash flow, financial condition and results of operations. 
 
We do not carry insurance for generally uninsurable losses such as loss from riots, war or acts of God, and, in some cases, flooding, and insurance companies may no longer offer coverage against certain types of losses, such as environmental liabilities or other catastrophic events, or, if offered, the expense of obtaining such coverage may not be justified. Some of our policies, such as those covering losses due to terrorism and floods, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover all losses, and in the future, we may be unable to renew or duplicate our current insurance coverage at adequate levels or at reasonable prices.  In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property, on the premises, due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination) and, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. However, tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies.  If we experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties, and the loss could seriously disrupt our operations, delay revenue and result in significant expenses. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical or undesirable to use insurance proceeds to replace a property after it has been damaged or destroyed. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. 
 
Our expenses may remain constant or increase, which could reduce our cash flow and funds available for future distributions, particularly if such expenses are not offset by an increase in corresponding revenues. 
 
Our existing properties and any properties we develop or acquire in the future are and will continue to be subject to operating risks common to real estate in general, any or all of which may negatively affect us. The expenses of owning and operating properties generally do not decrease, and may increase, when circumstances such as market factors and competition cause a reduction in income from the properties. Our properties continue to be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses, regardless of occupancy rates. As a result, if any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds for that property’s operating expenses. Therefore, constant or rising operating expenses could reduce our cash flow and funds available for future distributions, particularly if such expenses are not offset by corresponding revenues.

Our business faces potential risks associated with natural disasters, severe weather conditions and climate change and related legislation and regulations, which could have an adverse effect on our cash flow and operating results.
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Global climate change continues to attract considerable public and scientific attention with widespread concern about the impact of human activity on the environment, including effects on the frequency and scale of natural disasters, and federal and state legislation and regulations in these areas continue to pose risks. Changing weather patterns and climatic conditions may affect the predictability and frequency of natural disasters in some parts of the world and create additional uncertainty as to future trends and exposures, including certain areas in which our portfolio is concentrated such as Texas, Indiana, Florida, North Carolina, and Nevada. Our properties are located in many areas that are subject to or have been affected by natural disasters and severe weather conditions such as hurricanes, tropical storms, tornadoes, earthquakes, droughts, floods and fires. Over time, the occurrence of natural disasters, severe weather conditions and changing climatic conditions can delay new development and redevelopment projects, increase repair costs and future insurance costs and negatively impact the demand for lease space in the affected areas, or in extreme cases, affect our ability to operate the properties at all.

    Changes in federal and state legislation and regulations on climate control could result in increased costs and expenses, such as utility expenses and/or capital expenditures to improve the energy efficiency of our existing properties, or potentially result in fines for non-compliance. These risks could have an adverse effect on our cash flow and operating results.

We could incur significant costs related to environmental matters, and our efforts to identify environmental liabilities may not be successful. 
 
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination. Some of the properties in our portfolio contain, may have contained or are adjacent to or near other properties that have contained or currently contain underground storage tanks for petroleum products or other hazardous or toxic substances, and some of our properties have tenants that may use hazardous or toxic substances in the routine course of their businesses. Indemnities in our leases may not fully protect us in the event that a tenant becomes insolvent. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral. In connection with the ownership, operation and management of real properties, we are potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and injuries to persons and property, liens on contaminated sites, and restrictions on operations.  We may also be liable to third parties for damage and injuries resulting from environmental contamination emanating from the real estate.  Finally, certain of our properties have contained asbestos-containing building materials ("ACBM") and other properties may have contained such materials based on the date of its construction. Environmental laws require that ACBM be properly managed and maintained, and may impose fines and penalties on building owners or operators for failure to comply with these requirements. The laws also may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. 
 
We test our properties for compliance with applicable environmental laws on a limited basis, and we cannot give assurance that existing environmental studies with respect to our properties reveal all potential environmental liabilities or that current or future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in environmental liabilities.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely affect our cash flows and results of operations. 
 
Our properties must comply with Title III of the ADA to the extent that such properties are public accommodations as defined by the ADA. Noncompliance with the ADA could result in orders requiring us to spend substantial sums to cure violations, pay attorneys' fees, or pay other amounts. Although we believe the properties in our portfolio substantially comply with present requirements of the ADA, we have not conducted an audit or investigation of all of our properties to determine our compliance, and while our tenants typically under tenant leases are obligated to cover costs associated with compliance, if required changes involve greater expenditures or faster timelines than anticipated, the ability of these tenants to cover costs could be adversely affected. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. We may be required to make substantial capital expenditures to comply with, and we may be restricted in our ability to renovate the properties subject to, these requirements, which could affect our cash flows and results of operations.

Inflation may adversely affect our financial condition and results of operations. 
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Most of our leases contain provisions requiring the tenant to pay a share of operating expenses, including common area maintenance or other operating expenses based on a fixed amount or fixed percentage, not subject to adjustment for inflation. However, increased inflation could have a more pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time.  It may also limit our ability to recover all of our operating expenses. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our average rents, and in some cases, our percentage rents, where applicable.  In addition, renewals of leases or future leases may not be negotiated on current terms, in which event we may recover a smaller percentage of our operating expenses. 
 
Rising interest rates could increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distributions to our shareholders, as well as decrease our share price, if investors seek higher yields through other investments.

An environment of rising interest rates could lead investors to seek higher yields through other investments, which could adversely affect the market price of our common shares. One of the factors that may influence the price of our common shares in public markets is the rate of annual cash distributions we pay as compared with the yields on alternative investments. Several other factors, such as governmental regulatory action and tax laws, could have a significant impact on the future market price of our common shares. In addition, increases in market interest rates could result in increased borrowing costs for us, which may adversely affect our cash flow and the amounts available for distributions to our shareholders.

We and our tenants face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions.

We and our tenants rely extensively on computer systems to process transactions and manage our respective businesses, and although various measures are utilized to prevent, detect and mitigate threats, we have been targeted by e-mail phishing attempts and scams in the past, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be both individual and/or highly organized attempts by very sophisticated hacking organizations. A cybersecurity attack could compromise the confidential information of our employees, tenants, and vendors. Additionally, we rely on a number of service providers and vendors, and cybersecurity risks at these service providers and vendors create additional risks for our information and business. A successful attack could lead to identity theft, fraud or other disruptions to our business operations, any of which may negatively affect our results of operations.

We conduct periodic assessments and use the results of such to create and implement a strategy designed to prevent, detect and respond to cybersecurity threats. However, there is no guarantee such efforts will be successful in preventing a cyber-attack.  
 
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE 
 
Our organizational documents contain provisions that generally would prohibit any person (other than members of the Kite family who, as a group, are currently allowed to own up to 21.5% of our outstanding common shares) from beneficially owning more than 7% of our outstanding common shares (or up to 9.8% in the case of certain designated investment entities, as defined in our declaration of trust), which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders. 
 
Our organizational documents contain provisions that may have an anti-takeover effect and inhibit a change of control transaction, which could prevent our shareholders from being paid a premium for their common shares over the then-prevailing market prices. 
 
(1)  There are ownership limits and restrictions on transferability in our declaration of trust. In order for us to qualify as a REIT, no more than 50% of the value of our outstanding shares may be owned, actually or constructively, by five or fewer individuals at any time during the last half of each taxable year. To make sure that we will not fail to satisfy this requirement and for anti-takeover reasons, our declaration of trust generally prohibits any shareholder (other than an excepted holder or certain designated investment entities, as defined in our declaration of trust) from owning (actually, constructively or by attribution), more than 7% of the value or number of our outstanding common shares. Our declaration of trust provides an excepted holder limit that allows members of the Kite family (Al Kite, John Kite and Paul Kite, their family members and
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certain entities controlled by one or more of the Kites), as a group, to own more than 7% of our outstanding common shares, subject to applicable tax attribution rules. Currently, one of the excepted holders would be attributed all of the common shares owned by each other excepted holder and, accordingly, the excepted holders as a group would not be allowed to own in excess of 21.5% of our common shares. If at a later time, there were not one excepted holder that would be attributed all of the shares owned by the excepted holders as a group, the excepted holder limit would not permit each excepted holder to own 21.5% of our common shares. Rather, the excepted holder limit would prevent two or more excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common shares than the maximum amount of common shares that could be owned by any one excepted holder (21.5%), plus the maximum amount of common shares that could be owned by any one or more other individual common shareholders who are not excepted holders (7%). Certain entities that are defined as designated investment entities in our declaration of trust, which generally include pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of our outstanding common shares, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the 7% ownership limit if those beneficial owners owned directly their proportionate share of the common shares owned by the designated investment entity. Our Board of Trustees may waive, and has waived in the past, the ownership limits subject to certain conditions. In addition, our declaration of trust contains certain other ownership restrictions intended to prevent us from earning income from related parties if such income would cause us to fail to comply with the REIT gross income requirements. The various ownership restrictions may discourage a tender offer or other change of control transaction or compel a shareholder who has acquired our shares in excess of these ownership limitations to dispose of the additional shares. Any acquisition of our common shares in violation of these ownership restrictions will be void ab initio and will result in automatic transfers of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees.

(2)   Our declaration of trust permits our Board of Trustees to issue preferred shares with terms that may discourage a third party from acquiring us. Our declaration of trust permits our Board of Trustees to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our Board of Trustees. Any preferred shares that we issue likely would rank senior to our common shares with respect to payment of distributions, in which case we could not pay any distributions on our common shares until full distributions were paid with respect to such preferred shares. 
 
(3)   Our declaration of trust and bylaws contain other possible anti-takeover provisions. Our declaration of trust and bylaws contain other provisions, such as advance notice requirements for shareholder proposals, the ability of our Board of Trustees' to reclassify shares or issue additional shares, and the absence of cumulative voting rights that may have the effect of delaying, deferring or preventing a change in control of our company or the removal of existing management. 

Certain provisions of Maryland law could inhibit changes in control. 
 
Maryland law includes “business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations with an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on business combinations, and “control share” provisions that provide that “control shares” (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in certain acquisitions have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances. Although we have opted out of these provisions of Maryland law, our Board of Trustees may opt to make these provisions applicable to us at any time, which may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of such shares. 
 
A substantial number of common shares eligible for future issuance or sale could cause our common share price to decline significantly and may be dilutive to current shareholders. 
 
Our declaration of trust authorizes our Board of Trustees to, among other things, issue additional common shares without shareholder approval. The issuance of substantial numbers of our common shares in the public market or the sale by existing shareholders, or the perception that such issuances or sales might occur, could adversely affect the per share trading price of our common shares, dilute our existing shareholders' interests in our company or impact our ability to sell equity or equity-related securities in the future at a time and price that we deem appropriate. As of December 31, 2020, we had outstanding 84,187,999 common shares, substantially all of which are freely tradable.  In addition, 2,523,861 units of our Operating Partnership were
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owned by our executive officers and other individuals as of December 31, 2020, and are redeemable by the holder for cash or, at our election, common shares. Pursuant to registration rights of certain of our executive officers and other individuals, we filed a registration statement with the SEC to register common shares issued (or issuable upon redemption of units in our Operating Partnership) in our formation transactions. As units are redeemed for common shares, the market price of our common shares could drop significantly if the holders of such shares sell them or are perceived by the market as intending to sell them. 
 
Certain officers and trustees may have interests that conflict with the interests of shareholders. 
 
Certain of our officers own limited partner units in our Operating Partnership. These individuals may have personal interests that conflict with the interests of our shareholders with respect to business decisions affecting us and our Operating Partnership, such as interests in the timing and pricing of property sales or refinancing transactions in order to obtain favorable tax treatment. As a result, the effect of certain transactions on these unit holders may influence our decisions affecting these properties. 
 
Departure or loss of our key officers could have an adverse effect on us. 
 
Our future success depends, to a significant extent, upon the continued services of our existing executive officers, whose experience in real estate acquisition, development, finance and management is a critical element of our future success. If one or more of our key executive officers were to die, become disabled or otherwise leave our employ, we may not be able to replace this person with an executive of equal skill, ability, and industry expertise within a reasonable timeframe, which could negatively affect our operations and financial condition.
 
Our rights and the rights of our shareholders to take action against our trustees and officers are limited. 
 
Maryland law provides that a director or officer has limited liability in that capacity if he or she performs his or her duties in good faith and in a manner that he or she reasonably believes to be in our best interests and that an ordinarily prudent person in a like position would use under similar circumstances. Our declaration of trust and bylaws require us to indemnify our trustees and officers for actions taken by them in those capacities to the extent permitted by Maryland law. 
 
Our shareholders have limited ability to prevent us from making any changes to our policies that they believe could harm our business, prospects, operating results or share price. 
 
Our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, will be determined by our management and, in certain cases, approved by our Board of Trustees. These policies may be amended or revised from time to time at the discretion of our Board of Trustees without a vote of our shareholders. This means that our shareholders will have limited control over changes in our policies. Such changes in our policies intended to improve, expand or diversify our business may not have the anticipated effects and consequently may adversely affect our business and prospects, results of operations and share price. 
 
Our common share price could be volatile and could decline, resulting in a substantial or complete loss of our shareholders’ investment. 
 
The stock markets (including The New York Stock Exchange (the “NYSE”) on which we list our common shares) have experienced and from time to time do experience significant price and volume fluctuations. The market price of our common shares could be similarly volatile, and investors in our shares may experience a decrease in the value of their shares, including decreases that may not be related to our operating performance or prospects, including the risk factors described in "Forward-Looking Statements" included elsewhere in this Annual Report on From 10-K.
 
Changes in accounting standards may adversely impact our financial results.

    The Financial Accounting Standards Board (the “FASB”), in conjunction with the SEC, has issued and may issue key pronouncements that impact how we account for our material transactions, including, but not limited to, lease accounting, business combinations and the recognition of other revenues. We are unable to predict which, if any, proposals may be issued in the future or what level of impact any such proposal could have on the presentation of our consolidated financial statements, our results of operations and the financial ratio required by our debt covenants.

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The cash available for distribution to shareholders may not be sufficient to pay distributions at expected levels, nor can we assure you of our ability to make distributions in the future, and we may use borrowed funds to make cash distributions and/or may choose to make distributions in part payable in our common shares. 
 
To qualify as a REIT, we are required to distribute to our shareholders each year at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains). In order to eliminate U.S. federal income tax, we are required to distribute annually 100% of our net taxable income, including capital gains. If cash available for distribution generated by our assets decreases in future periods from expected levels, our inability to make expected distributions could result in a decrease in the market price of our common shares.  All distributions will be made at the discretion of our Board of Trustees and will depend on our earnings, our financial condition, maintenance of our REIT qualification and other factors as our Board of Trustees may deem relevant from time to time. We may not be able to make distributions in the future. In addition, some of our distributions may include a return of capital. To the extent that we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder’s adjusted tax basis in his or her shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such shares. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. Finally, although we do not currently intend to do so, in order to maintain our REIT qualification, we may make distributions that are in part payable in our common shares. Taxable shareholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits and may be required to sell shares received in such distribution or may be required to sell other shares or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a significant number of our shareholders determine to sell common shares in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our common shares.

Future offerings of debt securities, which would be senior to our equity securities, may adversely affect the market prices of our common shares. 
 
In the future, we may attempt to increase our capital resources by making offerings of debt securities, including unsecured notes, medium term notes, and senior or subordinated notes, as well as debt securities that are convertible into equity. Holders of our debt securities will generally be entitled to receive interest payments, both current and in connection with any liquidation or sale, prior to the holders of our common shares being entitled to receive distributions. Future offerings of debt securities, or the perception that such offerings may occur, may reduce the market prices of our common shares and/or the distributions that we pay with respect to our common shares. Because we may generally issue such debt securities in the future without obtaining the consent of our shareholders, our shareholders will bear the risk of our future offerings reducing the market prices of our equity securities. 

RISKS RELATED TO TAX MATTERS
 
Failure of our company to qualify as a REIT would have serious adverse consequences to us and our shareholders. 
 
We believe that we have qualified for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2004.  We intend to continue to meet the requirements for qualification and taxation as a REIT, but we cannot assure shareholders that we will qualify as a REIT. We have not requested and do not plan to request a ruling from the IRS that we qualify as a REIT, and the statements in this Annual Report on Form 10-K are not binding on the IRS or any court. As a REIT, we generally will not be subject to U.S. federal income tax on our income that we distribute currently to our shareholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws. In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers. We also are required to distribute to our shareholders with respect to each year at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains). The fact that we hold substantially all of our assets through our Operating Partnership and its subsidiaries and joint ventures further complicates the application of the REIT requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT status, and, given the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations, we cannot provide any assurance that we will continue to qualify as a REIT. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new ruling, that make it more difficult, or impossible, for us to remain qualified as a REIT. 
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If we fail to qualify as a REIT for U.S. federal income tax purposes and are unable to avail ourselves of certain savings provisions set forth in the Code:

We would be taxed as a non-REIT "C" corporation, which under current laws, among other things, means not being able to take a deduction for distributions to shareholders in computing our taxable income or pass through long term capital gains to individual shareholders at favorable rates and possibly increased state and local taxes;

We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify;

We would have to pay significant income taxes, which would reduce our net earnings available for investment or distribution to our shareholders. Moreover, such failure would cause an event of default under our Credit Facility and unsecured term loans and may adversely affect our ability to raise capital and to service our debt.  This likely would have a significant adverse effect on our earnings and the value of our securities. In addition, we would no longer be required to pay any distributions to shareholders; and

We would be required to pay penalty taxes of $50,000 or more for each such failure.  
 
We will pay some taxes even if we qualify as a REIT. 
 
Even if we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay certain U.S. federal, state and local taxes on our income and property. For example, we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable income (including capital gains). Additionally, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% penalty tax.
 
In addition, any net taxable income earned directly by our TRS, or through entities that are disregarded for U.S. federal income tax purposes as entities separate from our TRS, will be subject to U.S. federal and possibly state corporate income tax. We have elected to treat Kite Realty Holdings, LLC as a TRS, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a TRS will be subject to an appropriate level of U.S. federal income taxation. For example, a TRS is limited in its ability to deduct interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by the taxable REIT subsidiaries if the economic arrangements between the REIT, the REIT’s tenants, and the TRS are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to U.S. federal income tax on that income because not all states and localities treat REITs the same way they are treated for U.S. federal income tax purposes. To the extent that we and our affiliates are required to pay U.S. federal, state and local taxes, we will have less cash available for distributions to our shareholders. 
 
REIT distribution requirements may increase our indebtedness. 
 
We may be required from time to time, under certain circumstances, to accrue income for tax purposes that has not yet been received. In such event, or upon our repayment of principal on debt, we could have taxable income without sufficient cash to enable us to meet the distribution requirements of a REIT. Accordingly, we could be required to borrow funds or liquidate investments on adverse terms in order to meet these distribution requirements. Additionally, the sale of properties resulting in significant tax gains could require higher distributions to our shareholders or payment of additional income taxes in order to maintain our REIT status.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. 
 
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate risk will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges interest rate risk on liabilities used to carry or acquire real estate assets or manages the risk of certain currency fluctuations, and such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we
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may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear.
 
Complying with the REIT requirements may cause us to forgo and/or liquidate otherwise attractive investments. 
 
To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts that we distribute to our shareholders and the ownership of our shares. To meet these tests, we may be required to take actions we would otherwise prefer not to take or forgo taking actions that we would otherwise consider advantageous. For instance, in order to satisfy the gross income or asset tests applicable to REITs under the Code, we may be required to forgo investments that we otherwise would make. Furthermore, we may be required to liquidate from our portfolio otherwise attractive investments. In addition, we may be required to make distributions to shareholders at disadvantageous times or when we do not have funds readily available for distribution. These actions could reduce our income and amounts available for distribution to our shareholders. Thus, compliance with the REIT requirements may hinder our investment performance. 
 
Dividends paid by REITs generally do not qualify for effective tax rates as low as dividends paid by non-REIT "C" corporations. 
 
The maximum rate applicable to “qualified dividend income” paid by non-REIT “C” corporations to certain non-corporate U.S. shareholders has been reduced by legislation to 23.8% (taking into account the 3.8% Medicare tax applicable to net investment income).  Dividends payable by REITs, however, generally are not eligible for the reduced rates. Effective for taxable years beginning after December 31, 2017 and before January 1, 2026, non-corporate shareholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends). For non-corporate shareholders in the top marginal tax bracket of 37%, the deduction for REIT dividends yields an effective income tax rate of 29.6% on REIT dividends, which is higher than the 20% tax rate on qualified dividend income paid by non-REIT “C” corporations. This does not adversely affect the taxation of REITs, however, it could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT “C” corporations that pay dividends, which could adversely affect the value of our common shares. 
 
If the Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we could fail to qualify as a REIT and suffer other adverse consequences. 
 
We believe that our Operating Partnership is organized and operated in a manner so as to be treated as a partnership and not an association or a publicly traded partnership taxable as a corporation, for U.S. federal income tax purposes. As a partnership, our Operating Partnership is not subject to U.S. federal income tax on its income. Instead, each of the partners is allocated its share of our Operating Partnership’s income. No assurance can be provided, however, that the IRS will not challenge our Operating Partnership’s status as a partnership for U.S. federal income tax purposes or that a court would not sustain such a challenge. If the IRS were successful in treating our Operating Partnership as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of its cash available for distribution to its partners, including us.

There is a risk that the tax laws applicable to REITs may change. 
 
The IRS, the United States Treasury Department and Congress frequently review U.S. federal income tax legislation, regulations and other guidance. The Company cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted. Any legislative action may prospectively or retroactively modify the Company's tax treatment and, therefore, may adversely affect our taxation or taxation of our shareholders. We urge you to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. Although REITs generally receive certain tax advantages compared to entities taxed as non-REIT “C” corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a non-REIT “C” corporation.



25


ITEM 1B. UNRESOLVED STAFF COMMENTS 
 
None





ITEM 2. PROPERTIES
  
Retail Operating Properties 
 
As of December 31, 2020, we owned interests in a portfolio of 83 retail operating properties totaling approximately 16.3 million square feet of total GLA (including approximately 4.6 million square feet of non-owned anchor space).  The following table sets forth more specific information with respect to our retail operating properties as of December 31, 2020:




Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Arizona
The CornerTucson200879,902 55,883 24,019 100.0 %100.0 %100.0 %$30.87 Total Wine & MoreNordstrom Rack, Panera Bread, (Home Depot)
Connecticut
Crossing at Killingly CommonsWillimantic, CT2010206,560 149,202 57,358 79.0 %85.7 %61.7 %14.77 Stop & Shop Supermarket, (Target)TJ Maxx, Michaels, Petco, Staples, Lowe's Home Improvement Center
Florida
12th Street PlazaVero Beach1978/2003135,016 121,376 13,640 75.7 %73.0 %100.0 %11.32 PublixTuesday Morning
Bayport CommonsTampa200898,668 73,045 25,623 100.0 %100.0 %100.0 %17.85 (Target)Burlington, PetSmart, Michaels
Centre Point CommonsSarasota2007119,366 93,574 25,792 97.4 %100.0 %88.2 %17.75 Best Buy, Dick's Sporting Goods, Office Depot, Panera Bread, (Lowe's Home Improvement Center)
Cobblestone PlazaMiami2011133,251 68,219 65,032 96.7 %100.0 %93.2 %28.72 Whole FoodsParty City, Planet Fitness
Colonial SquareFort Myers2010186,517 150,505 36,012 88.1 %100.0 %38.4 %11.89 Kohl's, Hobby Lobby, PetSmart
Delray MarketplaceMiami2013260,347 118,136 142,211 94.9 %100.0 %90.6 %26.39 PublixParagon Theatres, Burt & Max's, Ann Taylor Loft, Chico's, White House Black Market
Estero Town CommonsFort Meyers200625,696 — 25,696 94.7 %0.0 %94.7 %15.53 Lowe's Home Improvement Center, Dollar Tree
Hunter's Creek PromenadeOrlando1994119,738 55,999 63,739 99.1 %100.0 %98.3 %15.94 Publix
Indian River SquareVero Beach1997/2004142,622 109,000 33,622 95.9 %100.0 %82.7 %11.2 (Target)Beall's, Office Depot, Dollar Tree, Panera
International Speedway SquareDaytona Beach1999/2013233,424 203,405 30,019 79.2 %82.3 %57.9 %12.24 Total Wine & MoreBed Bath & Beyond, Old Navy, Staples, Michaels, Dick’s Sporting Goods, Shoe Carnival
Kings Lake SquareNaples1986/201488,611 45,600 43,011 99.1 %100.0 %98.1 %19.37 Publix
Lake City CommonsLake City200865,746 45,600 20,146 100.0 %100.0 %100.0 %15.92 Publix
Lake City Commons - Phase IILake City201116,291 12,131 4,160 100.0 %100.0 %100.0 %15.89 PublixPetSmart
Lake Mary PlazaOrlando200921,385 14,880 6,505 100.0 %100.0 %100.0 %38.22 Walgreens
Lithia CrossingTampa2003/201390,522 53,547 36,975 58.9 %32.8 %96.8 %22.8 The Fresh MarketChili's, Panera Bread
Miramar SquareMiami2008231,680 147,505 84,175 94.7 %100.0 %85.3 %18.13 Sprouts Farmers MarketKohl's, Miami Children's Hospital
Northdale PromenadeTampa1985/2017179,559 130,269 49,290 95.0 %100.0 %81.9 %12.64 (Winn Dixie)TJ Maxx, Ulta Beauty, Beall's, Crunch Fitness, Tuesday Morning
Pine Ridge CrossingNaples1993105,986 66,435 39,551 94.2 %100.0 %84.5 %18.1 Publix, (Target)Ulta Beauty, (Beall's)
Pleasant Hill CommonsOrlando200870,645 45,600 25,045 100.0 %100.0 %100.0 %16.06 Publix
Riverchase PlazaNaples1991/200178,291 48,890 29,401 96.3 %100.0 %90.3 %17.24 Publix
Saxon CrossingDaytona Beach2009119,909 95,304 24,605 96.0 %100.0 %80.5 %15.29 (Target)Hobby Lobby, LA Fitness, (Lowe's Home Improvement Center)
Shoppes of EastwoodOrlando199769,076 51,512 17,564 90.1 %100.0 %61.1 %12.52 Publix
Shops at Eagle CreekNaples1983/201370,731 50,187 20,544 95.8 %100.0 %85.7 %16.23 The Fresh MarketStaples, Panera Bread, (Lowe's Home Improvement Center)
Tamiami CrossingNaples2016121,591 121,591 — 73.7 %73.7 %0.0 %13.46 Aldi, (Walmart)Marshalls, Michaels, PetSmart, Ross Stores, Ulta Beauty


28


Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Tarpon Bay PlazaNaples200781,864 59,442 22,422 100.0 %100.0 %100.0 %17.77 (Target)PetSmart, Cost Plus World Market, Ross Stores, Panera Bread
The Landing at Tradition Port St. Lucie2007359,227 283,208 76,019 88.4 %89.8 %82.9 %15.39 (Target)TJ Maxx, Ulta Beauty, Burlington, Bed Bath & Beyond, LA Fitness, Michaels, Old Navy, PetSmart, DSW, Five Below, Ross Stores
The Shops at Julington Creek Jacksonville201140,254 21,038 19,216 100.0 %100.0 %100.0 %20.87 The Fresh Market
Tradition Village Center Port St. Lucie200685,057 45,600 39,457 96.9 %100.0 %93.3 %18.75 Publix
Waterford Lakes VillageOrlando199778,007 51,703 26,304 98.4 %100.0 %95.2 %13.91 
Georgia
Mullins Crossing Augusta2005276,318 228,224 48,094 99.3 %100.0 %96.1 %13.39 (Target)Ross Stores, Old Navy, Five Below, Kohls, La-Z-Boy, Marshalls, Office Max, Petco, Ulta Beauty, Panera Bread
Illinois
Naperville MarketplaceChicago200883,759 61,683 22,076 97.7 %100.0 %91.1 %14.01 (Caputo's Fresh Market)TJ Maxx, PetSmart
Indiana
54th & CollegeIndianapolis2008— — — — %— %— %— The Fresh Market
Bridgewater MarketplaceWestfield200825,975 — 25,975 100.0 %0.0 %100.0 %22.15 (Walgreens), The Local Eatery, Original Pancake House
Castleton CrossingIndianapolis1975/2012286,377 247,710 38,667 97.4 %100.0 %80.6 %12.21 TJ Maxx/HomeGoods, Burlington, Shoe Carnival, Value City Furniture, K&G Menswear, Chipotle, Verizon, Five Below
Cool Creek CommonsWestfield2005125,072 54,401 70,671 68.1 %36.0 %92.8 %23.50 The Fresh MarketMcAlister's Deli, Buffalo Wild Wings, Pet People
Depauw University Bookstore and CaféIndianapolis201211,974 — 11,974 100.0 %0.0 %100.0 %9.17 Follett's, Starbucks
Eddy Street Commons at Notre DameSouth Bend200987,987 20,154 67,833 96.1 %100.0 %95.0 %27.32 Hammes Bookstore & Cafe, Chipotle, Urban Outfitters, Five Guys, Kilwins, Blaze Pizza
Fishers StationFishers1989/201852,395 15,441 36,954 78.8 %100.0 %70.0 %16.83 Dollar Tree, Goodwill
Geist PavilionFishers200663,910 29,700 34,210 97.6 %100.0 %95.6 %17.6 Ace Hardware, Goodwill, Ale Emporium, Pure Barre
Greyhound CommonsCarmel20059,152 — 9,152 100.0 %0.0 %100.0 %15.33 (Lowe's Home Improvement Center), Koto Japenese Steakhouse
Nora PlazaIndianapolis2004139,670 73,589 66,081 94.1 %100.0 %87.6 %15.29 Whole Foods, (Target)Marshalls
Rangeline CrossingCarmel1986/201399,497 48,171 51,326 66.4 %47.7 %84.0 %25.05 Walgreens, Panera Bread, City BBQ
Rivers EdgeIndianapolis2011150,463 117,890 32,573 98.9 %100.0 %95.0 %22.10 Nordstrom Rack, The Container Store, Arhaus Furniture, Bicycle Garage of Indy, Buy Buy Baby
Stoney Creek CommonsNoblesville2000/201384,226 84,226 — 64.1 %64.1 %0.0 %14.38 LA Fitness, Goodwill, (Lowe's Home Improvement Center)
Traders Point IIndianapolis2005211,545 170,809 40,736 94.4 %100.0 %70.9 %14.47 Dick's Sporting Goods, AMC Theatres, Michaels, Old Navy, PetSmart, Books-A-Million
Traders Point IIIndianapolis200545,978 — 45,978 90.4 %0.0 %90.4 %27.72Starbucks, Noodles & Company, Qdoba
29


Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Nevada
Centennial CenterLas Vegas2002334,023 147,824 186,199 99.2 %100.0 %98.6 %25.95Sam's Club, WalmartRoss Stores, Big Lots, Famous Footwear, Michaels, Petco, Home Depot, HomeGoods, Skechers, Five Below, Sephora, Tillys
Centennial GatewayLas Vegas2005193,452 140,277 53,175 99.4 %100.0 %97.9 %24.40 Trader Joe'sParty City, Sportsman's Warehouse, Walgreens, UFC Fit
Eastern Beltway CenterLas Vegas1998/2006162,318 77,436 84,882 88.7 %100.0 %78.4 %27.21Sam's Club, WalmartPetco, Ross Stores, Skechers, Old Navy, (Home Depot)
Rampart CommonsLas Vegas2002/201879,314 11,965 67,349 100.0 %100.0 %100.0 %33.55Athleta, North Italia, Pottery Barn, Williams Sonoma, Flower Child, Crunch Fitness
New Jersey
Bayonne Crossing New York / Northern New Jersey2011112,871 52,219 60,652 72.8 %41.2 %100.0 %34.41WalmartMichaels, Lowe's Home Improvement Center
Livingston Shopping CenterNew York / Northern New Jersey1997139,022 133,125 5,897 97.9 %100.0 %50.8 %20.93Cost Plus World Market, Buy Buy Baby, Nordstrom Rack, DSW, TJ Maxx, Ulta Beauty
New York
City CenterNew York / Northern New Jersey2004/2018363,023 325,139 37,884 97.0 %100.0 %70.9 %25.97ShopRiteNordstrom Rack, New York Sports Club, Burlington, Club Champion Golf, National Amusements
North Carolina
Eastgate CrossingRaleigh1958/2007156,276 62,386 93,890 72.7 %55.4 %84.2 %32.90Trader Joe'sChipotle, Petco, Starbucks, Ulta Beauty
Holly Springs Towne Center - Phase IRaleigh2013209,811 121,761 88,050 91.7 %100.0 %80.1 %18.28(Target)Dick's Sporting Goods, Marshalls, Petco, Ulta Beauty, Michaels, Old Navy, Five Below
Holly Springs Towne Center - Phase IIRaleigh2016145,043 111,843 33,200 98.8 %100.0 %94.6 %17.94(Target)Bed Bath & Beyond, DSW, AMC Theatres, 02 Fitness
Northcrest Shopping Center Charlotte2008133,621 65,576 68,045 94.2 %100.0 %88.6 %23.74(Target)REI Co-Op, David's Bridal, Old Navy, Five Below
Oleander PlaceWilmington201245,524 30,144 15,380 100.0 %100.0 %100.0 %18.05Whole Foods
Parkside Town Commons - Phase IRaleigh201555,368 22,500 32,868 100.0 %100.0 %100.0 %26.23Harris Teeter/Kroger, (Target)Petco, Guitar Center
Parkside Town Commons - Phase IIRaleigh2017298,094 188,785 109,309 67.5 %50.6 %96.7 %22.21(Target)Golf Galaxy, Hobby Lobby, Chuy's, Starbucks, Panera Bread, Levity Live
Perimeter Woods Charlotte2008125,579 105,175 20,404 100.0 %100.0 %100.0 %20.82Best Buy, Off Broadway Shoes, PetSmart, Michaels, (Lowe's Home Improvement Center)
Toringdon MarketCharlotte200461,101 26,546 34,555 97.9 %100.0 %96.3 %23.34Earth Fare
Ohio
Eastgate PavilionCincinnati1995236,230 231,730 4,500 100.0 %100.0 %100.0 %9.38Best Buy, Dick's Sporting Goods, Value City Furniture, Petsmart, DSW
Oklahoma
Belle Isle StationOklahoma City2000196,164 115,783 80,381 85.9 %100.0 %65.5 %17.42(Walmart)REI, Shoe Carnival, Old Navy, Ross Stores, Nordstrom Rack, Ulta Beauty, Five Below
Shops at Moore Oklahoma City2010260,625 188,037 72,588 92.6 %94.6 %87.2 %12.35Bed Bath & Beyond, Best Buy, Hobby Lobby, Old Navy, PetSmart, Ross Stores

30



Property1
Location (MSA)Year
Built/
Renovated
Owned GLA2
Leased %ABR
per SqFt
Grocery Anchors4
Other Retailers4
TotalAnchorsShopsTotalAnchorsShops
Silver Springs Pointe Oklahoma City200148,440 20,515 27,925 83.0 %100.0 %70.4 %14.38(Sam's Club), (Walmart)Kohls, Office Depot, (Home Depot)
South Carolina
Publix at WoodruffGreenville199768,103 47,955 20,148 91.0 %100.0 %69.5 %10.54Publix
Shoppes at Plaza GreenGreenville2000189,730 162,068 27,662 82.6 %87.0 %56.8 %12.87 Bed Bath & Beyond, Christmas Tree Shops, American Freight, Party City, Shoe Carnival, Old Navy
Tennessee
Cool Springs MarketNashville1995230,981 172,712 58,269 97.8 %100.0 %91.4 %16.69 (Kroger)Dick's Sporting Goods, Marshalls, Buy Buy Baby, DSW, Staples, Jo-Ann Fabric, Panera Bread
Texas
Chapel Hill Shopping CenterDallas/Ft. Worth2001126,812 43,450 83,362 100.0 %100.0 %100.0 %26.68 H-E-B GroceryThe Container Store, Cost Plus World Market
Colleyville DownsDallas/Ft. Worth2014194,744 139,219 55,525 94.4 %100.0 %80.4 %15.68 Whole FoodsWestlake Hardware, Goody Goody Liquor, Petco, Fit Factory
Kingwood CommonsHouston1999158,109 74,836 83,273 51.5 %14.5 %84.7 %28.28 Petco, Chico's, Talbots, Ann Taylor
Market Street Village/
Pipeline Point
Dallas/Ft. Worth1970/2011156,621 136,742 19,879 100.0 %100.0 %100.0 %13.67 Jo-Ann Fabric, Ross Stores, Buy Buy Baby, Party City, Spec's Wine Spirits & Finer Foods
Plaza at Cedar HillDallas/Ft. Worth2000/2010295,665 234,358 61,307 92.4 %100.0 %63.1 %13.67 Sprouts Farmers Market, Total WineDSW, Ross Stores, Hobby Lobby, Office Max, Marshalls, Home Goods
Plaza VolenteAustin2004156,146 105,000 51,146 94.8 %100.0 %84.2 %$17.34 H-E-B Grocery
Portofino Shopping CenterHouston1999/2010369,802 218,861 150,941 83.2 %83.6 %82.6 %21.38(Sam's Club)DSW, Michaels, PGA Superstore, PetSmart, Old Navy, TJ Maxx, Nordstrom Rack, Five Below
Sunland Towne CentreEl Paso1996/2014306,454 265,037 41,417 98.9 %100.0 %91.7 %11.27Sprouts Farmers MarketPetSmart, Ross Stores, Bed Bath & Beyond, Spec's Fine Wines, At Home
Waxahachie Crossing Dallas/Ft. Worth201097,127 72,191 24,936 100.0 %100.0 %100.0 %15.55Best Buy, PetSmart, Ross Stores, (Home Depot)
Westside Market Dallas/Ft. Worth201393,377 70,000 23,377 100.0 %100.0 %100.0 %16.66Randalls Tom Thumb
Utah
Draper Crossing Salt Lake City2012164,657 115,916 48,741 100.0 %100.0 %100.0 %17.28Kroger/Smith'sTJ Maxx, Dollar Tree, Downeast Home
Draper Peaks Salt Lake City2012227,667 101,464 126,203 91.5 %100.0 %84.7 %21.27 Michaels, Office Depot, Petco, Quilted Bear, Ross Stores, (Kohl's)
 Total11,661,7317,878,9593,782,77291.2 %92.9 %87.6 %$18.42 
Total at Pro-Rata Share11,328,3247,591,1863,737,13891.2 %93.0 %87.7 %$18.44 
31



____________________
1All properties are wholly owned, except as indicated through reference to Note 3 below. Unless otherwise noted, each property is owned in fee simple by the Company.
2Percentage of Owned GLA Leased reflects Owned GLA/NRA leased as of December 31, 2020, except for Greyhound Commons and 54th & College.
3Asset is owned in a joint venture.
4Tenants within parentheses are non-owned.
32


Office Operating Properties and Other 

As of December 31, 2020, we owned interests in one office operating property, two parking garages, and one triple-net leased property. In addition, two of our retail properties contain stand-alone office components. Together, these properties have a total of 0.5 million square feet of net rentable area (“NRA”) of space.  The following table sets forth more specific information with respect to our office, parking and other properties as of December 31, 2020: 
 
($ in thousands, except per square foot data)
PropertyMSAYear Built/
Renovated
Acquired,
Redeveloped
or Developed
Owned
NRA
Percentage
Of Owned
NRA
Leased
Annualized
Base Rent1
Percentage
of
Annualized
Office and Other
Base Rent
Base Rent
Per Leased
Sq. Ft.
Major Tenants
Commercial Properties
Thirty South Meridian2
Indianapolis1905/2002Redeveloped284,874 94.6 %$5,448 67.2 %$20.22 Carrier, Kite Realty Group, Lumina Foundation
Union Station Parking Garage3
Indianapolis1986AcquiredN/AN/AN/AN/AN/ADenison Parking (manager)
Pan Am Plaza Parking Garage3
IndianapolisAcquiredN/AN/AN/AN/AN/ADenison Parking (manager)
Stand-alone Office Components of Retail Properties
Eddy Street Office (part of Eddy Street Commons)4
South Bend2009Developed81,628 100.0 %1,32416.4 %16.23 University of Notre Dame Offices
Tradition Village Office (part of Tradition Village Square)Port St. Lucie2006Acquired24,340 100.0 %7359.1 %30.19 
Total Commercial Properties390,842 96.1 %$7,507 92.7 %$20.00 
Other Properties
BurlingtonSan Antonio1992/2000Acquired107,400 100.0 %$591 7.3 %$5.50 Burlington
107,400 100.0 %$591 7.3 %$5.50 
Total Commercial and Other498,242 96.9 %$8,098 100.0 %$16.77 
Multi-Family/Lodging
Embassy Suites South Bend at Notre Dame5
South Bend2018Developed N/A$  %$ Full service hotel with 164 rooms
The Foundry Lofts and Apartments at Eddy StreetSouth Bend2009Developed 100.0 %  $ Air rights lease for apartment complex with 266 units
The Foundry Lofts and Apartments at Eddy Street Phase IISouth Bend2020Developed 100.0 %  $ Air rights lease for apartment complex with 453 units
Summit at City Center ApartmentsNew York / Northern New Jersey2004Acquired 100.0 %  $ Apartment complex with 24 units.

33


____________
1Annualized Base Rent represents the monthly contractual rent as of December 31, 2020 for each applicable property, multiplied by 12.
2Annualized Base Rent includes $859,256 from the Company and subsidiaries as of December 31, 2020, which is eliminated for purposes of our consolidated financial statement presentation.
3The garage is managed by a third party.
4The Company also owns the Eddy Street Commons retail shopping center in South Bend, Indiana, along with a parking garage that serves a hotel and the office and retail components of the property.
5Property owned in an unconsolidated joint venture.


Development Projects Under Construction

     In addition to our retail and office operating properties, as of December 31, 2020, we owned an interest in two development projects currently under construction.  The following table sets forth more specific information with respect to the Company’s development projects as of December 31, 2020:

($ in thousands)
ProjectMSAAnticipated Start Date
Projected Stabilization Date1
Projected New Total GLAProjected New Owned GLATotal Project CostKRG Equity RequirementKRG Remaining Spend
Estimated Return on Project2
Glendale Town Center ApartmentsIndianapolis, INQ2 2020Q2 2022207,000 24,000 $38,400 $1,200 $900 7.0% - 8.0%
Eddy Street Commons at Notre Dame, IN - Phase IIISouth Bend, INQ3 2020Q1 202268,500 18,600 $7,500 7,500 6,1008.5% - 9.5%
Glendale Town Center Retail3
Indianapolis, INQ1 2021Q1 202254,500 54,500 $11,000 3,900 3,90027.0% - 28.0%

____________________
1Stabilization date represents near completion of project construction and substantial occupancy of the property.
2Projected ROI for redevelopments is an estimate of the expected incremental stabilized annual operating cash flows to be generated divided by the estimated project costs, including construction, development, financing, and other soft costs, when applicable to the project.
3Equity requirement is lower than total project cost due to a $7.1 million TIF received from the City of Indianapolis.

34


Tenant Diversification 
 
No individual retail or office tenant accounted for more than 2.5% of the portfolio’s annualized base rent for the year ended December 31, 2020. The following table sets forth certain information for the largest 25 tenants open for business at the Company’s retail properties based on minimum rents in place as of December 31, 2020: 
 
TOP 25 TENANTS BY ANNUALIZED BASE RENT
 
($ in thousands, except per square foot data)
Number of Stores
TenantWholly Owned
JV1
Total Leased GLA/NRA2
ABR at Pro-Rata Share 3
ABR psf at Pro-Rata
% of Total
Portfolio
Annualized
Base Rent4
Publix Super Markets, Inc.11535,466 $5,455 $10.19 2.50 %
The TJX Companies, Inc.5
142471,684 4,845 11.22 2.22 %
PetSmart, Inc.131291,379 4,084 14.62 1.87 %
Ross Stores, Inc.121364,442 4,000 11.61 1.83 %
Dick's Sporting Goods, Inc.6
7340,502 3,741 10.99 1.71 %
Bed Bath & Beyond, Inc.7
132387,848 3,718 10.53 1.70 %
Nordstrom Rack51197,797 3,571 20.75 1.64 %
Michaels Stores, Inc.111253,849 3,283 13.66 1.50 %
Burlington Stores, Inc.5310,423 3,039 9.79 1.39 %
National Amusements180,000 2,953 36.92 1.35 %
Old Navy (11) / Athleta (1)12183,599 2,868 15.62 1.31 %
Kohl's Corporation4184,516 2,832 7.87 1.30 %
Walmart Stores, Inc.8
5— 2,776 3.42 1.27 %
Best Buy Co., Inc.5183,604 2,627 14.31 1.20 %
Petco Animal Supplies, Inc.10136,669 2,526 18.48 1.16 %
Lowe's Companies, Inc.3— 2,375 4.91 1.09 %
LA Fitness3125,209 2,292 18.31 1.05 %
Hobby Lobby Stores, Inc.5271,254 2,248 8.29 1.03 %
Whole Foods Market, Inc.4139,781 2,130 15.24 0.98 %
Mattress Firm, Inc.9
1676,408 2,121 27.75 0.97 %
Walgreens463,462 2,104 33.15 0.96 %
The Kroger Co.10
360,268 2,099 9.19 0.96 %
Five Below, Inc.1192,694 1,738 18.75 0.80 %
DSW61133,255 1,687 14.33 0.77 %
Sprouts Farmers Market, Inc.383,985 1,589 18.92 0.73 %
TOTAL18694,968,094 $72,702 $11.55 33.3 %

35


___
1JV Stores represent stores at unconsolidated properties.
2Excludes the estimated size of the structures located on land owned by the Company and ground leased to tenants.
3Annualized base rent represents the monthly contractual rent for December 31, 2020, for each applicable tenant multiplied by 12. Annualized base rent does not include tenant reimbursements. Annualized base rent represents 100% of the annualized base rent at consolidated properties and our share of the annualized base rent at unconsolidated properties.
4Annualized base rent and percent of total portfolio includes ground lease rent.
5Includes TJ Maxx (9), Marshalls (5) and HomeGoods (2).
6Includes Dick's Sporting Goods (6) and Golf Galaxy (1).
7Includes Bed Bath and Beyond (8), Buy Buy Baby (4), and Cost Plus World Market (3).
8Includes Walmart (3) and Sam's Club (2).
9Includes Mattress Firm (12) and Sleepy's (4).
10Includes Kroger (1), Harris Teeter (1), and Smith's (1).

36


Geographic Diversification – Annualized Base Rent by Region and State
 
The Company owns interests in 90 operating and redevelopment properties. We also own interests in two development projects under construction. The total operating portfolio consists of approximately 12 million of owned square feet in 16 states. The following table summarizes the Company’s operating properties by region and state as of December 31, 2020: 
($ in thousands)
Total Operating Portfolio Excluding Developments and Redevelopments
Developments and Redevelopments2
Joint Ventures 3
Total Operating Portfolio Including
Developments and Redevelopments
Region/State
Owned
GLA/NRA
1
Annualized
Base Rent
Owned
GLA/NRA
1
Annualized
Base Rent
Owned
GLA/NRA
1
Annualized
Base Rent
Number of Properties
Owned
GLA/NRA
1
Annualized Base Rent - Ground LeasesTotal Annualized
Base Rent
Percent of
Annualiz