Kite Realty Group Trust (NYSE:KRG) Q1 2018 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 12:00 pm ET


Kite Realty Group Trust (NYSE:KRG) Q1 2018 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Kite Realty Group Trust First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference maybe recorded.

I would now like to turn the conference over to Ms. Ashley Underwood with Investor Relations. Ma'am, you may begin.

Ashley Underwood

Thank you, and good afternoon, everyone. Welcome to Kite Realty Group's first quarter earnings call. Today's comments contain forward-looking statements that are based on assumptions of future events and are subject to inherent risks and uncertainties. Actual results may differ materially from these statements. For more information about the factors that can adversely affect the company's results, please see our SEC filings, including our most recent 10-K. Today's remarks also include certain non-GAAP financial measures. Please refer to yesterday's earnings press release available on our website for a reconciliation of these non-GAAP performance measures to our GAAP financial results.

On the call with me today from the company are Chief Executive Officer, John Kite; Chief Operating Officer, Tom McGowan; and Chief Financial Officer, Dan Sink.

And with that, I'd like to turn the call over to John.

John Kite

Thanks, Ashley. Good afternoon, everyone, thank you for joining us. Let me first start by acknowledging our announcement earlier this week that Dan will be leaving the company at the end of June. I want to publicly thank Dan for his 18-plus years of service and let him know that I and our entire team deeply appreciate everything that he's done for this company, and I'm sure that he will continue to support us in every way possible. So thanks again, Dan.

Now with respect to the first quarter we continue to make positive strides towards our stated objectives for 2018. We met our disposition goal with the sales of Memorial Commons in Goldsboro, North Carolina; and Trussville Promenade in Birmingham, Alabama. These sales combined to generate $63 million in gross proceeds at a blended low 8 cap, which were used to pay down the line-of-credit. This allowed us to further reduce our office supply exposure and completed our exit from the Alabama market. The ABR for both these centers was well below our operating portfolio average, with a blended ABR of $10.63. As a result of these sales the total ABR for the portfolio increased by $0.23 from the end of 2017. While we have not contemplated any additional transactions into guidance, we will continue to explore the sale of assets, where pricing remains attractive and fair value can be achieved and we would then capitalize on that to further drive down leverage.

With respect to leasing, our Big Box Surge initiative gained momentum in the first quarter as we executed two leases for former vacant boxes. Gander Outdoors, the rebranded concept owned by Camping World will be replacing the former 30,000 square foot Gander Mountain at Bayport Commons in Tampa,