Kite Realty Group Trust to Commence Construction on Parkside Town Commons in Early 2013

  Kite Realty Group Trust to Commence Construction on Parkside Town Commons in
  Early 2013

Business Wire

INDIANAPOLIS -- January 3, 2013

Kite Realty Group Trust (NYSE: KRG) (the “Company”) is providing a leasing and
joint venture update for its planned Parkside Town Commons development project
in Raleigh, North Carolina.

Overview of the Project

Parkside Town Commons is a planned multi-phased 580,000 square foot retail
development located in Raleigh, North Carolina. Phase I will be anchored by a
Harris Teeter grocery store and a non-owned Target. Phase II will be anchored
by Golf Galaxy, Frank Theatres CineBowl & Grille, and a new concept owned by a
national credit tenant focused on outdoor activities such as hunting, fishing,
and camping. The retail site is directly adjacent to Research Triangle Park,
which serves as the home to a work force of 52,000 people and more than 170
companies, including IBM, Cisco Systems, GlaxoSmithKline, Fidelity
Investments, and RTI International. The demographics within the trade area of
the project are attractive, with a population density of nearly 86,000 and an
average household income in excess of $113,000.

Leasing Update – Phase I

The development’s primary anchor, Target Corporation, has acquired 10.7 acres
of land for the construction of a 135,000 square foot store in the project’s
first phase. In addition, Harris Teeter-Neighborhood Food and Pharmacy has
signed a ground lease and will construct a 53,000 square foot grocery store.
Phase I of the development is expected to contain approximately 250,000 total
square feet with an estimated project cost of approximately $39 million.
Construction is anticipated to commence in early 2013 with an estimated
opening in the Spring of 2014.

Leasing Update – Phase II

The second phase of the development is expected to contain a total of
approximately 330,000 square feet which includes square footage attributable
to non-owned outlots. Leases have been executed with three of the primary
anchor tenants in Phase II of the development: a 35,000 square foot Golf
Galaxy; a 56,000 square foot Frank Theatres CineBowl & Grille which will
include 12 screens, 16 bowling lanes, and a full-service restaurant; as well
as a 50,000 square foot new concept owned by a national credit tenant focused
on outdoor activities such as hunting, fishing, and camping. Phase II
construction is anticipated to commence in late 2013 or early 2014 with an
estimated project cost of approximately $66 million.

Joint Venture Update

On December 31, 2012, in advance of construction commencement on the
development, the Company acquired its partner’s 60% interest in the project
for $13.3 million, including assumption of the partner’s $8.7 million share of
indebtedness on the project. The acquisition of the partner’s interest is at a
significant discount to book cost which enhances the Company’s overall project
return and enables the Company to receive 100% of the future cash flow from
this project. As a result of this opportunistic buyout, the Company is
required under generally accepted accounting principles to re-measure its
original equity method investment in the development. The Company anticipates
recognizing a net loss of approximately $7.8 - $8.1 million for the fourth
quarter of 2012. This is a non-cash charge that will not impact the Company’s
liquidity or its funds from operations for 2012.

“The Parkside Town Commons development is very well located real estate
adjacent to the Research Triangle Park,” said John A. Kite, the Company’s
Chairman and Chief Executive Officer. “We have secured the primary anchors and
will begin site work on the project in early 2013 with an estimated opening
for Phase I in the Spring of 2014. The opportunistic buyout of our partner’s
interest has enabled us to increase our overall projected return and gain
control of an exciting project in a high-growth area of North Carolina. The
timing of construction of the Parkside development throughout 2013 and 2014
will enable us to maximize the use of our development platform on an
outstanding project as a number of our current development projects reach
substantial completion in 2013.”

About Kite Realty Group Trust

Kite Realty Group Trust is a full-service, vertically integrated real estate
investment trust engaged in the ownership, operation, management, leasing,
acquisition, construction, redevelopment and development of neighborhood and
community shopping centers in selected markets in the United States. At
September 30, 2012, the Company owned interests in a portfolio of 60 operating
and redevelopment properties totaling approximately 8.9 million square feet
and an additional two properties currently under development totaling 0.6
million square feet.

Safe Harbor

This press release 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 expressed or implied by the forward-looking statements. 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
light of the recent slowing of growth in the U.S. economy; financing risks,
including the availability of and costs associated with sources of liquidity;
the Company’s ability to refinance, or extend the maturity dates of, its
indebtedness; the level and volatility of interest rates; the financial
stability of tenants, including their ability to pay rent and the risk of
tenant bankruptcies; the competitive environment in which the Company
operates; acquisition, disposition, development and joint venture risks;
property ownership and management risks; the Company’s ability to maintain its
status as a real estate investment trust (“REIT”) for federal income tax
purposes; potential environmental and other liabilities; impairment in the
value of real estate property the Company owns; risks related to the
geographical concentration of our properties in Indiana, Florida and Texas;
and other factors affecting the real estate industry generally. The Company
refers you to the documents filed by the Company from time to time with the
Securities and Exchange Commission, specifically the section titled “Risk
Factors” in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2011, which discuss these and other factors that could adversely
affect the Company’s results. The Company undertakes no obligation to publicly
update or revise these forward-looking statements (including the FFO and net
income estimates), whether as a result of new information, future events or


Kite Realty Group Trust
Dan Sink, Chief Financial Officer, 317-577-5609
Adam Basch, Investor Relations, 317-578-5161
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