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Item 9A. Controls and Procedures

2021-02-22 compared with 2020-02-20 · 611 added, 490 removed, 1156 unchanged (49% of the section changed)

10 unchanged sentences

Based on its evaluation under the framework in Internal Control – Integrated Framework, the Parent Company's management has concluded that its internal control over financial reporting was effective as of December 31, 2020.

The Parent Company's independent auditors, Ernst & Young LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein.

The Parent Company's independent auditors, KPMG LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein.

The Parent Company's internal control system was designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements.

11 unchanged sentences

Based on its evaluation under the framework in Internal Control – Integrated Framework, the Operating Partnership's management has concluded that its internal control over financial reporting was effective as of December 31, 2020.

The Operating Partnership's independent auditors, Ernst & Young LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein.

The Operating Partnership's independent auditors, KPMG LLP, an independent registered public accounting firm, have issued a report on its internal control over financial reporting as stated in their report which is included herein.

The Operating Partnership's internal control system was designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements.

2 unchanged sentences

Report of Independent Registered Public Accounting Firm

The Shareholders and the Board of Trustees of Kite Realty Group Trust:

To the Shareholders and Board of Trustees of Kite Realty Group Trust:

Opinion on Internal Control Over Financial Reporting

We have audited Kite Realty Group Trust’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria).

In our opinion, Kite Realty Group Trust (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 20, 2020, expressed an unqualified opinion thereon.

We have audited Kite Realty Group Trust and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements), and our report dated February 22, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

3 unchanged sentences

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

6 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Indianapolis, Indiana

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

The Partners of Kite Realty Group, L.P.

and subsidiaries and the Board of Trustees of Kite Realty Group Trust:

To the Partners of Kite Realty Group, L.P.

and subsidiaries and Board of Trustees of Kite Realty Group Trust:

Opinion on Internal Control Over Financial Reporting

We have audited Kite Realty Group, L.P.

and subsidiaries’ internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria).

In our opinion, Kite Realty Group, L.P and subsidiaries (the Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Partnership as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, partners’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 20, 2020 expressed an unqualified opinion thereon.

and subsidiaries’ (the Partnership) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Partnership as of December 31, 2020, the related consolidated statements of operations and comprehensive income, partner’s equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements), and our report dated February 22, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit.

3 unchanged sentences

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

6 unchanged sentences

/s/ Ernst & Young LLP

Indianapolis, Indiana

11 unchanged sentences

The information required by this Item is hereby incorporated by reference to the material appearing in our Proxy Statement.

EXHIBITS, AND FINANCIAL STATEMENT SCHEDULE

Documents filed as part of this report:

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report:

(1) Financial Statements:

2 unchanged sentences

Financial statement schedule for the Company listed on the index immediately preceding the financial statements at the end of this report.

(3) Exhibits:

The Company files as part of this report the exhibits listed on the Exhibit Index.

(b) Exhibits:

The Company files as part of this report the exhibits listed on the Exhibit Index.

Other financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Financial Statement Schedule:

The Company files as part of this report the financial statement schedule listed on the index immediately preceding the financial statements at the end of this report.

FORM 10-K SUMMARY

Not applicable.

EXHIBIT INDEX

Description Location

2.1 Agreement and Plan of Merger by and among Kite Realty Group Trust, KRG Magellan, LLC and Inland Diversified Real Estate Trust, Inc., dated February 9, 2014

Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on February 11, 2014

Articles of Amendment and Restatement of Declaration of Trust of the Company, as supplemented and amended

3.1 Articles of Amendment and Restatement of Declaration of Trust of the Kite R ealty Group Trust , as supplemented and amended

Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015

1 unchanged sentence

Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015

3.3 Articles of Amendment to the Articles of Amendment and Restatement of Declaration of Trust of Kite Realty Group Trust, as supplemented and amended

Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 20, 2020

3.4 Second Amended and Restated Bylaws of the Company, as amended

2 unchanged sentences

Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015

3.6 Second Amendment to the Second Amended and Restated Bylaws of Kite Realty Group Trust, as amended

Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 20, 2020

3.7 Certificate of Limited Partnership of Kite Realty Group, L.P.

Filed herewith

4.1 Form of Common Share Certificate

28 unchanged sentences

Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 26, 2019

Executive Employment Agreement, dated as of July 28, 2014, by and between the Company and John A.

Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014

Executive Employment Agreement, dated as of July 28, 2014, by and between the Company and Thomas K.

Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on July 29, 2014

10.7 Executive Employment Agreement, dated as of December 29, 2 020 , by and between the Company and John A.

Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020

10.8 Executive Employment Agreement, dated as of December 29, 2020 , by and between the Company and Thomas K.

Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020

10.9 Executive Employment Agreement, dated as of December 29, 2020 , by and between the Company and Heath R.

Incorporated by reference to Exhibit 10.3 the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on December 31, 2020

10.10 Executive Employment Agreement, dated as of August 6, 2014 , by and between the Company and Scott E.

Incorporated by reference to Exhibit 10.8 the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2014.

Executive Employment Agreement, dated as of October 1, 2018, by and between Kite Realty Group Trust and Heath R.

Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on October 4, 2018

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 10, 2014

10.11 Separation Agreement, dated as of November 3, 2020, by and between the Company and Scott E.

Filed herewith

10.12 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.13 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.14 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Rea lty Group Trust, Kite Realty Group, L.P.

and Thomas K.

Incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.15 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Daniel R.

Incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Scott E.

10.16 Indemnification Agreement, dated as of February 27, 2015, by and between Kite Rea lty Group Trust, Kite Realty Group, L.P., and Scott E.

Incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015

1 unchanged sentence

Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 7, 2018

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.18 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and William E.

Incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.19 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Michael L.

Incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.20 Indemnification Agreement, dated as of August 16, 2004, by and between Kite R eal ty Group Trust, Kite Realty Group, L.P.

and Eugene Golub*

Incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.21 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Richard A.

Incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group, L.P.

10.22 Indemnification Agreement, dated as of August 16, 2004, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Gerald L.

Incorporated by reference to Exhibit 10.24 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on August 20, 2004

Indemnification Agreement, dated as of November 3, 2008, by and between Kite Realty Group, L.P.

10.23 Indemnification Agreement, dated as of November 3, 2008, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Darell E.

Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2008

Indemnification Agreement, dated as of March 8, 2013, by and between Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 11, 2008

10.24 Indemnification Agreement, dated as of March 8, 2013, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Victor J.

Incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Kite Realty Group Trust for the period ended December 31, 2012

Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 8, 2013

10.25 Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Christie B.

Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013

Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013

Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 7, 2014

10.26 Indemnification Agreement, dated as of March 7, 2014, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

Incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on March 7, 2014

10.27 Indemnification Agreement, dated as of March 7, 2014, by and between K ite Realty Group Trust, Kite Realty Group, L.P.

and Barton R.

Incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Kite Realty Group Trust for the year ended December 31, 2013

Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Lee A.

Incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Kite Realty Group Trust filled with the SEC on March 7, 2014

10.28 Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group Trust, Kite Realty Group, L.P., and Lee A.

Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015

Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Gerald W.

10.29 Indemnification Agreement, dated as of February 27, 2015, by and between Kite Rea lty Grou p T rust, Kite Realty Group, L.P., and Gerald W.

Incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015

Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Group, L.P., and Charles H.

10.30 Indemnification Agreement, dated as of February 27, 2015, by and between Kite Realty Grou p Trust, Kite Realty Group, L.P., and Charles H.

Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015

10.31 Indemnification Agreement, dated as of February 16, 2021, by and between Kite Realty Group Trust, Kite Realty Group, L.P.

and Caroline L.

Filed herewith

10.32 Kite Realty Group Trust 2008 Employee Share Purchase Plan*

11 unchanged sentences

1 to Registration Rights Agreement, dated August 29, 2005, by and among the Company and the other parties listed on the signature page thereto

Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended September 30, 2005

Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on November 14, 2005

10.35 Tax Protection Agreement, dated August 16, 2004, by and among the Company, Kite Realty Group, L.P., Alvin E.

17 unchanged sentences

10.42 Kite Realty Group Trust Trustee Deferred Compensation Plan*

Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust for the period ended June 30, 2006

Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Kite Realty Group Trust filed with the SEC on August 9, 2006

10.43 Form of Performance Share Unit Agreement under 2013 Equity Incentive Plan*

4 unchanged sentences

Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on March 5, 2019

10.46 Form of LTIP Unit Agreement*

Filed herewith

10.47 Fifth Amended and Restated Credit Agreement, dated as of July 28, 2016, by and among Kite Realty Group, L.P., KeyBank National Association, as Administrative Agent, and the other lenders party thereto

24 unchanged sentences

Filed herewith

23.3 Consent of KPMG LLP relating to the Parent Company

Filed herewith

23.4 Consent of KPMG LLP relating to the Operating Partnership

Filed herewith

31.1 Certification of principal executive officer of the Parent Company required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

15 unchanged sentences

Filed herewith

XBRL Instance Document

Filed herewith

XBRL Taxonomy Extension Schema Document

Filed herewith

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith

101.INS Inline XBRL Instance Document Filed herewith

101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) Filed herewith

____________________

* Denotes a management contract or compensatory, plan contract or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FORM 10-K SUMMARY

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

KITE REALTY GROUP TRUST

February 20, 2020

Chairman and Chief Executive Officer

(Principal Executive Officer)

February 20, 2020

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

February 22, 2021 Chairman and Chief Executive Officer

(Date) (Principal Executive Officer)

February 22, 2021 Executive Vice President and Chief Financial Officer

(Date) (Principal Financial Officer)

KITE REALTY GROUP L.P.

AND SUBSIDIARIES

February 20, 2020

Chairman and Chief Executive Officer

(Principal Executive Officer)

February 20, 2020

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by persons on behalf of the Registrant and in the capacities and on the dates indicated.

Chairman, Chief Executive Officer, and Trustee

(Principal Executive Officer)

February 20, 2020

Kite Realty Group Trust, its sole general partner

February 22, 2021 Chairman and Chief Executive Officer

(Date) (Principal Executive Officer)

February 22, 2021 Executive Vice President and Chief Financial Officer

(Date) (Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature Title Date

Kite Chairman, Chief Executive Officer, and Trustee

(Principal Executive Officer) February 22, 2021

/s/ William E.

February 20, 2020

Bindley Trustee February 22, 2021

/s/ Victor J.

February 20, 2020

Coleman Trustee February 22, 2021

/s/ Christie B.

February 20, 2020

Kelly Trustee February 22, 2021

O’Reilly Trustee February 22, 2021

/s/ Barton R.

February 20, 2020

Peterson Trustee February 22, 2021

Daniels Trustee February 22, 2021

/s/ Charles H.

February 20, 2020

Executive Vice President and Chief Financial Officer (Principal Financial Officer)

February 20, 2020

Senior Vice President, Chief Accounting Officer

February 20, 2020

Wurtzebach Trustee February 22, 2021

/s/ Caroline L.

Young Trustee February 22, 2021

Fear Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 22, 2021

Buell Senior Vice President, Chief Accounting Officer February 22, 2021

Kite Realty Group Trust and Kite Realty Group, L.P.

3 unchanged sentences

Kite Realty Group Trust:

Report of Independent Registered Public Accounting Firm

Report s of Independent Registered Public Accounting Fir ms

Kite Realty Group, L.P.

and subsidiaries

Report of Independent Registered Public Accounting Firm

Report s of Independent Registered Public Accounting Fir ms

Kite Realty Group Trust:

15 unchanged sentences

and subsidiaries:

Schedule III – Real Estate and Accumulated Depreciation

Schedule III – Consolidated Real Estate and Accumulated Depreciation

Notes to Schedule III

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of Kite Realty Group Trust:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Kite Realty Group Trust and subsidiaries (the Company) as of December 31, 2020, the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2021 expressed an unqualified opinion on the effectiveness of the Partnership’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Partnership’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of investment properties for potential impairment

As discussed in Note 2 of the consolidated financial statements, land, buildings, and improvements as of December 31, 2020 was $3,109,122 thousand.

The Company’s investment properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

This review for possible impairment triggering events requires certain assumptions, estimates, and significant judgment.

The evaluation of investment properties for potential impairment is subject to certain management assumptions which includes the anticipated holding period for a real estate investment property.

We identified the evaluation of investment properties for potential impairment as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate the Company’s intent and ability to hold investment properties for particular periods of time .

A shortening of the anticipated holding period could indicate a potential impairment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control over the Company’s process to evaluate potential impairment triggering events, including evaluation of holding period.

We compared the holding period assumed in the

Company’s analysis to the Company’s historical holding period for similar assets.

We inquired of Company officials and inspected documents, such as meeting minutes of the board of trustees and sub-committees and the capital allocation committee to evaluate the Company’s intent and ability to hold investment properties for particular periods of time.

We read external communications with investors and analysts in order to identify information regarding potential sales of the Company’s investment properties.

We have served as the Company’s auditor since 2020.

Indianapolis, Indiana

February 22, 2021

Report of Independent Registered Public Accounting Firm

To the Partners of Kite Realty Group, L.P.

and subsidiaries and Board of Trustees of Kite Realty Group Trust:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Kite Realty Group, L.P.

and subsidiaries (the Partnership) as of December 31, 2020, the related consolidated statements of operations and comprehensive income, partner’s equity, and cash flows for the year ended December 31, 2020, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Evaluation of investment properties for potential impairment

As discussed in Note 2 of the consolidated financial statements, land, buildings, and improvements as of December 31, 2020 was $3,109,122 thousand.

The Partnership’s investment properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

This review for possible impairment triggering events requires certain assumptions, estimates, and significant judgment.

The evaluation of investment properties for potential impairment is subject to certain management assumptions which includes the anticipated holding period for a real estate investment property.

We identified the evaluation of investment properties for potential impairment as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate the Partnership’s intent and ability to hold investment properties for particular periods of time .

A shortening of the anticipated holding period could indicate a potential impairment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control over the Partnership’s process to evaluate potential impairment triggering events, including evaluation of holding period.

We compared the holding period assumed in the Partnership’s analysis to the Partnership’s historical holding period for similar assets.

We inquired of Partnership officials and inspected documents, such as meeting minutes of the Parent Company’s board of trustees and sub-committees and the capital allocation committee to evaluate the Partnership’s intent and ability to hold investment properties for particular periods of time.

We read external communications with investors and analysts in order to identify information regarding potential sales of the Partnership’s investment properties.

We have served as the Partnership’s auditor since 2020.

Indianapolis, Indiana

February 22, 2021

Report of Independent Registered Public Accounting Firm

The Shareholders and Board of Trustees of Kite Realty Group Trust:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kite Realty Group Trust (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.

We have audited the accompanying consolidated balance sheet of Kite Realty Group Trust (the Company) as of December 31, 2019, the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S.

generally accepted accounting principles .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Investment Property

Description of the Matter

At December 31, 2019, the Company’s net consolidated investment properties totaled $2.4 billion.

As discussed in Note 2 of the consolidated financial statements, the Company’s investment properties are reviewed for impairment on a property-by-property basis on at least a quarterly basis, or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

Impairment losses for investment properties are measured when the undiscounted cash flows estimated to be generated by the investment properties during the expected holding period are less than the carrying amounts of those assets.

Impairment losses are recorded as the excess of the carrying value over the estimated fair value of the asset.

Auditing management’s evaluation of investment properties for impairment was complex due to the significant estimation uncertainty in determining the estimated future undiscounted cash flows and fair value of investment properties where an indicator of potential impairment was identified.

In particular, these estimates were sensitive to significant assumptions such as projected net operating income, anticipated hold period, expected capital expenditures and the capitalization rate used to estimate the property’s residual value, all of which can be affected by expectations about future market conditions, rental demand, and competition, as well as management’s intent to hold and operate the property over the term assumed in the analysis.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to the Company’s process for evaluating investment properties for impairment, including controls over management’s review of the significant assumptions described above.

To test the Company’s evaluation of investment properties for impairment, we performed audit procedures that included, among others, assessing the methodologies, evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by management in its analysis.

We compared the significant assumptions used by management to historical actual results of the property, relevant observable market information for recent sales of comparable assets, real estate industry publications, current industry trends or other relevant factors.

We also involved a valuation specialist to assist in evaluating certain assumptions.

As part of our evaluation, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the future undiscounted cash flows and fair value of certain properties that would result from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2004.

We served as the Company’s auditor from 2004 until 2020.

Indianapolis, Indiana

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kite Realty Group, L.P.

and subsidiaries (the Partnership) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive income, partner’s equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.

We have audited the accompanying consolidated balance sheet of Kite Realty Group, L.P.

and subsidiaries (the Partnership) as of December 31, 2019, the related consolidated statements of operations and comprehensive income, partner’s equity and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S.

generally accepted accounting principles .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 20, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No.

13 unchanged sentences

/s/ Ernst & Young LLP

We have served as the Partnership’s auditor since 2015.

We served as the Partnership’s auditor from 2015 until 2020.

Indianapolis, Indiana

3 unchanged sentences

($ in thousands, except share data)

2020 December 31,

Investment properties at cost:

$ 3,143,961 $ 3,087,391

accumulated depreciation ( 755,100 ) ( 666,952 )

2,388,861 2,420,439

Cash and cash equivalents 43,648 31,336

Tenant and other receivables, including accrued straight-line rent of $ 24,783 and $ 27,256 , respectively

57,154 55,286

Restricted cash and escrow deposits 2,938 21,477

2 unchanged sentences

Investments in unconsolidated subsidiaries 12,792 12,644

Assets held for sale

Total Assets $ 2,608,539 $ 2,648,887

Liabilities and Shareholders' Equity:

12 unchanged sentences

Noncontrolling Interest 698 698

Total Equity 1,231,352 1,289,736

Total Liabilities and Shareholders' Equity $ 2,608,539 $ 2,648,887

4 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental income $ 257,670 $ 308,399 $ 338,523

Other property related revenue 8,597 6,326 13,138

Fee income 378 448 2,523

Total revenue 266,645 315,173 354,184

11 unchanged sentences

Equity in loss of unconsolidated subsidiary ( 1,685 ) ( 628 ) ( 278 )

Other expense, net

Consolidated net (loss) income

Other income (expense), net 254 ( 573 ) ( 646 )

Consolidated net loss ( 16,123 ) ( 2 ) ( 46,451 )

Net income attributable to noncontrolling interests ( 100 ) ( 532 ) ( 116 )

Net (loss) income attributable to Kite Realty Group Trust

Net (loss) income per common share – basic

Net (loss) income per common share – diluted

Net loss attributable to Kite Realty Group Trust ( 16,223 ) ( 534 ) ( 46,567 )

Net income per common share – basic & diluted $ ( 0.19 ) $ ( 0.01 ) $ ( 0.56 )

Weighted average common shares outstanding - basic 84,142,261 83,926,296 83,693,385

1 unchanged sentence

Dividends declared per common share $ 0.4495 $ 1.2700 $ 1.2700

Consolidated net (loss) income

Consolidated net loss $ ( 16,123 ) $ ( 2 ) $ ( 46,451 )

Change in fair value of derivatives ( 14,969 ) ( 13,158 ) ( 6,647 )

Total comprehensive (loss) income

Total comprehensive loss ( 31,092 ) ( 13,160 ) ( 53,098 )

Comprehensive loss (income) attributable to noncontrolling interests 367 ( 160 ) 44

Comprehensive (loss) income attributable to Kite Realty Group Trust

Comprehensive loss attributable to Kite Realty Group Trust $ ( 30,725 ) $ ( 13,320 ) $ ( 53,054 )

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

($ in thousands, except share data)

Common Shares

Paid-in Capital

Accumulated Other

Comprehensive (Loss) Income

Common Shares Additional

Paid-in Capital Accumulated Other

Comprehensive (Loss) Income Accumulated

Shares Amount

Balances, December 31, 2017 83,606,068 $ 836 $ 2,071,418 $ 2,990 $ ( 509,833 ) $ 1,565,411

Stock compensation activity 163,318 2 5,695 — — 5,697

Other comprehensive income attributable to Kite Realty Group Trust

Other comprehensive loss attributable to Kite Realty Group Trust — — ( 6,487 ) — ( 6,487 )

Distributions declared to common shareholders — — — — ( 106,335 ) ( 106,335 )

Net income attributable to Kite Realty Group Trust

Acquisition of partner's noncontrolling interest in Fishers Station operating property

Net loss attributable to Kite Realty Group Trust — — — — ( 46,567 ) ( 46,567 )

Exchange of redeemable noncontrolling interests for common shares 31,500 — 561 — — 561

12 unchanged sentences

Net loss attributable to Kite Realty Group Trust — — — — ( 16,223 ) ( 16,223 )

Acquisition of partner's noncontrolling interest in Pan Am Plaza — — ( 2,500 ) — — ( 2,500 )

Exchange of redeemable noncontrolling interests for common shares 18,039 — 187 — — 187

6 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash flow from operating activities:

Consolidated net (loss) income

Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities:

Consolidated net loss $ ( 16,123 ) $ ( 2 ) $ ( 46,451 )

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

Gain on sale of operating properties ( 4,733 ) ( 38,971 ) ( 3,424 )

13 unchanged sentences

Acquisitions of interests in properties ( 65,298 ) ( 58,205 ) —

Capital expenditures, net

Capital expenditures ( 38,266 ) ( 53,278 ) ( 59,304 )

Net proceeds from sales of land 9,134 — —

Net proceeds from sales of operating properties 13,888 529,417 218,387

Small business loan funding ( 2,199 ) — —

Change in construction payables 2,442 ( 542 ) ( 777 )

Capital contribution to unconsolidated joint venture ( 541 ) ( 798 ) ( 9,973 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities ( 80,840 ) 416,594 148,333

Cash flow from financing activities:

1 unchanged sentence

Repurchases of common shares upon the vesting of restricted shares ( 1,336 ) ( 533 ) ( 350 )

Acquisition of partner's interest in Fishers Station operating property

Loan proceeds 325,000 75,000 399,500

4 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 1,533 ) ( 3,838 ) ( 3,716 )

Acquisition of partner's interest in Pan Am Plaza joint venture ( 2,500 ) — —

Acquisition of partners' interests in Territory joint venture — — ( 21,993 )

Net cash used in financing activities ( 20,902 ) ( 547,249 ) ( 289,386 )

Increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash beginning of year

Cash, cash equivalents, and restricted cash end of year

Net change in cash, cash equivalents, and restricted cash ( 6,227 ) 7,307 13,330

Cash, cash equivalents, and restricted cash beginning of period 52,813 45,506 32,176

Cash, cash equivalents, and restricted cash end of period $ 46,586 $ 52,813 $ 45,506

Supplemental disclosures

Cash paid for interest, net of capitalized interest $ 50,387 $ 60,534 $ 67,998

Non-cash investing activities

Net investment in sales-type lease $ 4,665 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

($ in thousands, except unit data)

2020 December 31,

Investment properties at cost:

$ 3,143,961 $ 3,087,391

accumulated depreciation ( 755,100 ) ( 666,952 )

2,388,861 2,420,439

Cash and cash equivalents 43,648 31,336

Tenant and other receivables, including accrued straight-line rent of $ 24,783 and $ 27,256 , respectively

57,154 55,286

Restricted cash and escrow deposits 2,938 21,477

2 unchanged sentences

Investments in unconsolidated subsidiaries 12,792 12,644

Asset held for sale

Total Assets $ 2,608,539 $ 2,648,887

Liabilities and Equity:

8 unchanged sentences

Common equity, 84,187,999 and 83,963,369 units issued and outstanding at December 31, 2020 and December 31, 2019, respectively

1,261,539 1,305,321

Accumulated other comprehensive loss ( 30,885 ) ( 16,283 )

1 unchanged sentence

Noncontrolling Interests 698 698

Total Equity 1,231,352 1,289,736

Total Liabilities and Equity $ 2,608,539 $ 2,648,887

5 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental income $ 257,670 $ 308,399 $ 338,523

Other property related revenue 8,597 6,326 13,138

Fee income 378 448 2,523

Total revenue 266,645 315,173 354,184

11 unchanged sentences

Equity in loss of unconsolidated subsidiaries ( 1,685 ) ( 628 ) ( 278 )

Other expense, net

Consolidated net (loss) income

Other income (expense), net 254 ( 573 ) ( 646 )

Net loss ( 16,123 ) ( 2 ) ( 46,451 )

Net income attributable to noncontrolling interests ( 528 ) ( 528 ) ( 1,151 )

Net (loss) income attributable to common unitholders

Net loss attributable to common unitholders $ ( 16,651 ) $ ( 530 ) $ ( 47,602 )

Allocation of net (loss) income:

1 unchanged sentence

Parent Company ( 16,223 ) ( 534 ) ( 46,567 )

Net (loss) income per unit - basic

Net (loss) income per unit - diluted

$ ( 16,651 ) $ ( 530 ) $ ( 47,602 )

Net loss per unit - basic and diluted $ ( 0.19 ) $ ( 0.01 ) $ ( 0.56 )

Weighted average common units outstanding - basic 86,361,139 86,027,409 85,740,449

1 unchanged sentence

Distributions declared per common unit $ 0.4495 $ 1.2700 $ 1.2700

Consolidated net (loss) income

Consolidated net loss $ ( 16,123 ) $ ( 2 ) $ ( 46,451 )

Change in fair value of derivatives ( 14,969 ) ( 13,158 ) ( 6,647 )

Total comprehensive (loss) income

Total comprehensive loss ( 31,092 ) ( 13,160 ) ( 53,098 )

Comprehensive income attributable to noncontrolling interests ( 528 ) ( 528 ) ( 1,151 )

Comprehensive (loss) income attributable to common unitholders

Comprehensive loss attributable to common unitholders $ ( 31,620 ) $ ( 13,688 ) $ ( 54,249 )

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

($ in thousands)

General Partner

Common Equity

General Partner Total

Common Equity Accumulated

Comprehensive

2 unchanged sentences

Stock compensation activity 5,697 — 5,697

Other comprehensive income attributable to Parent Company

Other comprehensive loss attributable to Parent Company — ( 6,487 ) ( 6,487 )

Distributions declared to Parent Company ( 106,335 ) — ( 106,335 )

Net income attributable to Parent Company

Acquisition of partner's interest in Fishers Station operating property

Net loss attributable to Parent Company ( 46,567 ) — ( 46,567 )

Conversion of Limited Partner Units to shares of the Parent Company 561 — 561

12 unchanged sentences

Net loss attributable to Parent Company ( 16,223 ) — ( 16,223 )

Acquisition of partner's noncontrolling interest in Pan Am Plaza ( 2,500 ) — ( 2,500 )

Conversion of Limited Partner Units to shares of the Parent Company 187 — 187

7 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash flow from operating activities:

Consolidated net (loss) income

Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities:

Gain on sale of operating properties, net of tax

Consolidated net loss $ ( 16,123 ) $ ( 2 ) $ ( 46,451 )

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

Gain on sales of operating properties ( 4,733 ) ( 38,971 ) ( 3,424 )

Impairment charge — 37,723 70,360

12 unchanged sentences

Acquisitions of interests in properties ( 65,298 ) ( 58,205 ) —

Capital expenditures, net

Capital expenditures ( 38,266 ) ( 53,278 ) ( 59,304 )

Net proceeds from sales of land 9,134 — —

Net proceeds from sales of operating properties 13,888 529,417 218,387

Change in construction payables 2,442 ( 542 ) ( 777 )

Small business loan funding ( 2,199 ) — —

Capital contribution to unconsolidated joint venture ( 541 ) ( 798 ) ( 9,973 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities ( 80,840 ) 416,594 148,333

Cash flow from financing activities:

Contributions from the Parent Company

Distributions to the Parent Company for repurchases of common shares upon the vesting of restricted shares

Acquisition of partner's interest in Fishers Station operating property

Contributions from the General Partner 72 350 76

Repurchases of common shares upon the vesting of restricted shares ( 1,336 ) ( 533 ) ( 350 )

Loan proceeds 325,000 75,000 399,500

4 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 1,533 ) ( 3,838 ) ( 3,716 )

Acquisition of partner's interest in Pan Am Plaza joint venture ( 2,500 ) — —

Acquisition of partners' interests in Territory joint venture — — ( 21,993 )

Net cash used in financing activities ( 20,902 ) ( 547,249 ) ( 289,386 )

Increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash beginning of year

Cash, cash equivalents, and restricted cash end of year

Net change in cash, cash equivalents, and restricted cash ( 6,227 ) 7,307 13,330

Cash, cash equivalents, and restricted cash beginning of period 52,813 45,506 32,176

Cash, cash equivalents, and restricted cash end of period $ 46,586 $ 52,813 $ 45,506

Supplemental disclosures

Cash paid for interest, net of capitalized interest $ 50,387 $ 60,534 $ 67,998

Non-cash investing activities

Net investment in sales-type lease $ 4,665 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

17 unchanged sentences

At December 31, 2020, we owned interests in 90 operating and redevelopment properties totaling approximately 17.3 million square feet.

We also owned one development project under construction as of this date.

We also owned two development projects under construction as of this date.

Of the 90 properties, 87 are consolidated in these financial statements, and the remaining three are accounted for under the equity method.

8 unchanged sentences

The Company’s investment properties as of December 31, 2020 and December 31, 2019 were as follows:

($ in thousands)

($ in thousands) Balance at

2020 December 31,

Investment properties, at cost:

2 unchanged sentences

Construction in progress 27,860 41,204

$ 3,143,961 $ 3,087,391

Consolidation and Investments in Joint Ventures

The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiary of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.

The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the TRS of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.

In general, a VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) has equity investors that do not provide sufficient financial resources for the entity to support its activities, (b) does not have equity investors with voting rights or (c) has equity investors whose votes are disproportionate from their economics and substantially all of the activities are conducted on behalf of the investor with disproportionately fewer voting rights.

5 unchanged sentences

In determining whether to consolidate a VIE with the Operating Partnership, we consider all relationships between the Operating Partnership and the applicable VIE, including development agreements, management agreements and other contractual arrangements, in determining whether we have the power to direct the activities of the VIE that most significantly affect the VIE's performance.

As of December 31, 2019 , we owned investments in two joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of December 31, 2020, we owned investments in two consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of this date, these VIEs had total debt of $ 55.1 million, which were secured by assets of the VIEs totaling $ 113.3 million.

14 unchanged sentences

We are accounting for the joint venture under the equity method as both members have substantive participating rights and we do not control the activities of the venture.

Glendale Multifamily Joint Venture

In May 2020, the Company formed a joint venture for the planned development of a multifamily project adjacent to our Glendale Town Center retail property.

The Company contributed land valued at $ 1.6 million to the joint venture and retained a 12 % interest in the joint venture.

The Company's partner serves as the operating member responsible for day-to-day management.

Both members have substantive participating rights over major decisions that impact the economics and

operations of the joint venture.

The Company is accounting for the joint venture on the equity method as it has the ability to exercise influence but not control over operating and financial policies.

Acquisition of Real Estate Properties

1 unchanged sentence

Based on these estimates, we record the estimated fair value to the applicable assets and liabilities.

In making estimates of fair values, a number of sources are utilized, including

information obtained as a result of pre-acquisition due diligence, marketing and leasing activities.

In making estimates of fair values, a number of sources are utilized, including information obtained as a result of pre-acquisition due diligence, marketing and leasing activities.

The estimates of fair value were determined to have primarily relied upon Level 2 and Level 3 inputs, as defined below.

23 unchanged sentences

Pre-development costs are incurred prior to vertical construction and for certain land held for development during the due diligence phase and include contract deposits, legal, engineering, cost of internal resources and other professional fees related to evaluating the feasibility of developing or redeveloping a shopping center or other project.

These pre-development costs are capitalized and included in construction in progress in the accompanying consolidated balance sheets.

These pre-development

costs are capitalized and included in construction in progress in the accompanying consolidated balance sheets.

If we determine that the completion of a development project is no longer probable, all previously incurred pre-development costs are immediately expensed.

6 unchanged sentences

Depreciation may be accelerated for a redevelopment project including partial demolition of existing structure after the asset is assessed for impairment.

Management reviews operational and development projects, land parcels and intangible assets for impairment on a property-by-property basis on at least a quarterly basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

Management reviews operational and development projects, land parcels and intangible assets for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

This review for possible impairment requires certain assumptions, estimates, and significant judgment.

10 unchanged sentences

Escrow deposits consist of cash held for real estate taxes, property maintenance, insurance and other requirements at specific properties as required by lending institutions and certain municipalities.

In addition, escrow deposits include $ 13.2 million of proceeds from the sale of an operating property to be utilized to acquire a potential asset in a tax-deferred exchange.

In addition at December 31, 2019, escrow deposits included $ 13.2 million of proceeds from the sale of an operating property to be utilized to acquire a potential asset in a tax-deferred exchange.

Cash and Cash Equivalents

3 unchanged sentences

The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the years ended December 31, 2020, 2019, and 2018:

2020 2019 2018

Cash and cash equivalents 43,648 31,336 35,376

27 unchanged sentences

Overage rent is recognized when tenants achieve the specified sales targets as defined in their lease agreements.

Overage rent is included in rental income in the accompanying consolidated statements of operations for the year ended December 31, 2019.

Overage rent is included in rental income in the accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019.

If we determine that collectibility is probable, we recognize income from rentals based on the methodology described above.

1 unchanged sentence

These receivables are reduced for credit loss that is recognized as a reduction to rental income.

We regularly evaluate the collectibility of these lease-related receivables by analyzing past due account balances and consider such facts as the credit quality of our customer, historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the collectibility of rental income.

We regularly evaluate the collectibility

of these lease-related receivables by analyzing past due account balances and consider such facts as the credit quality of our customer, historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the collectibility of rental income.

Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.

14 unchanged sentences

In addition, our accounts receivable from and leases with tenants potentially subjects us to a concentration of credit risk related to our accounts receivable and revenue.

Total billed receivables due from tenants leasing space in the states of Florida, Indiana, and Texas, consisted of the following as of December 31, 2019 and 2018 :

As of December 31, 2019

For the years ended December 31, 2019 , 2018 , and 2017 , the Company's revenue recognized from tenants leasing space in the states of Florida, Indiana, and Texas, were as follows:

Year Ended December 31,

Total billed receivables due from tenants leasing space in the states of Florida, Indiana, Texas, North Carolina, and Nevada, consisted of the following as of December 31, 2020:

North Carolina 11 %

For the year ended December 31, 2020, the Company's revenue recognized from tenants leasing space in the states of Florida, Indiana, Texas, North Carolina, and Nevada, were as follows:

North Carolina 12 %

Earnings Per Share

6 unchanged sentences

Weighted average Limited Partner Units outstanding for the years ended December 31, 2020, 2019 and 2018 were 2.2 million, 2.1 million and 2.0 million, respectively.

Less than 0.1 million outstanding options to acquire common shares were excluded from the computations of diluted earnings per share or unit because their impact was not dilutive for each of the twelve months ended December 31, 2019 , 2018 and 2017 .

In addition, Limited Partner Units, appreciation only LTIP units, and deferred common share units are excluded from the computation of diluted earnings per share due to the net loss position in 2018 and 2019.

These potentially dilutive securities are excluded from the computation of diluted earnings per share due to the net loss position in 2018, 2019, and 2020.

Segment Reporting

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Parent Company

The Parent Company, which is considered a corporation for U.S.

federal income tax purposes, has been organized and intends to continue to operate in a manner that will enable it to maintain its qualification as a REIT for federal income tax purposes.

The Parent Company has been organized and operated, and intends to continue to operate, in a manner that will enable it to maintain its qualification as a REIT for U.S.

federal income tax purposes.

As a result, it generally will not be subject to U.S.

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We may also be subject to certain U.S.

federal, state and local taxes on our income and property and to federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT.

federal, state and local taxes on our income and property and to U.S.

federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT.

The Operating Partnership intends to continue to make distributions to the Parent Company in amounts sufficient to assist the Parent Company in adhering to REIT requirements and maintaining its REIT status.

We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiary of the Operating Partnership, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future.

We have elected to treat Kite Realty Holdings, LLC as a TRS of the Operating Partnership, and we may elect to treat other subsidiaries as TRSs in the future.

This election enables us to receive income and provide services that would otherwise be impermissible for a REIT.

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Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

On March 27, 2020 and December 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Consolidated Appropriations Act, 2021 (CAA).

Among other provisions, the CARES Act and the CAA provide relief to U.S.

federal corporate taxpayers through temporary adjustments to net operating loss rules, changes to limitations on interest expense deductibility, and the acceleration of available refunds for minimum tax credit carryforwards.

The CARES Act and the CAA did not have a material effect on the Company’s consolidated financial statements.

Our tax return for the year ended December 31, 2020 has not been filed.

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A summary of the tax characterization of the dividends paid by the Parent Company for the years ended December 31, 2020, 2019, and 2018 is as follows:

2020 2019 2018

Ordinary income 89.3 % 29.7 % 56.0 %

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Operating Partnership

The allocated share of income and loss, other than the operations of our taxable REIT subsidiary, is included in the income tax returns of the Operating Partnership's partners.

The allocated share of income and loss, other than the operations of our TRS, is included in the income tax returns of the Operating Partnership's partners.

Accordingly, the only U.S.

federal income taxes included in the accompanying consolidated financial statements are in connection with the taxable REIT subsidiary.

federal income taxes included in the accompanying consolidated financial statements are in connection with the TRS.

Noncontrolling Interests

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The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital.

At December 31, 2019 , the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balance was accordingly adjusted to redemption value.

At December 31, 2020, the redemption value of the redeemable noncontrolling interests in the Operating Partnership did not exceed the historical book value, and the balance was accordingly adjusted to historical book value.

At December 31, 2019, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balance was accordingly adjusted to redemption value.

We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest.

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Year Ended December 31,

Parent Company’s weighted average interest in

Operating Partnership

Limited partners' weighted average interests in

Operating Partnership

2020 2019 2018

Parent Company’s weighted average interest in Operating Partnership 97.4 % 97.6 % 97.6 %

Limited partners' weighted average interests in Operating Partnership 2.6 % 2.4 % 2.4 %

At December 31, 2020, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.1 % and 2.9 %.

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There were 2,532,861 and 2,110,037 Limited Partner Units outstanding as of December 31, 2020 and 2019, respectively.

The increase in Limited Partner Units outstanding from December 31, 2018 is due primarily to non-cash compensation awards made to our executive officers.

The increase in Limited Partner Units outstanding from December 31, 2019 is due to non-cash compensation awards made to our executive officers.

Redeemable Noncontrolling Interests - Subsidiaries

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We consolidate this joint venture because we control the decision making and our joint venture partner has limited protective rights.

In March 2017, certain Class B unit holders exercised their right to redeem $ 8.3 million of their Class B units for cash.

We funded the redemption in December 2017 using operating cash flows.

In 2018, the same Class B unit holders exercised their right to redeem their remaining Class B units for cash.

In 2018, certain Class B unit holders exercised their right to redeem their remaining Class B units for cash.

We funded $ 10.0 million of the redemption in August 2018 and the remaining $ 12.0 million in November 2018.

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Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at December 31 $ 43,275 $ 52,574 $ 45,743

Reclassifications

Certain amounts in the accompanying consolidated financial statements for 2017 and 2018 have been reclassified to conform to the 2019 consolidated financial statement presentation.

The reclassifications had no impact on the net income previously reported.

Effects of Accounting Pronouncements

Adoption of New Standards

On January 1, 2019.

we adopted Accounting Standards Update ("ASU") ASU 2016-02, Leases, using the modified retrospective approach along with electing the package of practical expedients.

ASU 2016-02 amends the existing accounting

standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making certain changes to lessor accounting, including the accounting for sales-type and direct financing leases.

For leases with a term of one year or less, the Company made an accounting policy election by underlying asset to not recognize lease liabilities and right-of-use (ROU) assets, and expenses for these short-term leases is immaterial for all periods presented.

The practical expedients include the following:

• The Company did not reassess whether any expired or existing contracts are or contain leases;

• The Company did not reassess the lease classification of any expired or existing leases;

• The Company did not reassess initial direct costs for any existing leases;

The Company elected to not separate non-lease components, such as common area maintenance, of a contract from the leases to which they relate when specific criteria are met.

The new leasing standard also amended ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers.

Under ASC 340-40, incremental costs of obtaining a contract are recognized as an asset if the entity expects to recover them.

Certain costs that were previously capitalized as a leasing cost no longer meet the requirements for capitalization under the new leasing standard.

The Company capitalized $ 5.4 million less in leasing costs during the year ended December 31, 2019 as compared to the prior year.

Note 9 to the Financial Statements includes a discussion of the lease rental income and expense for the year ended December 31, 2019 and future rental income and expense to be received or paid under non-cancelable operating leases.

Derivatives and Hedging

On January 1, 2019, we adopted ASU 2017-12, Derivatives and Hedging:

Targeted Improvements to Accounting for Hedging Activities.

ASU 2017-02 better aligns a company’s financial reporting for hedging activities with the economic objectives of those activities.

The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements.

New Standards Issued but Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses." The ASU sets forth a "current expected credit loss" (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.

This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets.

Receivables arising from operating leases are not within the scope of this standard, but rather, are accounted for in accordance with the Leases standard.

The new standard is effective for the Company beginning with the first quarter of 2020 and will not have a material impact on the Company's consolidated financial statements.

Reference Rate Reform

In the first quarter of 2020, the Financial Accounting Standards Board issued ASU 2020-04, Reference Rate Reform (Topic 848).

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

Financial Instruments - Credit Losses

On January 1, 2020, we adopted ASU 2016-13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments.

It also modified the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination.

Instruments in scope include loans, held-to-maturity debt securities, and net investments in leases as well as reinsurance and trade receivables.

In November 2018, the FASB issued ASU 2018-19, which clarifies that operating lease receivables are outside the scope of the new standard.

The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

In April 2020, the FASB issued a question-and-answer document focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19.

Under Topic 842, Leases, the Company would have to evaluate, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant or if a lease concession was under the enforceable rights and obligations within the existing lease agreement.

The FASB clarified that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 is a lease modification.

The Company made this election to evaluate COVID-related lease modifications on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.

The Company entered into rent deferral agreements during the year ended December 31, 2020 that provided for legally due rent to be paid back over a period of time, typically twelve to eighteen months .

The Company has deferred the payment by tenants of $ 6.1 million of contractually due rental income that remains outstanding as of December 31, 2020.

The future impact of such modifications is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions.

There was not a material amount of rent abatement provided to tenants as a result of COVID-19 during 2020.

Share-Based Compensation

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A summary of option activity under the Plan as of December 31, 2020, and changes during the year then ended, is presented below:

($ in thousands, except share and per share data)

Aggregate Intrinsic Value

Weighted-Average Remaining

Contractual Term (in years)

Weighted-Average

($ in thousands, except share and per share data) Aggregate Intrinsic Value Weighted-Average Remaining

Contractual Term (in years) Options Weighted-Average

Exercise Price

Outstanding at January 1, 2020 24,067 $ 20.25

Exercised ( 2,500 ) 16.60

Forfeited — —

Outstanding at December 31, 2020 $ — 0.25 21,567 $ 20.67

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The aggregate intrinsic value of the 2,500 , 33,375 and 3,125 options exercised during the years ended December 31, 2020, 2019, and 2018 was $ 2,000 , $ 86,000 and $ 23,000 , respectively.

There were no options exercised in 2017.

Restricted Shares

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Number of Restricted

Weighted Average

Shares Weighted Average

Grant Date Fair

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The following table summarizes the restricted share grants and vestings during the years ended December 31, 2020, 2019, and 2018:

($ in thousands, except share and per share data)

Number of Restricted Shares Granted

Weighted Average

($ in thousands, except share and per share data) Number of Restricted Shares Granted Weighted Average

Grant Date Fair

Value per share

Fair Value of Restricted Shares Vested

Value per share Fair Value of Restricted Shares Vested

2020 211,476 $ 13.21 $ 2,727

2019 154,440 15.84 2,270

2018 202,043 15.35 2,038

As of December 31, 2020, there was $ 3.0 million of total unrecognized compensation cost related to restricted shares granted under the Plan, which is expected to be recognized in the consolidated statements of operations over a weighted-average period of 0.91 years.

We expect to incur $ 1.8 million of this expense in 2020 , $ 1.4 million in 2021 , $ 0.6 million in 2022 , and the remainder in 2023 .

We expect to incur $ 1.8 million of this expense in 2021, $ 1.1 million in 2022, and the remainder in 2023.

Performance Awards

In 2016, the Compensation Committee established overall target values for incentive compensation for each executive officer, with 40 % of the target value being granted in the form of time-based awards and the remaining 60 % being granted in the form of performance awards.

In 2017, the Compensation Committee awarded each of the four named executive officers a three -year performance award in the form of PSUs.

The PSUs may be earned over a three -year performance period from January 1, 2017 to December 31, 2019.

The performance criteria will be based 50 % on the absolute TSR achieved by the Company over the three -year measurement period and 50 % on the relative TSR achieved by the Company measured against a peer group over the three -year measurement period.

The total number of PSUs issued to the executive officers was based on a target value of $ 2.0 million , but may be earned in a range from 0 % to 200 % of the target value depending on our absolute TSR over the measurement period and our relative TSR over the measurement period in relation to the peer group.

Approximately 73,000 PSU's were earned based upon the Company's performance on the relative TSR measurement.

In 2018, the Compensation Committee awarded each of the four named executive officers a three -year performance award in the form of PSUs.

In 2018, the Compensation Committee awarded each of the named executive officers a three-year performance award in the form of PSUs.

The PSUs may be earned over a three-year performance period from January 1, 2018 to December 31, 2020.

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Additionally, any PSUs earned based on the achievement of the pre-established FAD goals will be subject to adjustment (either up or down 25 %) based on the Company's absolute TSR over the three-year measurement period.

The 2018 and 2017 PSUs were valued at an aggregate value of $ 2.2 million and $ 2.2 million , respectively, utilizing a Monte Carlo simulation.

We expect to incur $ 0.7 million of this expense in 2020 and less than $ 0.1 million in 2021 .

Approximately 172,000 PSU's were earned based upon the Company's performance on the relative TSR measurement.

The PSUs were valued at an aggregate value of $ 2.2 million utilizing a Monte Carlo simulation.

There is no remaining unrecognized compensation cost related to the 2018 performance awards.

Restricted Units

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Number of Restricted

Weighted Average

Units Weighted Average

Grant Date Fair

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The following table summarizes the time-based restricted unit grants and vestings during the years ended December 31, 2020, 2019, and 2018:

($ in thousands, except unit and per unit data)

Number of Restricted Units Granted

Weighted Average

($ in thousands, except unit and per unit data) Number of Restricted Units Granted Weighted Average

Grant Date Fair

Value per Unit

Fair Value of Restricted Units Vested

Value per Unit Fair Value of Restricted Units Vested

2020 431,913 $ 13.10 $ 1,784

2019 84,987 14.11 749

2018 92,019 13.16 1,924

As of December 31, 2020, there was $ 5.4 million of total unrecognized compensation cost related to restricted units granted under the Plan, which is expected to be recognized in the consolidated statements of operations over a weighted-average period of 2.15 years.

We expect to incur $ 1.0 million of this expense in 2020 , $ 0.5 million in 2021 , and the remainder in 2022 .

AO LTIP Units

During 2019, i n connection with its annual review of executive compensation and as described in the table below, the Compensation Committee of the Company's Board of Trustees approved an aggregate grant of AO LTIP Units (the “awards”) to the Company’s executive officers under the Plan.

Number of AO LTIP Units

Participation Threshold per AO LTIP Unit

We expect to incur $ 1.7 million of this expense in 2021, $ 1.4 million in 2022, $ 0.8 million in 2023, $ 0.8 million in 2024, and the remainder in 2025.

AO LTIP Units - 2019 Awards

During 2019, in connection with its annual review of executive compensation and as described in the table below, the Compensation Committee of the Company's Board of Trustees approved an aggregate grant of AO LTIP Units (the “2019 awards”) to the Company’s executive officers under the Plan.

Executive Number of AO LTIP Units Participation Threshold per AO LTIP Unit

Kite 1,490,683 $ 15.79

McGowan 372,671 $ 15.79

Fear 253,416 $ 15.79

The Company entered into an award agreement with each executive officer with respect to his awards, which provide terms of vesting, conversion, distribution, and other terms.

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Any AO LTIP Units that do not become vested will be forfeited and become null and void as of the fifth anniversary of the grant date, but AO LTIP Units may also be forfeited earlier in connection with a corporate transaction or with the holder’s termination of service.

The AO LTIP Units were valued using a Monte Carlo simulation, and the resulting total compensation expense of $ 3.7 million is being amortized over three years .

The AO LTIP Units were valued using a Monte Carlo simulation, and the resulting compensation expense of is being amortized over three years .

We recognized $ 1.1 million of compensation expense in 2020.

We expect to incur $ 1.2 million of this expense in 2020 , $ 1.2 million of this expense in 2021 , and the remainder in 2022.

We expect to incur $ 1.1 million of this expense in 2021 and $ 1.1 million in 2022.

AO LTIP Units - 2020 Awards

During 2020, in connection with its annual review of executive compensation and as described in the table below, the Compensation Committee of the Company's Board of Trustees approved an aggregate grant of AO LTIP Units (the “2020 awards”) to the Company’s executive officers under the Plan.

Executive Number of AO LTIP Units Participation Threshold per AO LTIP Unit

Kite 1,729,729 $ 17.76

McGowan 405,405 $ 17.76

Fear 275,675 $ 17.76

The Company entered into an award agreement with each executive officer with respect to his awards, which provide terms of vesting, conversion, distribution, and other terms.

AO LTIP Units are designed to have economics similar to stock options and allow the recipient, subject to vesting requirements, to realize value above a threshold level set as of the grant date of the award (the “Participation Threshold”).

The value of vested AO LTIP Units is realized through conversion into a number of vested LTIP Units in the Operating Partnership determined on the basis of how much the value of a common share of the Company has increased over the Participation Threshold.

The AO LTIP Units are only exercisable and convertible into vested LTIP Units of the Operating Partnership to the extent that they become vested AO LTIP Units.

The awards of AO LTIP Units are subject to both time-based and stock price performance-based vesting requirements.

Subject to the terms of the award agreement, the AO LTIP Units shall vest and become fully exercisable as of the date that both of the following requirements have been met:

(i) the grantee remains in continuous service from the grant date through the third anniversary of the grant date;

and (ii) at any time during the period beginning in the second year and ending at the end of the fifth year following the grant date, the reported closing price per common share of the Company appreciates at least 15 % over the applicable Participation Threshold per AO LTIP Unit (as set forth in the table above) for a minimum of 20 consecutive trading days.

The AO LTIP Units were valued using a Monte Carlo simulation, and the resulting total compensation expense of $ 3.6 million is being amortized over five years .

We recognized $ 0.6 million of compensation expense in 2020.

We expect to annually incur $ 0.7 million of this expense in 2021 through 2024 and the remainder in 2025.

Deferred Costs and Intangibles, net

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Deferred leasing costs and other 57,481 62,109

112,833 122,971

Less—accumulated amortization ( 49,662 ) ( 49,814 )

Less - asset held for sale

Total $ 63,171 $ 73,157

The estimated net amounts of amortization from acquired lease intangible assets for each of the next five years and thereafter are as follows:

($ in thousands)

Amortization of above market leases

Amortization of acquired lease intangible assets

($ in thousands) Amortization of above market leases Amortization of acquired lease intangible assets Total

2021 $ 978 $ 4,409 $ 5,387

2022 728 3,590 4,318

2023 676 2,721 3,397

2024 529 2,136 2,665

2025 506 1,756 2,262

Thereafter 1,105 10,487 11,592

Total $ 4,522 $ 25,099 $ 29,621

Amortization of deferred leasing costs, leasing intangibles and other is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

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The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:

($ in thousands)

For the year ended December 31,

($ in thousands) For the year ended December 31,

2020 2019 2018

Amortization of deferred leasing costs, lease intangibles and other $ 13,916 $ 14,239 $ 18,648

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Lease liabilities 26,511 27,015

The amortization of below market lease intangibles is included as a component of minimum rent in the accompanying consolidated statements and was $ 5.0 million , $ 8.9 million and $ 7.7 million for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Total $ 85,649 $ 90,180

The amortization of below market lease intangibles is included as a component of minimum rent in the accompanying consolidated statements was $ 4.8 million, $ 5.0 million and $ 8.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The estimated net amounts of amortization of in-place lease liabilities and the increasing effect on minimum rent for each of the next five years and thereafter is as follows:

($ in thousands)

Thereafter 33,764

Total $ 45,479

Disposals of Operating Properties and Impairment Charges

In February 2019, the Company announced a plan to market and sell up to $ 500 million in non-core assets as part of a program designed to improve the Company's portfolio quality, reduce its leverage, and focus operations on markets where the Company believes it can gain scale and generate attractive risk-adjusted returns.

During the year ended December 31, 2019, we sold twenty-three operating properties for aggregate gross proceeds of $ 543.8 million .

There were no operating properties sold during the year ended December 31, 2020.

The Company sold one redevelopment property during the year ended December 31, 2020 for gross proceeds of $ 14.0 million and a net gain of $ 3.1 million.

During the year ended December 31, 2019, we sold 23 operating properties for aggregate gross proceeds of $ 543.8 million as part of a program designed to improve the Company's portfolio quality, reduce its leverage, and focus operations on markets where the Company believes it can gain scale and generate attractive risk-adjusted returns.

The following summarizes our 2019 operating property dispositions:

Property Name

Disposition Date

Whitehall Pike

Bloomington, IN

Beechwood Promenade

Village at Bay Park

Green Bay, WI

Lakewood Promenade

Jacksonville, FL

Palm Coast Landing

Palm Coast, FL

Lowe's - Perimeter Woods

Charlotte, NC

Cannery Corner

Las Vegas, NV

Temple Terrace

University Town Center

Oklahoma City, OK

Gainesville Plaza

Gainesville, FL

Jacksonville, FL

Eastgate Plaza

Las Vegas, NV

Punta Gorda, FL

Landstown Commons

Virginia Beach, VA

Lima Marketplace

Fort Wayne, IN

September 2019

Hitchcock Plaza

September 2019

Merrimack Village Center

Manchester, NH

September 2019

Publix at Acworth

The Centre at Panola

Crown Point, IN

Bell Oaks Centre

Evansville, IN

November 2019

South Elgin Commons

December 2019

Boulevard Crossing

December 2019

Property Name MSA Disposition Date

Whitehall Pike Bloomington, IN March 2019

Beechwood Promenade Athens, GA April 2019

Village at Bay Park Green Bay, WI May 2019

Lakewood Promenade Jacksonville, FL May 2019

Palm Coast Landing Palm Coast, FL May 2019

Lowe's - Perimeter Woods Charlotte, NC May 2019

Cannery Corner Las Vegas, NV June 2019

Temple Terrace Tampa, FL June 2019

University Town Center Oklahoma City, OK June 2019

Gainesville Plaza Gainesville, FL July 2019

Bolton Plaza Jacksonville, FL July 2019

Eastgate Plaza Las Vegas, NV July 2019

Burnt Store Punta Gorda, FL July 2019

Landstown Commons Virginia Beach, VA August 2019

Lima Marketplace Fort Wayne, IN September 2019

Hitchcock Plaza Aiken, SC September 2019

Merrimack Village Center Manchester, NH September 2019

Publix at Acworth Atlanta, GA October 2019

The Centre at Panola Atlanta, GA October 2019

Beacon Hill Crown Point, IN October 2019

Bell Oaks Centre Evansville, IN November 2019

South Elgin Commons Chicago, IL December 2019

Boulevard Crossing Kokomo, IN December 2019

The Company recorded a net gain of $ 39.0 million as a result of the 2019 disposal activity.

During 2019, in connection with the preparation and review of the financial statements for the applicable periods, we evaluated a total of seven operating properties for impairment and recorded a cumulative $ 37.7 million impairment charge due to changes in facts and circumstances underlying the Company's expected future hold period of these properties.

to changes in facts and circumstances underlying the Company's expected future hold period of these properties.

A shortening of the expected future hold period is considered an impairment indicator under applicable accounting rules, and this indicator caused us to further evaluate the carrying value of these properties.

We concluded the estimated undiscounted cash flows over the expected

holding period did not exceed the carrying value of these assets given the new holding period, leading to the charge.

We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of these assets given the new holding period, leading to the charge.

We estimated the fair value using the market approach by utilizing recent sales offers without adjustment.

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The following summarizes our 2018 operating property dispositions:

Property Name

Disposition Date

Trussville Promenade

Birmingham, AL

February 2018

Memorial Commons

Goldsboro, NC

Lake Lofts at Deerwood

Jacksonville, FL

November 2018

Hamilton Crossing

Knoxville, TN

November 2018

Fox Lake Crossing

December 2018

Las Vegas, NV

December 2018

Property Name MSA Disposition Date

Trussville Promenade Birmingham, AL February 2018

Memorial Commons Goldsboro, NC March 2018

Lake Lofts at Deerwood Jacksonville, FL November 2018

Hamilton Crossing Knoxville, TN November 2018

Fox Lake Crossing Chicago, IL December 2018

Lowe's Plaza Las Vegas, NV December 2018

In addition, we entered into a joint venture with TH Real Estate by selling an 80 % interest in three operating assets for an agreed upon value of $ 99.8 million.

The properties sold to the joint venture were the following:

Property Name

Disposition Date

Livingston Shopping Center

New York/Northern New Jersey

Plaza Volente

Tamiami Crossing

Property Name MSA Disposition Date

Livingston Shopping Center New York/Northern New Jersey June 2018

Plaza Volente Austin, TX June 2018

Tamiami Crossing Naples, FL June 2018

The Company recorded a net gain of $ 3.4 million as a result of the 2018 disposal activity.

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We compared the estimated aggregate fair value of $ 130.2 million to the carrying values, which resulted in the recording of the non-cash impairment charges totaling $ 70.4 million for the year ended December 31, 2018.

As of December 31, 2018, the Company classified its Whitehall Pike operating property as held for sale.

This asset was sold in March 2019.

During the year ended December 31, 2017, we sold four operating properties for aggregate gross proceeds of $ 76.1 million and a net gain of $ 15.2 million .

The following summarizes our 2017 operating property dispositions.

Property Name

Disposition Date

Clay Marketplace

Birmingham, AL

The Shops at Village Walk

Fort Myers, FL

Wheatland Towne Crossing

In connection with the preparation and review of the financial statements for the three months ended March 31, 2017, we evaluated an operating property for impairment including shortening of the intended holding period.

We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of the asset.

The Company estimated the fair value of the property to be $ 26.0 million using Level 3 inputs within the fair value hierarchy, primarily using the market

We compared the fair value measurement to the carrying value, which resulted in the recording of a non-cash impairment charge of $ 7.4 million .

This property was sold during 2017.

The results of all the operating properties sold in 2020, 2019, and 2018 are not included in discontinued operations in the accompanying statements of operations as none of the operating properties individually, nor in the aggregate, represent a strategic shift that has had or will have a material effect on our operations or financial results.

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Mortgage and other indebtedness consisted of the following as of December 31, 2020 and 2019:

($ in thousands)

As of December 31, 2019

Unamortized Net Premiums

Unamortized Debt Issuance Costs

($ in thousands) As of December 31, 2020

Principal Unamortized Net Premiums Unamortized Debt Issuance Costs Total

Senior unsecured notes—fixed rate

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interest rates ranging from 4.00 % to 4.57 % at December 31, 2020

$ 550,000 $ — $ ( 3,595 ) $ 546,405

Unsecured revolving credit facility

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interest at LIBOR + 1.15 % or 1.29 % at December 31, 2020

Unsecured Term Loans

25,000 — ( 1,672 ) 23,328

Unsecured term loan

Matures October 2025;

interest at LIBOR + 2.00 % or 2.14 % at December 31, 2020

250,000 — ( 1,647 ) 248,353

Mortgage notes payable—fixed rate

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interest rates ranging from 3.78 % to 5.73 % at December 31, 2020

Mortgage Notes Payable—Variable Rate

295,966 1,732 ( 25 ) 297,673

Mortgage note payable—variable rate

Due in monthly installments of principal and interest;

1 unchanged sentence

interest at LIBOR + 1.60 % or 1.74 % at December 31, 2020

55,110 — ( 75 ) 55,035

Total mortgage and other indebtedness $ 1,176,076 $ 1,732 $ ( 7,014 ) $ 1,170,794

($ in thousands)

As of December 31, 2018

Unamortized Net Premiums

Unamortized Debt Issuance Costs

($ in thousands) As of December 31, 2019

Principal Unamortized Net Premiums Unamortized Debt Issuance Costs Total

Senior Unsecured Notes—Fixed Rate

1 unchanged sentence

interest rates ranging from 4.00 % to 4.57 % at December 31, 2019

$ 550,000 $ — $ ( 4,231 ) $ 545,769

Unsecured Revolving Credit Facility

2 unchanged sentences

interest at LIBOR + 1.15 % 2 or 2.91 % at December 31, 2019

— — ( 2,625 ) ( 2,625 )

Unsecured Term Loans

$95 million matures July 2021;

interest at LIBOR + 1.30% 2 or 3.80% at December 31, 2018;

$250 million matures October 2025;

Matures October 2025;

interest at LIBOR + 2.00 % or 3.76 % at December 31, 2019

250,000 — ( 1,859 ) 248,141

Mortgage Notes Payable—Fixed Rate

Generally due in monthly installments of principal and interest;

maturing at various dates from September 2020 through June 2030;

maturing at various dates from April 2022 through June 2030;

interest rates ranging from 3.78 % to 5.73 % at December 31, 2019

297,472 2,176 ( 40 ) 299,608

Mortgage Notes Payable—Variable Rate

Due in monthly installments of principal and interest;

maturing at various dates February 2022 through June 2025;

interest at LIBOR + 1.50%-1.60%, ranging from 4.00% to 4.10% at December 31, 2018

maturing in February 2022;

interest at LIBOR + 1.60 %, or 3.36 % at December 31, 2019

55,830 — ( 143 ) 55,687

Total mortgage and other indebtedness $ 1,153,302 $ 2,176 $ ( 8,898 ) $ 1,146,580

6 unchanged sentences

The accompanying consolidated statements of operations include the following amounts of amortization of debt issuance costs as a component of interest expense:

($ in thousands)

For the year ended December 31,

($ in thousands) For the year ended December 31,

2020 2019 2018

Amortization of debt issuance costs $ 2,135 $ 2,762 $ 3,944

11 unchanged sentences

The Operating Partnership is permitted to prepay the Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

As of December 31, 2019 , there was no balance outstanding under the Credit Facility.

As of December 31, 2020, there was $ 25 million outstanding under the Credit Facility.

Additionally, we had letters of credit outstanding which totaled $ 1.2 million, against which no amounts were advanced as of December 31, 2020.

1 unchanged sentence

As of December 31, 2020, the value of the assets in our unencumbered asset pool, calculated pursuant to the Credit Facility agreement, was $ 1.3 billion.

Taking into account outstanding borrowings on the line of credit, term loans, unsecured notes and letters of credit, we had $ 583.4 million available under our Credit Facility for future borrowings as of December 31, 2019 .

Taking into account outstanding borrowings on the line of credit, term loans, unsecured

notes and letters of credit, we had $ 523.2 million available under our Credit Facility for future borrowings as of December 31, 2020.

Our ability to borrow under the Credit Facility is subject to our compliance with various restrictive and financial covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales.

8 unchanged sentences

The following table presents maturities of mortgage debt and corporate debt as of December 31, 2020:

($ in thousands)

Scheduled Principal Payments

Term Maturities

($ in thousands) Scheduled Principal Payments Term Maturities Total

2021 $ 2,303 $ — $ 2,303

2022 1,043 203,877 204,920

2023 806 256,517 257,323

2024 854 — 854

2025 904 330,000 330,904

Thereafter 4,672 375,100 379,772

$ 10,582 $ 1,165,494 $ 1,176,076

Unamortized net debt premiums and issuance costs, net ( 5,282 )

Total $ 1,170,794

Other Debt Activity

For the year ended December 31, 2020, we had total new borrowings of $ 325.0 million and total repayments of $ 302.2 million.

In addition to the items mentioned above, the components of this activity were as follows:

We retired sixteen fixed-rate secured loans and one variable-rate secured loan for $ 250.9 million in connection with the sale of operating properties;

We repaid $ 120.6 million on the Credit Facility using proceeds from the sale of operating properties;

We borrowed $ 30.0 million on the Credit Facility to fund the acquisition of the Pan Am Plaza Garage;

We borrowed $ 45.0 million on the Credit Facility to fund development activities, redevelopment activities, tenant improvement costs, and other working capital needs;

The components of this activity were as follows:

• In March 2020, we borrowed $ 300 million on 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;

• In December 2020, we borrowed $ 25 million on the Credit Facility to fund a portion of the purchase price of Eastgate Crossing;

• We made scheduled principal payments on indebtedness during the year totaling $ 2.2 million.

3 unchanged sentences

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 3.37 % to 3.88 %.

As of December 31, 2019 , the estimated fair value of variable rate debt was $ 307.6 million compared to the book value of $ 305.8 million .

As of December 31, 2020, the estimated fair value of variable rate

debt was $ 329.1 million compared to the book value of $ 330.1 million.

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 1.28 % to 3.62 %.

15 unchanged sentences

As of December 31, 2020, this balance is reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet.

At December 31, 2018 the estimated fair value of our interest rate derivatives was a net liability of $ 3.5 million , including accrued interest receivable of $ 0.1 million .

As of December 31, 2018 , $ 3.6 million is reflected in prepaid and other assets and $ 7.1 million is reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet.

At December 31, 2019 the estimated fair value of our interest rate derivatives was a liability of $ 16.8 million, including accrued interest of $ 0.1 million.

As of December 31, 2019, this was reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings.

Approximately $ 0.6 million was reclassified as an increase to earnings during the year ended December 31, 2019 .

Approximately $ 4.0 million and $ 0.8 million was reclassified as a reduction to earnings during the years ended December 31, 2020 and 2018, respectively.

Approximately $ 0.6 million was reclassified as an increase to earnings during the year ended December 31, 2019.

As the interest payments on our derivatives are made over the next 12 months, we estimate the increase to interest expense to be $ 6.4 million, assuming the current LIBOR curve.

8 unchanged sentences

From a lessor perspective, the new accounting guidance adopted in 2019 remained mostly similar to legacy GAAP as the Company elected the practical expedient to not separate non-lease components from lease components.

This election resulted in a change on the Company's consolidated statements of operations as the Company no longer presents minimum rents and tenant reimbursements as separate amounts because the Company now accounts for these amounts as a single combined lease component, rental income, on the basis of the lease component being the predominant component of the contract.

This election resulted in a change on the Company's consolidated statements of operations as the Company no longer presents minimum rents

and tenant reimbursements as separate amounts because the Company now accounts for these amounts as a single combined lease component, rental income, on the basis of the lease component being the predominant component of the contract.

As such, non-lease components, including common area maintenance reimbursements that are of a fixed nature are recognized on a straight-line basis over the term of the lease.

Further, bad debt, which has previously been recorded in property operating expenses, has now been classified as a contra-revenue account in rental income in the Company’s consolidated statements of operations and comprehensive income for the year ended December 31, 2019.

The Company recognized the following lease rental income for the year ended December 31, 2019:

The Company recognized the following lease rental income for the years ended December 31, 2020 and 2019, respectively:

($ in thousands)

2 unchanged sentences

Variable Lease Payments - Operating Leases 52,128 61,368

Bad Debt Reserve ( 13,259 ) ( 3,620 )

Straight-Line Rent Adjustment 1,155 3,362

Straight-Line Rent Reserve for Uncollectibility ( 4,177 ) ( 1,153 )

Amortization of In-Place Lease Liabilities, net 3,819 3,776

Total $ 257,670 $ 308,399

The weighted average remaining term of the lease agreements is approximately 4.5 years.

2 unchanged sentences

($ in thousands)

2021 $ 217,118

Thereafter 365,042

Total $ 1,193,825

Commitments under Ground Leases

9 unchanged sentences

Ground lease expense incurred by the Company on these operating leases for the years ended December 31, 2020, 2019, and 2018 was $ 1.9 million, $ 1.8 million, and $ 1.7 million, respectively.

The Company made payments of $ 1.7 million for the year ended December 31, 2019, of which the majority was included in operating cash flows.

The Company made payments of $ 1.8 million and $ 1.7 million for the years ended December 31, 2020 and 2019, respectively, which were included in operating cash flows.

Future minimum lease payments due under ground leases for the next five years ending December 31 and thereafter are as follows:

($ in thousands)

Thereafter 68,971

Total $ 77,393

Shareholders’ Equity

1 unchanged sentence

Our Board of Trustees declared a cash distribution of $ 0.1500 per common share and Common Unit for the fourth quarter of 2020.

This distribution was paid on December 27, 2019 to common shareholders and Common Unit holders of record as of December 20, 2019.

This distribution was paid on January 15, 2021 to common shareholders and Common Unit holders of record as of January 8, 2021.

For the years ended December 31, 2020, 2019 and 2018, we declared cash distributions of $ 0.4495 , $ 1.27 , and $ 1.27 respectively per common share and Common Units.

Accrued but unpaid distributions on common shares and units was $ 27.3 million as of December 31, 2018 and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Dividend Reinvestment and Share Purchase Plan

1 unchanged sentence

Participants in this plan are also able to make optional cash investments with certain restrictions.

Quarterly Financial Data (Unaudited)

Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2019 and 2018 .

($ in thousands, except per share data)

Quarter Ended

September 30,

Quarter Ended

Total revenue

Gain (loss) on sale of operating properties, net

Operating income (loss)

Consolidated net income (loss)

Net income (loss) attributable to Kite Realty Group Trust common shareholders

Net income (loss) per common share – basic and diluted

Weighted average Common Shares outstanding - basic

Weighted average Common Shares outstanding - diluted

($ in thousands, except per share data)

Quarter Ended

September 30,

Quarter Ended

Total revenue

Gain (loss) on sale of operating properties, net

Operating income (loss)

Consolidated net income (loss)

Net income (loss) attributable to Kite Realty Group Trust common shareholders

Net income (loss) per common share – basic and diluted

Weighted average Common Shares outstanding - basic

Weighted average Common Shares outstanding - diluted

Commitments and Contingencies

1 unchanged sentence

We are not subject to any material litigation nor, to management’s knowledge, is any material litigation currently threatened against us.

We are parties to routine litigation, claims, and administrative proceedings arising in the ordinary course of

We are parties to routine litigation, claims, and administrative proceedings arising in the ordinary course of business.

Management believes that such matters will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows taken as a whole.

We are obligated under various completion guarantees with lenders and lease agreements with tenants to complete all or portions of the development and redevelopment projects.

We are obligated under various completion guarantees with lease agreements with tenants to complete all or portions of a development project and tenant-specific space currently under construction.

We believe we currently have sufficient financing in place to fund our investment in any existing or future projects through cash from operations and borrowings on our unsecured revolving credit facility.

8 unchanged sentences

During the years ended December 31, 2020, 2019 and 2018, we paid $ 0.5 million, $ 0.8 million and $ 0.5 million, respectively, to this related entity.

In 2020, we acquired one retail operating property for $ 65.3 million.

The fair value of the real estate and other assets acquired were primarily determined using the income approach.

The income approach required us to make assumptions about market leasing rates, tenant-related costs, discount rates, and disposal rates.

The estimates of fair value primarily relied upon Level 2 and Level 3 inputs, as previously defined.

The following table summarizes the estimation of the fair value of assets acquired and liabilities assumed for the property acquired in 2020:

($ in thousands)

Investment properties, net $ 63,570

Lease-related intangible assets, net 2,254

Total acquired assets 65,824

Accounts payable and accrued expenses 280

Deferred revenue and other liabilities 246

Total assumed liabilities 526

Fair value of acquired net assets $ 65,298

The leases at the acquired property had a weighted average remaining life at acquisition of approximately 3.2 years.

The range of the most significant Level 3 assumptions utilized in determining the value of the real estate and related assets acquired are as follows:

Net rental rate per square foot - Anchors $ 22.50 $ 27.50

Net rental rate per square foot - Small Shops $ 15.00 $ 65.00

Discount rate 9.0 % 9.0 %

In 2019, we acquired one retail operating property for $ 29.0 million and one parking garage for $ 29.5 million.

2 unchanged sentences

The estimates of fair value primarily relied upon Level 2 and Level 3 inputs, as previously defined.

The results of operations for each of the properties acquired during the year ended December 31, 2019 have been included in operations since their respective dates of acquisition.

The following table summarizes the estimation of the fair value of assets acquired and liabilities assumed for the properties acquired in 2019:

2 unchanged sentences

Lease-related intangible assets, net 2,458

Other assets 320

Total acquired assets 59,171

8 unchanged sentences

Discount rate 9.0 % 9.0 %

We did not acquire any properties in 2018 or 2017.

Subsequent Events

Dividend Declaration

On February 12, 2020, our Board of Trustees declared a cash distribution of $ 0.3175 per common share and Common Unit for the first quarter of 2020.

This distribution is expected to be paid on or about April 3, 2020 to common shareholders and Common Unit holders of record as of March 27, 2020.

The results of operations for each of the properties acquired during the years ended December 31, 2020 and 2019 have been included in operations since their respective dates of acquisition.

We did no t acquire any properties in 2018.

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 for the rest of 2020 and potentially beyond 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 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.

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 remains 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.

Kite Realty Group Trust and Kite Realty Group, L.P.

1 unchanged sentence

Consolidated Real Estate and Accumulated Depreciation

($ in thousands)

Cost Capitalized

Subsequent to Acquisition/Development

Gross Carrying Amount

($ in thousands) Initial Cost Cost Capitalized

Subsequent to Acquisition/Development Gross Carrying Amount

Close of Period

Building & Building & Building & Accumulated Year Built / Year

Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired

Operating Properties

12th Street Plaza * $ — $ 2,624 $ 12,892 $ — $ 755 $ 2,624 $ 13,647 $ 16,271 $ 4,530 1978/2003 2012

54th & College *

54th & College * — 2,672 — — — 2,672 — 2,672 — 2008 NA

Bayonne Crossing 42,113 47,809 43,960 — 917 47,809 44,877 92,686 12,397 2011 2014

Bayport Commons *

Bridgewater Marketplace *

Bayport Commons * — 7,005 20,776 — 4,109 7,005 24,886 31,891 8,162 2008 NA

Belle Isle * — 9,130 41,167 — 5,968 9,130 47,135 56,265 12,409 2000 2015

Bridgewater Marketplace * — 3,407 8,602 — 1,244 3,407 9,845 13,252 3,708 2008 NA

Burlington Coat Factory * — — 2,773 — 29 — 2,802 2,802 2,093 1992/2000 2000

5 unchanged sentences

Centre Point Commons 14,410 2,918 22,310 — 132 2,918 22,441 25,359 5,790 2007 2014

Cobblestone Plaza *

Cobblestone Plaza * — 11,221 45,028 — 2,849 11,221 47,877 59,098 13,852 2011 NA

Colonial Square * — 7,521 18,696 — 2,138 7,521 20,834 28,355 5,009 2010 2014

Colleyville Downs * — 5,446 38,533 — 2,064 5,446 40,597 46,043 12,875 2014 2015

Cool Creek Commons *

Cool Creek Commons * — 6,062 13,428 — 3,802 6,062 17,229 23,291 7,192 2005 NA

Cool Springs Market * — 12,644 22,870 40 6,449 12,684 29,319 42,003 10,152 1995 2013

Crossing at Killingly Commons * — 21,999 34,968 — ( 5 ) 21,999 34,963 56,962 10,252 2010 2014

Delray Marketplace

DePauw University Bookstore & Café

Delray Marketplace 55,110 18,750 88,421 1,284 4,960 20,034 93,381 113,415 24,378 2013 NA

DePauw University Bookstore & Café — 64 663 — 45 64 708 772 416 2012 NA

Draper Crossing * — 9,054 27,241 — 894 9,054 28,134 37,188 8,171 2012 2014

1 unchanged sentence

Eastern Beltway Center 34,100 23,221 45,725 — 4,675 23,221 50,400 73,621 11,620 1998/2006 2014

Eastgate Crossing — 4,244 59,326 — — 4,244 59,326 63,570 — 1958/2007 2020

Eastgate Pavilion * — 8,026 18,763 — 904 8,026 19,667 27,693 9,224 1995 2004

Eddy Street Commons

Estero Town Commons *

Fishers Station *

Cost Capitalized

Subsequent to Acquisition/Development

Gross Carrying Amount

Eddy Street Commons — 1,900 37,051 — 1,154 1,900 38,205 40,105 13,599 2009 NA

Estero Town Commons * — 8,973 9,960 — 989 8,973 10,949 19,922 4,077 2006 NA

Fishers Station * — 4,008 15,607 — 73 4,008 15,680 19,688 5,215 2018 NA

Initial Cost Cost Capitalized

Subsequent to Acquisition/Development Gross Carrying Amount

Close of Period

Building & Building & Building & Accumulated Year Built / Year

Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired

Operating Properties (continued)

Geist Pavilion *

Greyhound Commons *

Holly Springs Towne Center *

Holly Springs Towne Center - Phase II *

Geist Pavilion * $ — $ 1,368 $ 8,280 $ — $ 2,362 $ 1,368 $ 10,642 $ 12,010 $ 4,898 2006 NA

Greyhound Commons * — 2,629 794 — 863 2,629 1,657 4,286 942 2005 NA

Holly Springs Towne Center * — 12,319 45,904 — 4,783 12,319 50,688 63,007 11,499 2013 NA

Holly Springs Towne Center - Phase II * — 11,590 49,006 — 1,455 11,590 50,461 62,051 8,159 2016 NA

Hunters Creek Promenade * — 8,335 12,681 179 1,151 8,514 13,831 22,345 3,685 1994 2013

Indian River Square * — 5,100 6,305 1,100 1,924 6,200 8,229 14,429 3,251 1997/2004 2005

International Speedway Square *

International Speedway Square * — 7,424 12,840 — 6,875 7,424 19,715 27,139 11,267 1999 NA

King's Lake Square * — 4,519 15,405 — 1,698 4,519 17,103 21,622 8,698 1986/2014 2003

7 unchanged sentences

Mullins Crossing * — 10,582 42,140 — 6,233 10,582 48,373 58,955 14,063 2005 2014

Naperville Marketplace

Naperville Marketplace — 5,364 11,475 — 160 5,364 11,634 16,998 4,328 2008 NA

Nora Plaza 3,790 21,310 — 2,150 3,790 23,460 27,249 2,077 2004 2019

Northcrest Shopping Center — 4,044 33,684 — 1,284 4,044 34,968 39,012 8,101 2008 2014

Northdale Promenade *

Northdale Promenade * — 1,718 27,292 — 161 1,718 27,453 29,171 12,891 2017 NA

Oleander Place * — 863 5,935 — 285 863 6,220 7,083 2,522 2012 2011

Parkside Town Commons - Phase I *

Parkside Town Commons - Phase II *

Parkside Town Commons - Phase I * — 3,108 42,194 ( 60 ) 711 3,047 42,905 45,952 11,279 2015 N/A

Parkside Town Commons - Phase II * — 20,722 66,524 — 9,828 20,722 76,352 97,074 15,245 2017 N/A

Perimeter Woods * — 8,993 27,277 — 1,937 8,993 29,213 38,206 6,857 2008 2014

5 unchanged sentences

Rampart Commons 8,816 1,136 42,726 — 592 1,136 43,318 44,454 11,926 2018 2014

Rangeline Crossing *

Cost Capitalized

Subsequent to Acquisition/Development

Gross Carrying Amount

Rangeline Crossing * — 2,006 18,020 — 619 2,006 18,639 20,645 7,580 1986/2013 NA

Initial Cost Cost Capitalized

Subsequent to Acquisition/Development Gross Carrying Amount

Close of Period

Building & Building & Building & Accumulated Year Built / Year

Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired

Operating Properties (continued)

8 unchanged sentences

Silver Springs Pointe — 7,580 4,992 — 321 7,580 5,313 12,893 1,605 2001 2014

Stoney Creek Commons *

Stoney Creek Commons * — 628 3,700 — 5,913 628 9,614 10,242 4,107 2000 NA

Sunland Towne Centre * — 14,774 22,528 — 3,540 14,774 26,068 40,842 12,047 1996 2004

Tarpon Bay Plaza *

Tarpon Bay Plaza * — 4,273 23,001 — 4,452 4,273 27,454 31,727 8,350 2007 NA

The Corner 14,750 3,772 24,642 — 28 3,772 24,669 28,441 5,970 2008 2014

The Landing at Tradition * — 18,505 46,210 — 2,980 18,505 49,191 67,696 10,922 2007 2014

Toringdon Market * — 5,448 8,703 — 622 5,448 9,325 14,773 2,734 2004 2013

Traders Point *

Traders Point II *

Traders Point * — 9,443 34,697 — 3,403 9,443 38,100 47,543 20,127 2005 NA

Traders Point II * — 2,376 6,363 — 914 2,376 7,277 9,653 3,281 2005 NA

Tradition Village Center * — 3,140 14,826 — 632 3,140 15,458 18,598 3,943 2006 2014

3 unchanged sentences

Total Operating Properties 351,076 621,773 2,142,304 3,452 200,519 625,225 2,342,823 2,968,048 688,558

C ost Capitalized

Initial Cost C ost Capitalized

Subsequent to Acquisition/Development

1 unchanged sentence

Close of Period

Building & Building & Building & Accumulated Year Built / Year

Name Encumbrances Land Improvements Land Improvements Land Improvements Total Depreciation Renovated Acquired

Office Properties

4 unchanged sentences

Development and Redevelopment Properties

Courthouse Shadows *

Eddy Street Commons - Phase II

Glendale Town Center*

Hamilton Crossing Centre*

Eddy Street Commons - Phase II 4,188 5,642 — — 4,188 5,642 9,830 267 NA NA

Glendale Town Center* — 1,307 43,221 — 4,148 1,307 47,369 48,676 32,685 NA NA

Hamilton Crossing Centre* — 5,531 10,339 — 63 5,531 10,403 15,934 4,471 NA NA

The Corner * — 304 4,145 — — 304 4,145 4,449 — NA NA

Total Development and Redevelopment Properties — 11,329 63,347 — 4,211 11,329 67,558 78,888 37,423

Bridgewater Marketplace *

Landstown - Fulton Bank Pad

KRG Development

KRG New Hill *

Line of credit/Term Loan/Unsecured notes

Bridgewater Marketplace * — 1,722 — — — 1,722 — 1,722 — NA NA

KRG Development — — 716 — — — 716 716 74 NA NA

KRG New Hill * — 1,812 — — — 1,812 — 1,812 — NA NA

KRG Peakway — 5,777 — — — 5,777 — 5,777 — NA NA

Pan Am Plaza — 11,694 — — — 11,694 — 11,694 — NA NA

Total Other — 21,006 716 — — 21,006 716 21,722 74

Line of credit/Term Loan/Unsecured notes 825,000 — — — — — — — — NA NA

Grand Total $ 1,176,076 $ 656,655 $ 2,248,089 $ 3,452 $ 228,785 $ 660,107 $ 2,476,874 $ 3,136,982 $ 750,119

____________________

9 unchanged sentences

The changes in investment properties of the Company for the years ended December 31, 2020, 2019, and 2018 are as follows:

2020 2019 2018

Balance, beginning of year $ 3,079,616 $ 3,633,376 $ 3,949,431

Acquisitions 63,570 57,494 —

Improvements 39,544 52,713 68,349

Impairment — ( 56,948 ) ( 73,198 )

Disposals ( 45,748 ) ( 607,019 ) ( 311,206 )

Balance, end of year $ 3,136,982 $ 3,079,616 $ 3,633,376

3 unchanged sentences

The changes in accumulated depreciation of the Company for the years ended December 31, 2020, 2019, and 2018 are as follows:

2020 2019 2018

Balance, beginning of year $ 661,546 $ 695,012 $ 660,276

Depreciation expense 113,973 117,216 132,662

Impairment — ( 19,226 ) ( 2,838 )

Disposals ( 25,400 ) ( 131,456 ) ( 95,088 )

Balance, end of year $ 750,119 $ 661,546 $ 695,012

Depreciation of investment properties reflected in the statements of operations is calculated over the estimated original lives of the assets as follows:

Building improvements

Tenant improvements

Term of related lease

Furniture and Fixtures

Buildings 20 - 35 years

Building improvements 10 - 35 years

Tenant improvements Term of related lease

Furniture and Fixtures 5 - 10 years

All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures