What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-02-22 · 114 added, 87 removed, 112 unchanged (64% of the section changed)

Unless the context suggests otherwise, references to “we,” “us,” “our” or the “Company” refer to Kite Realty Group Trust and our business and operations conducted through our directly or indirectly owned subsidiaries, including Kite Realty Group, L.P., our operating partnership (the “Operating Partnership”).

Kite Realty Group Trust is a publicly-held real estate investment trust which, through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States.

Kite Realty Group Trust is a publicly held real estate investment trust which, through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership, operation, acquisition, development and redevelopment of high-quality, open-air shopping centers and mixed-use assets in select markets in the United States.

We derive revenues primarily from activities associated with the collection of contractual rents and reimbursement payments from tenants at our properties.

Our operating results therefore depend materially on, among other things, the ability of our tenants to make required lease payments, the health and resilience of the United States retail sector, interest rate volatility, job growth and real estate market and overall economic conditions.

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

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

Our retail operating portfolio was 91.2% leased to a diversified retail tenant base, with no single retail tenant accounting for more than 2.5% of our total annualized base rent.

In the aggregate, our largest 25 tenants accounted for 33.3% of our annualized base rent.

See Item 2, “Properties” for a list of our top 25 tenants by annualized base rent.

Impact of COVID-19

Since first being reported in December 2019, the novel strain of coronavirus (COVID-19) has spread globally.

In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency with respect to COVID-19.

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and how it impacts the Company's tenants and business partners.

Certain segments of retailers and the Company experienced disruption during 2020, and, going forward, the potential adverse effect of the COVID-19 pandemic, including possible resurgences and mutations, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market, global economy, and financial markets, and the extent of such effects, will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

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

• As of December 31, 2020, over 98% of our tenants have reopened.

However, many of these retailers are operating at a lower capacity than normal due to COVID-19.

Store closures or the inability to return to full capacity, particularly if for an extended period, increase the risk of business failures and lease defaults.

• As of February 11, 2021, we have collected approximately 95% of rent billings for the three months ended December 31, 2020 and 92% of rent billings for the period from April 1, 2020 through December 31, 2020.

• Many of our tenants have taken on additional debt as a result of COVID-19, including loans administered by the Small Business Administration.

To the extent this debt is not forgiven, the increased debt load may hamper their ability to continue to operate and to pay rent, which could cause the Company to realize decreased cash flow and increased vacancies at its properties.

Starting in March 2020 and continuing through January 2021, the Company received rent relief requests from a significant proportion of its tenants.

Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic;

the Company and its legal advisers generally disagree with these legal arguments.

The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant's financial strength, the tenant's operating history, potential co-tenancy impacts, the tenant's contribution to the shopping center in which it operates, the Company's assessment of the tenant's long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors.

As a result of this evaluation, the Company has agreed to defer rent for approximately 375 of its tenants subject to certain conditions.

The Company had deferred the collection of $6.1 million of rental income that remained outstanding as of December 31, 2020.

To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company's operating and capital uses.

We have taken various steps to mitigate the impact of COVID-19 on our liquidity, including deferrals of certain planned capital expenditures for 2020.

In March 2020, we borrowed $300 million on the unsecured revolving credit facility (the "Credit Facility") as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic.

Subsequent to the initial borrowing, we have repaid the $300 million of borrowings.

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

The effects of COVID-19 have triggered a global and domestic economic recession, and if the recession continues well beyond the lifting of government restrictions related to COVID-19, many of our tenants could face financial distress.

Historically, economic indicators such as GDP growth, consumer confidence and employment are correlated with demand for certain of our tenants’ products and services.

These conditions could increase the number of our tenants that are unable to meet their lease obligations to us and could limit the demand for our space from new tenants.

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

These uncertainties make it difficult to predict operating results for our business for 2021.

Therefore, our operating results depend materially on, among other things, the ability of our tenants to make required lease payments, the health and resilience of the U.S.

retail sector, interest rate volatility, job growth and real estate market and overall economic conditions.

As of December 31, 2021, we owned interests in 180 operating retail properties totaling approximately 29.0 million square feet and one office property with 0.3 million square feet.

Of the 180 operating retail properties, 11 contain an office component.

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

Our retail operating portfolio was 93.4% leased to a diversified retail tenant base, with no single retail tenant accounting for more than 2.5% of our total annualized base rent (“ABR”).

In the aggregate, our largest 25 tenants accounted for 29.6% of our ABR.

See Item 2, “Properties” for a list of our top 25 tenants by ABR.

On October 22, 2021, we completed a Merger (defined below) with RPAI in which RPAI merged with and into our wholly owned subsidiary in a stock-for-stock exchange with a transaction value of approximately $4.7 billion, including the assumption of approximately $1.8 billion of debt.

See Note 3 to the accompanying consolidated financial statements for additional details.

Significant 2021 Activities

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

Merger with RPAI

On October 22, 2021, we completed the merger with RPAI in accordance with the Agreement and Plan of Merger dated July 18, 2021 (the “Merger Agreement”), by and among the Company, its wholly owned subsidiary KRG Oak, LLC (“Merger Sub”) and RPAI, pursuant to which RPAI merged with and into Merger Sub (the “Merger”).

Immediately following the closing of the Merger, Merger Sub merged with and into the Operating Partnership so that all of the assets and liabilities of the Company continue to be held at or below the Operating Partnership level.

The transaction value was approximately $4.7 billion, including the assumption of approximately $1.8 billion of debt.

See Note 3 to the accompanying consolidated financial statements for additional details.

We acquired 100 operating retail properties and five active development projects through the Merger along with multiple parcels of entitled land for future value creation.

Pursuant to the terms of the Merger Agreement, each outstanding share of RPAI common stock converted into the right to receive 0.623 common shares of the Company plus cash in lieu of fractional Company shares.

The aggregate value of the Merger consideration paid or payable to former holders of RPAI common stock was approximately $2.8 billion, excluding the value of RPAI restricted stock units that vested at closing and certain restricted share awards assumed by the Company at closing.

In connection with the Merger, the Operating Partnership issued an equivalent amount of General Partner Units to the Parent Company.

The Merger provided numerous positive benefits to the Company, including:

• Enhancing the portfolio quality by bolstering our presence in existing strategic markets across the Sunbelt along with providing entry into other strategic markets such as Washington, D.C.

• Providing multiple value creation opportunities including lease-up and completion of development and redevelopment projects;

• Improving the strength of our balance sheet by reducing leverage and increasing liquidity to over $1.0 billion;

• Further strengthening leasing relationships to provide more optionality to tenants due to the expanded size of the portfolio.

Operating Activities

• The Company realized net loss attributable to common shareholders of $16.2 million;

• The Company generated Funds From Operations, as defined by NAREIT, of $108.7 million and Funds From Operations, as adjusted for severance charges, of $112.0 million;

• Same Property Net Operating Income ("Same Property NOI") decreased by 6.6% in 2020 compared to 2019 as a result of the impact of COVID-19;

• We executed new and renewal leases on 215 individual spaces for approximately 1.5 million square feet of retail space, achieving a blended cash leasing spread of 7.0% and blended GAAP leasing spread of 14.5% for comparable leases;

• Our operating portfolio annual base rent ("ABR") per square foot as of December 31, 2020 was $18.42, an increase of $0.59 (or 3.3%) from the end of the prior year.

• The Company realized a net loss attributable to common shareholders of $80.8 million for the year ended December 31, 2021;

• The Company generated Funds From Operations, as defined by NAREIT, of $88.4 million and Funds From Operations, as adjusted for merger and acquisition costs, of $171.2 million;

• Same Property Net Operating Income (“Same Property NOI”), which excludes the properties acquired in the Merger with RPAI, grew by 6.1% in 2021 compared to 2020 primarily due to improved collection activity resulting in a significant reduction in bad debt expense in 2021 compared to 2020, which was more heavily impacted by the COVID-19 pandemic;

• In 2021, we executed new and renewal leases on 363 individual spaces for approximately 2.6 million square feet of retail space, achieving a blended cash leasing spread of 10.7% for comparable leases.

Total executed leases includes leasing activity for the legacy RPAI portfolio from October 22, 2021 through December 31, 2021;

• Our operating portfolio ABR per square foot as of December 31, 2021 was $19.36, an increase of $0.94 (or 5.1%) from the end of the prior year.

Financing and Capital Activities

In 2020, we were able to utilize our strong balance sheet, financial flexibility and liquidity to handle the adversity and deliver strong results in the midst of the disruption caused by the COVID-19 pandemic.

The Company had the following key investment highlights:

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

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

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

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

We have no debt scheduled to mature through December 31, 2021, and a debt service coverage ratio of 2.9x as of December 31, 2020.

We have been assigned investment grade corporate credit ratings from two nationally recognized credit rating agencies.

These ratings were unchanged during 2020.

• In connection with the Merger, we assumed an $850.0 million unsecured revolving credit facility (the “Revolving Facility”), of which $55.0 million was drawn as of December 31, 2021;

• We ended the year with approximately $1.0 billion of combined cash, short-term deposits and borrowing capacity on our Revolving Facility;

• In addition, we assumed (i) a $200.0 million unsecured term loan due 2023, (ii) a $120.0 million unsecured term loan due 2024, (iii) a $150.0 million unsecured term loan due 2026, (iv) private placement notes totaling $450.0 million maturing at various dates from June 2024 through June 2029, (v) $350.0 million of public notes due 2025, (vi) $400.0 million of public notes due 2030;

and (vii) $90.1 million of mortgages payable.

Subsequent to the Merger, the Company’s existing revolving credit facility was terminated;

• We issued $175.0 million aggregate principal amount of 0.75% exchangeable senior notes maturing in April 2027 (the “Exchangeable Notes”) to proactively fund 2022 debt maturities;

• We substantially completed the construction of Eddy Street Commons – Phase II and Glendale Town Center;

• We declared quarterly cash dividends totaling $0.68 per share during 2021.

We have $153.5 million of debt principal scheduled to mature through December 31, 2022, a debt service coverage ratio of 3.9x and approximately $93.2 million in cash on hand as of December 31, 2021.

We previously received investment grade corporate credit ratings from two nationally recognized credit rating agencies and these ratings were unchanged during 2021.

We were assigned an investment grade corporate credit rating from a third nationally recognized rating agency in October 2021.

Impacts on Business from COVID-19

The COVID-19 pandemic, and the public health measures that have been undertaken in response, have had a significant adverse impact on many of our tenants and on our business.

The effects of COVID-19, including related government restrictions, mandatory quarantines, “shelter in place” orders, border closures, “social distancing” practices, masking requirements and other travel and gathering restrictions and practices, have caused many of our tenants to close stores, reduce hours or significantly limit service, each of which may continue to create headwinds for our tenants.

Since we cannot estimate when the containment measures will roll back, end, or be reinstated, we cannot estimate the ultimate operational and financial impact of COVID-19 on our business.

In 2020, the effects of COVID-19 triggered a global and domestic economic recession and many of our tenants faced financial distress.

As the domestic economy continued to recover in 2021, retailers continued to improve their operations to

account for the pandemic, including using open-air centers as convenient shopping destinations and last-mile fulfillment through the use of in-store pickup, curbside pickup, and shipping from stores.

Historically, economic indicators such as GDP growth, consumer confidence and employment have been correlated with demand for certain of our tenants’ products and services.

If an economic recession returns, it could increase the number of our tenants that are unable to meet their lease obligations to us and could limit the demand for our space from new tenants.

We expect the significance of the COVID-19 pandemic, including the extent of its effects on our business, financial performance and condition, operating results and cash flows and the economic slowdown, to be dictated by, among other things, the duration of the COVID-19 pandemic, including possible resurgences and mutations, the success of efforts to contain it, the efficacy of vaccines, including against variants of COVID-19, public adoption rates of vaccines and the impact of other actions taken in response to the pandemic.

These uncertainties make it difficult to predict operating results for our business;

therefore, there can be no assurances that we will not experience further declines in revenues, net income, FFO or other operating metrics, which could be material.

Business Objectives and Strategies

Our primary business objectives are to increase the cash flow and value of our properties, achieve sustainable long-term growth and maximize shareholder value primarily through the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers.

We invest in properties with well-located real estate and strong demographics, and we use our leasing and management strategies to improve the long-term values and economic returns of our properties.

We believe that certain of our properties represent attractive opportunities for profitable redevelopment, renovation, and expansion.

Our primary business objectives are to increase the cash flow and value of our properties, achieve sustainable long-term growth and maximize shareholder value primarily through the ownership, operation, acquisition, development and redevelopment of high-quality, open-air shopping centers and mixed-used assets.

We invest in properties with well-located real estate and strong demographics, and we use our leasing and management strategies to improve the long-term value and economic returns of our properties.

We believe that certain of our properties represent attractive opportunities for profitable redevelopment, renovation, densification, and expansion.

We seek to implement our business objectives through the following strategies, each of which is more completely described in the sections that follow:

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Maintaining a strong balance sheet with flexibility to fund our operating and investment activities.

Funding sources include the public equity and debt markets, an existing revolving Credit Facility with $25 million outstanding, new secured debt, internally generated funds, proceeds from selling land and properties that no longer fit our strategy, and potential strategic joint ventures;

Funding sources include the public equity and debt markets, an existing Revolving Facility with $793.5 million of borrowing capacity as of December 31, 2021, secured debt, internally generated funds, proceeds from selling land and properties that no longer fit our strategy, and potential strategic joint ventures;

• Growth Strategy :

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• actively managing properties to minimize overhead and operating costs;

• maintaining strong tenant and retailer relationships in order to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-leasing space to new tenants;

• maintaining strong tenant and retailer relationships to avoid rent interruptions and reduce marketing, leasing and tenant improvement costs that result from re-leasing space to new tenants;

• taking advantage of under-utilized land or existing square footage, reconfiguring properties for more profitable use, and adding ancillary income sources to existing facilities.

We successfully executed our operating strategy in 2020 in a number of ways, as best evidenced in leading our peer group in rent collection rates, based upon publicly reported information by each peer as of February 19, 2021.

Additionally, our leasing process continues to perform at a high level as evidence by the execution of 215 new and renewal leases for approximately 1.5 million square feet.

We have placed significant emphasis on maintaining a strong and diverse retail tenant mix, which has resulted in no tenant accounting for more than 2.5% of our annualized base rent.

See Item 2, “Properties” for a list of our top tenants by gross leasable area ("GLA") and annualized base rent.

Financing and Capital Preservation Strategy.

We successfully executed our operating strategy in 2021 in a number of ways, as best evidenced by our strong growth in Same Property NOI.

Additionally, our leasing process continues to perform at a high level as evidenced by the execution of 363 new and renewal leases for approximately 2.6 million square feet, which includes leases for the legacy RPAI portfolio subsequent to the closing date of the Merger.

Our leased to occupied spread represents approximately $33.0 million of net operating income (“NOI”), the majority of which is expected to come online in 2022.

Included within this amount is $15.0 million of NOI from 27 leases for approximately 767,000 square feet of vacant anchor spaces.

We placed significant emphasis on maintaining a strong and diverse retail tenant mix, which has resulted in no tenant accounting for more than 2.5% of our ABR.

See Item 2, “Properties” for a list of our top tenants by gross leasable area (“GLA”) and ABR.

Financing and Capital Strategy.

We finance our acquisition, development, and redevelopment activities seeking to use the most advantageous sources of capital available to us at the time.

These sources may include the reinvestment of cash flows generated by operations, the sale of common or preferred shares through public offerings or private placements, the reinvestment of net proceeds from the disposition of assets, the incurrence of additional indebtedness through secured or unsecured borrowings, and entering into real estate joint ventures.

Our primary financing and capital preservation strategy is to maintain a strong balance sheet and enhance our flexibility to fund operating and investment activities in the most cost-effective way.

Our primary financing and capital strategy is to maintain a strong balance sheet and enhance our flexibility to fund operating and investment activities in the most cost-effective way.

We consider a number of factors when evaluating the amount and type of additional indebtedness we may elect to incur.

Among these factors are the construction costs or purchase prices of properties to be developed or acquired, the estimated market value of our properties and the Company as a whole upon consummation of the financing, and the ability to generate durable cash flow to cover expected debt service.

Among these factors are the construction costs or purchase price of properties to be developed or acquired, the estimated market value of our properties and the Company as a whole upon consummation of the financing, and the ability to generate durable cash flow to cover expected debt service.

Maintaining a strong balance sheet continues to be one of our top priorities.

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We intend to continue implementing our financing and capital strategies in a number of ways, which may include one or more of the following actions:

• prudently managing our balance sheet, including maintaining sufficient availability under our Credit Facility so that we have additional capacity to fund our development and redevelopment projects and pay down maturing debt if refinancing that debt is not desired or practical;

• prudently managing our balance sheet, including maintaining sufficient availability under our Revolving Facility so that we have additional capacity to fund our development and redevelopment projects and pay down maturing debt if refinancing that debt is not desired or practical;

• extending the scheduled maturity dates of and/or refinancing our near-term mortgage, construction and other indebtedness;

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• continually evaluating our operating properties for redevelopment and renovation opportunities that we believe will make them more attractive for leasing to new tenants, right-sizing of anchor spaces while increasing rental rates, and re-leasing spaces to existing tenants at increased rental rates;

• completion of our eight active development and redevelopment projects;

• evaluation of the entitled land holdings to determine the optimal real estate use and capital allocation decisions;

• disposing of selected assets that no longer meet our long-term investment criteria and recycling the net proceeds into properties that provide attractive returns and rent growth potential in targeted markets or using the proceeds to repay debt, thereby reducing our leverage;

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• the price being offered for the property, the current and projected operating performance of the property, the tax consequences of the transaction, and other related factors;

• opportunities for strengthening the tenant mix at our properties through the placement of anchor tenants such as grocers, value retailers, pet supply stores, hardware stores, or sporting goods retailers, as well as further enhancing a diverse tenant mix that includes restaurants, specialty shops, and other essential retailers that provide staple goods to the community and offer a high level of convenience;

• the configuration of the property, including ease of access, availability of parking, visibility, and the demographics of the surrounding area;

• opportunities for strengthening the tenant mix at our properties through the placement of anchor tenants such as grocers, value retailers, hardware stores, or sporting goods retailers, as well as further enhancing a diverse tenant mix that includes restaurants, specialty shops, and other essential retailers that provide staple goods to the community and offer a high level of convenience;

• the geographic location and configuration of the property, including ease of access, availability of parking, visibility, and the demographics of the surrounding area;

• the level of success of existing properties in the same or nearby markets.

The United States commercial real estate market continues to be highly competitive.

We successfully executed our growth strategy in 2021 with the completion of our transformative Merger with RPAI.

The transaction created a top five shopping center real estate investment trust (“REIT”) based upon enterprise value, enhanced our portfolio quality with entry into strategic gateway markets and bolstered our presence in existing markets, lowered our cost of capital, enhanced our near-term organic growth through lease-up and select development opportunities, and strengthened our balance sheet with limited near-term debt maturities.

commercial real estate market continues to be highly competitive.

We face competition from other REITs, including other retail REITs, and other owner-operators engaged in the ownership, leasing, acquisition, and development of shopping centers as well as from numerous local, regional and national real estate developers and owners in each of our markets.

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Affordable Care Act.

We may be subject to excise taxes under the employer mandate provisions of the Affordable Care Act ("ACA") if we (i) do not offer health care coverage to substantially all of our full-time employees and their dependents or (ii) do not offer health care coverage that meets the ACA's affordability and minimum value standards.

We may be subject to excise taxes under the employer mandate provisions of the Affordable Care Act (the “ACA”) if we (i) do not offer health care coverage to substantially all of our full-time employees and their dependents or (ii) do not offer health care coverage that meets the ACA’s affordability and minimum value standards.

The excise tax is based on the number of full-time employees.

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However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future.

With environmental sustainability becoming a national priority, we have continued to demonstrate our strong commitment to be a responsible corporate citizen through resource reduction and employee training that have resulted in reductions of energy consumption, waste and improved maintenance cycles.

With environmental sustainability becoming a national priority, we have continued to demonstrate our strong commitment to be a responsible corporate citizen through resource reduction and employee training that has resulted in reductions of energy consumption, waste and improved maintenance cycles.

COVID-19 Regulations.

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

As discussed in this Annual Report on Form 10-K, during the COVID-19 pandemic, our properties and our tenants have been subject to public health regulations and control measures, including states of emergency, mandatory quarantines, “shelter in place” orders, border closures, restrictions on types of businesses that may continue to operate, “social distancing” guidelines and other travel and gathering restrictions and practices, that have significantly impacted our business.

See page 13 of Item 1A.

“Risk Factors” for further information.

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Certain risks such as loss from riots, war or acts of God, and, in some cases, flooding are not insurable or the cost to insure over these events is costs prohibitive;

and therefore, we do not carry insurance for these losses.

Some of our policies, such as those covering losses due to terrorism and floods, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses.

therefore, we do not carry insurance for these losses.

Some of our policies, such as those covering losses due to terrorism and floods, are

insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses.

Our principal executive office is located at 30 S.

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As of December 31, 2021, we had 241 full-time employees.

The majority of these employees were based at our Indianapolis, Indiana headquarters.

The majority of these employees were based at our Indianapolis, Indiana headquarters though we also maintain regional offices across the United States.

We believe our employees are the most important part of our business.

We are committed to providing a work environment that attracts, develops and retains high-performing individuals and that treats employees with dignity and respect.

Diversity, Equity and Inclusion

Our policies are designed to promote fairness, equal opportunities, and diversity within the Company.

When attracting, developing and retaining talent, we seek individuals who hold varied experiences and viewpoints and embody our core values to create an inclusive and diverse culture and workplace that allows each employee to do their best work and drive our collective success.

We believe that a diverse workforce possesses a broader array of perspectives that businesses need to remain competitive in today’s economy.

We maintain employment policies that comply with federal, state and local labor laws and promote a culture of fairness and respect.

These policies set forth our goal to provide equal employment opportunity without discrimination or harassment on the basis of age, gender (including identity or expression), marital status, civil partnership status, sexual orientation, disability, color, nationality, race or ethnic origin or religion or belief.

We previously established a diversity target of 20% female representation on our Board of Trustees and a goal of at least one committee to be chaired by a female, taking into consideration the experience and skill sets required of the Board of Trustees.

As of the date of this filing, we are proud to have achieved these goals, with females comprising over 20% of our Board of Trustees and the chairing of our Corporate Governance and Nominating Committee by a female trustee.

In addition, we annually conduct a respect in the workplace and diversity training to further enhance our cultural behaviors.

As of December 31, 2021, approximately 47% of our workforce was female and minorities represented approximately 19% of our team.

Professional Development and Training

We believe a commitment to our employees’ learning and development through training, educational opportunities and mentorship is critical to our ability to continue to innovate.

We focus on leadership development at every level of the organization.

We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company and then provide effective feedback on their performance towards goals to ensure their growth.

We believe a commitment to our employees’ learning and development through training, educational opportunities and mentorship is critical to our ability to continue to innovate.

Through performance plans, talent recognition and individual development planning, along with reward packages, we advance our talent pool and create a sustainable and long-term enterprise.

The Company provides reimbursement for those seeking to further their education through degree or certification programs.

Community Development

We seek to foster a corporate culture where our many stakeholders, including our employees, engage in the topic of community development and collaborate to extend resources towards the advancement of this principle.

We are proud to be an active citizen of the communities in which we operate.

In furtherance of this commitment, we partner with and support local charitable organizations that we believe are contributing to the growth and development of the community.

In recent years, our employees have donated and coordinated substantial fundraising and have spent many hours volunteering to support a variety of charities with which we partner.

Our Kite Cares initiative contributes to the welfare of local youth and those in need.

The program’s efforts are community-focused and have included:

• charitable grants to programs benefiting our communities;

• fundraising to support displaced workers;

• contributions to healthcare workers and first responders;

• construction of a youth community center.

In addition in recent years, our employees have donated and coordinated substantial fundraising and have spent many hours volunteering to support a variety of charities with which we partner.

Team Wellness

The health, safety and well-being of our employees are always top priorities, and we believe our actions in response to COVID-19 were appropriate and in accordance with state and local health and safety laws.

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The Company strives to be a responsible corporate citizen, and we recognize the importance that environmental, social, and governance (“ESG”) initiatives play in our ability to generate long-term, sustainable returns.

To assist us in setting and meeting ESG goals, we have formed a cross-functional task force ("ESG Task Force") to review ESG issues that are important to investors and regularly report to the Board of Trustees on ESG efforts.

The ESG Task Force is led by our Chief Executive Officer and includes members from our asset management, employee experience, investor relations, marketing, internal audit, and legal groups.

In 2020, the ESG Task Force issued our ESG Policy and Corporate Citizenship Report, which we have published on our website.

The Company has undertaken multiple projects to make its operations more efficient and to reduce energy and water consumption, including installing LED lighting at various parking lots, solar panels at three properties, and electric-vehicle charging stations at six properties, and implementing smart meters and other initiatives aimed at water conservation, recycling and waste diversion at our properties.

To assist us in setting and meeting ESG goals, we formed a cross-functional task force (“ESG Task Force”) in 2020 to review ESG issues that are important to investors and regularly report to the Board of Trustees on ESG efforts.

The ESG Task Force is led by our Chief Executive Officer and includes members from our asset management, employee experience, investor relations, marketing, internal audit, and legal departments.

In 2020, the ESG Task Force issued our ESG Policy and Corporate Citizenship Report, which is published on our website.

In 2021, the Company has undertaken multiple projects to make its operations more efficient and to reduce energy and water consumption, including installing LED lighting at 15 properties, receiving IREM certifications for 29 properties, increasing the number of electric-vehicle charging stations to 100 stations across eight properties, and implementing smart meters and other initiatives aimed at water conservation, recycling and waste diversion at our properties.

Recent business initiatives encourage tenants to adopt green leases, also known as “high-performance” or “energy-aligned” leases, to equitably align the costs and benefits of energy and water efficiency investments for building owners and tenants, based on principles and best practices from the Green Lease Leaders Reference Guide by the Institute for Market Transformation and the U.S.

Department of Energy.

The Company also has partnered with One Tree Planted, a non-profit organization committed to reforestation, to plant new trees in 2020.

We also are evaluating potential actions that might reduce our carbon footprint or otherwise mitigate our environmental impact.

The Company also partnered with One Tree Planted, a non-profit organization committed to reforestation, to plant new trees in 2020 and continued this program in 2021.

We continue to evaluate potential actions that might reduce our carbon footprint or otherwise mitigate our environmental impact.

As described above, we are highly committed to our employees, and our policies are designed to promote fairness, equal opportunities, diversity, well-being and professional development within the Company.

Our corporate governance structure, led by our Board of Trustees, closely aligns our interests with those of our shareholders, as further described in our annual Proxy Statement.

Segment Reporting

Our primary business is the ownership and operation of neighborhood and community shopping centers.

We do not distinguish or group our operations on a geographical basis, or any other basis, when measuring performance.

Accordingly, we have one operating segment, which also serves as our reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States ("GAAP").

Available Information

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Our internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our Board of Trustees—the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee.

Also available on our website are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our Board of Trustees—the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee.

Copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and our committee charters are also available from us in print and free of charge to any shareholder upon request.

Any person wishing to obtain such copies in print should contact our Investor Relations department by mail at our principal executive office.

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

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

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 1. Business