What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-11-04 · 215 added, 408 removed, 531 unchanged (54% of the section changed)

3 unchanged sentences

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

September 30,

2023 December 31,

8 unchanged sentences

Deferred costs, net 381,539 409,828

Short-term deposits — 125,000

Prepaid and other assets 117,424 127,044

Investments in unconsolidated subsidiaries 10,341 10,414

Assets associated with investment property held for sale 22,727 —

Total assets $ 7,196,940 $ 7,341,982

3 unchanged sentences

Deferred revenue and other liabilities 294,760 298,039

Liabilities associated with investment property held for sale 939 —

Total liabilities 3,428,408 3,516,130

3 unchanged sentences

219,325,898 and 219,185,658 shares issued and outstanding at

September 30, 2022 and December 31, 2021, respectively

March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 4,896,049 4,897,736

Accumulated other comprehensive income (loss) 72,693 ( 15,902 )

Accumulated other comprehensive income 62,787 74,344

Accumulated deficit ( 1,255,025 ) ( 1,207,757 )

7 unchanged sentences

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Rental income $ 203,063 $ 190,892

13 unchanged sentences

Income tax benefit of taxable REIT subsidiary 29 71

Equity in earnings (loss) of unconsolidated subsidiaries 144 ( 196 ) ( 56 ) ( 758 )

Equity in loss of unconsolidated subsidiaries ( 244 ) ( 314 )

Other income (expense), net 403 ( 103 )

Net (loss) income ( 7,721 ) ( 6,828 ) ( 11,102 ) 18,433

Net income attributable to noncontrolling interests ( 116 ) ( 132 ) ( 408 ) ( 1,058 )

Net (loss) income attributable to common shareholders $ ( 7,837 ) $ ( 6,960 ) $ ( 11,510 ) $ 17,375

Net (loss) income per common share – basic $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.21

Net (loss) income per common share – diluted $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.20

Net income (loss) 5,561 ( 16,826 )

Net (income) loss attributable to noncontrolling interests ( 170 ) 22

Net income (loss) attributable to common shareholders $ 5,391 $ ( 16,804 )

Net income (loss) per common share – basic and diluted $ 0.02 $ ( 0.08 )

Weighted average common shares outstanding – basic 219,233,569 218,981,168

Weighted average common shares outstanding – diluted 219,965,061 218,981,168

Dividends declared per common share $ 0.21 $ 0.18 $ 0.60 $ 0.50

Net (loss) income $ ( 7,721 ) $ ( 6,828 ) $ ( 11,102 ) $ 18,433

Net income (loss) $ 5,561 $ ( 16,826 )

Change in fair value of derivatives ( 11,645 ) 38,938

Total comprehensive income (loss) 25,410 ( 4,909 ) 78,526 27,086

Comprehensive income attributable to noncontrolling

( 511 ) ( 173 ) ( 1,441 ) ( 1,302 )

Comprehensive income (loss) attributable to the Company $ 24,899 $ ( 5,082 ) $ 77,085 $ 25,784

Total comprehensive (loss) income ( 6,084 ) 22,112

Comprehensive income attributable to noncontrolling interests ( 82 ) ( 203 )

Comprehensive (loss) income attributable to the Company $ ( 6,166 ) $ 21,909

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

5 unchanged sentences

Comprehensive

(Loss) Income Accumulated

Income (Loss) Accumulated

Deficit Total

2 unchanged sentences

Stock compensation activity 140,240 1 2,134 — — 2,135

Other comprehensive income — — — 38,713 — 38,713

Distributions declared to common shareholders — — — — ( 41,600 ) ( 41,600 )

Net loss attributable to common shareholders — — — — ( 16,804 ) ( 16,804 )

Adjustment to redeemable noncontrolling interests — — ( 5,597 ) — — ( 5,597 )

Balance at March 31, 2022 219,042,903 $ 2,190 $ 4,894,897 $ 22,811 $ ( 1,021,317 ) $ 3,898,581

Stock compensation activity 58,095 1 2,850 — — 2,851

Other comprehensive income — — 17,146 — 17,146

Distributions declared to common shareholders — — — — ( 43,808 ) ( 43,808 )

Net income attributable to common shareholders — — — — 13,131 13,131

Adjustment to redeemable noncontrolling interests — — 3,239 — — 3,239

Balance at June 30, 2022 219,100,998 $ 2,191 $ 4,900,986 $ 39,957 $ ( 1,051,994 ) $ 3,891,140

Stock compensation activity ( 2,604 ) — 2,881 — — 2,881

Other comprehensive income — — — 32,736 — 32,736

Distributions declared to common shareholders — — — — ( 46,014 ) ( 46,014 )

Net loss attributable to common shareholders — — — — ( 7,837 ) ( 7,837 )

Adjustment to redeemable noncontrolling interests — — ( 94 ) — — ( 94 )

Balances, September 30, 2022 219,098,394 $ 2,191 $ 4,903,773 $ 72,693 $ ( 1,105,845 ) $ 3,872,812

Balance at December 31, 2020 84,187,999 $ 842 $ 2,085,003 $ ( 30,885 ) $ ( 824,306 ) $ 1,230,654

Stock compensation activity 182,486 2 1,464 — — 1,466

Other comprehensive income — — — 6,537 — 6,537

Distributions declared to common shareholders — — — — ( 12,992 ) ( 12,992 )

Other comprehensive loss — — — ( 11,557 ) — ( 11,557 )

Distributions to common shareholders — — — — ( 52,659 ) ( 52,659 )

Net income attributable to common shareholders — — — — 5,391 5,391

Purchase of capped calls — — ( 9,800 ) — — ( 9,800 )

Exchange of redeemable noncontrolling interests for common shares 115,697 1 2,061 — — 2,062

Adjustment to redeemable noncontrolling interests — — ( 3,821 ) — — ( 3,821 )

Balance at March 31, 2023 219,325,898 $ 2,193 $ 4,896,049 $ 62,787 $ ( 1,255,025 ) $ 3,706,004

Stock compensation activity 35,467 — 1,977 — — 1,977

Other comprehensive loss — — — ( 6 ) — ( 6 )

Distributions declared to common shareholders — — — — ( 14,363 ) ( 14,363 )

Net loss attributable to common shareholders — — — — ( 242 ) ( 242 )

Exchange of redeemable noncontrolling interests for common shares 25,000 — 530 — — 530

Adjustment to redeemable noncontrolling interests — — ( 6,292 ) — — ( 6,292 )

Balance at June 30, 2021 84,546,649 $ 845 $ 2,064,310 $ ( 24,354 ) $ ( 827,326 ) $ 1,213,475

Balance at December 31, 2021 218,949,569 $ 2,189 $ 4,898,673 $ ( 15,902 ) $ ( 962,913 ) $ 3,922,047

Stock compensation activity 93,334 1 1,821 — — 1,822

2 unchanged sentences

Net loss attributable to common shareholders — — — — ( 16,804 ) ( 16,804 )

Exchange of redeemable noncontrolling interests for common shares 26,538 1 536 — — 537

Adjustment to redeemable noncontrolling interests — — ( 5,597 ) — — ( 5,597 )

Balance at September 30, 2021 84,575,441 $ 846 $ 2,069,983 $ ( 22,476 ) $ ( 849,507 ) $ 1,198,846

Balance at March 31, 2022 219,042,903 $ 2,190 $ 4,894,897 $ 22,811 $ ( 1,021,317 ) $ 3,898,581

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

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net (loss) income $ ( 11,102 ) $ 18,433

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

Net income (loss) $ 5,561 $ ( 16,826 )

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

Depreciation and amortization 108,959 123,289

12 unchanged sentences

Capital expenditures ( 39,121 ) ( 23,752 )

Net proceeds from sales of land 3,680 47,706

Net proceeds from sales of operating properties — 6,904

Investment in short-term deposits 125,000 ( 125,000 )

Small business loan repayments 146 226

1 unchanged sentence

Distribution from unconsolidated joint venture 13 —

Capital contribution to unconsolidated joint venture ( 125 ) —

Net cash used in investing activities ( 41,514 ) ( 62,183 )

2 unchanged sentences

Repurchases of common shares upon the vesting of restricted shares ( 730 ) ( 939 )

Purchase of capped calls — ( 9,800 )

Debt and equity issuance costs ( 47 ) ( 263 )

3 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 671 ) ( 584 )

Net cash (used in) provided by financing activities ( 252,591 ) 62,445

Net cash used in financing activities ( 91,364 ) ( 5,573 )

Net change in cash, cash equivalents and restricted cash ( 69,275 ) ( 18,173 )

1 unchanged sentence

Cash, cash equivalents and restricted cash, end of period $ 52,695 $ 82,190

Non-cash investing and financing activities

Exchange of redeemable noncontrolling interests for common shares $ — $ 3,129

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

3 unchanged sentences

(in thousands, except unit data)

September 30,

2023 December 31,

8 unchanged sentences

Deferred costs, net 381,539 409,828

Short-term deposits — 125,000

Prepaid and other assets 117,424 127,044

Investments in unconsolidated subsidiaries 10,341 10,414

Assets associated with investment property held for sale 22,727 —

Total assets $ 7,196,940 $ 7,341,982

3 unchanged sentences

Deferred revenue and other liabilities 294,760 298,039

Liabilities associated with investment property held for sale 939 —

Total liabilities 3,428,408 3,516,130

3 unchanged sentences

Common equity, 219,325,898 and 219,185,658 units issued and outstanding

at September 30, 2022 and December 31, 2021, respectively

at March 31, 2023 and December 31, 2022, respectively

3,643,217 3,692,171

Accumulated other comprehensive income (loss) 72,693 ( 15,902 )

Accumulated other comprehensive income 62,787 74,344

Total Partners’ equity 3,706,004 3,766,515

7 unchanged sentences

(in thousands, except unit and per unit data)

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Rental income $ 203,063 $ 190,892

13 unchanged sentences

Income tax benefit of taxable REIT subsidiary 29 71

Equity in earnings (loss) of unconsolidated subsidiaries 144 ( 196 ) ( 56 ) ( 758 )

Equity in loss of unconsolidated subsidiaries ( 244 ) ( 314 )

Other income (expense), net 403 ( 103 )

Net (loss) income ( 7,721 ) ( 6,828 ) ( 11,102 ) 18,433

Net income (loss) 5,561 ( 16,826 )

Net income attributable to noncontrolling interests ( 104 ) ( 144 )

Net (loss) income attributable to common unitholders $ ( 7,930 ) $ ( 6,960 ) $ ( 11,637 ) $ 18,037

Allocation of net (loss) income:

Net income (loss) attributable to common unitholders $ 5,457 $ ( 16,970 )

Allocation of net income (loss):

Limited Partners $ 66 $ ( 166 )

1 unchanged sentence

$ 5,457 $ ( 16,970 )

Net (loss) income per common unit – basic and diluted $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.21

Net income (loss) per common unit – basic and diluted $ 0.02 $ ( 0.08 )

Weighted average common units outstanding – basic 222,186,023 221,428,198

Weighted average common units outstanding – diluted 222,917,515 221,428,198

Distributions declared per common unit $ 0.21 $ 0.18 $ 0.60 $ 0.50

Net (loss) income $ ( 7,721 ) $ ( 6,828 ) $ ( 11,102 ) $ 18,433

Net income (loss) $ 5,561 $ ( 16,826 )

Change in fair value of derivatives ( 11,645 ) 38,938

Total comprehensive income (loss) 25,410 ( 4,909 ) 78,526 27,086

Comprehensive income attributable to noncontrolling

( 209 ) ( 132 ) ( 535 ) ( 396 )

Comprehensive income (loss) attributable to common

$ 25,201 $ ( 5,041 ) $ 77,991 $ 26,690

Total comprehensive (loss) income ( 6,084 ) 22,112

Comprehensive income attributable to noncontrolling interests ( 104 ) ( 144 )

Comprehensive (loss) income attributable to common unitholders $ ( 6,188 ) $ 21,968

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

6 unchanged sentences

Comprehensive

(Loss) Income

Balance at December 31, 2021 $ 3,937,949 $ ( 15,902 ) $ 3,922,047

Stock compensation activity 1,822 — 1,822

Other comprehensive income attributable to Parent Company — 38,713 38,713

Distributions declared to Parent Company ( 41,600 ) — ( 41,600 )

Net loss attributable to Parent Company ( 16,804 ) — ( 16,804 )

Adjustment to redeemable noncontrolling interests ( 5,597 ) — ( 5,597 )

Balance at March 31, 2022 $ 3,875,770 $ 22,811 $ 3,898,581

Stock compensation activity 2,851 — 2,851

Other comprehensive income attributable to Parent Company — 17,146 17,146

Distributions declared to Parent Company ( 43,808 ) — ( 43,808 )

Net income attributable to Parent Company 13,131 — 13,131

Adjustment to redeemable noncontrolling interests 3,239 — 3,239

Balance at June 30, 2022 $ 3,851,183 $ 39,957 $ 3,891,140

Stock compensation activity 2,881 — 2,881

Other comprehensive income attributable to Parent Company — 32,736 32,736

Distributions declared to Parent Company ( 46,014 ) — ( 46,014 )

Net loss attributable to Parent Company ( 7,837 ) — ( 7,837 )

Adjustment to redeemable noncontrolling interests ( 94 ) — ( 94 )

Balance at September 30, 2022 $ 3,800,119 $ 72,693 $ 3,872,812

Income (Loss)

Balance at December 31, 2022 $ 3,692,171 $ 74,344 $ 3,766,515

Stock compensation activity 2,135 — 2,135

Other comprehensive income attributable to Parent Company — 6,537 6,537

Distributions declared to Parent Company ( 12,992 ) — ( 12,992 )

Other comprehensive loss attributable to Parent Company — ( 11,557 ) ( 11,557 )

Distributions to Parent Company ( 52,659 ) — ( 52,659 )

Net income attributable to Parent Company 5,391 — 5,391

Purchase of capped calls ( 9,800 ) — ( 9,800 )

Conversion of Limited Partner Units to shares of the Parent Company 2,062 — 2,062

Adjustment to redeemable noncontrolling interests ( 3,821 ) — ( 3,821 )

Balance at March 31, 2023 $ 3,643,217 $ 62,787 $ 3,706,004

Stock compensation activity 1,977 — 1,977

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

Distributions declared to Parent Company ( 14,363 ) — ( 14,363 )

Net loss attributable to Parent Company ( 242 ) — ( 242 )

Conversion of Limited Partner Units to shares of the Parent Company 530 — 530

Adjustment to redeemable noncontrolling interests ( 6,292 ) — ( 6,292 )

Balance at June 30, 2021 $ 1,237,829 $ ( 24,354 ) $ 1,213,475

Balance at December 31, 2021 $ 3,937,949 $ ( 15,902 ) $ 3,922,047

Stock compensation activity 1,822 — 1,822

Other comprehensive income attributable to Parent Company — 38,713 38,713

Distributions declared to Parent Company ( 15,221 ) — ( 15,221 )

Distributions to Parent Company ( 41,600 ) — ( 41,600 )

Net loss attributable to Parent Company ( 16,804 ) — ( 16,804 )

Conversion of Limited Partner Units to shares of the Parent Company 537 — 537

Adjustment to redeemable noncontrolling interests ( 5,597 ) — ( 5,597 )

Balance at September 30, 2021 $ 1,221,322 $ ( 22,476 ) $ 1,198,846

Balance at March 31, 2022 $ 3,875,770 $ 22,811 $ 3,898,581

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

3 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net (loss) income $ ( 11,102 ) $ 18,433

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

Net income (loss) $ 5,561 $ ( 16,826 )

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

Depreciation and amortization 108,959 123,289

12 unchanged sentences

Capital expenditures ( 39,121 ) ( 23,752 )

Net proceeds from sales of land 3,680 47,706

Net proceeds from sales of operating properties — 6,904

Investment in short-term deposits 125,000 ( 125,000 )

Small business loan repayments 146 226

1 unchanged sentence

Distribution from unconsolidated joint venture 13 —

Capital contribution to unconsolidated joint venture ( 125 ) —

Net cash used in investing activities ( 41,514 ) ( 62,183 )

2 unchanged sentences

Repurchases of common shares upon the vesting of restricted shares ( 730 ) ( 939 )

Purchase of capped calls — ( 9,800 )

Debt and equity issuance costs ( 47 ) ( 263 )

3 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 671 ) ( 584 )

Net cash (used in) provided by financing activities ( 252,591 ) 62,445

Net cash used in financing activities ( 91,364 ) ( 5,573 )

Net change in cash, cash equivalents and restricted cash ( 69,275 ) ( 18,173 )

1 unchanged sentence

Cash, cash equivalents and restricted cash, end of period $ 52,695 $ 82,190

Non-cash investing and financing activities

Conversion of Limited Partner Units to shares of the Parent Company $ — $ 3,129

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

2 unchanged sentences

Notes to Consolidated Financial Statements

September 30, 2022

March 31, 2023

($ in thousands, except share, per share, unit and per unit amounts and where indicated in millions or billions)

6 unchanged sentences

We believe the Company qualifies as a real estate investment trust (“REIT”) under provisions of the Internal Revenue Code of 1986, as amended.

The Parent Company is the sole general partner of the Operating Partnership, and as of September 30, 2022 owned approximately 98.7 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The Parent Company is the sole general partner of the Operating Partnership, and as of March 31, 2023 owned approximately 98.6 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The remaining 1.4 % of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) were owned by the limited partners.

5 unchanged sentences

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading.

The unaudited financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The unaudited financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the combined Annual Report on Form 10-K of the Parent Company and the Operating Partnership for the year ended December 31, 2022.

2 unchanged sentences

The results of operations for the interim periods are not necessarily indicative of the results that may be expected on an annual basis.

On October 22, 2021, we completed a merger with Retail Properties of America, Inc.

(“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.

We acquired 100 operating retail properties and five 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.

As of September 30, 2022, we owned interests in 183 operating retail properties totaling approximately 28.9 million square feet and one office property with 0.3 million square feet.

Of the 183 operating retail properties, 11 contain an office component.

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

As of March 31, 2023, the Company’s portfolio consisted of the following (square footage in thousands) :

Properties Square Footage

Operating retail properties (1)

Office properties 1 287

Development and redevelopment projects:

The Landing at Tradition – Phase II (2)

Carillon medical office building 1 126

The Corner (IN) 1 24

(1) Included within operating retail properties are 11 properties that contain an office component.

Excludes one operating retail property classified as held for sale as of March 31, 2023.

Of the 181 operating retail properties, 178 are consolidated in these financial statements and the remaining three are accounted for under the equity method.

CONSOLIDATION, INVESTMENTS IN JOINT VENTURES AND NONCONTROLLING INTERESTS

(2) The operating portion of this property is included within the property count for operating retail properties.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Components of Investment Properties

The following table summarizes the composition of the Company’s investment properties as of September 30, 2022 and December 31, 2021:

The following table summarizes the composition of the Company’s investment properties as of March 31, 2023 and December 31, 2022 (in thousands) :

Balance as of

($ in thousands) September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Land, buildings and improvements $ 7,625,276 $ 7,656,765

Furniture, equipment and other 7,495 7,612

Construction in progress 94,401 75,808

1 unchanged sentence

Components of Rental Income including Allowance for Uncollectible Accounts

Rental income related to the Company’s operating leases is comprised of the following for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended

September 30, Nine Months Ended

September 30,

($ in thousands) 2022 2021 2022 2021

Rental income related to the Company’s operating leases is comprised of the following for the three months ended March 31, 2023 and 2022 (in thousands) :

Three Months Ended March 31,

Fixed contractual lease payments – operating leases $ 158,590 $ 149,824

Variable lease payments – operating leases 39,754 37,025

Bad debt (reserve) recovery ( 1,882 ) 1,709 ( 3,624 ) 338

Bad debt reserve ( 1,555 ) ( 571 )

Straight-line rent adjustments 3,858 4,093

Straight-line rent (reserve) recovery for uncollectibility ( 34 ) 39 ( 298 ) 587

Straight-line rent reserve for uncollectibility ( 314 ) ( 62 )

Amortization of in-place lease liabilities, net 2,730 583

3 unchanged sentences

An allowance for uncollectible accounts, including future credit losses of the accrued straight-line rent receivables, is maintained for estimated losses resulting from the inability of certain tenants to meet contractual obligations under their lease agreements.

Short-Term Deposits

During the nine months ended September 30, 2022, the Company used the proceeds from a $ 125.0 million short-term deposit that matured on April 7, 2022 to repay borrowings on the Company’s revolving line of credit.

The deposit balance was held in a custody account at Bank of New York Mellon and earned interest at a rate of the Federal Funds Rate plus 43 basis points.

Interest income on the deposit is recorded within “Other income (expense), net” on the accompanying consolidated statements of operations and comprehensive income.

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 subsidiaries (“TRSs”) 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.

As of September 30, 2022, we owned investments in three consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of September 30, 2022, these consolidated VIEs had mortgage debt of $ 28.5 million, which were secured by assets of the VIEs totaling $ 118.9 million.

As of March 31, 2023, 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 March 31, 2023, these consolidated VIEs had mortgage debt of $ 28.1 million, which were secured by assets of the VIEs totaling $ 117.2 million.

The Operating Partnership guarantees the mortgage debt of these VIEs.

13 unchanged sentences

federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost.

Additionally, we may also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases.

We may also be subject to certain U.S.

3 unchanged sentences

We have elected to treat Kite Realty Holdings, LLC as a TRS of the Operating Partnership.

In addition, in connection with the Merger, we assumed RPAI’s existing TRS, IWR Protective Corporation, as a TRS of the Operating Partnership and we may elect to treat other subsidiaries as TRSs in the future.

In addition, in connection with the merger with Retail Properties of America, Inc.

(“RPAI”) in October 2021, we assumed RPAI’s existing TRS, IWR Protective Corporation, 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.

7 unchanged sentences

We report the non-redeemable noncontrolling interests in subsidiaries as equity, and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the consolidated financial statements.

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

($ in thousands) 2022 2021

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the three months ended March 31, 2023 and 2022 (in thousands) :

Three Months Ended March 31,

Noncontrolling interests balance as of January 1, $ 5,370 $ 5,146

Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests 104 12

Noncontrolling interests balance as of September 30,

Noncontrolling interests balance as of March 31,

$ 5,474 $ 5,158

2 unchanged sentences

The Company owns 90 % of the joint venture.

As of September 30, 2022, the Company has funded $ 0.9 million of the partner’s development costs related to One Loudoun Downtown – Pads G & H through a loan provided by the Company to the joint venture.

The loan is secured by the joint venture project, is required to be repaid subsequent to the completion of construction and stabilization of the project and is eliminated upon consolidation.

As of March 31, 2023, the Company has funded $ 0.9 million of the partner’s development costs related to One Loudoun Downtown – Pads G & H through a loan provided by the Company to the joint venture.

The loan is secured by the joint venture

project, is required to be repaid subsequent to the completion of construction and stabilization of the project and is eliminated upon consolidation.

Subsequent to March 31, 2023, the construction loan was repaid in conjunction with the origination of a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the joint venture project.

Under terms defined in the joint venture agreement, after construction completion and stabilization of the development project (as defined in the joint venture agreement), the Company has the ability to call, and the joint venture partner has the ability to put to the Company, subject to certain conditions, the joint venture partner’s interest in the joint venture at fair value.

The Company expects that these conditions will be met in the second half of 2023.

The joint venture is considered a VIE primarily because the Company’s joint venture partner does not have substantive kick-out rights or substantive participating rights.

5 unchanged sentences

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.

As of September 30, 2022, the redemption value of the redeemable noncontrolling interests in the Operating Partnership did not exceed the historical book value, and the balances were accordingly adjusted to historical book value.

As of December 31, 2021, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balances were accordingly adjusted to redemption value.

As of March 31, 2023 and December 31, 2022, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balances were 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.

1 unchanged sentence

This adjustment is reflected in our shareholders’ and Parent Company’s equity.

For the three and nine months ended September 30, 2022 and 2021, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

For the three months ended March 31, 2023 and 2022, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

Three Months Ended March 31,

Parent Company’s weighted average interest in Operating Partnership 98.7 % 98.9 %

Limited partners’ weighted average interests in Operating Partnership 1.3 % 1.1 %

At September 30, 2022, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.7 % and 1.3 %.

At December 31, 2021, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.9 % and 1.1 %.

As of March 31, 2023, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.6 % and 1.4 %.

As of December 31, 2022, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.7 % and 1.3 %.

Concurrent with the Parent Company’s initial public offering and related formation transactions, certain individuals received Limited Partner Units of the Operating Partnership in exchange for their interests in certain properties.

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The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed.

There were 2,955,697 and 2,377,777 Limited Partner Units outstanding as of September 30, 2022 and December 31, 2021, respectively.

The increase in Limited Partner Units outstanding from December 31, 2021 is due to non-cash compensation awards made to our executive officers in the form of Limited Partner Units.

There were 3,034,212 and 2,870,697 Limited Partner Units outstanding as of March 31, 2023 and December 31, 2022, respectively.

The increase in Limited Partner Units outstanding from December 31, 2022 is due to non-cash compensation awards granted to our executive officers in the form of Limited Partner Units.

Redeemable Noncontrolling Interests – Subsidiaries

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(“Inland Diversified”) in 2014, Inland Diversified formed joint ventures with the previous owners of certain properties and issued Class B units in three joint ventures that indirectly own those properties.

As of September 30, 2022, the Class B units related to one of these joint ventures that owned Crossing at Killingly Commons, our multi-tenant retail property in Dayville, Connecticut, was outstanding and accounted for as noncontrolling interests in the remaining venture.

As of March 31, 2022, the Class B units related to one of these joint ventures that owned Crossing at Killingly Commons, our multi-tenant retail property in Dayville, Connecticut, was outstanding and accounted for as

noncontrolling interests in the remaining venture.

In October 2022, the remaining Class B units became redeemable at the partner’s election and the fulfillment of certain redemption criteria for cash or Limited Partner Units in the Operating Partnership.

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Prior to the redemption, we consolidated this joint venture because we controlled the decision-making and our joint venture partner had limited protective rights.

We classify the redeemable noncontrolling interests related to the remaining Class B units in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to the Class B unitholders in this subsidiary upon redemption of their interests.

Prior to the redemption, we classified the redeemable noncontrolling interests related to the remaining Class B units in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we could have been required to pay cash to the Class B unitholders in this subsidiary upon redemption of their interests.

The carrying amount of these redeemable noncontrolling interests is required to be reflected at the greater of initial book value or redemption value with a corresponding adjustment to additional paid-in capital.

As of September 30, 2022 and December 31, 2021, the redemption amounts of these interests did not exceed their fair value nor did they exceed the initial book value.

The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the nine months ended September 30, 2022 and 2021 were as follows:

Nine Months Ended September 30,

($ in thousands) 2022 2021

As of March 31, 2022, the redemption amounts of these interests did not exceed their fair value nor did they exceed the initial book value.

The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the three months ended March 31, 2023 and 2022 were as follows (in thousands) :

Three Months Ended March 31,

Redeemable noncontrolling interests balance as of January 1, $ 53,967 $ 55,173

Net income allocable to redeemable noncontrolling interests 269 1,058

Net income (loss) allocable to redeemable noncontrolling interests 65 ( 34 )

Distributions declared to redeemable noncontrolling interests ( 728 ) ( 584 )

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Total limited partners’ interests in Operating Partnership and other

redeemable noncontrolling interests balance as of September 30,

redeemable noncontrolling interests balance as of March 31,

$ 57,054 $ 60,376

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Total limited partners’ interests in Operating Partnership and other

redeemable noncontrolling interests balance as of September 30,

redeemable noncontrolling interests balance as of March 31,

$ 57,054 $ 60,376

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• Level 1 fair value inputs are quoted prices in active markets for identical instruments to which we have access.

• Level 2 fair value inputs are inputs other than quoted prices included in Level 1 that are observable for similar instruments, either directly or indirectly, and appropriately consider counterparty creditworthiness in the valuations.

• Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an instrument at the measurement date.

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Effects of Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) , which 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.

In March 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“LIBOR”)-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

During the nine months ended September 30, 2022, the Company elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risks as qualifying changes have been made to applicable debt and derivative contracts.

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

The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

On October 22, 2021, we completed a Merger with RPAI pursuant to which RPAI merged with and into Merger Sub, with the Company continuing as the surviving public company.

The total purchase price was calculated based on the closing price of the Company’s common stock on October 21, 2021, the last business day prior to the effective time of the Merger, which was $ 21.18 per share.

At the effective time of the Merger, each share of RPAI common stock issued and outstanding immediately prior to the effective time was converted into the right to receive 0.623 newly issued Company common shares plus cash in lieu of fractional Company shares.

In addition, holders of (i) options to purchase shares of RPAI common stock, (ii) certain awards of restricted shares of RPAI common stock (as agreed in accordance with the Merger Agreement), and (iii) restricted stock units representing the right to vest in and be issued shares of RPAI common stock became entitled to receive cash and/or Company common shares in accordance with the terms of the Merger Agreement.

The Company assumed certain existing awards of restricted shares of RPAI common stock, each of which were converted into 0.623 awards of restricted Company common shares plus cash in lieu of fractional Company shares in accordance with the Merger Agreement.

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

The number of RPAI common stock outstanding as of October 21, 2021 converted to shares of the Company’s common stock was determined as follows:

RPAI common stock outstanding as of October 21, 2021 214,797,869

Exchange ratio 0.623

Company common shares issued for outstanding RPAI common stock 133,814,066

Company common shares issued for RPAI restricted stock units 1,117,399

Total Company common shares issued 134,931,465

The following table presents the purchase price and total value of equity consideration paid by the Company at the close of the Merger:

(in thousands, except share price) Price of

common shares Equity

Consideration Given

(Company common shares issued) Total Value

of Stock Consideration (1)

As of October 21, 2021 $ 21.18 134,931 $ 2,847,369

(1) The total value of stock consideration is the total of the common shares issued multiplied by the closing price of the Company’s common stock on October 21, 2021 excluding the value of certain RPAI restricted stock that vested at the closing of the Merger and share awards assumed by the Company at the closing of the Merger.

As a result of the Merger, the Company acquired 100 operating retail properties and five development projects under construction along with multiple parcels of entitled land for future value creation.

During the nine months ended September 30, 2022, the Company incurred $ 1.0 million of merger and acquisition costs consisting primarily of professional fees and technology costs, which are recorded within “Merger and acquisition costs” in the accompanying consolidated statements of operations and comprehensive income.

In addition, the Company assumed approximately $ 1.8 billion of debt in connection with the Merger.

“Rental income” and “Net income attributable to common shareholders” in the accompanying consolidated statements of operations and comprehensive income include revenues from the RPAI portfolio of $ 124.7 million and $ 375.0 million and net loss of $ 7.1 million and $ 17.3 million for the three months and nine months ended September 30, 2022, respectively, which includes $ 84.0 million and $ 265.2 million of depreciation and amortization, respectively, as a result of the Merger.

Purchase Price Allocation

In accordance with ASC 805-10, Business Combinations , the Company accounted for the Merger as a business combination using the acquisition method of accounting.

Based on the value of the common shares issued, the total fair value of the assets acquired and liabilities assumed in the Merger was $ 2.8 billion as of October 22, 2021, the date of the Merger.

The Company used the following valuation methodologies, inputs and assumptions to estimate the fair value of the assets acquired and liabilities assumed:

• Investment properties:

The Company estimated the fair value of the buildings on an as-if-vacant basis using either a direct capitalization method or a discounted cash flow analysis.

Comparable market data, real estate tax assessments and independent appraisals were used in estimating the fair value of the land acquired.

These valuation methodologies are based on Level 2 and Level 3 inputs in the fair value hierarchy, such as estimates of future income growth, capitalization rates and cash flow projections at the respective properties.

• Acquired lease intangible assets:

The Company estimated the fair value of its above-market and below-market in-place leases based on the present value (using a discount rate that reflects the risk associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases.

Any below-market renewal options are also considered in the in-place lease values.

This valuation methodology is based on Level 3 inputs in the fair value hierarchy.

• In-place lease liabilities:

The Company estimated the fair value of its in-place leases using independent and internal sources, which are methods similar to those used by independent appraisers.

Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and foregone costs and rent received during the estimated lease-up period as if the space was vacant.

This valuation methodology is based on Level 3 inputs in the fair value hierarchy.

• Mortgage and other indebtedness:

The Company estimated the fair value of the secured and unsecured debt assumed, including related derivative instruments, using third party and independent sources for our estimates.

Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining term of the loan using the interest method.

This valuation methodology is based on Level 2 and Level 3 inputs in the fair value hierarchy.

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

Range of Assumptions

Net rental rate per square foot – Anchors $ 4.00 to $ 45.00

Net rental rate per square foot – Small Shops $ 7.00 to $ 140.00

Capitalization rate 5.50 % to 12.00 %

The following table summarizes the final purchase price allocation, including the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed:

($ in thousands) Purchase Price

Investment properties $ 4,425,254

Acquired lease intangible assets 535,465

Cash, accounts receivable and other assets 84,632

Total assets acquired 5,045,351

Mortgage and other indebtedness, net ( 1,848,476 )

Accounts payable, other liabilities, tenant security deposits and prepaid rent ( 176,391 )

In-place lease liabilities ( 168,652 )

Noncontrolling interests ( 4,463 )

Total liabilities assumed ( 2,197,982 )

Total purchase price $ 2,847,369

The following table details the weighted average amortization periods, in years, of the purchase price allocated to real estate and related intangible assets and liabilities acquired arising from the Merger:

Weighted Average

Amortization Period

Building 18.8

Tenant improvements 6.7

In-place lease intangibles 5.5

Above-market leases 5.7

Below-market leases (including below-market option periods) 20.5

Fair market value of debt adjustments 6.8

Pro Forma Financial Information (unaudited)

The pro forma financial information set forth below is based upon the Company’s historical consolidated statements of operations for the three and nine months ended September 30, 2021, adjusted to give effect for the properties assumed through the Merger as if they were acquired as of January 1, 2021.

The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it purport to represent the results of income for future periods.

($ in thousands) Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021

Rental income $ 190,908 $ 560,423

Net loss $ ( 38,786 ) $ ( 87,551 )

Net loss attributable to common shareholders $ ( 38,358 ) $ ( 86,571 )

Net loss attributable to common shareholders per common share:

Basic $ ( 0.17 ) $ ( 0.39 )

Diluted $ ( 0.17 ) $ ( 0.39 )

Asset Acquisitions

The Company closed on the following asset acquisitions during the nine months ended September 30, 2022:

Any recently issued accounting standards or pronouncements have been excluded as they are either not relevant to the Company or are not expected to have a material impact on the Company’s consolidated financial statements.

The Company did not acquire any properties during the three months ended March 31, 2023.

The Company closed on the following asset acquisition during the three months ended March 31, 2022 (dollars in thousands) :

Date Property Name Metropolitan

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February 16, 2022 Pebble Marketplace Las Vegas Multi-tenant retail 85,796 $ 44,100

April 13, 2022 MacArthur Crossing Dallas Two-tenant building 56,077 21,920

July 15, 2022 Palms Plaza Miami Multi-tenant retail 68,976 35,750

210,849 $ 101,770

The above acquisitions were funded using a combination of available cash on hand and proceeds from the Company’s unsecured revolving line of credit.

The above acquisition was funded using a combination of available cash on hand and proceeds from the Company’s unsecured revolving line of credit.

Substantially all of the purchase price was allocated to investment properties.

The Company did not acquire any properties during the nine months ended September 30, 2021.

During the nine months ended September 30, 2022, the Company sold Plaza Del Lago, a 100,016 square foot multi-tenant retail property located in the Chicago MSA, for a sales price of $ 58.7 million and a net gain of $ 24.0 million.

Plaza Del Lago also contains 8,800 square feet of residential space comprised of 18 multifamily rental units.

In addition, the Company sold a portion of Hamilton Crossing Centre, a redevelopment property located in the Indianapolis MSA, for a sales price of $ 6.9 million and a net gain of $ 3.2 million during the nine months ended September 30, 2022.

During the nine months ended September 30, 2021, the Company sold 17 ground leases for gross proceeds of $ 42.0 million and a net gain of $ 27.6 million.

A portion of the proceeds was used to pay down our unsecured revolving line of credit .

The Company did not sell any properties during the three months ended March 31, 2023.

The Company closed on the following disposition during the three months ended March 31, 2022 (dollars in thousands) :

Date Property Name MSA Property Type Square

Footage Sales Price Gain

January 26, 2022 Hamilton Crossing Centre Indianapolis Redevelopment — $ 6,900 $ 3,168

As of March 31, 2023, the Company had entered into a contract to sell Kingwood Commons, a 158,172 square foot multi-tenant retail property located in the Houston MSA.

This property qualified for held for sale accounting treatment upon meeting all applicable GAAP criteria during the quarter ended March 31, 2023, at which time depreciation and amortization were ceased.

In addition, the assets and liabilities associated with this property are separately classified as held for sale in the accompanying consolidated balance sheet as of March 31, 2023.

No properties qualified for held for sale accounting treatment as of December 31, 2022.

The following table presents the assets and liabilities associated with the investment property, Kingwood Commons, classified as held for sale as of March 31, 2023 (in thousands) :

March 31, 2023

Investment properties, at cost $ 34,856

accumulated depreciation ( 12,367 )

Net investment properties 22,489

Tenant and other receivables 123

Deferred costs, net 104

Prepaid and other assets 11

Assets associated with investment property held for sale $ 22,727

Accounts payable and accrued expenses $ 277

Deferred revenue and other liabilities 662

Liabilities associated with investment property held for sale $ 939

DEFERRED COSTS AND INTANGIBLES, NET

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Deferred leasing costs, lease intangibles and similar costs are amortized on a straight-line basis over the terms of the related leases.

As of September 30, 2022 and December 31, 2021, deferred costs consisted of the following:

($ in thousands) September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, deferred costs consisted of the following (in thousands) :

March 31, 2023 December 31, 2022

Acquired lease intangible assets $ 491,585 $ 522,152

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accumulated amortization ( 178,278 ) ( 179,166 )

$ 381,643 $ 409,828

deferred costs associated with investment property held for sale ( 104 ) —

Total $ 381,539 $ 409,828

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The amortization of above-market lease intangibles is included as a reduction to “Rental income” in the accompanying consolidated statements of operations and comprehensive income.

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

Nine Months Ended September 30,

($ in thousands) 2022 2021

The amounts of such amortization included in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands) :

Three Months Ended March 31,

Amortization of deferred leasing costs, lease intangibles and other $ 28,481 $ 42,829

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DEFERRED REVENUE, INTANGIBLES, NET AND OTHER LIABILITIES

Deferred revenue and other liabilities consist of the unamortized fair value of below-market lease liabilities recorded in connection with purchase accounting, retainage payables for development and redevelopment projects, tenant rent payments received in advance of the month in which they are due, and lease liabilities recorded upon adoption of ASU 2016-02, Leases (Topic 842) .

Deferred revenue and other liabilities consist of (i) the unamortized fair value of below-market lease liabilities recorded in connection with purchase accounting, (ii) retainage payables for development and redevelopment projects, (iii) tenant rent payments received in advance of the month in which they are due, and (iv) lease liabilities recorded upon adoption of ASU 2016-02, Leases (Topic 842) .

The amortization of below-market lease liabilities is recognized as revenue over the remaining life of the leases (including option periods for leases with below-market renewal options) through 2085.

Tenant rent payments received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt.

As of September 30, 2022 and December 31, 2021, deferred revenue, intangibles, net and other liabilities consisted of the following:

($ in thousands) September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, deferred revenue, intangibles, net and other liabilities consisted of the following (in thousands) :

March 31, 2023 December 31, 2022

Unamortized in-place lease liabilities $ 182,903 $ 188,815

2 unchanged sentences

Lease liabilities 67,972 67,167

$ 295,422 $ 298,039

deferred revenue associated with investment property held for sale ( 662 ) —

Total $ 294,760 $ 298,039

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 13.3 million and $ 2.1 million for the nine months ended September 30, 2022 and 2021, respectively.

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 5.9 million and $ 3.9 million for the three months ended March 31, 2023 and 2022, respectively.

MORTGAGE AND OTHER INDEBTEDNESS

The following table summarizes the Company’s indebtedness as of September 30, 2022 and December 31, 2021:

($ in thousands) September 30, 2022 December 31, 2021

The following table summarizes the Company’s indebtedness as of March 31, 2023 and December 31, 2022 (in thousands) :

March 31, 2023 December 31, 2022

Mortgages payable $ 71,285 $ 233,621

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Unsecured term loans 820,000 820,000

Revolving line of credit — 55,000

Unsecured revolving line of credit 125,000 —

2,940,920 2,978,256

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Total mortgage and other indebtedness, net $ 2,972,567 $ 3,010,299

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of September 30, 2022, considering the impact of interest rate swaps, is summarized below:

($ in thousands) Amount

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of March 31, 2023, considering the impact of interest rate swaps, is summarized below (dollars in thousands) :

Outstanding Ratio Weighted Average

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(1) Fixed rate debt includes the portion of variable rate debt that has been hedged by interest rate swaps.

As of September 30, 2022, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 2.9 years.

As of March 31, 2023, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 2.4 years.

(2) Variable rate debt includes the portion of fixed rate debt that has been hedged by interest rate swaps.

As of September 30, 2022, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 2.9 years.

As of March 31, 2023, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 2.4 years.

Mortgages Payable

The following table summarizes the Company’s mortgages payable:

September 30, 2022 December 31, 2021

($ in thousands) Balance Weighted Average

The following table summarizes the Company’s mortgages payable (dollars in thousands) :

March 31, 2023 December 31, 2022

Balance Weighted Average

Interest Rate Weighted Average Years

6 unchanged sentences

Total mortgages payable $ 71,285 $ 233,621

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of September 30, 2022 and December 31, 2021.

(2) On April 1, 2022, the interest rate on the variable rate mortgage switched to the Bloomberg Short Term Bank Yield Index (“BSBY”) plus 160 basis points from LIBOR plus 160 basis points.

The one-month BSBY rate was 3.09 % as of September 30, 2022.

The one-month LIBOR rate was 0.10 % as of December 31, 2021.

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of March 31, 2023 and December 31, 2022.

(2) The interest rate on the variable rate mortgage is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus 160 basis points.

The one-month BSBY rate was 4.92 % and 4.36 % as of March 31, 2023 and December 31, 2022, respectively.

Mortgages payable are secured by certain real estate and, in some cases, by guarantees from the Operating Partnership, are generally due in monthly installments of principal and interest and mature over various terms through 2032.

During the nine months ended September 30, 2022, we repaid mortgages payable totaling $ 155.2 million that had a weighted average fixed interest rate of 4.31 % and made scheduled principal payments of $ 3.0 million related to amortizing loans.

During the three months ended March 31, 2023, we repaid mortgages payable totaling $ 161.5 million that had a weighted average fixed interest rate of 3.85 % and made scheduled principal payments of $ 0.8 million related to amortizing loans.

Unsecured Notes

The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes:

September 30, 2022 December 31, 2021

($ in thousands) Maturity Date Balance Interest Rate Balance Interest Rate

The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes (dollars in thousands) :

March 31, 2023 December 31, 2022

Maturity Date Balance Interest Rate Balance Interest Rate

Senior notes – 4.23 % due 2023

21 unchanged sentences

Total senior unsecured notes $ 1,924,635 $ 1,924,635

(1) Private placement notes assumed in connection with the Merger.

(2) Publicly placed notes assumed in connection with the Merger.

(1) $ 80,000 of 4.47 % senior unsecured notes has been swapped to a variable rate of three-month LIBOR plus 3.65 % through September 10, 2025.

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Unsecured Term Loans and Revolving Line of Credit

The following table summarizes the Company’s term loans and revolving line of credit:

September 30, 2022 December 31, 2021

($ in thousands) Maturity Date Balance Interest Rate Balance Interest Rate

Unsecured term loan due 2023 – fixed rate (1)(2)

November 22, 2023 $ — — % $ 200,000 4.10 %

The following table summarizes the Company’s term loans and revolving line of credit (dollars in thousands) :

March 31, 2023 December 31, 2022

Maturity Date Balance Interest Rate Balance Interest Rate

Unsecured term loan due 2024 – fixed rate (1)

10 unchanged sentences

January 8, 2026 $ 125,000 6.07 % $ — 5.56 %

(1) Unsecured term loans assumed in connection with the Merger.

(2) As of December 31, 2021, $ 200,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 2.85 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.85 % through November 22, 2023.

The applicable credit spread was 1.25 % as of December 31, 2021.

(3) As of September 30, 2022, $ 120,000 of Secured Overnight Financing Rate (“SOFR”)-based variable rate debt has been swapped to a fixed rate of 1.58 % plus a credit spread based on a ratings grid ranging from 0.80 % to 1.65 % through July 17, 2024.

The applicable

credit spread was 1.10 % as of September 30, 2022.

As of December 31, 2021, $ 120,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 1.68 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2024.

The applicable credit spread was 1.20 % as of December 31, 2021.

(4) $ 250,000 of LIBOR-based variable rate debt has been swapped to a fixed rate of 5.09 % through October 24, 2025.

The maturity date of the term loan may be extended for up to three additional periods of one year at the Operating Partnership’s option, subject to certain conditions.

(5) As of September 30, 2022, $ 150,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 1.68 % plus a credit spread based on a ratings grid ranging from 0.75 % to 1.60 % through July 17, 2026.

The applicable credit spread was 1.05 % as of September 30, 2022.

As of December 31, 2021, $ 150,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 1.77 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2026.

The applicable credit spread was 1.20 % as of December 31, 2021.

(1) $ 120,000 of Secured Overnight Financing Rate (“SOFR”)-based variable rate debt has been swapped to a fixed rate of 1.58 % plus a credit spread based on a ratings grid ranging from 0.80 % to 1.65 % through July 17, 2024.

The applicable credit spread was 1.10 % as of March 31, 2023 and December 31, 2022.

(2) $ 250,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 5.09 % through October 24, 2025.

The maturity date of the term loan may be extended for up to three additional periods of one year each at the Operating Partnership’s option, subject to certain conditions.

(3) $ 150,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 1.68 % plus a credit spread based on a ratings grid ranging from 0.75 % to 1.60 % through July 17, 2026.

The applicable credit spread was 1.05 % as of March 31, 2023 and December 31, 2022.

(4) $ 300,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 2.70 % plus a credit spread based on a ratings grid ranging from 1.15 % to 2.20 % through November 22, 2023.

The applicable credit spread was 1.35 % as of September 30, 2022.

The applicable credit spread was 1.35 % as of March 31, 2023 and December 31, 2022.

(5) The revolving line of credit has two six-month extension options that the Company can exercise, at its election, subject to (i) customary representations and warranties, including, but not limited to, the absence of an event of default as defined in the unsecured credit agreement and (ii) payment of an extension fee equal to 0.075 % of the revolving line of credit capacity.

On July 29, 2022, SOFR replaced LIBOR as the interest reference rate for the revolving line of credit.

Unsecured Revolving Credit Facility

On July 29, 2022, the Operating Partnership, as borrower, and the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Credit Agreement”) with a syndicate of financial institutions to provide for (i) a $ 250.0 million increase to the $ 850.0 million unsecured revolving line of credit that was assumed in the Merger, resulting in a $ 1.1 billion unsecured revolving credit facility (the “2022 Revolving Facility”) and (ii) a seven-year $ 300.0 million unsecured term loan (the “$ 300 M Term Loan”).

In July 2022, the Operating Partnership, as borrower, and the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Credit Agreement”) with a syndicate of financial institutions to provide for an unsecured revolving credit facility aggregating $ 1.1 billion (the “Revolving Facility”) and a seven-year $ 300.0 million unsecured term loan (the “$ 300 M Term Loan”).

Under the Second Amendment, the Operating Partnership has the option, subject to certain customary conditions, to increase the Revolving Facility and/or incur additional term loans in an aggregate amount for all such increases and additional loans of up to $ 600.0 million, for a total facility amount of up to $ 2.0 billion.

5 unchanged sentences

The Company may irrevocably elect to convert to the ratings-based pricing grid at any time.

As of September 30, 2022, making such an election would have resulted in a lower interest rate;

As of March 31, 2023, making such an election would have resulted in a lower interest rate;

however, the Company had not made the election to convert to the ratings-based pricing grid.

The Credit Agreement includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

The following table summarizes the key terms of the 2022 Revolving Facility as of September 30, 2022:

($ in thousands) Leverage-Based Pricing Investment Grade Pricing

The following table summarizes the key terms of the Revolving Facility as of March 31, 2023 (dollars in thousands) :

Leverage-Based Pricing Investment Grade Pricing

Credit Agreement Maturity Date Extension Option Extension Fee Credit Spread Facility Fee Credit Spread Facility Fee SOFR Adjustment

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and (v) a minimum unencumbered interest coverage ratio.

As of September 30, 2022, we were in compliance with all such covenants.

As of September 30, 2022, we had letters of credit outstanding which totaled $ 1.5 million, against which no amounts were advanced as of September 30, 2022.

As of March 31, 2023, we were in compliance with all such covenants.

As of March 31, 2023, we had letters of credit outstanding totaling $ 0.3 million, against which no amounts were advanced as of March 31, 2023.

Unsecured Term Loans

On July 29, 2022, in conjunction with the Second Amendment, the Operating Partnership obtained a $ 300 M Term Loan that is priced on a ratings-based pricing grid at a rate of SOFR plus a credit spread ranging from 1.15 % to 2.20 %.

The SOFR rate is also subject to an additional 0.10 % spread adjustment as specified in the Second Amendment.

Proceeds from the $ 300 M Term Loan were used to repay the Operating Partnership’s $ 200.0 million unsecured term loan that was assumed in the Merger and was scheduled to mature on November 22, 2023 (the “$ 200 M Term Loan”), certain secured loans, and for other general corporate purposes.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024.

The agreement related to the $ 300 M Term Loan includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

On October 22, 2021, in connection with the Merger, the Operating Partnership (as successor by merger to RPAI) assumed RPAI’s $ 120.0 million (the “$ 120 M Term Loan”) and $ 150.0 million (the “$ 150 M Term Loan”) unsecured term loans, which were originally priced on a leverage-based pricing grid with the credit spread set forth in the leverage grid resetting quarterly based on the Company’s leverage, as calculated at the previous quarter end.

The Company had the option to irrevocably elect to convert to a ratings-based pricing grid at any time.

On August 2, 2022, the Company made the election to convert to the ratings-based pricing grid.

The agreement related to the $ 150 M Term Loan includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

Under the agreement related to the $ 120 M Term Loan and the $ 150 M Term Loan, the Operating Partnership has the option to increase each of the term loans to $ 250.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay each of the $ 120 M Term Loan and $ 150 M Term Loan, in whole or in part, at any time without being subject to a prepayment fee.

On October 25, 2018, the Operating Partnership entered into a term loan agreement with KeyBank National Association, as Administrative Agent, and the other lenders party thereto, providing for an unsecured term loan facility of up to $ 250.0 million (the “$ 250 M Term Loan”).

The Operating Partnership has the option to increase the $ 250 M Term Loan to $ 300.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

The unsecured term loan agreements contain representations, financial and other affirmative and negative covenants and events of default that are substantially similar to those contained in the Credit Agreement.

The unsecured term loan agreements all rank pari passu with the Operating Partnership’s 2022 Revolving Facility and other unsecured indebtedness of the Operating Partnership.

The following table summarizes the key terms of the unsecured term loans as of September 30, 2022:

($ in thousands)

As of March 31, 2023, the Operating Partnership has the following unsecured term loans:

(i) a $ 120.0 million unsecured term loan due July 2024 (the “$ 120 M Term Loan”), (ii) a $ 250.0 million unsecured term loan due October 2025 (the “$ 250 M Term Loan”), (iii) a $ 150.0 million unsecured term loan due July 2026 (the “$ 150 M Term Loan”), and (iv) the $ 300 M Term Loan that matures in July 2029, each of which bears interest at a rate of SOFR plus a credit spread.

The $ 120 M Term Loan, $ 150 M Term Loan and $ 300 M Term Loan are each priced on a ratings-based pricing grid while the $ 250 M Term Loan is priced on a leverage-based pricing grid.

The agreements related to the $ 150 M Term Loan and $ 300 M Term Loan include a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth in each agreement.

The following table summarizes the key terms of the unsecured term loans as of March 31, 2023 (dollars in thousands) :

Unsecured Term Loans

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(1) The maturity date may be extended for up to three additional periods of one year each at the Operating Partnership’s option, subject to certain conditions.

The Operating Partnership is permitted to prepay each of the $ 120 M Term Loan and $ 150 M Term Loan, in whole or in part, at any time without being subject to a prepayment fee.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024.

The unsecured term loan agreements all rank pari passu with the Operating Partnership’s Revolving Facility and other unsecured indebtedness of the Operating Partnership.

Debt Issuance Costs

Debt issuance costs are amortized over the terms of the respective loan agreements.

The following amounts of amortization of debt issuance costs are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income:

Nine Months Ended September 30,

($ in thousands) 2022 2021

The following amounts of amortization of debt issuance costs are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income (in thousands) :

Three Months Ended March 31,

Amortization of debt issuance costs $ 888 $ 650

Fair Value of Fixed and Variable Rate Debt

As of September 30, 2022, the estimated fair value of fixed rate debt was $ 1.9 billion compared to the book value of $ 2.1 billion.

As of March 31, 2023, the estimated fair value of fixed rate debt was $ 1.8 billion compared to the book value of $ 2.0 billion.

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 5.97 % to 7.81 %.

As of September 30, 2022, the estimated fair value of variable rate debt was $ 850.5 million compared to the book value of $ 848.5 million.

As of March 31, 2023, the estimated fair value of variable rate debt was $ 947.8 million compared to the book value of $ 973.1 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 5.85 % to 6.80 %.

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The agreements with each of our derivative counterparties provide that in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations.

During the three months ended September 30, 2022, we amended certain interest rate swap agreements, contemporaneous with a modification of the Company’s unsecured revolving credit facility and $ 300 M Term Loan, $ 120 M Term Loan and $ 150 M Term Loan, to facilitate reference rate reform, converting the outstanding swaps from LIBOR to SOFR.

In addition, we (i) designated the interest rate swaps related to the $ 200 M Term Loan that was repaid in July 2022 to the $ 300 M Term Loan with an effective date of August 2022 and a maturity date of November 2023;

(ii) entered into two forward-starting interest rate swap contracts with notional amounts totaling $ 200.0 million that swap a floating rate of term SOFR to a fixed rate of 2.37 % plus a credit spread of 1.35 % with an effective date of November 2023 and a maturity date of August 2025;

and (iii) entered into two agreements to swap a total of $ 100.0 million of SOFR-based variable rate debt to a fixed rate of 2.66 % plus a credit spread of 1.35 % with an effective date of August 2022 and a maturity date of August 2025.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments that were designated and qualified as part of a hedging relationship as of September 30, 2022 and December 31, 2021:

($ in thousands) Fair Value Assets (Liabilities) (1)

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date September 30, 2022 December 31, 2021

Cash Flow Four $ 250,000 LIBOR 3.09 % 12/3/2018 10/24/2025 $ 7,243 $ ( 18,282 )

Fair Value Assets (Liabilities) (1)

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date March 31, 2023 December 31, 2022

Cash Flow Four $ 250,000 SOFR 2.99 % 12/1/2022 10/24/2025 $ 4,831 $ 7,134

Cash Flow Two 100,000 SOFR 2.66 % 8/1/2022 8/1/2025 2,655 3,616

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Forward-Starting

Cash Flow (3)

Two $ 200,000 SOFR 2.37 % 11/22/2023 8/1/2025 $ 3,528 $ 4,370

Forward-Starting

Two $ 200,000 SOFR 2.37 % 11/22/2023 8/1/2025 $ 4,761 $ —

(1) Derivatives in an asset position are included within “Prepaid and other assets” and derivatives in a liability position are included within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

(2) The derivative agreements swap a blended fixed rate of 4.52 % for a blended floating rate of LIBOR plus 3.70 %.

(3) Subsequent to September 30, 2022, we terminated these two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and received proceeds of $ 30.9 million upon termination.

This settlement is included as a component of accumulated other comprehensive income and will be reclassified to earnings over time as the hedged items are recognized in earnings.

In October 2022, we terminated two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and a maturity date of June 1, 2032 and received $ 30.9 million upon termination.

This settlement is included as a component of “Accumulated other comprehensive income” in the accompanying consolidated balance sheets and is being reclassified to earnings over time as the hedged items are recognized in earnings.

During the three months ended March 31, 2023, we accelerated the reclassification of $ 1.5 million in accumulated other comprehensive income as a reduction to interest expense as a result of a portion of the hedged forecasted transaction becoming probable not to occur.

We currently expect that the debt issuance will occur during 2023.

These interest rate derivative agreements are the only assets or liabilities that we record at fair value on a recurring basis.

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We also incorporate credit valuation adjustments into the fair value measurements to reflect nonperformance risk on both our part and that of the respective counterparties.

We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

As of September 30, 2022 and December 31, 2021, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.

We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives use Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

As of March 31, 2023 and December 31, 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.

As a result, we determined our derivative valuations were classified within Level 2 of the fair value hierarchy.

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 $ 1.2 million and $ 1.7 million was reclassified as a reduction to earnings during the three months ended September 30, 2022 and 2021, respectively.

Approximately $ 8.6 million and $ 4.1 million was reclassified as a reduction to earnings during the nine months ended September 30, 2022 and 2021, respectively.

As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be $ 13.1 million, assuming the current LIBOR and SOFR curves.

Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive loss.

Approximately $ 4.2 million was reclassified as an increase to earnings during the three months ended March 31, 2023 and approximately $ 4.1 million was reclassified as a decrease to earnings during the three months ended March 31, 2022.

As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be approximately $ 25.1 million, assuming the current SOFR and LIBOR curves.

Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive income.

SHAREHOLDERS’ EQUITY

Distributions

Our Board of Trustees declared a cash distribution of $ 0.22 per common share and Common Unit for the third quarter of 2022.

This distribution was paid on October 14, 2022 to common shareholders and Common Unit holders of record as of October 7, 2022.

Our Board of Trustees declared a cash distribution of $ 0.24 per common share and Common Unit for the first quarter of 2023.

This distribution was paid on April 14, 2023 to common shareholders and Common Unit holders of record as of April 7, 2023.

For the three months ended March 31, 2022, we declared a cash distribution of $ 0.20 per common share and Common Unit.

At-The-Market Offering Program

On February 23, 2021, the Company and the Operating Partnership entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with each of BofA Securities, Inc., Citigroup Global Markets Inc., KeyBanc Capital Markets Inc.

In February 2021, the Company and the Operating Partnership entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with each of BofA Securities, Inc., Citigroup Global Markets Inc., KeyBanc Capital Markets Inc.

and Raymond James & Associates, Inc., pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $ 150.0 million of its common shares of beneficial interest, $ 0.01 par value per share, under an at-the-market offering program (the “ATM Program”).

On November 30, 2021, the Company and the Operating Partnership amended the Equity Distribution Agreement to reflect their filing of a shelf registration statement on November 16, 2021 with the SEC.

As of September 30, 2022, the Company has no t sold any common shares under the ATM Program.

In November 2021, the Company and the Operating Partnership amended the Equity Distribution Agreement to reflect their filing of a shelf registration statement on November 16, 2021 with the SEC.

The Operating Partnership intends to use the net proceeds, if any, to repay borrowings under its Revolving Facility and other indebtedness and for working capital and other general corporate purposes.

The Operating Partnership may also use the net proceeds for acquisitions of operating properties and the development or redevelopment of properties, although there are currently no understandings, commitments or agreements to do so.

As of March 31, 2023, the Company has no t sold any common shares under the ATM Program.

Share Repurchase Program

In February 2021, the Company’s Board of Trustees approved a share repurchase program, authorizing share repurchases up to an aggregate of $ 150.0 million (the “Share Repurchase Program”).

In February 2022, the Company extended its Share Repurchase Program for an additional year and it will now terminate on February 28, 2023, if not terminated or extended prior to that date.

In April 2022, the Company’s Board of Trustees authorized a $ 150.0 million increase to the size of the Share Repurchase Program, authorizing share repurchases up to an aggregate of $ 300.0 million.

As of September 30, 2022, the Company has no t repurchased any shares under its Share Repurchase Program.

The Company intends to fund any future repurchases under the Share Repurchase Program with cash on hand or availability under the 2022 Revolving Facility, subject

to any applicable restrictions.

The Company has an existing share repurchase program under which it may repurchase, from time to time, up to a maximum of $ 300.0 million of its common shares (the “Share Repurchase Program”).

The Company intends to fund any future repurchases under the Share Repurchase Program with cash on hand or availability under the Revolving Facility, subject to any applicable restrictions.

The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will depend upon prevailing market conditions, regulatory requirements and other factors.

In February 2023, the Company extended the Share Repurchase Program for an additional year so it will now terminate on February 28, 2024, if not terminated or extended prior to that date.

As of March 31, 2023, the Company has no t repurchased any shares under the Share Repurchase Program.

EARNINGS PER SHARE OR UNIT

Basic earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period.

Diluted earnings per share or unit is determined based on the weighted average number of common shares or units outstanding during the period combined with the incremental average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible.

Diluted earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period combined with the incremental average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible.

Potentially dilutive securities include (i) outstanding options to acquire common shares;

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and (iv) deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of compensation paid in cash or the issuance of common shares to such trustees.

Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the denominator would have no dilutive impact.

Weighted average Limited Partner Units outstanding were 3.0 million and 2.7 million for the three and nine months ended September 30, 2022, respectively, and 2.4 million and 2.5 million for the three and nine months ended September 30, 2021, respectively.

Due to the net loss allocable to common shareholders and Common Unit holders for the three and nine months ended September 30, 2022 and the three months ended September 30, 2021, no securities had a dilutive impact for those periods.

Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including those amounts in the denominator would have no dilutive impact.

Weighted average Limited Partner Units outstanding were 3.0 million and 2.4 million for the three months ended March 31, 2023 and 2022, respectively.

Due to the net loss allocable to common shareholders and Common Unit holders for the three months ended March 31, 2022, no securities had a dilutive impact for this period.

COMMITMENTS AND CONTINGENCIES

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Our portion of the repayment guaranty is limited to $ 5.9 million and the guaranty’s term is through July 1, 2024, the maturity date of the construction loan.

As of September 30, 2022, the outstanding loan balance was $ 33.6 million, of which our share was $ 11.8 million.

As of March 31, 2023, the outstanding loan balance was $ 33.3 million, of which our share was $ 11.7 million.

The loan is secured by the hotel.

As of September 30, 2022, we had outstanding letters of credit totaling $ 1.5 million with no amounts advanced against these instruments.

In 2021, we provided repayment and completion guaranties on loans totaling $ 66.2 million associated with the development of The Corner mixed-use project in the Indianapolis MSA.

As of March 31, 2023, the outstanding balance of the loans was $ 37.2 million, of which our share was $ 18.6 million.

As of March 31, 2023, we had outstanding letters of credit totaling $ 0.3 million with no amounts advanced against these instruments.

Legal Proceedings

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SUBSEQUENT EVENTS

Subsequent to September 30, 2022, we:

• redeemed all remaining Class B units related to a joint venture that owned Crossing at Killingly Commons that was entered into by Inland Diversified prior to its merger with the Company for $ 9.7 million;

• sold one ground lease at Lincoln Plaza, our multi-tenant retail property in Worcester, Massachusetts, for a sales price of $ 10.0 million;

• terminated two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and received proceeds of $ 30.9 million upon termination.

This settlement is included as a component of accumulated other comprehensive income and will be reclassified to earnings over time as the hedged items are recognized in earnings.

Subsequent to March 31, 2023, we originated a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the multifamily rental portion of the expansion project at One Loudoun Downtown – Pads G & H.

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-Q

Item 1. Financial Statements