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Item 7. Management’s Discussion and Analysis

2025-02-12 compared with 2024-02-20 · 225 added, 199 removed, 350 unchanged (55% of the section changed)

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In the following overview, we discuss, among other things, the status of our business and properties, the effect that current U.S.

economic conditions is having on our retail tenants and us, and the current state of the financial markets and how it impacts our financing strategy.

economic conditions are having on our retail tenants and us, and the current state of the financial markets and how it impacts our financing strategy.

Our Business and Properties

Kite Realty Group Trust is a publicly held REIT that, 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 that are primarily grocery-anchored and located in high-growth Sun Belt markets and select strategic gateway markets in the United States.

Kite Realty Group Trust is a publicly held REIT that, 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, grocery-anchored shopping centers and vibrant mixed-use assets that are primarily located in high-growth Sun Belt markets and select strategic gateway markets in the United States.

Following our merger with RPAI in 2021, we became a top-five open-air shopping center REIT based upon market capitalization.

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

As of December 31, 2023, we owned interests in 180 operating retail properties totaling approximately 28.1 million square feet and one office property with 0.3 million square feet.

As of December 31, 2024, we own interests in 179 operating retail properties totaling approximately 27.7 million square feet, excluding one operating retail property classified as held for sale as of December 31, 2024, and two office properties with 0.4 million square feet.

Of the 179 operating retail properties, 10 contain an office component.

We also owned two development projects under construction as of this date and an additional two properties with future redevelopment opportunities.

We believe inflationary concerns could negatively impact consumer confidence and spending and our tenants’ sales and overall health.

This could, in turn, continue to put downward pricing pressure on rents that we are able to charge to new or renewing tenants, such that future rent spreads and, in some cases, our percentage rents, could be adversely impacted.

We also own interests in two development projects under construction as of December 31, 2024 and an additional two properties with future redevelopment opportunities.

Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including stated rent increases and requirements for tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance, or other operating expenses related to the maintenance of our properties, with escalation clauses in certain leases.

In 2023, we have made significant improvements converting leases to higher fixed rent bumps and including CPI protection.

Over the past two years, we have made significant progress in executing leases that include higher fixed-rent bumps while also including CPI-based, anti-gouging protection for tenants.

However, the stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses could be lower than the increase in inflation at any given time.

Inflation may also increase labor or other general and administrative expenses that cannot be easily reduced.

Inflation may also increase labor or other general and administrative expenses, which cannot be easily reduced.

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, among other impacts, increase the number of our tenants that are unable to meet their lease obligations to us and limit the demand from new tenants for space in our properties.

Portfolio Update

In 2023, demand for open-air retail real estate was strong due to the limited availability of desirable retail space and limited new construction over the previous 15 years.

As a result, we experienced our highest quarterly new leasing activity in the Company’s history in the fourth quarter with over 380,000 square feet of new leasing volume.

Over the past two years, demand for open-air retail real estate has been strong due to the limited availability of desirable retail space and limited new construction over the previous 15 years.

As a result, in 2024 we experienced our highest annual leasing activity in the Company’s history with approximately 5.0 million square feet of leasing volume.

Open-air centers are thriving for a variety of reasons, including their ability to function as last-mile fulfillment centers and their convenient and affordable nature for retailers and consumers.

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In addition, the Company’s property types are particularly suited for retailers’ current and evolving needs, including curbside pick-up and buying online and picking up in store (“BOPIS”), which we believe will benefit from tenant demand for additional space.

The strength of the Company’s real estate is further evidenced by our continued strong cash leasing spreads and ABR for the retail portfolio of $20.70 per square foot.

The Company has continued to improve its asset quality and through the October 2021 merger with RPAI acquired a refined portfolio of high-quality, open-air shopping centers and mixed-use assets.

The strength of the Company’s real estate is further evidenced by our continued strong cash leasing spreads and ABR for the retail portfolio of $21.15 per square foot as of December 31, 2024.

In evaluating potential acquisition, development, and redevelopment opportunities, we look for strong sub-markets where average household income, educational attainment, population density, traffic counts, and daytime workforce populations are above the broader market average.

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In addition to targeting sub-markets with strong consumer demographics, we focus on having the most desirable tenant mix at each shopping center.

We have aggressively targeted and executed leases with prominent grocers including Publix, Lidl, Aldi, Whole Foods, Trader Joe’s, Sprouts Farmers Market, and The Fresh Market, expanding retailers such as T.J.

Maxx, HomeGoods, Ross Dress for Less, Burlington, Old Navy, J.Crew Factory, Dick’s Sporting Goods, and pOpshelf, service and restaurant retailers and other retailers such as Ulta Beauty, REI, Five Below and Total Wine & More.

We have aggressively targeted and executed leases with prominent grocers, including Lidl, Aldi, Whole Foods, Trader Joe’s, Sprouts Farmers Market, and BJ’s Wholesale Club, expanding retailers such as Nordstrom Rack, Homesense, Ross Dress for Less, Burlington, Sierra, J.Crew Factory, and pOpshelf, service and restaurant retailers, and other retailers such as Ulta Beauty, REI, Five Below, L.L.Bean, and Total Wine & More.

Additionally, we have identified cost-efficient ways to relocate, re-tenant, and renegotiate leases at several of our properties, which allows us to attract more suitable tenants.

Capital and Financing Activities

In 2023, we maintained a conservative balance sheet and improved our liquidity to fund future growth.

In 2024, we maintained a conservative balance sheet and ample liquidity to fund future growth.

We ended 2024 with approximately $1.6 billion of combined cash and borrowing capacity on the Revolving Facility.

In addition, as of December 31, 2023, we had $269.6 million of debt principal scheduled to mature through December 31, 2024, which we expect will be satisfied with proceeds from the Notes Due 2034 that were issued in January 2024.

In addition, as of December 31, 2024, we had $430.0 million of debt principal scheduled to mature through December 31, 2025, which we expect will be satisfied through a combination of proceeds from the Notes Due 2031 that were issued in August 2024, cash flows generated from operations, capital markets transactions, and borrowings on the Revolving Facility.

The three investment-grade credit ratings we maintain provide us with access to the unsecured public bond market, which we may continue to use in the future to finance acquisitions, repay maturing debt, and fix interest rates.

Results of Operations

As of December 31, 2023, we owned interests in 180 operating retail properties, one office property, two development projects currently under construction, and two additional properties with future redevelopment opportunities.

The following table sets forth the total operating properties and development projects we owned as of December 31, 2023, 2022 and 2021:

As of December 31, 2024, we own interests in 179 operating retail properties, excluding one operating retail property classified as held for sale as of December 31, 2024, two office properties, two development projects that are currently under construction, and two additional properties with future redevelopment opportunities.

The following table sets forth the total operating properties and development projects we own as of December 31, 2024, 2023 and 2022:

Number of Properties

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Therefore, we believe it is most useful to review the comparisons of our results of operations for these years (as set forth below under “Comparison of Operating Results for the Years Ended December 31, 2024 and 2023”) in conjunction with the discussion of our activities during those periods, which is set forth below.

In addition to the 100 properties acquired in the October 2021 merger with RPAI, the following operating properties were acquired during the years ended December 31, 2023, 2022 and 2021:

The following operating properties were acquired during the years ended December 31, 2024, 2023 and 2022:

Property Name MSA Acquisition Date GLA

Nora Plaza outparcel Indianapolis, IN December 22, 2021 23,722

Pebble Marketplace Las Vegas, NV February 16, 2022 85,796

MacArthur Crossing two-tenant building Dallas, TX April 13, 2022 56,077

Palms Plaza Miami, FL July 15, 2022 68,976

Prestonwood Place Dallas, TX September 22, 2023 155,975

Pebble Marketplace Las Vegas February 16, 2022 85,796

MacArthur Crossing two-tenant building Dallas/Ft.

Worth April 13, 2022 56,077

Palms Plaza Miami July 15, 2022 68,976

Prestonwood Place Dallas/Ft.

Worth September 22, 2023 155,975

Parkside West Cobb Atlanta August 30, 2024 141,627

The following operating and other properties were sold during the years ended December 31, 2024, 2023 and 2022:

Property Name MSA Disposition Date GLA

Westside Market Dallas, TX October 26, 2021 93,377

Plaza Del Lago (1)

Chicago, IL June 16, 2022 100,016

Chicago June 16, 2022 100,016

Lincoln Plaza – Lowe’s (2)

Worcester, MA October 27, 2022 —

Kingwood Commons Houston, TX May 8, 2023 158,172

Pan Am Plaza & Garage Indianapolis, IN June 8, 2023 —

Reisterstown Road Plaza Baltimore, MD September 11, 2023 376,683

Eastside Dallas, TX October 24, 2023 43,640

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

Kingwood Commons Houston May 8, 2023 158,172

Pan Am Plaza & Garage Indianapolis June 8, 2023 —

Reisterstown Road Plaza Baltimore September 11, 2023 376,683

Eastside Dallas/Ft.

Worth October 24, 2023 43,640

Ashland & Roosevelt Chicago May 31, 2024 104,176

(1) Plaza Del Lago also contains 8,800 square feet of residential space composed of 18 multifamily rental units.

(2) We sold the ground lease interest in one tenant at an existing multi-tenant operating retail property.

The total number of properties in our portfolio was not affected by this transaction.

In addition, during the year ended December 31, 2024, the joint venture that owned Glendale Center Apartments, of which we have an 11.5% ownership interest, sold the 267-unit property to a third party.

Glendale Center Apartments is adjacent to our Glendale Town Center operating retail property in the Indianapolis MSA.

Development and Redevelopment Projects

The following properties were under active development or redevelopment during portions of the years ended December 31, 2023, 2022 and 2021 and removed from our operating portfolio during such period:

The following properties were under active development or redevelopment at various times during the years ended December 31, 2024, 2023 and 2022 and removed from our operating portfolio:

Project Name MSA Transition to

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Active Projects

Carillon MOB (2)

Washington, D.C.

October 2021 Pending 126,000

The Corner – IN (2)

Indianapolis, IN December 2015 Pending 24,000

Indianapolis December 2015 Pending 24,000

One Loudoun Expansion (3)

Washington, D.C.

September 2024 Pending 119,000

Future Opportunities

Hamilton Crossing Centre (2)(4)

Indianapolis, IN June 2014 Pending 92,283

Indianapolis June 2014 Pending 92,283

Edwards Multiplex – Ontario (2)

Los Angeles, CA March 2023 Pending 124,614

Los Angeles March 2023 Pending 124,614

Completed Projects

Glendale Town Center Indianapolis, IN March 2019 December 2021 199,021

Eddy Street Commons – Phase III South Bend, IN September 2020 March 2022 18,600

Shoppes at Quarterfield Baltimore, MD October 2021 June 2022 58,000

Shoppes at Quarterfield Baltimore October 2021 June 2022 58,000

One Loudoun Downtown – Pads G&H

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October 2021 June 2022 —

Circle East Baltimore, MD October 2021 September 2022 82,000

Circle East Baltimore October 2021 September 2022 82,000

One Loudoun Downtown – Pads G&H

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Lucie, FL September 2021 June 2023 39,900

Carillon MOB (5)

Washington, D.C.

October 2021 December 2024 126,000

(1) Transition date represents the date the property was transferred from our operating portfolio into redevelopment status.

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The redevelopment projects at Hamilton Crossing Centre and The Corner – IN will include the creation of a mixed-use development.

(3) The property is comprised of the development project (which has been excluded from the Company’s same property pool due to the ongoing development) and the remaining retail operating portion of the property (which is included in the Company’s same property pool as of December 31, 2024).

(4) Approximately half of the Hamilton Crossing site was sold in January 2022 to Republic Airways Inc.

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Phase I of the corporate campus was completed in 2023.

(5) This property is included in the office portfolio and is not included in the operating portfolio or the same property pool.

In addition, during the year ended December 31, 2024, the Company disposed of the first phase of a land parcel and the rights to develop 24 residential units at One Loudoun Expansion in the Washington, D.

The Company is under contract to sell the remaining land and the rights to develop an additional 54 residential units, which are expected to close in phases through 2026.

Comparison of Operating Results for the Years Ended December 31, 2024 and 2023

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General, administrative and other 52,558 56,142 (3,584)

Merger and acquisition costs — 925 (925)

Depreciation and amortization 393,335 426,361 (33,026)

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Total expenses 729,588 693,364 36,224

Gain on sales of operating properties, net 22,601 27,069 (4,468)

(Loss) gain on sales of operating properties, net (864) 22,601 (23,465)

Operating income 111,390 152,241 (40,851)

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Income tax expense of taxable REIT subsidiary (139) (533) 394

Equity in earnings of unconsolidated subsidiaries 33 256 (223)

Loss on extinguishment of debt (180) — (180)

Equity in (loss) earnings of unconsolidated subsidiaries (1,158) 33 (1,191)

Gain on sale of unconsolidated property, net 2,325 — 2,325

Other income, net 17,869 1,991 15,878

Net income (loss) 48,383 (12,154) 60,537

Net income 4,416 48,383 (43,967)

Net income attributable to noncontrolling interests (345) (885) 540

Net income (loss) attributable to common shareholders $ 47,498 $ (12,636) $ 60,134

Net income attributable to common shareholders $ 4,071 $ 47,498 $ (43,427)

Property operating expense to total revenue ratio 13.5 % 13.1 %

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December 31, 2023 to 2024

Properties or components of properties sold during 2022 or 2023 $ (7,830)

Properties or components of properties sold or held for sale during 2023 and/or 2024 $ (14,039)

Properties under redevelopment or acquired during 2023 and/or 2024 7,677

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Total $ 16,402

The net increase of $23.5 million in rental income for properties that were fully operational during 2022 and 2023 is primarily due to (i) increases in base minimum rent of $14.7 million due to contractual rent changes and tenant reimbursements of $2.9 million due to higher recoverable common area maintenance expenses, (ii) a decrease in bad debt expense of $2.1 million, and (iii) increases in lease termination income of $1.6 million, overage rent of $1.2 million due to improved tenant performance, and $1.0 million in ancillary income.

The occupancy of the fully operational properties increased from 91.8% for 2022 to 92.0% for 2023.

The net increase of $22.8 million in rental income for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following:

(i) base minimum rent of $13.5 million due to changes via contractual rate increases and leasing spreads, (ii) tenant reimbursements of $11.1 million due to higher recoverable common area maintenance expenses, and (iii) ancillary income of $0.5 million.

These variances were partially offset by an increase in bad debt expense of $1.3 million and decreases in lease termination income of $0.6 million and overage rent of $0.4 million.

The occupancy of the fully operational properties decreased from 92.0% for 2023 to 91.6% for 2024.

We continued to experience strong leasing volumes in 2024 and generate higher base rent on new leases and renewals.

The average base rents for new comparable leases signed in 2023 was $27.53 per square foot compared to average expiring base rents of $19.48 per square foot in that period.

The average base rents for renewals signed in 2023 was $18.10 per square foot

compared to average expiring base rents of $16.74 per square foot in that period.

The average base rents for new comparable leases signed in 2024 was $27.29 per square foot compared to average expiring base

rents of $20.69 per square foot in that period.

The average base rents for renewals signed in 2024 was $17.27 per square foot compared to average expiring base rents of $16.19 per square foot in that period.

For the entire portfolio, the spread between leased and occupied square footage is approximately 240 basis points and represents approximately $27.3 million of NOI, the majority of which is expected to come online in 2025.

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Other property-related revenue primarily consists of parking revenues, gains on the sale of land, and other miscellaneous activity.

This revenue decreased by $2.6 million primarily as a result of lower gains on sales of undepreciated assets of $2.8 million recognized during the year ended December 31, 2023 and a decrease in parking revenue of $1.3 million due to the sale of Pan Am Plaza Garage in June 2023, partially offset by an increase in miscellaneous income of $1.5 million.

This revenue increased by $2.1 million primarily as a result of higher gains on sales of land of $2.7 million recognized during the year ended December 31, 2024, partially offset by decreases in miscellaneous income of $0.5 million and parking revenue of $0.1 million.

We recorded fee income of $4.7 million and $4.4 million during the years ended December 31, 2024 and 2023, respectively, from property management and development services provided to third parties and unconsolidated joint ventures.

The decrease in fee income is primarily due to a decrease in development fees earned related to the development of a corporate campus for Republic Airways at Hamilton Crossing Centre.

The increase in fee income is primarily related to development fees earned related to the development of a hotel on the Pan Am Plaza site during 2024, partially offset by a decrease in development fees earned related to the development of a corporate campus for Republic Airways at Hamilton Crossing Centre in 2024 due to the completion of Phase I of the corporate campus in 2023.

Property operating expenses increased $5.6 million, or 5.2%, due to the following (in thousands) :

December 31, 2023 to 2024

Properties or components of properties sold during 2022 or 2023 $ (2,227)

Properties or components of properties sold or held for sale during 2023 and/or 2024 $ (3,407)

Properties under redevelopment or acquired during 2023 and/or 2024 838

Properties fully operational during 2023 and 2024 and other 8,212

The net increase of $1.7 million in property operating expenses for properties that were fully operational during 2022 and 2023 is primarily due to increases of (i) $3.3 million in non-recoverable operating expenses, the majority of which relates to vacancies caused by retailer bankruptcies, (ii) $0.4 million in landscaping and repairs and maintenance expenses, and (iii) $0.2 million in security expenses, partially offset by a $3.0 million decrease in insurance expense.

As a percentage of revenue, property operating expenses decreased from 13.4% to 13.1% primarily due to an increase in revenue in 2023.

Real estate taxes decreased $2.2 million, or 2.1%, due to the following (in thousands) :

Total $ 5,643

The net increase of $8.2 million in property operating expenses for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following:

(i) $4.8 million in insurance expenses, (ii) $2.5 million in landscaping and repairs and maintenance expenses, (iii) $0.8 million in non-recoverable operating expenses, the majority of which relates to vacancies caused by retailer bankruptcies, and (iv) $0.3 million in security expenses.

These variances were partially offset by a decrease in utilities of $0.3 million.

As a percentage of revenue, property operating expenses increased from 13.1% to 13.5% primarily due to an increase in expenses in 2024.

Real estate taxes increased $1.5 million, or 1.4%, due to the following (in thousands) :

December 31, 2023 to 2024

Properties or components of properties sold during 2022 or 2023 $ (1,854)

Properties or components of properties sold or held for sale during 2023 and/or 2024 $ (1,880)

Properties under redevelopment or acquired during 2023 and/or 2024 732

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Total $ 1,467

The net decrease of $2.3 million in real estate taxes for properties that were fully operational during 2022 and 2023 is primarily due to a decrease in real estate tax assessments at certain properties in the portfolio in 2023, most notably for certain of our Texas and Illinois properties.

The majority of real estate tax expense is recoverable from tenants and such recovery is reflected within rental income.

General, administrative and other expenses increased $1.3 million, or 2.3%, primarily due to an increase in transportation expenses and consulting fees, partially offset by a decrease in legal expenses and payroll costs due to lower head count.

The Company did not incur any significant merger and acquisition costs related to the October 2021 merger with RPAI during the year ended December 31, 2023.

The Company incurred $0.9 million of merger and acquisition costs during the year ended December 31, 2022, primarily consisting of professional fees and technology costs.

The net increase of $2.6 million in real estate taxes for properties that were fully operational during 2023 and 2024 is primarily due to higher real estate tax assessments at certain properties in the portfolio in 2024, most notably for certain of our Illinois and Indiana properties, and higher real estate tax consulting fees, partially offset by higher capitalized real estate tax expenses related to signed leases at certain properties in the portfolio in 2024.

The majority of real estate tax expenses are recoverable from tenants and such recovery is reflected within “Rental income” in the accompanying consolidated statements of operations and comprehensive income.

General, administrative and other expenses decreased $3.6 million, or 6.4%, primarily due to lower compensation expenses and a decrease in consulting fees in 2024, partially offset by higher marketing expenses.

Depreciation and amortization expense decreased $33.0 million, or 7.7%, due to the following (in thousands) :

December 31, 2023 to 2024

Properties or components of properties sold during 2022 or 2023 $ (9,444)

Properties or components of properties sold or held for sale during 2023 and/or 2024 $ (11,135)

Properties under redevelopment or acquired during 2023 and/or 2024 4,831

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Total $ (33,026)

The net increase of $6.2 million in depreciation and amortization at properties under redevelopment or acquired during 2022 and 2023 is primarily due to the reclassification of Edwards Multiplex – Ontario into redevelopment in March 2023 along with the acquisitions of Palms Plaza in July 2022 and Prestonwood Place in September 2023.

The net decrease of $40.2 million in depreciation and amortization at properties that were fully operational during 2022 and 2023 is primarily due to certain assets with shorter useful lives acquired in the October 2021 merger with RPAI that became fully depreciated during the prior year.

Based on the results of our evaluations for impairment, we recorded a $0.5 million impairment charge during the year ended December 31, 2023 related to Eastside, a retail operating property in the Dallas MSA that qualified for held-for-sale accounting treatment as of September 30, 2023 and was sold on October 24, 2023.

No impairment charges were recorded during the year ended December 31, 2022.

We recorded a net gain on sales of operating properties of $22.6 million for the year ended December 31, 2023 on the sale of Kingwood Commons, the undeveloped land and related parking garage at Pan Am Plaza, Reisterstown Road Plaza, and Eastside compared to a net gain of $27.1 million on the sale of Plaza Del Lago, a portion of Hamilton Crossing Centre and the ground lease interest in Lowe’s at Lincoln Plaza for the year ended December 31, 2022.

Interest expense increased $1.1 million, or 1.0%, primarily due to higher interest costs related to our variable rate debt, including borrowings on the Revolving Facility that were used to repay mortgages payable at maturity, partially offset by favorable interest rate swaps.

The net increase of $4.8 million in depreciation and amortization at properties under redevelopment or acquired during 2023 and/or 2024 is primarily due to the acquisitions of Prestonwood Place in September 2023 and Parkside West Cobb in August 2024 along with the reclassification of Edwards Multiplex – Ontario into redevelopment in March 2023 and depreciation and amortization recorded for Carillon medical office building through December 2024.

The net decrease of $26.7 million in depreciation and amortization at properties that were fully operational during 2023 and 2024 is primarily due to the timing of placing assets in service and writing-off tenant-related assets as a result of tenant move-outs along with certain assets acquired in the October 2021 merger with RPAI that became fully depreciated during the year.

Based on a reduction in the expected future hold period (see Note 4 to the accompanying consolidated financial statements), we recorded a $66.2 million impairment charge during the year ended December 31, 2024 related to City Center, a retail operating property in the New York MSA that is classified as held for sale as of December 31, 2024.

During the year ended December 31, 2023, we recorded a $0.5 million impairment charge on Eastside, a retail operating property in the Dallas/Ft.

Worth MSA that was sold on October 24, 2023.

We recorded a net loss on sales of operating properties of $0.9 million for the year ended December 31, 2024 primarily on the sale of Ashland & Roosevelt, which loss was offset by the receipt of a $0.6 million escrow related to the sale of Reisterstown Road Plaza that previously closed on September 11, 2023.

During the year ended December 31, 2023, we recorded a net gain on sales of operating properties of $22.6 million on the sale of Kingwood Commons, the undeveloped land and related parking garage at Pan Am Plaza, Reisterstown Road Plaza, and Eastside.

Interest expense increased $20.3 million, or 19.3%, primarily due to interest on the Notes Due 2034 and the Notes Due 2031, which were issued in 2024, partially offset by favorable interest rate swaps.

The $2.3 million gain on sale of unconsolidated property represents our share of the gain on the sale of Glendale Center Apartments recognized during the year ended December 31, 2024.

No such gain was recorded during the year ended December 31, 2023.

Other income, net increased $15.9 million primarily due to interest income earned on the proceeds from the Notes Due 2034 and the Notes Due 2031, which were invested in short-term deposits at various points during the year ended December 31, 2024.

Management’s discussion of the financial condition, changes in financial condition and results of operations for the year ended December 31, 2023, with comparison to the year ended December 31, 2022, was included in Item 7.

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Same Property NOI is net income excluding properties that have not been owned for the full periods presented.

Same Property NOI also excludes (i) net gains from outlot sales, (ii) straight-line rent revenue, (iii) lease termination income in excess of lost rent, (iv) amortization of lease intangibles, and (v) significant prior period expense recoveries and adjustments, if any.

Same Property NOI also excludes (i) net gains from outlot sales, (ii) straight-line rent revenue, (iii) lease termination income in

excess of lost rent, (iv) amortization of lease intangibles, and (v) significant prior period expense recoveries and adjustments, if any.

When we receive payments in excess of any accounts receivable for terminating a lease, Same Property NOI will include such excess payments as monthly rent until the earlier of the expiration of 12 months or the start date of a replacement tenant.

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Same Property NOI includes the results of properties that have been owned for the entire current and prior year reporting periods.

NOI and Same Property NOI should not, however, be considered as alternatives to net income (calculated in accordance with GAAP) as indicators of our financial performance.

NOI and Same Property NOI should not, however, be considered as an alternative to net income (calculated in accordance with GAAP) as an indicator of our financial performance.

Our computation of NOI and Same Property NOI may differ from the methodology used by other REITs and, therefore, may not be comparable to such other REITs.

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• properties acquired or placed in service during 2023 and 2024;

• the multifamily rental units and commercial portion at One Loudoun Downtown – Pads G & H;

• Shoppes at Quarterfield, Circle East and The Landing at Tradition – Phase II, which were reclassified from active redevelopment into our operating portfolio in June 2022, September 2022 and June 2023, respectively;

• our active development and redevelopment projects at Carillon medical office building and The Corner – IN;

• The Landing at Tradition – Phase II, which was reclassified from active redevelopment into our operating portfolio in June 2023;

• our active development and redevelopment projects at The Corner – IN and One Loudoun Expansion;

• Hamilton Crossing Centre and Edwards Multiplex – Ontario, which were reclassified from our operating portfolio into redevelopment in June 2014 and March 2023, respectively;

• properties sold or classified as held for sale during 2023 and 2024;

• office properties.

The following table presents Same Property NOI and a reconciliation to net income (loss) attributable to common shareholders for the years ended December 31, 2023 and 2022 (unaudited) (dollars in thousands) :

• office properties, including Carillon medical office building, which was reclassified from active redevelopment into our office portfolio in December 2024.

The following table presents Same Property NOI and a reconciliation to net income attributable to common shareholders for the years ended December 31, 2024 and 2023 (unaudited) (dollars in thousands) :

Year Ended December 31,

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Leased percentage at period end 95.0 % 94.2 %

94.0 % 95.4 %

Economic occupancy percentage at period end 92.5 % 91.3 %

91.2 % 92.5 %

Economic occupancy percentage (2)

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General, administrative and other (52,558) (56,142)

Merger and acquisition costs — (925)

Loss on extinguishment of debt (180) —

Impairment charges (66,201) (477)

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Interest expense (125,691) (105,349)

Gain on sales of operating properties, net 22,601 27,069

(Loss) gain on sales of operating properties, net (864) 22,601

Gain on sale of unconsolidated property, net 2,325 —

Net income attributable to noncontrolling interests (345) (885)

Net income (loss) attributable to common shareholders $ 47,498 $ (12,636)

Net income attributable to common shareholders $ 4,071 $ 47,498

(1) Same Property NOI excludes the following:

(i) properties acquired or placed in service during 2023 and 2024;

(ii) the multifamily rental units and commercial portion at One Loudoun Downtown – Pads G & H, (iii) Shoppes at Quarterfield, Circle East and The Landing at Tradition – Phase II, which were reclassified from active redevelopment into our operating portfolio in June 2022, September 2022 and June 2023, respectively, (iv) our active development and redevelopment projects at Carillon medical office building and The Corner – IN, (v) Hamilton Crossing Centre and Edwards Multiplex – Ontario, which were reclassified from our operating portfolio into redevelopment in June 2014 and March 2023, respectively;

(vi) properties sold or classified as held for sale during 2022 and 2023;

and (vii) office properties.

(2) Decrease in leased and economic occupancy percentages is primarily attributable to the Bed Bath & Beyond Inc.

(ii) The Landing at Tradition – Phase II, which was reclassified from active redevelopment into our operating portfolio in June 2023;

(iii) our active development and redevelopment projects at The Corner – IN and One Loudoun Expansion;

(iv) Hamilton Crossing Centre and Edwards Multiplex – Ontario, which were reclassified from our operating portfolio into redevelopment in June 2014 and March 2023, respectively;

(v) properties sold or classified as held for sale during 2023 and 2024;

and (vi) office properties, including Carillon medical office building, which was reclassified from active redevelopment into our office portfolio in December 2024.

(2) Excludes leases that are signed but for which tenants have not yet commenced the payment of cash rent;

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(3) Includes non-cash activity across the portfolio as well as NOI from properties not included in the Same Property Pool, including properties sold during both periods.

Our Same Property NOI increased 4.8% in 2023 compared to 2022 primarily due to contractual rent growth, higher base rent driven by positive new and renewal leasing spreads, lower bad debt expense, and an increase in overage rent from certain tenants.

Our Same Property NOI increased 3.0% in 2024 compared to 2023 primarily due to contractual rent growth, higher base rent driven by positive new and renewal leasing spreads, and an increase in specialty leasing income from certain tenants, partially offset by higher bad debt expense.

Funds From Operations

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The NAREIT white paper defines FFO as net income (calculated in accordance with GAAP), excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

Considering the nature of our business as a real estate owner and operator, the Company believes that FFO is helpful to investors in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains or losses from sales of depreciated property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult.

FFO excludes the 2021 gain on sale of the ground lease portfolios as these sales were part of our capital strategy distinct from our ongoing operating strategy of selling individual land parcels from time to time.

FFO (a) should not be considered as an alternative to net income (calculated in accordance with GAAP) for the purpose of measuring our financial performance, (b) is not an alternative to cash flow from operating activities (calculated in accordance with GAAP) as a measure of our liquidity, and (c) is not indicative of funds available to satisfy our cash needs, including our ability to make distributions.

depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult.

FFO (a) should not be considered as an alternative to net income (calculated in accordance with GAAP) for the purpose of measuring our financial performance, (b) is not an alternative to cash flows from operating activities (calculated in accordance with GAAP) as a measure of our liquidity, and (c) is not indicative of funds available to satisfy our cash needs, including our ability to make distributions.

Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.

From time to time, the Company may report or provide guidance with respect to “FFO, as adjusted,” which removes the impact of certain non-recurring and non-operating transactions or other items the Company does not consider to be representative of its core operating results including, without limitation, (i) gains or losses associated with the early extinguishment of debt, (ii) gains or losses associated with litigation involving the Company that is not in the normal course of business, (iii) merger and acquisition costs, (iv) the impact on earnings from employee severance, (v) the excess of redemption value over carrying value of preferred stock redemption, and (vi) in 2022 and 2021, the impact of prior period bad debt or the collection of accounts receivable previously written off (“prior period collection impact”) due to the recovery from the COVID-19 pandemic, which are not otherwise adjusted in the Company’s calculation of FFO.

Our calculations of FFO and reconciliation to net income and FFO, as adjusted, for the years ended December 31, 2023, 2022 and 2021 (unaudited) are as follows (dollars in thousands) :

From time to time, the Company may report or provide guidance with respect to “FFO, as adjusted,” which removes the impact of certain non-recurring and non-operating transactions or other items the Company does not consider to be representative of its core operating results including, without limitation, (i) gains or losses associated with the early extinguishment of debt, (ii) gains or losses associated with litigation involving the Company that is not in the normal course of business, (iii) merger and acquisition costs, (iv) the impact on earnings from employee severance, (v) the excess of redemption value over carrying value of preferred stock redemption, and (vi) the impact of prior period bad debt or the collection of accounts receivable previously written off (“prior period collection impact”) due to the recovery from the COVID-19 pandemic, which are not otherwise adjusted in the Company’s calculation of FFO.

Core Funds From Operations (“Core FFO”) is a non-GAAP financial measure of operating performance that modifies FFO for certain non-cash transactions that result in recording income or expense and impact the Company’s period-over-period performance, including (i) amortization of deferred financing costs, (ii) non-cash compensation expense and other, (iii) straight-line rent related to minimum rent and common area maintenance, (iv) market rent amortization income, and (v) amortization of debt discounts, premiums and hedge instruments.

The Company believes that Core FFO is useful to investors in evaluating the core cash flow-generating operations of the Company by adjusting for items that we do not consider to be part of our core business operations, allowing for comparison of core operating performance of the Company between periods.

Core FFO should not be considered as an alternative to net income as an indicator of the Company’s performance or as an alternative to cash flow as a measure of liquidity or the Company’s ability to make distributions.

The Company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other REITs, and therefore, may not be comparable to such other REITs.

Our calculations of FFO and reconciliations to net income (loss), FFO, as adjusted, and Core FFO for the years ended December 31, 2024, 2023 and 2022 (unaudited) are as follows (dollars in thousands) :

Year Ended December 31,

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net income attributable to noncontrolling interests in properties (280) (257) (623)

gain on sales of operating properties, net (22,601) (27,069) (31,209)

loss (gain) on sales of operating properties, net 864 (22,601) (27,069)

gain on sale of unconsolidated property, net (2,325) — —

impairment charges 66,201 477 —

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Limited Partners’ interests in FFO (7,889) (6,447) (5,395)

(6,447) (5,395) (1,945)

FFO attributable to common shareholders (1)

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FFO, as adjusted, per share of the Operating Partnership – diluted $ 2.07 $ 2.03 $ 1.93

FFO, as adjusted, of the Operating Partnership (1)

$ 463,723 $ 453,337 $ 429,609

Amortization of deferred financing costs 4,650 3,609 3,163

Non-cash compensation expense and other 11,276 11,063 10,897

Straight-line rent – minimum rent and common area maintenance 12,085 11,820 16,660

Market rent amortization income 10,082 12,117 4,826

Amortization of debt discounts, premiums and hedge instruments 13,592 19,503 20,140

Core FFO of the Operating Partnership $ 443,890 $ 424,569 $ 402,043

Core FFO per share of the Operating Partnership – diluted $ 1.99 $ 1.90 $ 1.93

(1) “FFO of the Operating Partnership” measures 100% of the operating performance of the Operating Partnership’s real estate properties.

“FFO attributable to common shareholders” reflects a reduction for the redeemable noncontrolling weighted average diluted interest in the Operating Partnership.

Earnings before Interest, Tax, Depreciation, and Amortization (“EBITDA”)

We define EBITDA, a non-GAAP financial measure, as net income before interest expense, income tax expense of the TRS, and depreciation and amortization.

For informational purposes, we also provide Adjusted EBITDA, which we define as EBITDA less (i) Adjusted EBITDA from unconsolidated entities, (ii) gains on sales of operating properties or impairment charges, (iii) merger and acquisition costs, (iv) other income and expense, (v) noncontrolling interest Adjusted EBITDA, and (vi) other non-recurring activity or items impacting comparability from period to period.

Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”)

We define EBITDA, a non-GAAP financial measure, as net income before interest expense, income tax expense of the TRSs, and depreciation and amortization.

For informational purposes, we also provide Adjusted EBITDA, which we define as EBITDA less (i) EBITDA from unconsolidated entities, as adjusted, (ii) gains on sales of operating properties or impairment charges, (iii) merger and acquisition costs, (iv) other income and expense, (v) noncontrolling interest Adjusted EBITDA, and (vi) other non-recurring activity or items impacting comparability from period to period.

Annualized Adjusted EBITDA is Adjusted EBITDA for the most recent quarter multiplied by four.

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Interest expense 32,706

Income tax expense of taxable REIT subsidiary 449

Income tax benefit of taxable REIT subsidiaries (186)

EBITDA 151,759

Unconsolidated Adjusted EBITDA 828

Gain on sales of operating properties, net (133)

Unconsolidated EBITDA, as adjusted 1,134

Loss on extinguishment of debt 180

Other income and expense, net (5,618)

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Company share of unconsolidated joint venture debt 44,569

Partner share of consolidated joint venture debt (2)

cash, cash equivalents, and restricted cash (43,986)

debt discounts, premiums and issuance costs, net 1,255

Partner share of consolidated joint venture debt (2)

Company’s consolidated debt and share of unconsolidated debt 3,262,953

cash, cash equivalents, restricted cash and short-term deposits (485,280)

Company share of Net Debt $ 2,777,673

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We continuously monitor the capital markets and may consider raising additional capital through the issuance of our common or preferred shares, unsecured debt securities, or other securities.

As of December 31, 2023, we had approximately $36.4 million in cash and cash equivalents on hand, $5.0 million in restricted cash and escrow deposits, $1.1 billion of remaining availability under the Revolving Facility, and $269.6 million of debt maturities due in 2024.

During the year ended December 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 and repaid the $95.0 million principal balance of the 4.23% senior unsecured notes due 2023 using available cash on hand.

In January 2024, we issued $350.0 million aggregate principal amount of 5.50% senior unsecured notes due 2034, which we expect will be used to satisfy all 2024 debt maturities.

As of December 31, 2024, we had approximately $128.1 million in cash and cash equivalents on hand, $5.3 million in restricted cash and escrow deposits, $350.0 million in short-term deposits, and $1.1 billion of remaining availability under the Revolving Facility compared to $430.0 million of debt maturities due in 2025.

During the year ended December 31, 2024, we completed (i) a public offering of the Notes Due 2034, the proceeds of which were used to satisfy all 2024 debt maturities and

for general corporate purposes, and (ii) a public offering of the Notes Due 2031, the proceeds of which are currently invested in short-term deposits that will be used to repay the $350.0 million principal balance of the 4.00% senior unsecured notes due March 2025.

We believe we will have adequate liquidity over the next 12 months and beyond to operate our business and meet our cash requirements.

We derive the majority of our revenue from tenants who lease space from us under existing lease agreements at each of our properties.

Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our tenants.

in the banking sector, tenant bankruptcies, inflation, labor shortages, supply chain constraints, and/or increasing energy prices and interest rates, among other events, could adversely affect the ability of some of our tenants to meet their lease obligations.

Therefore, our ability to generate cash from operations is dependent upon the rents that we are able to charge and collect from our tenants.

While we believe that the nature of the properties in which we typically invest—primarily neighborhood and community shopping centers—provides a relatively stable revenue flow, an economic downturn, instability in the banking sector, tenant bankruptcies, inflation, labor shortages, supply chain constraints, severe weather events, and/or increasing energy prices and interest rates, among other events, could adversely affect the ability of some of our tenants to meet their lease obligations.

Our Principal Capital Resources

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As of December 31, 2024, we had approximately $1.1 billion available under the Revolving Facility for future borrowings.

We also had $36.4 million in cash and cash equivalents as of December 31, 2023.

We also had $478.1 million in cash, cash equivalents and short-term deposits as of December 31, 2024.

We were in compliance with all applicable financial covenants under the Revolving Facility, unsecured term loans and senior unsecured notes as of December 31, 2024.

On November 16, 2021, the Company filed with the SEC a shelf registration statement on Form S-3, which is effective for a term of three years, relating to the offer and sale, from time to time, of an indeterminate amount of equity and debt securities.

On June 7, 2024, the Company filed with the SEC a new shelf registration statement on Form S-3, which is effective for a term of three years, relating to the offer and sale, from time to time, of an indeterminate amount of equity and debt securities.

Equity securities may be offered and sold by the Parent Company, and the net proceeds of any such offerings would be contributed to the Operating Partnership in exchange for additional General Partner Units.

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From time to time, we may issue securities under this shelf registration statement for general corporate purposes, which may include acquisitions of additional properties, repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment, and/or improvement of properties in our portfolio, working capital, and other general purposes.

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.

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.

The Operating Partnership intends to use the net proceeds, if any, to repay borrowings under the 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 December 31, 2023, the Company has not sold any common shares under the ATM Program.

In the future, we will continue to monitor the capital markets and may consider raising additional capital through the issuance of our common or preferred shares or other securities.

In the future, we will continue to monitor the capital markets and may consider raising additional capital through the issuance of our common shares, preferred shares, or other securities.

We may also raise capital by disposing of properties, land parcels, or other assets that are no longer core components of our growth strategy.

The sale price may differ from our carrying value at the time of sale.

The sales price may differ from our carrying value at the time of sale.

Our Principal Liquidity Needs

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Near-Term Debt Maturities .

As of December 31, 2023, we had no secured debt, excluding scheduled monthly principal payments, and $269.6 million of unsecured debt scheduled to mature in 2024.

We believe we have sufficient liquidity to repay these obligations with proceeds from the Notes Due 2034, available cash on hand, and borrowings on the Revolving Facility.

As of December 31, 2024, we have no secured debt, excluding scheduled monthly principal payments, and $430.0 million of unsecured debt scheduled to mature in 2025.

We believe we have sufficient liquidity to repay this obligation through a combination of proceeds from the Notes Due 2031, cash flows generated from operations, capital markets transactions, and borrowings on the Revolving Facility.

Other Short-Term Liquidity Needs.

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Such requirements cause us to have substantial liquidity needs over both the short and long term.

Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our operating properties, scheduled interest and principal payments on our debt of approximately $125 million and $5.1 million, respectively, in 2024, expected dividend payments to our common shareholders and common unitholders, and recurring capital expenditures.

In February 2024, our Board of Trustees declared a cash distribution of $0.25 per common share and Common Unit for the first quarter of 2024, which is expected to be paid on April 12, 2024 to common shareholders and common unitholders of record as of April 5, 2024.

Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our operating properties, scheduled interest and principal payments on our debt of approximately $140 million and $5.2 million, respectively, in 2025, expected dividend payments to our common shareholders and common unit holders, and recurring capital expenditures.

In February 2025, our Board of Trustees declared a cash distribution of $0.27 per common share and Common Unit for the first quarter of 2025, which is expected to be paid on April 16, 2025 to common shareholders and common unit holders of

record as of April 9, 2025.

Future distributions, if any, are at the discretion of the Board of Trustees, who will continue to evaluate our sources and uses of capital, liquidity position, operating fundamentals, maintenance of our REIT qualification, and other factors they may deem relevant.

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During the year ended December 31, 2024, we incurred $25.8 million for recurring capital expenditures on operating properties and $90.9 million for tenant improvements and external leasing commissions, which includes costs to re-lease anchor space at our operating properties related to tenants open and operating as of December 31, 2024 (excluding development and redevelopment properties).

We currently anticipate incurring approximately $100 million of additional major tenant improvement costs related to leasing activity for space that is currently vacant at a number of our operating properties over the next 12 to 24 months.

We currently anticipate incurring approximately $120 million of additional major tenant improvement costs related to executed leases for tenants not yet open at a number of our operating properties over the next 12 to 24 months.

We believe we have the ability to fund these costs through cash flows from operations or borrowings on the Revolving Facility.

In 2023, certain retailers have filed for bankruptcy protection including Bed Bath & Beyond Inc., a tenant that, as of December 31, 2022, occupied 613,000 square feet across 23 locations in our portfolio and generated $8.3 million of annualized base rent.

As part of its bankruptcy process, three of Bed Bath & Beyond’s leases were acquired by other retailers and the remaining leases were rejected.

Re-leasing costs may be significant for the leases that were rejected, and we could experience a significant reduction in our revenues from those properties over the next 12 to 18 months.

During the year ended December 31, 2023, we completed major development construction activities at The Landing at Tradition – Phase II and placed this project in service.

In addition, we began redevelopment activities at Edwards Multiplex – Ontario and reclassified this property from our operating portfolio into redevelopment.

As of December 31, 2023, we had development projects under construction at Carillon medical office building and The Corner – IN.

Our share of total estimated costs for the two projects is $91.6 million, of which our share of the expected funding requirement is estimated to be $59.7 million.

As of December 31, 2023, we have incurred $29.6 million of these costs.

We anticipate incurring the majority of the remaining costs for these projects over the next 12 months and believe we have the ability to fund these projects through cash flows from operations or borrowings on the Revolving Facility.

During the year ended December 31, 2024, we began development activities on the retail and office portions of the expansion project at One Loudoun Downtown (the “One Loudoun Expansion”), our mixed-use lifestyle center in the Washington, D.C.

We also completed the major redevelopment construction activities at Carillon medical office building in 2023 and reclassified the property from active redevelopment into our office portfolio in December 2024.

In addition to the One Loudoun Expansion, as of December 31, 2024, we had a development project under construction at The Corner – IN.

Our share of the total estimated costs for the two active projects is approximately $112.9 million to $122.9 million, of which our share of the expected funding requirement is approximately $65.0 million to $75.0 million.

As of December 31, 2024, we have not incurred any of these costs.

We anticipate incurring the majority of the costs for these projects over the next 12 to 24 months and believe we have the ability to fund these projects through cash flows from operations or borrowings on the Revolving Facility.

Share Repurchase Program

In February 2021, our Board of Trustees approved a share repurchase program under which the Company may repurchase, from time to time, up to an aggregate of $150.0 million of its common shares.

In April 2022, our 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 of its common shares (the “Share Repurchase Program”).

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

In April 2022, our Board of Trustees authorized a $150.0 million increase to the size of the share repurchase program, authorizing share repurchases 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 available 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 2024, the Company extended the Share Repurchase Program for an additional year to February 28, 2025, if not terminated or extended prior to that date.

In January 2025, the Company extended the Share Repurchase Program for an additional year to February 28, 2026, if not terminated or extended prior to that date.

As of December 31, 2024, the Company has not repurchased any shares under the Share Repurchase Program.

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We capitalize certain indirect costs, such as interest, payroll, and other general and administrative costs related to these development activities.

If we had experienced a 10% reduction in development and redevelopment activities, without a corresponding decrease in indirect project costs, we would have recorded additional expense of $0.4 million for the year ended December 31, 2023.

If we had experienced a 10% reduction in development and redevelopment activities without a corresponding decrease in indirect project costs, we would have recorded additional expenses of $0.4 million for the year ended December 31, 2024.

Impact of Changes in Credit Ratings on Our Liquidity

We have received investment-grade corporate credit ratings from three nationally recognized credit rating agencies.

These ratings did not change in 2023.

We received a positive credit rating outlook from one of the rating agencies in 2023.

During the year ended December 31, 2024, we received a credit rating upgrade with a stable outlook from two of the rating agencies and a positive credit rating outlook from the third rating agency.

In the future, these ratings could change based upon, among other things, the impact that prevailing economic conditions may have on our results of operations and financial condition.

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As of December 31, 2024, we had cash, cash equivalents and restricted cash of $133.6 million.

We may be subject to concentrations of credit risk with regards to our cash and cash equivalents.

We may be subject to concentrations of credit risk with regard to our cash and cash equivalents.

We place our cash and short-term investments with highly rated financial institutions.

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Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Our cash flow activities are summarized as follows (in thousands) :

The following table summarizes our cash flow activities (in thousands) :

Year Ended December 31,

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Net cash used in investing activities (498,991) (81,731) (417,260)

Net cash used in financing activities (393,457) (312,527) (80,930)

(Decrease) increase in cash, cash equivalents and restricted cash (80,540) 21,607 (102,147)

Cash, cash equivalents and restricted cash, beginning of year 121,970 100,363

Cash, cash equivalents and restricted cash, end of year $ 41,430 $ 121,970

Net cash provided by (used in) financing activities 172,085 (393,457) 565,542

Increase (decrease) in cash, cash equivalents and restricted cash 92,122 (80,540) 172,662

Cash, cash equivalents and restricted cash, at beginning of year 41,430 121,970

Cash, cash equivalents and restricted cash, at end of year $ 133,552 $ 41,430

Cash provided by operating activities was $419.0 million for the year ended December 31, 2024 and $394.6 million for the same period of 2023.

The cash flows were positively impacted by an increase in net operating income.

The cash flows were positively impacted by an increase in net operating income and interest income received from the short-term certificates of deposit.

Cash used in investing activities was $499.0 million for the year ended December 31, 2024 and $81.7 million for the same period of 2023.

Highlights of significant cash sources and uses in investing activities are as follows:

• We received net proceeds of $140.9 million from the sale of Kingwood Commons, the undeveloped land and related parking garage at Pan Am Plaza, Reisterstown Road Plaza, Eastside, and other land parcels in 2023 compared to net proceeds of $80.4 million from the sale of Plaza Del Lago, a portion of Hamilton Crossing Centre and other land parcels in 2022;

• We acquired Prestonwood Place in 2023 for $78.3 million compared to the acquisitions of Pebble Marketplace, the two-tenant building adjacent to MacArthur Crossing and Palms Plaza in 2022 for $100.1 million;

• We received the proceeds from a $125.0 million short-term deposit that matured on April 7, 2022 during the year ended December 31, 2022;

• We invested $615.0 million of proceeds from the Notes Due 2034 and the Notes Due 2031 in short-term certificates of deposit in 2024 and received $265.0 million in principal upon maturity of the certificates of deposit that matured in June and July 2024;

• We acquired Parkside West Cobb in 2024 and made an acquisition deposit related to the purchase of Village Commons for $40.6 million compared to the acquisition of Prestonwood Place for $78.3 million in 2023;

• We received net proceeds of $43.6 million from the sale of Ashland & Roosevelt, six parcels of land, and the receipt of an escrow related to the disposition of Reisterstown Road Plaza in 2024 compared to net proceeds of $140.9 million from the sale of Kingwood Commons, the undeveloped land and related parking garage at Pan Am Plaza, Reisterstown Road Plaza, Eastside, and four parcels of land in 2023;

• Capital expenditures decreased by $1.6 million primarily related to the timing of capital projects along with a change in construction payables of $0.5 million in 2024;

Cash used in financing activities was $393.5 million for the year ended December 31, 2023 and $312.5 million for the same period of 2022.

• We contributed a total of $13.2 million to unconsolidated joint ventures in 2024 primarily related to our share of the repayment of the construction loan associated with the development of the Embassy Suites at the University of Notre Dame;

• We received a $1.6 million distribution upon the joint venture’s disposition of Glendale Center Apartments, of which we own an 11.5% interest, to a third party in 2024.

Cash provided by financing activities was $172.1 million for the year ended December 31, 2024 compared to cash used in financing activities of $393.5 million for the same period of 2023.

Highlights of significant cash sources and uses in financing activities are as follows:

• We borrowed $274.0 million on the Revolving Facility and received proceeds of $95.1 million from the origination of a mortgage payable in 2023 compared to borrowings of $155.0 million on the Revolving Facility and entering into a seven-year $300.0 million unsecured term loan in 2022;

• We repaid (i) $274.0 million of borrowings on the Revolving Facility, (ii) $175.4 million of mortgages payable, and (iii) the $95.0 million principal balance of the 4.23% senior unsecured notes in 2023 compared to repayments of (i) $210.0 million of borrowings on the Revolving Facility, (ii) a $200.0 million unsecured term loan that was scheduled to mature in 2023, and (iii) $159.0 million of mortgages payable in 2022;

• We received total proceeds of $693.0 million from the Notes Due 2034 and the Notes Due 2031 and borrowed $40.0 million on the Revolving Facility in 2024 compared to borrowings of $274.0 million on the Revolving Facility and proceeds of $95.1 million from the origination of a mortgage payable in 2023;

• We repaid the following in 2024:

(i) $149.6 million principal balance of the 4.58% senior unsecured notes that matured on June 30, 2024, (ii) $120.0 million unsecured term loan that matured on July 17, 2024, (iii) $40.0 million of borrowings on the Revolving Facility, and (iv) $5.1 million of mortgages payable compared to the following repayments in 2023:

(i) $274.0 million of borrowings on the Revolving Facility, (ii) $175.4 million of mortgages payable, and (iii) $95.0 million principal balance of the 4.23% senior unsecured notes that matured on September 10, 2023;

• We incurred $19.0 million in debt and equity issuance costs in 2024 primarily related to the restatement and extension of the Revolving Facility and the $250M Term Loan;

• We made distributions to common shareholders and holders of common partnership interests in the Operating Partnership of $225.5 million in 2024 compared to distributions of $213.5 million in 2023.

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Obligations in Connection with Projects Under Construction

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

We believe we currently have sufficient financing in place to fund these projects and expect to do so primarily through free cash flow or borrowings on the Revolving Facility.

In addition, we have provided a repayment guaranty on a $33.8 million construction loan associated with the development of the Embassy Suites at the University of Notre Dame, consistent with our 35% ownership interest.

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 December 31, 2023, the outstanding loan balance was $32.7 million, of which our share was $11.4 million.

We also provide repayment and completion guaranties on loans totaling $66.2 million associated with the development of The Corner mixed-use project in the Indianapolis MSA.

We provide 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 December 31, 2024, the outstanding balance of the loans was $68.4 million, of which our share was $34.2 million.

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Outstanding Indebtedness

The following table provides details on our outstanding consolidated indebtedness as of December 31, 2023 and 2022 (in thousands) :

The following table provides details on our consolidated indebtedness outstanding as of December 31, 2024 and 2023 (in thousands) :

December 31, 2024 December 31, 2023

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Mortgage indebtedness is collateralized by certain real estate properties and leases and is generally repaid in monthly installments of principal and interest with maturities over various terms through 2033.

The variable interest rate on mortgage indebtedness is based on the Bloomberg Short Term Bank Yield Index (“BSBY”) plus 215 basis points as of December 31, 2023.

As of December 31, 2023, the one-month BSBY interest rate was 5.44%.

The interest rate on our variable rate mortgage is based on SOFR plus 215 basis points as of December 31, 2024.

The one-month SOFR interest rate was 4.33% as of December 31, 2024.

Fixed interest rates on mortgages payable range from 3.75% to 5.73%.

Critical Accounting Estimates

Our significant accounting policies are more fully described in Note 2 to the accompanying consolidated financial statements.

Our significant accounting policies are more fully described in Note 2.

“Summary of Significant Accounting Policies” to the accompanying consolidated financial statements.

As disclosed in Note 2 , the preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the compilation of our financial condition and results of operations and, in some cases, require management’s most difficult, subjective or complex judgments.

Acquisition of Investment Properties

Real estate assets are recognized on our consolidated balance sheets at historical cost, less accumulated depreciation and amortization.

Upon acquisition of real estate operating properties, we estimate the fair value of acquired identifiable tangible assets (consisting of land, buildings and improvements) and identified intangible assets and liabilities (consisting of above-market and below-market leases and in-place leases), assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition based on an evaluation of information and estimates available at the acquisition date.

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

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

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

Fair value is determined for tangible assets and intangibles, including:

• the fair value of the building on an as-if-vacant basis and the fair value of land determined either by comparable market data, real estate tax assessments, independent appraisals or other relevant data;

• above-market and below-market in-place lease values for acquired properties, which are based on the present value (using an interest rate that reflects the risks 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.

The capitalized above-market and below-market lease values are amortized as a reduction of, or addition to, rental income over the term of the leases.

Should a tenant vacate, terminate its lease, or otherwise notify us of its intent to do so, the unamortized portion of the lease intangibles would be charged or credited to income as applicable;

• the value of having a lease in place at the acquisition date.

We use independent and internal sources for our estimates to determine the respective in-place lease values.

Our estimates of value use 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 related to the reimbursement of property operating expenses, and fair market rent received during the estimated lease-up period as if the space was vacant.

The value of in-place leases is amortized to depreciation and amortization expense over the remaining initial terms of the respective leases;

• the fair value of any assumed financing that is determined to be above- or below-market terms.

We use third party and independent sources for our estimates to determine the respective fair value of each mortgage and other indebtedness, including related derivative instruments, assumed.

The fair market value of each is amortized to interest expense over the remaining initial terms of the respective instruments.

We also consider whether there is any value to in-place leases that have a related customer relationship intangible value.

Characteristics we consider in determining these values include the nature and extent of existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, among other factors.

To date, we have not developed a tenant relationship that we consider to have a current intangible value.

We believe that the following discussion addresses our most critical

accounting policies, which are those that are most important to the compilation of our financial condition and results of operations and, in some cases, require management’s most difficult, subjective, or complex judgments.

Revenue Recognition

As a lessor of real estate assets, the Company retains substantially all of the risks and benefits of ownership and accounts for its leases as operating leases.

Contractual minimum base rent, percentage rent, and expense reimbursements from tenants for common area maintenance costs, insurance, and real estate taxes are our principal sources of revenue.

Base minimum rents are recognized on a straight-line basis over the terms of the respective leases.

Certain lease agreements contain provisions that provide for additional rents based on a tenant’s sales volume (contingent overage rent).

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

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

If we determine that collectibility is not probable, we recognize income only to the extent that cash has been received from the tenant.

We have accounts receivable due from tenants and are subject to the risk of tenant defaults and bankruptcies, which may affect the collection of outstanding receivables.

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

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

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

We recognize the sale of real estate when control transfers to the buyer.

As part of our ongoing business strategy, we will, from time to time, sell properties, land parcels and outlots, some of which are ground-leased to tenants.

Valuation of Investment Properties

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Depreciation and amortization are suspended during the held-for-sale period.

Revenue Recognition

As a lessor of real estate assets, the Company retains substantially all of the risks and benefits of ownership and accounts for its leases as operating leases.

Contractual minimum base rent, percentage rent, and expense reimbursements from tenants for common area maintenance costs, insurance and real estate taxes are our principal sources of revenue.

Base minimum rents are recognized on a straight-line basis over the terms of the respective leases.

Certain lease agreements contain provisions that provide for additional rents based on a tenant’s sales volume (contingent overage rent).

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

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

If we determine that collectibility is not probable, we recognize income only to the extent that cash has been received from the tenant.

We have accounts receivable due from tenants and are subject to the risk of tenant defaults and bankruptcies, which may affect the collection of outstanding receivables.

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

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

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

We recognize the sale of real estate when control transfers to the buyer.

As part of our ongoing business strategy, we will, from time to time, sell properties, land parcels and outlots, some of which are ground-leased to tenants.

Acquisition of Investment Properties

Real estate assets are recognized on our consolidated balance sheets at historical cost, less accumulated depreciation and amortization.

Upon acquisition of real estate operating properties, we estimate the fair value of acquired identifiable tangible assets (consisting of land, buildings and improvements) and identified intangible assets and liabilities (consisting of above-market and below-market leases and in-place leases), assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition based upon an evaluation of information and estimates available at the acquisition date.

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

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

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

Fair value is determined for tangible assets and intangible assets and liabilities, including:

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

The capitalized above-market and below-market lease values are amortized as a reduction of, or addition to, rental income over the term of the leases.

Should a tenant vacate, terminate its lease, or otherwise notify us of its intent to do so, the unamortized portion of the lease intangibles would be charged or credited to income as applicable;

• the value of having a lease in place at the acquisition date.

We use independent and internal sources for our estimates to determine the respective in-place lease values.

Our estimates of value use 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 related to the reimbursement of property operating expenses, and fair market rent received during the estimated lease-up period as if the space was vacant.

The value of in-place leases is amortized to depreciation and amortization expense over the remaining initial terms of the respective leases;

• the fair value of any assumed financing that is determined to be above- or below-market terms.

We use third-party and independent sources for our estimates to determine the respective fair value of each mortgage and other indebtedness, including related derivative instruments, assumed.

The fair market value of each is amortized to interest expense over the remaining initial terms of the respective instruments.

We also consider whether there is any value to in-place leases that have a related customer relationship intangible value.

To date, we have not developed a tenant relationship that we consider to have a current intangible value.

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 7. Management’s Discussion and Analysis