(NASDAQ: ROIC), Brixmor (NYSE: BRX), and Kimco (NYSE: KIM)) KRG owns a portfolio that consists of primarily grocery-anchored properties (~67%) as well as power/regional centers (~36%). Not unique to many peers (like Regency (NYSE: REG), Weingarten (NYSE: WRI), Retail Opportunity Investment Corp. Kite has a broad geographic reach that includes many major markets, such as Las Vegas, Dallas, Orlando, Raleigh, Indianapolis, and White Plans. Around 93% of the tenants are considered internet resistant / omni-channel and over 70% of ABR is coming from the top 50 MSAs. Kite’s portfolio consists primarily of need-based and value oriented retailers. The average size of each shopping center is ~200,000 square feet Today the Kite portfolio consists of 120 properties in 20 states with over 24 million square feet. Like many REITs during the last recession, much of its failures had to do with being overly cautious, and the banking crisis played a large role in the dividend cuts for many REITs.Īs you can see (below), since the last recession Kite has grown its portfolio in size considerably. We can now see why KRG has maintained a conservative payout ratio. Kite Realty Group went public on Aug(just over 12 years ago), and as evidenced by the snapshot below, the company grew rapidly and was forced to cut its dividend during the Great Recession, from $3.28 per share (in 2008) to $0.96 per share (in 2010).Īs illustrated below, KRG grew profits (or FFO) until, in 2008, its earnings stream took a hard hit. Kite Lost Its Wind During the Great Recession Based on my previous research (almost 2 years ago) I was bullish with Kite, and the potential for the company to increase its earnings and dividend power. Post AMZN/WFM news, I thought that it would be appropriate to take a closer look at Kite to determine whether there’s an outsized opportunity to become a larger investor in the shares. This disruptive news serves to validate the strength of brick-and-mortar and the appeal for investing in high-quality grocery-anchored shopping centers. Kite appears to be attractive, based upon my quantitative research…over the next 5 years, I believe there will be increased M&A (and privatization) in the shopping center sector, and Kite should be a leading consolidator.Īs you know, there has been a lot of activity since my last article on Kite, notably Amazon ( AMZN) recently announced the proposed acquisition of Whole Foods ( WFM). You may recall that I first added Kite Realty ( NYSE: KRG) to my research in 2015, in which I added a modest amount of capital and commenced a BUY recommendation. I’m sure you know the lyrics to the song from Walt Disney’s film Mary Poppins.īefore you get nauseous, I promise you that I will not be singing “Let’s Go Fly A Kite” today, I am only writing about a Kite that I am reiterating on my BUY list.
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