Kite Realty Group Trust (NYSE:KRG) executives used the company’s fourth-quarter 2025 earnings call to highlight a year of record leasing activity, significant capital recycling and share repurchases, while also laying out guidance that reflects a more measured transaction slate and an expected acceleration in same-property growth later in 2026.
2025 highlights: record leasing, portfolio shift and $300 million in buybacks
Chairman and CEO John Kite said the fourth quarter “concluded a year of outstanding execution,” pointing to nearly 5 million square feet leased during 2025, including the company’s highest annual new leasing volume in its history. Kite said demand across the portfolio helped the company improve lease structures, including higher rent escalators and better deal terms.
Executives also detailed a heavy year of capital allocation activity:
- Two joint ventures with GIC totaling about $1 billion of gross asset value.
- Sale of 13 properties and two land parcels for approximately $622 million.
- Use of proceeds to fund $300 million of share repurchases, which management said occurred at a significant discount to consensus NAV and around a 9% Core FFO yield at the time.
Kite said the dispositions reduced the percentage of annual base rent coming from power centers by 400 basis points versus the prior year and increased exposure to neighborhood, grocery, lifestyle and mixed-use assets. He added that the sales helped the company shed 21 watch list anchor boxes totaling about 578,000 square feet.
Operating trends: leasing strength and focus on embedded rent growth
Management said small shop leasing continued to improve. Kite noted the small shop lease rate increased 50 basis points sequentially and 110 basis points year-over-year, and he said the company intends to push shop lease rates higher in 2026 as part of a broader focus on long-term organic growth.
A key metric for the company is embedded rent escalators. Kite said embedded rent bumps for the portfolio are 180 basis points, up nearly 25 basis points from the first quarter of 2024, and reiterated a goal of reaching 200 basis points through asset rotation and negotiating higher annual bumps.
On lease terms, Kite said ongoing demand—particularly for anchor space—has given the company leverage to pursue improvements such as fewer fixed options, tighter use restrictions and more favorable co-tenancy provisions.
Development and acquisitions: One Loudoun expansion and Legacy West performance
Kite highlighted work at One Loudoun, describing it as a major mixed-use expansion that includes 86,000 square feet of retail, 33,000 square feet of office, 169 hotel rooms and 429 additional multifamily units. He said the retail portion is 65% leased to tenants including Arhaus, Williams-Sonoma, Pottery Barn, Tatte and Alo Yoga.
The company also discussed Legacy West, which Kite said has been outperforming original underwriting since its acquisition in April 2025 alongside a “world-class partner.” He said the property has signed or opened tenants including Watches of Switzerland, Ralph Lauren, The Henry, Buck Mason, 7th Avenue and adidas, and described Legacy West as helping open “a new tier of luxury tenant relationships.”
Financial results and 2026 guidance
Executive Vice President and CFO Heath Fear said Kite Realty earned $0.52 of NAREIT FFO per share and $0.51 of Core FFO per share in the fourth quarter. For full-year 2025, the company reported $2.10 of NAREIT FFO per share and $2.06 of Core FFO per share, with Core FFO per share up 3.5% year-over-year.
Fear said full-year same-property NOI growth was 2.9%, which he noted was 115 basis points above the company’s original guidance. He added that over the past four years, same-property NOI growth has averaged 4%.
On leasing pipeline, Fear said the signed-not-open (SNO) pipeline increased $4 million sequentially to $37 million of NOI after accounting for fourth-quarter dispositions, and the gap between leased and occupied space widened to 340 basis points. He said about 70% of the signed-not-open NOI is expected to come online in 2026.
For 2026, management issued NAREIT and Core FFO per share guidance of $2.06 to $2.12. At the midpoint, assumptions include:
- Same-property NOI growth of 2.75%
- Bad debt reserve of 100 basis points of total revenues
- Interest expense net of interest income of $121 million
The midpoint also assumes about $110 million of 1031 acquisitions in the first half of 2026, offset by approximately $150 million of non-core asset sales later in the year. Fear said same-property NOI growth is expected to be lower in the first half and then accelerate in the back half of 2026 and into 2027, due in part to bankruptcy rents collected early in 2025 and the timing of the SNO pipeline coming online.
Capital allocation, balance sheet and transaction timing
Management repeatedly emphasized balance sheet flexibility. Fear said the company ended the period with more than $1 billion in liquidity and net debt to EBITDA of 4.9x, below its long-term target of 5.0x to 5.5x.
On transaction timing, executives said 2025’s capital recycling and buybacks are expected to be accretive on an annualized basis, but the timing creates a $0.02 headwind into 2026 guidance. Fear said this reflects the gap between when disposition income rolls off and when proceeds are redeployed, including the timing of planned 1031 acquisitions.
During Q&A, the company said a portion of the planned 2026 dispositions includes City Center, with management describing expected proceeds as “mid-fifties” million dollars. Fear also said the weighted average transaction date for the 2026 disposition group is expected around August.
Executives said 2026 guidance includes a $0.04 headwind from “recurring but unpredictable” items, with management noting it had about $21.5 million of such items in 2025 and just under $13 million included for 2026. Fear also said the company chose a 100 basis point general bad debt reserve for 2026, citing The Container Store as a key factor.
Looking beyond the base plan, management reiterated it may pursue another round of larger-format, non-core dispositions opportunistically, depending on market conditions, tax considerations and potential earnings impact. Executives said their broader strategy remains focused on de-risking cash flows and increasing embedded rent growth, with the aim of improving long-term growth “over the next four or five years,” rather than optimizing only near-term results.
About Kite Realty Group Trust (NYSE:KRG)
Kite Realty Group Trust (NYSE: KRG) is a real estate investment trust that specializes in the ownership, development and management of open-air retail real estate. Headquartered in Indianapolis, Indiana, the company focuses on acquiring, developing and operating community and neighborhood shopping centers, as well as mixed-use properties that accommodate national, regional and local retailers.
Established in 1994, Kite Realty has grown its portfolio through strategic development projects, targeted acquisitions and selective dispositions.
