Kite Realty Group (NYSE: KRG) announced that its operating partnership, Kite Realty Group, L.P., has closed its previously announced offering of $345 million aggregate principal amount of 3.25% exchangeable senior notes due 2032. The offering includes the full exercise by initial purchasers of their overallotment option for an additional $45 million aggregate principal amount of notes. The notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.

The notes are senior unsecured obligations of the operating partnership and accrue interest payable semi-annually in arrears on April 15 and October 15 of each year, beginning on April 15, 2027. The notes will mature on April 15, 2032, unless earlier exchanged, repurchased, or redeemed. Holders may exchange the notes for cash, common shares of beneficial interest with a par value of $0.01 per share, or a combination thereof. The exchange rate initially equals 28.2466 common shares per $1,000 principal amount of notes, equivalent to an exchange price of approximately $35.40 per share and an exchange premium of approximately 22.5% based on the closing price of $28.90 per share on June 29, 2026.

The operating partnership used a portion of the net proceeds to pay the cost of capped call transactions entered into with certain financial institutions, including the initial purchasers or their affiliates. These transactions are designed to reduce potential dilution to common shares upon exchange and offset cash payments exceeding the principal amount. The cap price is initially $41.91, representing a premium of approximately 45% over the last reported sale price of the common shares on June 29, 2026.

Remaining net proceeds, combined with recent asset disposition proceeds, were used to repurchase approximately $30 million of common shares concurrently with the pricing. The partnership also intends to use the proceeds to repay or redeem the entire $300 million aggregate principal amount of 4.00% senior unsecured notes due 2026 at or prior to maturity.

Key Offering Details

Kite Realty Group sold City Center, a multi-level mixed-use asset in White Plains, New York, for gross proceeds of $50 million. The transaction, announced on June 26, 2026, advances the company's capital recycling objectives, consistent with commentary from its most recent earnings call.

Capital Recycling Strategy

The sale of City Center reflects KRG's ongoing strategy to optimize its portfolio. The company intends to provide additional details on the use of the sale proceeds and its remaining 2026 capital allocation activity during its next earnings call.

Asset Overview

City Center is a multi-level mixed-use asset located in White Plains, New York. The property was part of KRG's portfolio of open-air shopping centers and mixed-use destinations, which is concentrated in high-growth Sun Belt and select strategic gateway markets.

Kite Realty Group Profile

Kite Realty Group is a real estate investment trust (REIT) with over six decades of experience in developing, operating, and investing in real estate. The company has been publicly listed since 2004.