Thank you for standing by, and welcome to Kite Realty Group Trust fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to your host, Senior Vice President, Corporate Marketing and Communications, Bryan McCarthy. Please go ahead. Thank you, and good morning, everyone. Welcome to Kite Realty Group's fourth quarter earnings call. Some of today's comments contain forward-looking statements that are based on assumptions of future events and are subject to inherent risks and uncertainties. Actual results may differ materially from these statements. For more information about the factors that can adversely affect the company's results, please see our SEC filings, including our most recent 10-K. Today's remarks also include certain non-GAAP financial measures. Please refer to yesterday's earnings press release available on our website for reconciliation of these non-GAAP performance measures to our GAAP financial results. On the call with me today from Kite Realty Group, our Chairman and Chief Executive Officer, John Kite, President and Chief Operating Officer, Tom McGowan, Executive Vice President and Chief Financial Officer, Heath Fear, Senior Vice President and Chief Accounting Officer, Dave Buell, and Senior Vice President, Capital Markets and Investor Relations, Jason Colton. I will now turn the call over to John. Thanks, Bryan, and thank you, everyone for joining us today. While we've certainly been looking forward to this call today for quite some time, today is our first opportunity to truly quantify and articulate the benefits of our highly accretive merger. We closed on the transaction in late October, and since then have been working tirelessly to complete the integration and implement KRG's culture and operating philosophy across the combined organization. The timing of the merger was impeccable, and KRG was positioned perfectly to take advantage of the opportunity. It's now become clear that the merger is even better than we anticipated. Today, I'm gonna speak about three horizons of opportunity for KRG. Those opportunities that are immediately in front of us, those that we'll cultivate over the next 18-24 months, and those that will materialize over the long term. The most immediate benefit of the merger, of course, is the significant earnings accretion. As set forth in our press release, we're providing 2022 full year FFO as adjusted guidance of $1.69-$1.75. Heath will give additional color as to the underlying assumptions. As mentioned in our press release, the midpoint of our guidance represents a 33% increase over KRG's full year 2020 FFO per share. While we've only owned the legacy RPAI assets since October 22nd, we quickly jumped headfirst into attacking operational efficiencies with an intense focus, as always, on our leasing efforts. Against a backdrop of strong demand from a deep and diverse set of retailers, KRG is experiencing significant leasing momentum across all of our open-air product types. In fact, we're noticing that national retailers are now looking more intently for space across the open-air spectrum, which dovetails nicely with our high quality and well-located properties. These positive trends are readily evidenced in our fourth quarter and full year leasing results. During the fourth quarter, KRG leased over 900,000 sq ft at a very strong 12.9% blended cash spread on comparable new and renewal leases. The blended spread on our fourth quarter comparable non-option renewals was 10.2%. This is a strong indicator of where market rents are headed for the KRG portfolio. For the full year, KRG leased over 2.6 million sq ft at blended cash spreads on a comparable deals of 10.7%. As a reminder, those leasing statistics, including the leasing activity from the legacy RPAI portfolio, are since October 22nd. If we include the activity from the legacy RPAI assets for all of 2021, we leased over 5.1 million sq ft for the combined portfolio. Based on this progress, our retail lease percentage stands at 93.4%, up 220 basis points over last year, and yet we still have significant upside. The portfolio has signed not open NOI of approximately $33 million, which will primarily come online during the back half of 2022 and the first half of 2023. This bodes extremely well for our growth trajectory going into 2023, as the rents from all these leases will be fully annualized. The good news is that the $33 million of signed not open NOI represents about half of the near-term leasing related NOI opportunity. As detailed in our investor presentation, leasing our active developments and the balance of the portfolio to pre-pandemic levels, which is very achievable in the current environment, would equate to an additional $34 million of NOI coming online over the next few years over and above the $33 million of signed not opened NOI. Our increased scale and improved balance sheet represent a host of immediate opportunities, including the potential for lower debt costs, increased liquidity in our stock, and enhanced relevance with our tenants and vendors. We are marching toward completing the active development projects detailed in our supplemental. It's important to note that we reevaluated every in-process legacy RPAI project solely on a forward-looking basis. Based on KRG's underwritten incremental NOI related to the active developments, we are anticipating very solid returns. We're meticulously reviewing the land bank also disclosed in our investor deck, in addition to a multitude of other opportunities embedded within the KRG portfolio. We have learned over the years that each project is unique and requires a customized approach in order to achieve the best risk-adjusted returns. Sometimes that means bringing in an experienced JV partner or monetizing the land. For example, during the quarter, we entered into an agreement with Republic Airways to develop a new $200 million corporate campus on an outdated retail location owned by KRG in Carmel, Indiana. We knew the highest and best use of the land was no longer retail. Therefore, we sold a portion of the land to Republic Airways for approximately $7 million and will serve as the master developer of their campus. KRG will not only receive a sizable development fee, but also a profit component, all the while putting 0 KRG capital at risk. The cash from this development will be recycled into an income-producing investment, a big win for KRG on a site that was not generating any NOI. This is one of several examples detailed in our investor presentation where KRG creatively generated high-risk adjusted returns for our shareholders. I'm very optimistic about the long-term outlook. It should come as no surprise that in the near term, we will be spending a significant amount of capital on leasing. Looking beyond the next few years, we begin to generate substantial additional free cash flow while also naturally deleveraging. We're setting up to be in a very liquid and favorable position with a net debt to EBITDA in the low- to mid-5x. While I can't predict the macro environment, I'm confident we will be ready to respond aggressively regardless. Before I turn the call to Heath, it's important that I note all the great opportunities that I just outlined are ancillary benefits of the merger. We did this deal because we love the real estate and saw significant upside potential, period. Having been in this business for over 30 years, having visited nearly every legacy RPAI asset, I can unequivocally tell you that the quality of our portfolio improved by virtue of the merger. When I see what's happened in the private market valuations over the past six months, I couldn't be happier with respect to the timing of our transaction. We doubled down on the amount of GLA that we have in our warmer, cheaper markets. These markets continue to benefit from household and employer migration, which is a trend we don't see changing anytime soon. We have a sector leading presence with over 60% of our ABR in these markets, 40% alone being in Texas and Florida. The merger also provided KRG with a new or enhanced scale in key gateway markets such as Washington, D.C., New York, and Seattle. These world-class cultural, educational, health, and lifestyle hubs have endured the test of time and are home to many of the opportunities that we discussed. In summary, there's nothing better than owning high-quality assets in high-quality places. As the world opens back up, I encourage each one of you to join us on a property tour and see the quality firsthand. As always, I wanna thank the entire KRG team for their hard work and dedication. KRG is nothing without our tremendous people. I can't emphasize enough how excited I am about what we've accomplished as a team, but more importantly, what we'll accomplish together in the future. I'll now turn the call to Heath to provide more color on the quarterly results. Thanks, John, and good morning, everyone. I want to echo John's excitement and confidence in the path that lies ahead. The opportunity in front of us is absolutely energizing. On the integration front, our substantial efforts to date have enabled the combined organization to operate at a high level and truly embrace our internal motto of one team, one focus. Before I discuss KRG's fourth quarter results, please keep in mind that they're a bit clunky by virtue of the fact that we closed the merger on October 22nd. While the results are from the combined portfolios, we only have two months and nine days of contribution from the legacy RPAI assets. For the fourth quarter, KRG generated $0.43 of FFO per share. As compared to NAREIT, our as adjusted FFO results add back in the $76 million of merger-related costs and deducts the $400,000 of net prior period activity. For the full year, KRG generated $1.50 of FFO per share as compared to NAREIT. Our as adjusted FFO adds back in the $87 million of merger-related costs and deducts the $3.7 million of prior period activities. Our same property growth for the fourth quarter and full year is 7.2% and 6.1% respectively. These results are primarily driven by a reduction in bad debt as compared to the prior year periods. Absent the net contribution from prior period activities, the fourth quarter and the full year same property NOI growth is 6.8% and 4.3% respectively. These metrics and a host of others are set forth on the new summary page in our revised supplemental. We hope you like the changes. Our balance sheet and liquidity profile not only remains solid, but continue to improve. Our net debt to EBITDA was 6x, down from 6.1x last quarter. Adding in $33 million of signed but not open NOI from the combined portfolio, our net debt to EBITDA would be 5.6x. We are in a great position to not only weather any storm, but to also take advantage of any opportunities that present themselves. As John alluded to earlier, we are providing FFO as adjusted guidance of $1.69-$1.75 per share. The variance from NAREIT FFO is approximately $0.02, which represents our estimate of $4 million of non-recurring merger-related costs. Furthermore, the accounting adjustments related to the legacy RPAI below market leases and above market debt contribute an incremental $0.06 of FFO per share to our 2022 guidance. This is a good indicator of our future ability to drive rents and reduce borrowing costs. Additional assumptions at the midpoint include neutral impact from any transactional activity and bad debt of 1.5% of total revenues. As you all know, providing same property NOI growth is a skewed proposition for the sector, given all the noise over the past few years. It is especially tricky right after a merger of two companies that approached the potential pandemic credit loss from different perspectives. In order to avoid any confusion, we are assuming same property NOI growth of 2% at the midpoint, excluding the net impact of prior period adjustments. This estimated 2% same property growth is primarily driven by occupancy gains and contractual rent bumps. Last week, KRG declared a dividend of $0.20 per share for the first quarter. This represents a 5% sequential increase and an 18% year-over-year increase. The dividend will be paid on or about April 15th to shareholders of record as of April 8th. One last thought before turning the call over for Q&A. In our press release, we touted the anticipated 33% growth of our 2022 FFO per share as compared to our 2020 FFO per share. I think another compelling comparison is to look at our original 2020 FFO guidance of $1.50 per share at the midpoint. Like our peers, we gave this guidance before the pandemic set in and reflected KRG's run rate after selling over $ 0.5 billion of assets in connection with Project Focus. Our 2022 per share guidance represents a 15% increase over our original 2020 per share guidance at the midpoint. During the course of 2021, many of you asked, when will your earnings return to pre-pandemic levels? On a per share basis, not only we returned to pre-pandemic levels, but we tacked on another 15%. Just another testament to the compelling accretion and synergies associated with our well-timed merger. Thank you to everyone for joining the call today. Operator, this concludes our prepared remarks. Please open the line for questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Floris van Dijkum of Compass Point. Your line is open. Thanks, guys, for taking my question. Heath, I just wanted to delve into this $0.06 below market lease adjustment a bit more. How should the market think about that? Is that just a one-off event? Does that just mean that you guys bought these things, you know, the RPAI assets cheaply? Or, how should investors think about that adjustment in your view? I think they should really look at the upside here, right? If we're getting a positive mark based on the below market rents and the leases, and we're getting a positive mark based on the above market debt, that means that we've got embedded growth pursuant to a, you know, an independent third party that looked at our leases, and that we should be able to borrow money at rates that are tighter than the debt that we assumed. I think yes, it's $0.06, but I think ultimately, at the end of the day, these are two very, very positive things that show you, again, it's one of the positive benefits of the merger. We got a great portfolio with great upside. Great. Maybe if I just follow up and, you know, maybe John, if I can get your views on this as well. Obviously, we estimated the yield at, you know, at the time of the transaction was 6.8%. Your stock price has fallen a little bit. Close to the time of the, you know, completion, it probably risen by almost 100 basis points to 7.8. Cap rates have clearly come down in the market. You know, what would you estimate this portfolio would trade at in today's market in light of the Donahue Schriber portfolio transaction, rumored yield and some of the other things? Maybe if you can comment a little bit on your own implied cap rates, which presumably will go up as a result of this transaction. The fact that you're writing these, you know, leases to market means your NOI goes up, although your AFFO is a little bit lower. Clearly, that has an impact on your share price and your value. If you could, John, maybe comment a little bit on, you know, the evolution of cap rates and particularly when it relates to KRG. All right, Floris, I'm gonna unpack that question. It's a heavy suitcase you just laid out there. Look, bottom line, you know, first of all, you know, it's great to be on the call. It's great to get the opportunity to finally be able to really show people how great of a transaction this really was. You know, we've been doing this a really long time, and you know, it's one of the best transactions I've ever seen. That's pretty simple. In terms of your question about cap rates and cap rate compression between when we first started working on this deal and now, you got to remember that, you know, that's almost a year, when we first engaged in conversations in April of last year. You know, cap rates have easily compressed 100-200 basis points across the spectrum. You know, if we were doing this deal today, there would just be a whole different ballgame. You know, I think the cap rate would obviously be significantly lower. That goes without question. You mentioned, you know, you've been on top of a lot of these trades. I mean, everything we're looking at, everything that's happening in the market with the wall of capital that is really pressing into retail right now across the board, I mean, you know, multiple transactions are trading in the 4s. It's pretty hard to get something, you know, that you like that's north of 5. You know, even just thinking about buying something at a 5, it used to be, "Okay, I could buy anything I wanted." You can't. The reality is, you know, we meant what we said when we said our timing was impeccable, but it wasn't by accident, you know? We said, when you go back to the beginning of COVID, I believe it was the first quarter call during the COVID, initial COVID issue, you know, we said we'd come out of it stronger. We knew we would, and we did come out stronger, and we took advantage of an incredible opportunity to put together two great companies that now makes one really, really good company that's top five in the space, and per your question, is trading at a significant discount for whatever reason. You asked me my view of cap of our NAV. Look, we put components out there for you guys to do the work that makes it reasonably easy. We don't throw NAVs around very lightly. If you just look at the consensus NAV from the, you know, 12 or 13 analysts that cover us, it's just under $25 the last time it was updated. I think it probably goes up from there. Last time I looked, you were around $27. Look, most smart people, you know, would value the company between, say, $25 and $29. You know, that's not me saying it. It's out there. People have those numbers out there. I wouldn't argue with the higher end of that. You know, we're out to prove and perform, and that's what we do. We will prove and perform. You know, I could go on. It's just a great deal. Thanks, John. Maybe if I can talk about, I know that you obviously have laid out your guidance for 2022, but it appears that you know that's based on you know relatively muted NOI growth. Are you stealing a page of David Simon's book and coming out with you know numbers that you think you could surpass later on this year? Well, I try not to steal from David. I make a habit of not doing that. But I would say, you know, I feel like our guidance that we put out is conservative. I think it's appropriately conservative in the beginning of a year. You know, although we're feeling, you know, pretty robust right now about our views and, you know, COVID still exists, so we have to. The reason that we use the 1.5% bad debt, you know, kind of number is that that's smart to do in the beginning of the year. Historically, pre-COVID, you know, that number would range between 75 basis points and 1. So, you know, we believe that's conservative but reasonable because you never know what's around the corner right now in the beginning of the year. Yeah, when I look at the guidance that we laid out and how Heath laid it out on the call, I look at the levers that we have as a larger organization, I would be disappointed if we weren't at the top end or better. Floris, I'll just add, when you said, you know, muted 2% NOI growth, you know, two things. Number one, our signed but not opened NOI, it comes on, as John said, in the back half of the year. We're really setting up tremendously well for 2022 and 2023. Also again, when you're thinking about our same store guidance, you gotta think about it in terms of the bad debt assumption, right? That's 1.5%. In a normal year, prior to pre-COVID, we were running 75-100. Again, we added in what we thought was an appropriate amount to make. You know, again, COVID's not gone, so we feel like this is a pretty conservative guidance and we aim to outperform it. Thanks, guys. Thank you. Thank you. Our next question comes from Todd Thomas of KeyBanc Capital Markets. Your line is open. Hi, thanks. John, you commented in your prepared remarks that, you know, it's clear that the RPAI merger is better than expected. Can you just talk a little bit about what specifically, you know, has trended better than expected? You know, how the RPAI portfolio is tracking versus plan, and maybe put some context around that comment and some detail, you know, around either occupancy gains or leasing activity, you know, or whether it's sort of, you know, some of the added benefits you mentioned around, you know, discussions with retailers, vendors, etc. I think it's all the above, Todd. I mean, let's start with NOI is higher than we thought it was gonna be, so that's a good place to be. You know, revenue's higher. Expenses are where we kind of thought they would be, which creates, you know, a better NOI picture. Again, I think we've been reasonably conservative as we pointed out already. You know, when you look at the fourth quarter and you look at our leasing spreads, you know, sector leading spreads, you know, at a basically 13%, that's the combined company from October 22nd on. You know, I think there was, you know, there may have been some concern around that particular topic that we have shown was an unnecessary concern. Quality of the assets, you know, we talked about that, you know, early on. You look at the metrics that the combined company has compared to the top five peers, and it's another way to triangulate why, you know, we should be trading at a much higher price than we are right now. I think the metrics, Todd, in terms of, you know, you look at demographics, you look at Super Zip, you look at ABR, you know, you just look at the quality that you can kind of discern from a metric, it's all there. You know, the leasing activity, as we mentioned, when you look at the combined leasing activity, if you would've had both companies for the year, is a tremendous number, you know, over 2.5 million sq ft. You know, just everything that we're looking at is better than we originally underwrote. I don't know how else to say that. The only one I would add, Todd, is the active development pipeline. I think when we got into this, we obviously didn't understand what all was contained and how it would be dealt with. This active development pipeline is very manageable when you go through each one of these properties and you look at $105 million that is yet to be spent. We have our arms around it already. We understand the execution, so you know, we feel comfortable there and look forward to the upside of that component as well. Okay, that's helpful. Then you know, at Kite, you had focused, you know, previously on increasing exposure to leases with fixed CAM over the years, and that helped drive your NOI margins higher. Expense recoveries, the expense recovery ratios came in a little bit with the integration of the RPAI portfolio this quarter. Are there plans to roll out fixed CAM across the RPAI portfolio and are there opportunities you see to, you know, relative to the roughly 72% NOI margin today to get back to a higher level? You know, how much upside do you think there could be over time, and what's the timeframe to do that? Yeah. First of all, there is no RPAI portfolio. It's just one portfolio, right? That we've talked about. One team, one focus. It means a lot to us. Yes, obviously bringing in the new properties, none of them were on fixed CAM. When you look at the combination, obviously it's gonna reduce our exposure to fixed CAM. It takes, you know, time, Todd. It took five years probably for that fixed CAM initiative to really get to the point where it was north of 50% of our portfolio and began to really pay benefits. We will do the same thing here, and we are doing the same thing as of this, you know, every real estate committee meeting that we have right now. You know, there was obviously deals that were in progress pre-closing that were done that would be not fixed CAM. Outside of that, it would be an aberration to not have fixed CAM. I would say that when you look at our margins and our recovery ratios, we were just way above the peer set. I mean, we're still now even in the combined numbers at the top end of the peer set. We'll drive that home. I mean, that's one of the things that we talked about that we do. That's a grind. We grind that out. We push hard to get that done. It'll take some time, but we definitely feel good about the ability to improve that over the next, you know, few years. Todd, to just put some numbers around that, every 25 basis point improvement in NOI margin is one share of FFO. Again, as John said, as we see what happened to our margins, we view this as a long-term opportunity. Okay. Heath, just for you on the balance sheet. The mortgage debt maturing through you know the balance of 2022, I guess really looks like April of 2023. You know should we assume like Baytown that they're mostly repaid at maturity with cash on hand or are you looking to refinance any of those? Yeah, Todd. As you remember, we did that exchangeable deal last year with the goal of paying off the 2022 mortgages. The reason why we didn't pay them off right away was because the open to par period is 90 days before the maturity date, so we're actually getting a yield maintenance savings by paying them off 90 days ahead. When you're modeling the payoff of the 2022 mortgages, just assume we're paying them all off at par, 90 days ahead of their maturity. Okay, got it. That's cash on hand and $125 million in the short-term deposits? Correct. Okay, got it. All right, thank you. Thank you. Thank you. Our next question comes from Alexander Goldfarb of Piper Sandler. Your question, please. Hey, morning out there. Just a question going back to sort of the guidance and, you know, you referenced the $0.06 from accounting benefit. How much has market rent growth impacted the numbers? When you look back sort of six months ago when you were penciling the deal versus now, how much benefit is from the overall market growing? I mean, obviously, it's a good thing, right? But just sort of curious for, you know, how much change has happened subsequent to you underwriting this deal, you know, both in actual market rent growth versus also what you found as you went through the RPAI and were busy, you know, combining it with legacy KRG. Yeah. Alex, I mean, I do think that's a factor in the sense that I mean, just look at our spreads, right? You look at a 13% blended spread 2024, which is the combined company, that would tell you right there that, you know, as you have said previously, that people underestimated lack of supply, right? We're talking about the demand equation, but we forget about equilibrium and how that plays a factor in all of economics. So the supply side was low. We're able to, you know, most often drive pretty strong rents. That's the other reason that we pointed to, you know, over 10% spreads on a cash basis in our non-option renewals, right? As you know, the non-option renewals are the opportunity for a tenant to say, "Look, I can just walk away from this lease. I don't have an option." You know, and it's the flip side is true for us. We can just say walk away. In that case, we've gotten a 10% cash spread plus with almost no TI associated with that. That's huge margin. I think it's just a play out of what the big picture looks like right now, which is that we're in the right business at the right time. John, can you give sort of perspective on how much market rent has grown in the past, you know, six months? Yeah. I mean, beyond the spreads, Alex, it's hard for me to, you know, I can tell you the spreads, you can see them. You can see that, you know, the leases we signed in terms of new leases in Q4 were over $25 a sq ft. I mean, look, I can't give you more than that outside of our own portfolio because I don't, you know, I'm not sure what people are doing outside of our portfolio. If we can, I mean, look, if we're growing rents, you know, on a cash basis, you know, north of 10%, like we have been for a while, it's a pretty damn good environment, Alex. Alex, I'd say another indicator of where the market rents are going is I can't remember being on real estate committee and having more deals where we've had multiple options for a space. When you're in a situation where obviously you can pick the player and you can drive rents, it's something we haven't seen for a very long time. Again, to the beginning of your question, that's why there was a positive mark-to-market, you know, on RPAI rents, right? Again, I think when we announced the deal, I'm not sure people would have guessed that one. Okay. Leads to the follow-up, which is on the supply side. You know, obviously in the, you know, basically since probably 2004, we haven't really had any new supply, and the stuff before that was driven either by rooftops or massive retailer rollouts. Do you see anything in the inkling that would either, you know, forebode supply or even if the rents pencil to make supply work or where we stand now, there's not enough retailer demand, in addition, there's not enough of a spread between construction costs and what, you know, the rents would have to be to even contemplate supply in a meaningful way? I mean, look, I think all those factors are part of what's kept new supply reasonable, you know, in a reasonable place. You also have to remember, you know, you talked about 2004, but I would say, Alex, when you went from 2004, probably 2001 - 2007, six years of a lot of construction and a lot of stuff that shouldn't have been built in the first place. It takes a long time for that to go away, and that's what has been playing out. This is obviously a very long time. You also have a lot of people that were in that merchant builders kind of retail business that are just gone, you know. People like us that have been doing this for a really long time, we expect to get high returns for this stuff, as Tom said, you know, in what we underwrote. I think the dynamics are there that would keep a lid on this for a while. It doesn't mean that, you know, at some point, someone who's, whatever, you know, 28 years old doesn't know what the hell I'm talking about and builds some spec. I mean, it happens, but it's very limited. No offense to the 28-year-olds, I didn't mean it that way. I mean, Alex, you gotta think outside the box. If you look at a handful of our properties, we're out getting tax increment financing and lowering bases and properties and being creative, working with municipalities to get the returns that we got. We know whatever we're gonna do, we're gonna have to look outside the box, be creative to make things work. Yeah, no, that's a good point. John, to your point, we were all 28 and, you know, at the time, so- That's right. Yeah, the experiences of mistakes last. Thank you. Thank you. Thank you. Our next question comes from Katy McConnell of Citi. Please go ahead. Thanks. Good morning, everyone. I just wanted to follow up on some of the non-core drivers within your guidance to better understand where you're coming in relative to expectations. Just wondering if you can comment on what you're assuming for total straight-line rent and size in 2022? Then on G&A, should we look to 4Q as a good run rate, or are you expecting further synergies from the merger to benefit 1Q? On the straight line, if you look at what we have in our 2022 model and you deduct RPAI's run rate straight line and KRG's run rate straight line prior to the merger, the difference is around $0.02 positive. However, that upside is split between the merger accounting that you just discussed and also new leases coming online. $0.02, but split between those two items. I'm sorry, what was the second part of your question, Katy? G&A. On the G&A, is the fourth quarter- The second part was on G&A. Yeah. Yeah. Is the fourth quarter a good run rate on the G&A? Listen, there's a lot of noise in the fourth quarter on the G&A. There's temporary employees, etc. There's merger-related expenses. So I would say that's not a good run rate. I will tell you that the, you know, the G&A savings that we articulated on the last call, you know, those are still intact, and the timing of those are still intact. I think, you know, going across the year, I think on a quarterly basis, you'll see G&A. Again, this is gonna be elevated by merger costs, etc. You're gonna see G&A somewhere around, I don't know, $12 million-$13 million a quarter. Okay, thanks. Now that you've broken out the office lease expiration separately, can you just speak to the 22% of ABR that expires this year and how much of that space you could potentially get back and just what the leasing environment looks like today? Yeah, we did have an outsized number in terms of percentage of ABR that would be expiring or coming due. I will tell you, they really come through two specific properties. One is Reisterstown and one is Fordham. In terms of working with the team, we are going to be in a position at real estate committee next week to handle about 150,000 sq ft of that, which is very positive. Then at Fordham, we're continuing to work on it. We do not have any great concern, even though there's no question that 22% range was a high number in terms of rolling leases. We have our arms around it, w e're leased up in our office components, not including active developments of close to 93%. It's a big charge for us as we push forward, and we're gonna be paying a lot of attention to the office portfolio. Only thing I would add to that, Katie, is when you look at it in totality against our total NOI, it's still a pretty small number. I mean, I guess it's cleaner to have it broken out like that, but it's not a number that is particularly scary at all. Makes sense. Okay, thanks, everyone. Thank you. Thank you. Our next question comes from Anthony Powell of Barclays. Your question, please. Hi, good morning. I think, John, you mentioned that you were seeing increased retail interest across the open-air spectrum. Maybe go into more detail on that point. What are you seeing in grocery-anchored, mixed-use power centers and whatnot? Yeah, thank you. I mean, I think what we're seeing is that you're seeing the retailers at, you know, obviously they're doing well. The backdrop of a lot of this is they're doing well. They've come out of COVID with just a vigor and an excitement about the business. They figured out their business from a margin perspective. They know that they are, you know, that the physical retail environment is the profitable outlet for them, so they're trying to push as much as of that into the stores as they can. What I meant by that was if you look at a tenant like, you know, like a Lululemon, or you look at a tenant like Sephora, or you look at a tenant like West Elm, you know, you might think those are tenants that would be lifestyle-type tenants only, or maybe they would go in mixed use. But we're doing deals with those guys right now in grocery anchored centers and community centers and power centers. You know, a lot of the brands. I mean, you look at adidas. I mean, we could go on and on with the brands that are doing that. The great thing for us is that, you know, we're well-represented across, you know, these kind of five food groups, the community centers, the neighborhood centers, mixed use, power and lifestyle. That said, you know, Anthony, we're still predominantly community and neighborhood, right? I mean, that's like almost 60% of our revenue is community and neighborhood. The other stuff supplements it, which gets us in front of people, and then they realize, damn, I wanna look at this whole portfolio, right? I want, I want an opportunity to sit down with KRG and look at the whole thing. That's what I meant by that, and it's just, it's just great for our team right now. Got it, thanks. Maybe on the bad debt, the 1.5% for this year, is that what we're actually seeing here in mid-February? Is that kind of what the actual number of kind of delinquent tenants in the portfolio right now? No. I would tell you for the course of 2021, it was 1.5%. However, that was front-weighted, and then as the year improved into the fourth quarter, it was more like 75%-100%. That was not a run rate most recently, but again, we thought it was a conservative number. Again, we don't have any reason to believe that we're gonna suffer that kind of credit loss. You know, our watch list right now is smaller than it's ever been. You saw a tremendous amount of wash out of the weaker tenants during COVID. As John mentioned, we're not out of this thing yet, right? We put in a number there that we felt comfortable with and that we fully intend to, should the world not take a drastic turn, outperform. Got it. Assuming there's no, I guess, major COVID setbacks, it's safe to assume, even though your guidance is 1.5% that, you should probably exit the year closer to that normal range. Is that fair? Yeah. I mean, I would say we're entering the year feeling like that we'll be there. I think we guided to something at the midpoint that was conservative because, you know, last summer we also felt the same way, and things changed a little bit. I highly doubt we'll go down that path that we did last summer where it got worse after the fact. That's why when you sit down at the beginning of the year and you're going through all your numbers, you know, you do something like that, Anthony. No, we're entering in the year well, you know, well below the 1.5%. All right. Thank you. Thank you. Thank you. Our next question comes from Wes Golladay of Baird. Your line is open. Everyone, can you talk about your expectations for leasing this year? Can you achieve the $5 million volume again? Are you gonna pivot more to small shop? Then lastly, can you talk about where you've seen on the tenant churn environment? Well, let me start with that and then Tom can get into it too. Look, when you look at 2022, Wes, when you look at 2023, that's what we were talking about. We still, you know, 2023 actually looks good as well. You know, I think entering the year, we still have this disproportional impact from the original, you know, Stein Mart fallout in the boxes that we had. That's why our spread, you know, between leased and occupied is pretty significant, which is frankly just a lot of upside. You know, we would like to pick up. You know, we don't guide to specific percentages on leasing 'cause of all the inputs and ebbs and flows. I would say within the next 24 months, you know, we would anticipate that we'll be back very close to where we were on a lease percentage, which will put our FFO per share, you know, well above where we are today. I think, you know, it's really going in the right direction. Tom, you wanna? Yeah, I'll talk about the boxes just real quickly because they're obviously huge drivers of lease percentage. If you take a look at what we have accomplished in the last year, we executed 27 deals, 27 boxes with a spread of 12%, but more importantly, you know, return on capital of 29%. The remaining 36 boxes that we have actually have a lower ABR at about $11.85. Once again, we feel like there's great spread potential there. More importantly, our pipeline through that 36, we're planning on putting a significant dent in that number. We're looking for a big year of leasing without question. We've got this new combined team, and everyone's gonna drive to the finish line, I can assure you that. Hey, Wes. I'll add one more thing. If you look at where our lease rate was at the end of 2019 and where it is at the end of 2021, we have one of the highest spreads. There's another 270 basis points of opportunity just to get us back to where we were in 2019. In addition to my commentary, I said, hey, listen, our FFO per share is already 15% over where it was pre-pandemic. We also have the largest upside in terms of leasing left in front of us. Got it. I wanna go back to that market rent commentary question. I guess what's the original expectation for the RPAI portfolio to have a maybe an above market rent when you acquired the assets? Just based on the S-4, it looked like it was gonna be a headwind to earnings this year on the pro forma. It looks like maybe market rent got stronger or you got a better handle of the assets and you saw more upside in them. Is that what was going on? No. I wouldn't say that we initially took a position that we thought that there was any above market rent. I maybe we just kind of assumed it would be neutral. You know, but as we got into it, you know, we looked at it obviously, again, this, you know, we got a third party involved, and we looked at it more deep, more granularly, and that's when you come up with the fact that you've got some positive rent marks. But and in terms of S-4, I'm guessing there was straight line rent involved in some of that as well. But, you know, bottom line, as I said, you know, Wes, when I was kind of giving my overall comment to why we did this deal, we knew there was upside, right? We knew we had upside from a leasing perspective, from an operational perspective, from a people perspective, real estate. It's why I said what I said at the end. I mean, we saw this opportunity. You gotta remember, it's pretty easy to look back right now and go, "Oh, well, you know, geez, that was easy. That was a good deal." Well, guess what? It was a little different last April when we first started talking about this. We had positioned the company to be one of the few that could even do it, right? I think people gotta look at their lens and kind of think back to what it was like and then maybe give us a little credit for a little foresight on a hell of a deal. Yeah, y ou definitely got the cap rate compression tailwind since then, so congratulations on that. Yep, thank you. Thanks. Thank you. Our next question comes from Linda Tsai of Jefferies. Your line is open. Hi. Good morning. On the same sort of guidance of 2% range of 1%-3%, what's the balance of revenue growth versus expense growth? The balance of revenue growth, the data drivers, as I said in my comments, were basically occupancy and rent bumps. In terms of the expense growth, I think that's, you know, again, where we're gonna be trying to improve our margins over time, but I don't think you're gonna see a huge pickup immediately over the course of the year. It's gonna be heavily weighted toward the revenues. Yeah. Linda, the other thing to remember there is obviously that includes the 1.5% bad debt, so, y ou know, that's your range really in the sense that, you know, if we were trending to more what we have been historically, it's probably closer to the 3% than it is the 2%. Got it. Why did economic occupancy decline 30 basis points? Yeah, that was in the same store pool. Again, that's only the historical KRG portfolio 'cause we didn't have the RPAI portfolio in that. Honestly, that 30 basis points was one deal. It was a Burlington that had vacated at one of our assets. Listen, that's one of the things of having a very small denominator, which we don't have anymore, is that you know, one deal can do some violence to your numbers. You also saw that the lease rate was up 30%, so I think that's the number that we care more about. That Burlington, I'm sorry, it was a Office Depot that left that's now being backfilled with a Burlington. It's one anchor deal at 30,000 sq ft moved the needle that much. That's the right trade. Office Depot. Yeah, we'll take that one. We'll take that. Just on the new cash spreads being so strong, can you just talk about what's driving that and to the extent that that's repeatable? Yeah. I mean, look, Linda, like we talked about, you know, really it's just everything. It's the real estate, it's the environment, it's the fact that we're still backfilling old Stein Marts, you know, is a chunk of that we talked about last year. We had more exposure than anybody else to that particular tenant, but the positive of that was that particular tenant paid single digit rents, you know. So that's a factor. I mean, look, as I said, you know, we're sector leading at 13% blended spreads. Will that moderate over time? When we fill up those boxes, I'm sure it comes down a little bit. But the reality is, you know, as long as we're generating, you know, near or above these double digit spreads, we're in a very healthy environment with limited supply. I feel pretty good about our chances of being able to outperform. Thanks. Thank you. Our next question comes from Chris Lucas of Capital One. Please go ahead. Hey, good morning, everybody. Just kind of going back to the tenant retention, question that was asked earlier. I guess just kind of curious as to maybe how you're seeing that this year compared to sort of pre-COVID levels. Sort of as an add-on to that, are you seeing anchors come to you at a rate that is higher than we saw previously for early, exercise of renewals? Hey, Chris. Yeah, I mean, I think the retention is kind of back to where it was, you know, pre-COVID in the sense that we're, you know, a little over 80%, probably 83%. I don't have in front of me, a little over 80% on retention. You know, that's kind of where we like to be. I mean, remember some of this, some of the loss is by our choice, right, in terms of rollovers that we don't, you know, that if someone has a non-option renewal, we may not renew them, right? A little over 80% is a good place to be, and it's where we were historically. In terms of early renewals, yes, I mean, we definitely have those conversations. Again, with our more meaningful portfolio that we have today, more impactful to the retailer, you know, I think that puts us in a position where, you know, that we're gonna hear a lot more from them, you know, on the front end. Yeah. A lot of that will just relate to where they sit in the market currently. If we feel like we have a strong market rent, and they wanna come in and work with us on a 10-year deal versus a five, we're always willing to listen to that, but it's gonna come down to basic economics. Okay. Thank you, guys. Heath, just on the same store guidance, and you had mentioned, I think, in your prepared comments that, you know, obviously you guys had a different approach to bad debt than RPAI. How does that factor, or if at all, into your same store guidance? If it doesn't, sort of where, you know, where should we be thinking about that number coming in from prior periods for 2022 at this point? Yeah. In terms of prior period stuff in 2022, Chris, we don't have a lot. We have about $18 million of call it the good news bucket. About $7 million of that is with tenants that vacated, so those are just in various levels of collections, and then another $11 million are from tenants that haven't vacated. You know, there may be some good news from prior periods, but we didn't have any of that in our guidance. In terms of how I'm thinking about the same store and the bad debt assumption, like John said, if you were to go ahead back to historical bad debt run rate of 75-100 basis points, that 2% number is really a 3% number. Again, it's a factor of really the conservatism in our assumption this year. Also again, as I mentioned before, it's a factor of t he $33 million coming online, it's very weighted to the back half of 2022. I think a lot of our peers are actually having their you know, that spread happening in the first half. Again, this is all setting us up so very nicely for 2023. Okay. Thank you, guys. Thank you, buddy. Thank you. Our next question comes from Craig Schmidt of Bank of America. Please go ahead. Thank you. Regarding leasing volumes, do you anticipate that Kite can maintain above average leasing volumes in 2022? Where do you think that total leasing volume might come out at? Well, again, you know, Craig, we're not guiding to the specific leasing volumes, but I do obviously we do think that it's going to continue, not just in 2022, but in 2023, as Heath pointed out a second ago, you know, with deals that we're working on, in terms of, as we pointed out in our investor presentation, you know, we've got the development pipeline that's leasing up that Tom talked about, and then getting back to where we were pre-COVID. I think the pipeline is definitely gonna remain strong. I think our spreads will remain strong. The leasing volume is a reflection of the quality and the quantity of deals that are out there right now. Yes, I think it'll continue. The only other thing I'll add, Craig, is you have two teams now that have been put together, and there's a lot of energy behind these groups, and we've set them up to be successful. We're already seeing the benefits of that and this new focus, you know, tying in the Kite culture. We're expecting big things as we keep pushing forward. The only thing I'd add to that, Craig, is I wouldn't really focus on quarterly volumes. It happens over a year. I know people write about a quarterly leasing number. It's just kind of a meaningless number amongst the, you know, what we're really doing. This plays out over longer time. Is this just a change in approach from the retailers that they want more bricks-and-mortar locations? I mean, to have such an elevated period of leasing, then in at least your mind, for three years, it would seem that you'd need to have a sea change in terms of your approach to the business. Yeah. Look, I think it's what we all talk about, what all the companies have been talking about for a little while now, which is that there's one profitable way to sell retail product. It's in a physical store. The other stuff is marketing. It just doesn't make money. Now I will say, buy online, pickup in store changed the game. You know, curbside pickup changed the game. You see all of our big retailers that you know for the most part are involved in that spectrum, and they know that they wanna drive people to the store because the margins are much higher than if they ship it from a warehouse to Timbuktu, which in today's world is very expensive to do. I think it's a realization, and it's a rebirth of the market. Again, open air retail is, has really been the huge beneficiary of those changes. Again, you know, again, going back to why we did the deal that we did, right? We did the deal that we did because we knew that was happening, we knew this was awesome real estate, and we knew there was a lot of upside. Now we just laid that out today for everyone to see, and we're just getting started with that. Great. What do you think your estimated annual redevelopment spend will be? I think you have $105 million in current active, but what is maybe an annual target? Yeah. We're not really putting out those annual targets. You know, it's really more internal discipline. If we put out targets, people chase them. We don't wanna do deals just because we put out a target. We do deals because we get high risk-adjusted returns. You know, Tom was talking about the $105 million. That's actually, you know, that's the active development pipeline that includes a little bit of redevelopment, a little bit of new development. You know, $100 million of spend for a company with a balance sheet that's almost $8 billion. I mean, it's pretty small. You know, we'll be opportunistic there, Craig. We're gonna find opportunistic deals that throw off the returns that experienced players like us need to justify doing a deal versus allocating capital somewhere else. We'll do it. We mentioned that we have that $105 million. We also mentioned that we have an embedded land bank, and it's truly that, a bank. We might monetize that in one or two or three different forms. That's why we laid out the examples that we put in our investor presentation of the different ways of doing development which lower risk and increase returns, you know, vis-a-vis joint ventures, sales, you know, 100% ownership. It just depends on the deal. Again, we've been doing this for a long time and have seen lots of cycles, have seen lots of things that go right and lots of things that go wrong, so I think we're the right stewards for that particular pipeline. Great, thank you. Thank you. Thank you. At this time, I'd like to turn the call back over to the CEO, John Kite, for closing remarks. Sir? Okay. Thank you very much to everyone for joining today. I hope you can hear, if not see, our enthusiasm that we have going forward for the next several years for this great company. We will see a lot of you in the next couple weeks in person. Really looking forward to the opportunity to further discuss. Thanks, and everybody have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.