Thank you for standing by, and welcome to the Kite Realty Group Trust Q1 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a Q&A session. To ask a question during the session, you'll need to press star one on your telephone. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Bryan McCarthy, Senior Vice President, Corporate Marketing and Communications. Please go ahead. Thank you, and good morning, everyone. Welcome to Kite Realty Group's Q1 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 Form 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. All right. Thanks a lot, Bryan. Good morning, everyone. As you can imagine, our team has been counting down the days to yesterday's release and this morning's earnings call. We're eager to share details regarding our exceptional Q1 results and outperformance across the board. 2022 is shaping up to be a monumental year for KRG. It goes without saying that we have high-quality real estate in high-quality places, but that really doesn't mean anything without a high-performing team that communicates well and works in lockstep towards our operational goals. For those of you that were concerned about how our ability to swiftly integrate post-merger, you can rest at ease. As reported yesterday, KRG had FFO per share of $0.46, beating consensus estimates by $0.05 per share and representing a 35% increase per share over the comparable period last year. Our same-property NOI growth for the quarter was 5.9% as compared to the same period in 2021. Heath will give more details around the components of each metric, but suffice to say, we blew past expectations due to a combination of operational outperformance and lower bad debt. As invigorating as this past quarter feels, I'm even more energized about the future based on our tremendous leasing results. KRG signed 182 leases representing over one million sq ft this quarter, including nine anchor leases. This strong leasing volume was bolstered by 16% blended cash spreads on comparable new and renewal leases. These spreads were 3% higher than the blended spreads we achieved in Q4 2021. I'm gonna speculate that once again, these blended spreads will be amongst the highest, if not the highest in the sector. I'd also like to call out the cash spread on our Q1 comparable non-option renewals was approximately 12% against the backdrop of a 90% retention ratio. Again, this is an important indicator of where market rents are headed for the KRG portfolio. KRG is experiencing strong demand from a deep and diverse set of retailers across all of our open air products. In fact, our national retailers are becoming increasingly agnostic to format type and more keenly focused on best-in-class real estate. This dovetails nicely with our diverse set of high quality and well-located properties. Retailers are not only flexible with respect to format, but are also willing to modify typical sizings of their space. The current environment has led to some very long and productive lease approval meetings, where we're seeing multiple tenants vying for the same space or tenants that are willing to occupy spaces that have been persistently vacant. We intend to ride these tailwinds into historically high occupancy levels. The portfolio has signed-not-open NOI of approximately $37 million, which will primarily come online during the back half of 2022 and H1 2023. This is an increase of $4 million as compared to last quarter, which is a result of $11 million of new signed-not-open NOI, partially offset by $7 million of new NOI that came online this quarter. The spread between leased and occupied for our retail operating portfolio has also grown to 320 basis points. This bodes extremely well for our growth trajectory going into 2023, as the rents from those leases will be fully realized. As a reminder, the $37 million of signed-not-open pipeline represents 7% of our projected future NOI growth, as shown on page seven of our investor deck, and is only a portion of the near-term growth opportunity. 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 $31 million of NOI coming online over the next several years. We've also been busy on the capital allocation front. We acquired two attractive Sun Belt assets for a total of $66 million. The first of which was Pebble Marketplace, a Smith's-anchored center in the desirable Green Valley area of Las Vegas. We also acquired a Sprouts and a Total Wine that are literally attached to our MacArthur Crossing Center in the Las Colinas area of the Dallas MSA. We love adjacency acquisitions, especially when they can create a halo value by compressing the cap rate on the balance of the center. Collectively, these two assets feature a three-mile population of over 116,000 people and an average household income of $115,000. We've also made progress on the development front. All of our active developments are coming along on time and/or under budget. As for the entitled land bank, we've unearthed additional value propositions as promised, and we are taking a bespoke approach to every single parcel. Over the course of 2022, we look forward to sharing our creative vision for maximizing value and minimizing risk. The best thing about the entitled land bank is that the investor community historically attributed very little value to the land, and we certainly didn't put a price tag on it when we were underwriting the merger, but we see excellent opportunities ahead. The culmination of all the great things I've discussed is allowing us to raise our 2022 FFO-as-adjusted guidance to $1.77 per share at the midpoint. We're also raising our 2022 same-property NOI growth assumption to a range of 2.25%-3.25%. Before turning the call over to Heath, I wanna address some of the macro elements that are on the horizon. REITs have historically outperformed broader markets during inflationary periods. As prices rise and sales increase, it follows that the tenant's occupancy costs should decline, allowing us to continue to drive rents. As an open-air shopping center owner, we have a healthy balance between the duration of our assets and liabilities. Based on our embedded escalators and our ability to turn over 10%-15% of our leases every year, we feel well-positioned to keep pace with inflation. Likewise, our longer lease durations temper the impact of any potential recessionary environment. On the supply chain front, we're acutely focused on ensuring all tenant build-outs are on time and on budget. Internally, we've been referring to 2022 as the year of the RCD, which stands for rent commencement date. Times like these are when KRG's hands-on management style shines. We have very experienced tenant coordination and construction teams that not only ensure we deliver on time, but help tenants with any challenges they may experience. Due to our tenacious and dogged approach, we're currently outperforming on deliveries. Finally, I wanna address the change to our share buyback program. The primary purpose is to properly size this critical capital allocation tool in light of our post-merger market capitalization. With that said, we are keenly aware of the disconnect between our stock price and our underlying fundamentals. We have great real estate, a best-in-class platform, and we will continue to outperform until that disconnect resolves itself. Whether you're a value investor or growth investor, I can't think of a name in our space that screens more attractively. As always, thanks again to the entire KRG team for their hard work and dedication. KRG is nothing without these amazing people. I can't emphasize enough how proud I am of what we've accomplished as a team, but more importantly, what we will accomplish together in the future. Now I'll turn the call over to Heath to provide more details. Thanks to all of you for joining us today. What a great quarter, and what a great sense of pride to see what our collective team has accomplished and will accomplish over the course of 2022. One team, one focus. As always, our goal is to provide our investors with transparent and best-in-class disclosure, which will be much easier on a go-forward basis now that we've had our first full quarter of combined results. Let's dive in. For Q1, KRG generated $0.46 of FFO per share, both on a NAREIT and on an as adjusted basis. As compared to NAREIT, our as adjusted FFO results exclude the positive impact of $1.1 million of prior period collections, offset by a $900 thousand add back of merger-related costs. Our same-property NOI growth for Q1 is 5.9% when excluding the impact of prior period collections. Please note that unlike last quarter, the same property pool for Q1 includes both the KRG and the RPAI legacy assets. 500 basis points of this growth was driven by higher minimum rent and over rents, with the balance being attributed to lower bad debt. Please note that Q1 same-property NOI is elevated due to heightened reserves taken in Q1 2021. As you may recall, there was a lot of uncertainty in Q1 2021 with Covid. As the macro environment stabilized and collections returned to historical norms, many of those reserves were reversed in Q2. What does this all mean? We expect our same store results to be muted in Q2 and then accelerate to H2 2022 as we begin to receive some of the $37 million of signed, not opened NOI. Page eight of our investor deck will help you understand the cadence of the rent commencement dates. Hopefully, this will help contextualize our full-year same-property NOI outlook. As detailed on page 26 of our investor deck, our balance sheet and liquidity profile not only remained solid but continue to improve. Our net debt to EBITDA was 5.7 times, down from six times last quarter. Adding in the $37 million of signed, not open NOI, our net debt to EBITDA would be 5.4 times. 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 raising FFO as adjusted guidance to $1.74-$1.80 per share. The variance from net NAREIT FFO is approximately $0.02, which represents our estimate of $4 million of non-recurring merger-related costs. The $0.05 increase at the midpoint is attributable to cash items with leasing outperformance, overdrawn termination fees, and accelerated development fees. At the midpoint of our FFO as adjusted, we lowered our bad debt assumption to 1.25% of revenues. While the current reserve is significantly higher than our historical bad debt run rate, it by no means represents any specific credit concerns. Rather, it reflects our continuing conservatism with respect to macro uncertainty that is not within our control. It's important to note that despite our recent acquisition activity, our guidance still assumes the net transactional impact will be neutral to earnings. Before turning the call over to Q&A, I want to address one additional macro item, which is the recent rise in interest rates. We are in the business of owning and operating best-in-class real estate, and we are by no means in the business of interest rate speculation. The primary tool we use to manage interest rate exposure is to maintain a well-laddered maturity schedule that allows us to average our cost of debt over time. In terms of our planned capital markets activity, we intend to be optimistic this year. When the time is right, we will start to retire our 2023 maturities. Thank you to everyone for joining the call today. Operator, this concludes our prepared remarks. Please open the line for questions. Certainly. Ladies and gentlemen, if you have a question at this time, please press star then one. Our first question comes from the line of Michael Bilerman from Citi. Your question please. Hey, John, it's Michael. I apologize. I joined a little bit late. I was wondering, John, if you can sort of outline capital recycling and I guess sort of your plans to both acquire but try to dispose of assets, you know, following the merger. I'm sure a relook at the portfolio could lead to incremental dispositions. Can you just talk a little bit about what your plans are? Sure. Well, as we said in the prepared remarks, you know, we've acquired, you know, two properties recently for $66 million, and we had mentioned in the remarks that we still intend on all of our kind of acquisition disposition activity to be neutral to earnings this year. That's the intention. You know, as a matter of fact, in terms of the two that we acquired, we're assuming that we would be match ing funding those with a couple of dispositions. Candidly, one of which is under contract, and another which is being negotiated. I think what I would say, macro, Michael, is that, you know, look, when you look at our results, we obviously have a very good portfolio and produced, you know, very good results, and we're very happy with that portfolio. That said, you're always looking to do things on the margins. We're not looking to do massive acquisition sales. You know, our balance sheet is in a great position. I would say what we do is gonna be pretty strategic, much like, you know, acquired these two properties that we like a lot, probably take advantage of the market as it is today, and match fund those down the road. We love the portfolio. We love the results we're getting. You don't feel a need to go deeper, you know, putting aside potential dilution, but just, you know, looking at this combined portfolio and taking a deeper cut about sort of where you wanna be. Obviously, you have a big Sunbelt portfolio, but you went more coastal and Northeast with the merger. I just didn't know whether there's an opportunity to, you know, recycle more to bring your portfolio more where you'd want it to be. I mean, I think as we move through the year, when we're looking to do things, it will probably be with those geographies in mind. That said, I mean, you know, I've talked about this before. When you look at some of the assets that we picked up, you know, vis-à-vis the merger, you know, in Seattle and D.C. and in Long Island, I mean, we got some great properties. I don't know that it's so much about, you know, the portfolio composition of what came in the merger and what we had before. It's really gonna be more what it's always been, which is to say, you know, if we feel a piece of real estate has maximized its value, and/or has a declining value, then we would look to dispose of that. Right. It's really not going to be some massive thing that, you know, is a result of the merger. Just second question, John. With ICSC coming up, obviously, this is the big first big in-person event with the combined company 'cause I don't think December you had that much going yet. Can you just talk a little bit about what the goals are gonna be for the combined organization at the conference, what sort of roster of meetings you have, and really what you're gonna try to accomplish at the convention in a couple weeks? Sure. I'll start, but let kind of Tom dig into that. From a macro perspective, I mean, we have great momentum, great tailwind right now. Our portfolio is performing at one of the highest levels in the business. We're just gonna look to lean into that and continue to push relationships that we have and that we've grown into. When you look at our results from the past quarter and the size and the depth and breadth of the leasing that we did and the spread that we generated from that's what, you know, we'll continue to do, Michael. It's really more. As I tried to say in my prepared remarks, this is an integrated one team, one focus company, and the idea that we have any issues regarding that's gone. So now it's leaning into that and expanding our relationships. Tom, you wanna talk about some specifics maybe? Sure. I mean, I think it's critical that we hit all of our property types, and we have a more diverse base that we'll be coming to Vegas with. It's gonna be critical that we nurture our existing tenants, but really focus on a lot of these new relationships that we're seeing, particularly in the lifestyle centers. You know, we're doing deals with some great tenants that haven't traditionally looked at coming out, people like The Buckle, Nike, Aerie. I mean, there's a whole host of those tenants that we wanna continue and expand those relationships, so we have as diverse outline of the tenant base as possible. We have a lot on our plate. We have a group coming, and the rule is, if you're out there, you got a full book. We're looking forward to it. All right. Great, guys. Thanks for the time. Thanks. Thank you. Thanks, Michael. Thank you. Our next question comes from the line of Floris van Dijkum from Compass Point. Your question please. Thanks for taking my question, guys. Obviously, results look, you know, we're well ahead of expectations. You took up your guide, but, you know, your guide sort of implies, you know, a lower cadence of FFO than you had in Q1. Are you guys being overly conservative? I know you took your bad debt down a little bit, but it still seems pretty elevated, 125 basis points. I mean, how much more room is there in your view, in terms of, you know, earnings for this year? Yeah, I mean, Floris, you're correct in how you outlined that, but clearly as we tried to say in our prepared remarks, you know, look, it's we're 4 months into the year, basically. You know, when you look out at a projection, you're gonna still be prudent with some conservatism. You know, the 1.25% bad debt is the primary driver of that cadence that you referred to. Obviously, in Q1, our bad debt was less than 1%. If things were to continue on the path that we're on right now, we would expect to do quite well. You know, it's early in the year, and that's why we've adjusted to the extent we've adjusted. That said, I mean, we're extremely optimistic about what's out there right now. Based on the leasing performance and based on the rent spread that we're able to generate on a cash basis, we feel very good about it. Heath, do you wanna add anything? Yeah. Probably two more specific items, Floris, that are having a cadence sort of slow is, you know, we had term fees this quarter. Our budget doesn't have any term fees in it whatsoever, so that's sort of an item that's not budgeted for the balance of the year. We outperformed on overage rent, which is great. G&A timing. The G&A was light in Q1, and then as we go through the balance of the back half of the year, you're gonna see the G&A pick up, primarily due to some IT projects that we're undertaking in the back half of the year. That's why the cadence isn't exactly the same. Got it. You know, just, I know the SNO pipeline is, you know, appears pretty impressive, you know, at the levels that you guys have it, particularly, you know, it's almost the same size as one of your peers who has, you know, a portfolio that's twice the size. Maybe talk about some of the additional stuff that you guys have here in terms of your additional potential lease-up. I think you'd said about $21 million of additional potential rental income or 4% of your NOI. What do you think is possible? You said you can get back to pre-COVID occupancy. Can you remind us again, what that was, particularly in the small shop space versus where we are today? Do you see a scenario where you could actually exceed pre-COVID levels? Well, you know, pre-COVID in the small shops, Floris, we were at 92.5%, which was sector leading. You know, we think we can get back there. You know, that's what we do. We execute. We have to go out and lease that space. Then the anchors at pre-COVID were 98%. Do we think we can get back there? We absolutely do. Does it happen just by saying it? No. You have to go out and execute. We feel confident in that ability. Yeah, that's why we pointed out, and if you look at our investor deck, there's a great page 7, which kind of highlights that and makes it pretty easy to do the math and the disconnect between current stock price and, you know, real values. Yeah, we think we can get there. We gotta do the work, and that's what we're gonna do, you know. Thanks. Maybe the last question for me is to talk about, you know, you talk about the match funding. I mean, would it be right to assume that some of your land holdings, which you estimate could, you know, have a value of $125 million-$180 million, are those likely candidates for monetization? Yeah, I mean, I think we mentioned in our remarks, Floris, that you know that we not only have the lease up to pre-COVID, the SNO, the active developments, which are in lease up right now and under construction and on pace, we have the land holdings. One of the beautiful things about that is that you know we certainly attributed no value to that in our analysis of the merger and knew that it was upside. It gives us the opportunity and the luxury of taking our time on a case-by-case basis, which is what we mean by bespoke, right? That we're gonna take our time on each individual land holding. They vary, you know, dramatically in terms of stages. For example, since you know the D.C. market well, you know that One Loudoun is a spectacular property. You know, we have a lot of optionality, is the word I would use. That's a long way of saying, sure, there's a possibility that, you know, we would look to utilize sales proceeds there in some form or another. There's also the possibility that, you know, we have a few assets that we could maximize the value and put that, recycle that capital into higher IRRs. That's what we do. We're always analyzing where the highest IRR we can get is with the least amount of risk. That's our primary job. We're gonna look at all those things. Thanks, John. Thank you. Thank you. Our next question comes from the line of RJ Milligan from Raymond James. Your question, please. Yeah. Hey, guys. Good morning. I was just looking for a little bit more color on the leasing spreads. I know one specific quarter doesn't necessarily make a trend because there could be one or two large leases that move it either in either direction. I'm just curious. I mean, the trend has been positive or increasing over the past couple quarters. I'm just curious, you know, is there a specific box type that's driving those higher rents or specific category that's driving those higher rents? Well, in this quarter, you know, you pointed out, you're right to say each quarter is different. You know, this particular quarter, it was really interesting because of the number of deals and the breadth of them. You know, Tom can talk about this a little too, but bottom line is, in terms of the new leasing, you know, we did a lot of leasing in some of the lifestyle deals that generated very, very strong results. But that's a microcosm because we did, I don't know, 24 new leases. Then on the options and the renewals, that was really interesting too, because the non-option renewal, you know, at 12% is spectacular. That was I think like 45 deals. It was across the board, but Tom, you wanna talk about it a little more? Yeah. When I mentioned about making sure we're expanding our tenant base and looking for new opportunities as we try to grow this portfolio, one of the big drivers was the simple fact that in our lifestyle centers, you know, we picked up new names to the company, people like The Buckle, Nike, Aerie, Heyday. I mean, they go on and on. But we also had, you know, strong furniture store comps in different areas. We had 5.11 Tactical. So it was definitely spread out. But these higher-end tenants that may not typically come to open air clearly drove us. And the box side held up very strong, even though there was only two comps in terms of that percentage as well. Okay, great. My second question is just, you know, how you were thinking about, and I think, John, you made some comments earlier, on, you know, the increase of the buyback program, which is, you know, reflective of the increased size of the overall company. But, you know, thinking about the balancing between leverage and buying back shares, you know, given the discount that they're trading at. Just how do you think about utilizing that program over the course of the year? Yeah, I mean, I think it's exactly what we laid out, RJ, which is that we wanted to make sure it was sized appropriately. That's the first step. You're right that whenever you look at this and you're trying to determine capital allocation, that you have to look at your balance sheet in conjunction with what you might be doing on the capital front. As Heath mentioned, right now, you know, our balance sheet is extremely strong and trending even stronger. You know, we produced fabulous results this quarter. We've got a lot going on. We have a lot of upside. It needs to be there in the case that disconnect isn't resolved naturally. We think it will be. I think in a couple weeks when we see Q1 results of shareholder buying. I think there's some really great names that have come into our name and some pretty smart investors, pretty astute. Hopefully, that helps as well. Bottom line, we're gonna keep driving, keep operating, keep producing, and you know, we hope that that takes care of it. If not, that's an option that we need to have available to us. I guess, in summary, probably wouldn't be aggressively buying shares at this price today, but if the discount persists, that's a potential for maybe the back half of the year. Yeah. I don't wanna speculate on timing of it, RJ. It's what I said. I mean, we need to have this available to us. We believe, like many others, that you know, the current value doesn't reflect the value of the business. There's a lot of different ways to squeeze that value out. That's just one of them. I think there's a lot of people who recognize this is a pretty damn good platform and has a lot of upside. Great. Thanks, guys. Thank you. Thank you. Our next question comes from the line of Alexander Goldfarb from Piper Sandler. Your question, please. Hey. Good morning out there. Two questions. First, on the signed but not yet open, we've seen this, you know, in peers where there are these great pipelines of signed but not yet open. When we look at, you know, it actually coming into earnings, it takes a long time, and the gap between, you know, occupied versus that signed but not yet open sort of persists. Just so we don't get carried away on the modeling side, are there offsets to this? So, like, are you more aggressively shaking out, you know, tenants so that even though you're getting this $37 million of annualized in, that's offset to some degree as you know, weed out weaker performing tenants and replace those? I'm just trying to get a sense for how much of it truly comes into earnings versus as you guys more actively pursue the portfolio because of the demand, you know, that sort of gap persists longer than what we might, you know, think just by looking at the presentation. Yeah, Alex, I think there's really probably two things that'll offset that growth. One is just bad debt, right? So what's your bad debt NOI? Say, it's 75 basis points of revenues, which is a typical run rate year. That's 1% of NOIs being just bad debt. That's your natural expirations. As John mentioned in his opening remarks, you know, we're sitting at 90% retention right now, so that feels really good. I think at the end of the day, in order for us to realize in that $37 million, we have to grow that occupancy, right? We have to shrink the spread between leased and occupied. I think you're gonna see it be fairly elevated even through the course of next quarter because the leasing velocity to date has just been so great that I don't see it closing anytime soon. In the meantime, we're opening up NOI now. Like John said in his remarks, we signed $11 million of new NOI in Q1, and $7 million of it came on. That's why our signed but not opened only went up by $4 million. Again, yes, there are some natural offsets to it, and the underlying assumption here is you have to grow your economic occupancy, which we intend to do. Yeah, I mean, personally, Alex, I look at it's an extreme positive. The only offsets would be just whatever's happening naturally in the business. Being at a 90% retention rate when we historically were in the 80s, you know, mid-80s, I guess, that's a big deal. Again, that's why I keep mentioning the non-option renewal spread at 12%. Assuming that things stay as they are, I see it as significant upside. Oh, John, don't get me wrong. I agree. I just Yeah. It's awesome. It's just, you know, us getting in reality checks so we don't, you know. Sure Overcook things. The second question is Yeah, that's what, Alex, that's why we wanted to be clear about the timing, right? That, you know, this is very back- half 2022 weighted and then 2023. I think it's never easy from your chair to figure that part out, but it's clearly a driver into 2023. Yeah. Okay. The second question is, you know, a lot of headlines recently decline in online sales while, you know, physical store sales are rising. You know, obviously, I think collectively, we all like that. But, you know, I don't know if there are any Amazon shareholders on the line. But, you know, when you think about that, is it reality that online sales truly are declining and physical stores are rising, or are the tenants themselves starting to reallocate and say, "Hey, it's not the point of purchase where we're gonna flag it's the point of where the fulfillment point? If it's being curbside, you know, pick up or, you know, delivered from a store to someone's house, we're gonna start crediting those as the store sale. I'm trying to figure out how much is actual, you know, true changes in online sales versus in-store sales versus the tenants reallocating where they're giving credit for those sales. I can't really speak to the reallocation part of your question much. I don't get the sense that that's what's driving this macro trend. I get the sense that candidly, you know, as we talked about quite a bit during COVID, you know, physical retail became very important to people at certain, you know, as COVID moved along. And there's a bond, I think, that was built during that period, where a lot of physical retailers were able to really take care of their customer in a much more rapid way than even online. And at some point, you know, I can remember you writing notes about this, you know, several quarters back, that it was pretty clear that, you know, the online penetration was slowing down. Look, in the end of the day, it's all interconnected. There's really only one material online only, and they're not even really online only anymore, which would be Amazon. Everything else kind of runs through our tenants and our customers. You know, when you look at foot traffic also, I mean, which we have a slide in our investor deck, in the quarter, we're over 100 million visits. You know, this is only one company, that, you know, in the open-air space, and we did 100 million visits in a quarter. It just shows clear traction, right? It's why we have the results that we have. So I feel very, very good about that, Alex. I think it's a positive trend in our direction, and it's just one more indicator of the strength of physical retail and the importance of physical retail in the distribution channel. Okay. Thank you, John. Thanks. Thank you. Our next question comes from the line of Todd Thomas from KeyBanc Capital Markets. Your question, please. Hi. Thanks. Good morning. John, you mentioned in your discussion about the leasing spreads during the quarter that the lifestyle segment was particularly strong. You picked up a number of lifestyle assets and assets with, you know, greater lifestyle tenant mix, I guess, with the RPAI portfolio. Curious if you could, you know, talk a little bit more about that, how that product's performing and recovering at this point in the cycle? Yeah. I mean, as both Tom and I mentioned, you know, we had some very strong results from multiple properties that would kind of be in that segment. Candidly, for us, there's kind of a merger of lifestyle and mixed use. I mean, we basically see those products as very similar, and it just comes down to a nuance of a definition. But really, I mean, when you look at the amount of deals we did in the quarter, Todd, it was very well balanced against all of our property segments. You know, essentially kind of the grocery segment, the power segment, the lifestyle segment, the mixed use segment and you know, the community center segment. To our point and what Tom was mentioning, I believe, was this just interplay amongst all of these products with the same retailers. These retailers are finding that they can do significant sales in our properties at lower cost occupancies, which is producing more EBITDA for them. I don't wanna get too caught up into any particular genre of our products because they're all super strong right now. But yeah, we're, you know, one of the things we said, why we love the deal that we did is it did expose us to this other element of mixed use and lifestyle more so than we were before. We knew at that point in time there was massive growth trajectory there. Now we're seeing it. You continue to just see this idea that open air, you know, it's just a very, very productive asset for most of the retailers we deal with. I'm super positive about it right now. Yeah. There's no doubt the trends nationally are that people want to be together to live, work, play. I just heard a ULI speech on it yesterday of 1,000 people within 1 block is how you activate. All these lifestyle centers are providing that to the properties, which just allows us to kind of ride this wave of positive momentum. I agree, Tom. I think the pent-up demand for experience is another reason why we really like the lifestyle center sector. I think it's also part of the reason of why you're seeing Amazon sales temper 'cause you can't sell an experience online, right? Yeah. Again, all good stuff, and we really appreciate the exposure to this new sector for us. Are the occupancy gains and is the rent growth that you're experiencing in that segment, is it outsized today as you kind of look out over the next several quarters, is it outsized relative to the community and neighborhood centers? I mean, not particularly because when you look at the totals and you look at the averages, they kind of blend out, Todd. I mean, sure. Is there a handful of deals in a particular, you know, for example, like at Southlake in Dallas, which is just, you know, spectacular property. Yeah, there's a, you know, there's gonna be some really large opportunities for us there to drive rents, but there's also large opportunities for us to drive rents, you know, at a Publix center in Naples. It's really just, this is so demand driven right now, and supply hasn't moved much in the last 10 plus years. The dynamics of very simple economics are working in our favor, and it looks like it'll continue for a while. As Heath just said, you know, when you get this blend of necessity, entertainment, experience, you know, you're just positioned smack dab in the middle of what's going on in the economy. Don't forget, I mean, for whatever reason, there's negativity in the air, you know, with the world that we live in. The reality is there's a lot of pent-up capital to be spent yet in a lot of ways. I think we're just positioned really well for that. As far as the mixed use goes, I mean, you know, lifestyle and mixed use, Todd, we're also getting a bigger exposure to, you know, the multifamily side, right? We've got some opportunities there as well. Okay. In terms of tenant retention, you mentioned it was about 90% in the quarter. How long do you think these elevated levels of tenant retention could persist? You know, tough to call that. Certainly as we sit here today and we look at the upcoming, you know, the quarter that we're actually in, it feels very good. You know, again, that's why we wanted to be clear that, you know, with our guidance, we felt very comfortable raising it, but yet we still maintain some conservatism because of the macro world. In terms of the micro that we live in every day, you know, we're in a great place and our portfolio is outstanding. I think it stacks up against anybody. I think, people are beginning to figure that out, so we feel very good about continuing to push that. It's unpredictable and, you know, one quarter could be different than another quarter. We'll look at the trends over, you know, years, not quarters. Supply is definitely tightening, which is gonna work to our advantage. Okay. That's helpful. Just a last one if I could, real quick on the investments completed in the quarter, and after the quarter. Can you provide a cap rate, I guess, on Pebble Marketplace and the two boxes at MacArthur Crossing? Well, we didn't really release these, Todd, but I would just say that, you know, they were market cap rates in the fives and, you know, we would be looking, as I said, to recycle and frankly, probably at tighter, lower cap rates than what we bought at. Okay. All right. Thank you. Thank you. Thank you. Our next question comes from the line of Chris Lucas from Capital One. Your question, please. Hey, good morning, everybody. Just a couple of quick follow-ups, more definitional than anything. Just as it relates to the retention rate for the quarter, I guess, John, just thinking historically, is that as good as you've seen? Have there been periods when it's been higher? That's pretty damn good. Chris, I think 90 is pretty good, and I can't remember seeing it much higher than that. Okay. Candidly, you know, it's one of these things that it's not your primary focus, when you're in a major kind of thinking about new leasing, but as our new leasing contracts, 'cause we have less spaces, it becomes a bigger focus, and it's in a really good place right now and it's super profitable. Okay. As we think about retention, should we assume that like in the current environment, you're thinking that retention and tenant fallout is sort of the same thing, but that at some point down the road, that those could diverge as you actually try to push? Yeah, I mean. rents higher and potentially lose tenants as a result. Sure. When you get to, you know, when you get back to where we were, occupancy levels pre-COVID, and you're at 98% in the anchors and 92.5 in the shops, you start to really price dynamically, right? You might let things roll over. You might, you know, again, that's why I wanted to come back to that non-option renewal spread, because it wasn't like we were renewing people at low spreads, right? We were renewing them. In fact, the non-option renewal was almost, you know, I think the option renewal spreads were probably 6.5%. So that shows you right there. When we had a free shot, you know, we were able to price it very dynamically. No, I think as we lease up more and more, we probably aren't as focused on that number because you're more focused on the marginal dollar at that point, right, Chris? Just trying to drive that. And the merchandising mix. We can't lose sight of that too. That's why it's never good to just focus in on any one particular metric, you know, other than, you know, we're driving, we continue to drive, you know, more EBITDA, more free cash flow, more earnings. Okay, great. Thank you for that. Just on the SNO schedule, I guess just definitionally, how do you arrive at, you know, sort of when that rent is expected? Is that based on construction and permitting expectations, or is that based on a sort of contractual, you know, lease contractual date set up? Well, Chris, there's typically a formula in the lease, and there's also a drop dead date. You know, they have to start paying rent after a certain period of time after they've been open. If they're delayed being open, whether it's their fault or our fault or, it just doesn't happen, they end up paying rent anyway. Again, it's a mixture of what you asked. you know, again, I mean, look, Yeah, Chris, our primary goal there is really, you know, taking care of our customers as much as we possibly can. So, you know, we obviously wanna get the rent commencement date as soon as possible, but we want a successful, you know, customer and a happy customer. So it's a balance and we drive it. Clearly right now, it's working pretty well. As John mentioned, and this one marks, Chris, we are actually ahead of schedule in terms of our average weighted opening date, so the team has been doing a fantastic job in getting people open. Yeah. Just, Heath, just on that, let me just understand. When you say ahead of the average expected opening date, is that based again on sort of like your expectations based on, you know, construction, permitting and all of that? Or is it based on that drop dead date? 'Cause I'm just trying to see how much or sort of think about how much excess performance is sort of built into sort of the SNO schedule or It's generally on the opening day, Chris. Okay. Super. Okay. Go ahead. Sorry, Chris. No, no, go ahead. If you've got more to add. Yeah, I was just saying that, you know, all this really comes down to is what we're internally modeling, and he's basically saying we're beating the expectation of the opening dates in our model. That's a positive thing. Yeah, those are the numbers, dates that we focus on twice a month in our meetings. That is what we determine the opening date, and that's why our team, we got a great team, will do whatever it takes. We'll source whatever they need to make it happen. That's our job, and that's why we got so much focus on it. Okay. Thank you, guys. Really appreciate it. Thanks. Thank you. Our next question comes from the line of Anthony Powell from Barclays. Your question, please. Hi, good morning. Question on Kohl's, which is like a top 20 tenant for you, I think with seven stores. Looks like they may be acquired by two mall owners. I'm curious what you think about that as a potential, you know, issue if they seek to either move those stores out or otherwise be tough negotiators with rent increases or over time. Well, let's just start with saying, you know, we don't know anything that anybody else doesn't know. Kohl's is a great customer and, you know, we certainly wouldn't see any problems with that. It's not a huge tenant for us, but it's an important customer. I think if something happens there, that's great. You know, we always look to work with whoever's, you know, running the business. We'll see what happens. Got it. Thanks. Maybe just one more on transactions. It seems like this year you're seeming to think to match fund buys with dispositions. You know, I know after you close a deal, the hope was that the cost of capital would go down. It could be aggressive acquisitions. Just curious what your view was on portfolio deals and maybe just, you know, being a bit more aggressive at some point in building up the portfolio over time. Yeah. I mean, look, right now, as you know, Anthony, the market is competitive. And there's still a great deal of capital chasing high quality open air retail. And frankly, that's a limited group, limited product to find. So as I said, you know, that's why we're very excited about the two acquisitions that we had, and we won't have much trouble match funding that at attractive spreads to capital. But in terms of portfolios versus individual assets, still at this point, haven't seen any material difference there. Anytime there's a high quality retail deal that is, you know, on the market or even if it's not on the market, there's just, you know, there's more capital than there is product. I guess that's putting it pretty simply. That continues to drive the cap rates that we're seeing, which continue to be, you know, high fours to mid fives. I mean, that's generally the market. You know, I know people think it's gonna change and interest rates are volatile, but, you know, most of the stuff that we're doing and that we're interested in buying and/or even product that we would sell would be all cash buyers. You know, it's more of an unlevered IRR play right now. Got it. Maybe one more. You know, when do you think supply starts to become, I guess, not an issue, but a bit more of something to watch out for? I know most of the centers still have a bit more occupancy to build up, so that can maybe prevent it. I'm just curious, with the strong fundamentals you have and others, it seems to me that at some point, developers will start building. I'm just curious what your long, long-term outlook for supply is. Yeah, I mean, I think first of all, it's quite difficult to build this product because you're talking about multi-tenant retail that's much more complex than it is to, say, put up an industrial box, for example. You know, generally in retail, people don't build the stuff that we own speculatively. There's a lot of pre-leasing that goes into it. There's, you know, finding the right land. I just think it's more difficult to do than people think. From a return perspective, you know, you really got to underwrite the risk associated with ground-up development. I think for the near term, it continues to be moderated, with not a lot of new construction in the high-end arena that we own. Then when you look at the geography of the real estate and the fact that our real estate is so strong, you know, again, it's just hard to find properties that you could build on without just spending way too much money, right? It feels like a pretty good balance right now for the next several years. Tough cost environment. That's true. Thank you. Thank you. Thank you. Thank you. Our next question comes from the line of Wes Golladay from Baird. Your question, please. Hi, guys. You know, with the comment that supply is tightening and it sounds like demand is very good at the moment, when does this dynamic translate into a big acceleration in rent growth? Well, I think we just had one this quarter. I mean, 16% blended cash rent spread. I meant what I said, I think that's pretty darn good. Then 12% spreads on non-option renewals, you know, is also very strong, Wes. Boy, I mean, where does it go from here? Hard to say. Again, we don't get caught up in any one quarter too much. Certainly the environment still feels very good and I think we can continue to move the needle. Again, like I said, Wes, when you look at the total occupancy cost for these retailers, our open air environment is quite cost effective, so that helps us as well. It feels like- Yeah. Feels like a pretty good place. Yeah. I guess what I'm trying to get at, it seems like the market is still absorbing supply and you're still getting the leases, so I was thinking maybe more like a hockey stick growth, like growth that we haven't seen since maybe the early 2000s. Do you think that dynamic is in play? Yeah. I mean, if we continue with the volume of leasing that we're doing, then that dynamic will come into play. You know, when we leased 1 million sq ft this quarter and Q2 is stacking up pretty nicely, you know, if we can continue to push those kind of lease, that kind of lease momentum, then yeah, you start to get to that point where we talked about you're highly leased and the marginal lease is gonna be at a very good attractive rate. But also, as we pointed out, you know, we're able now to lease some spaces that were kind of persistently vacant, you know, probably because of physical issues at a particular property, like an elbow space or something that we're now able to lease those spaces. that drives that incremental cash flow that we're so, you know, focused on. I think it's both of those things. Yeah. It sounds like there's also gonna be a new high- water mark for occupancy then. I guess when we look at the individual markets that you're in, does anyone stand out as maybe being earlier to that hockey stick potential moment? You know, when we look at the deals that you know, for example, in this quarter, when we look at the spread of deals that we did in the quarter, it was very well spread out throughout the country. You know, really each region that we're in produced you know, good results. Fortunately, again, because we have this really strong portfolio, it feels like each segment's performing quite well, so don't particularly see one beating the other right now. Got it. Thanks for taking the questions. Thank you. Thank you. Our next question comes from the line of Linda Tsai from Jefferies. Your question, please. Hi. Good morning. In terms of purchasing adjacencies to your existing properties, as you did with your Dallas center, do you track how many of these opportunities potentially exist in your portfolio? What's the best way to think about the scale or margin you achieve when you buy these adjacencies? Yeah. I mean, we definitely have a kind of inventory of deals that we're interested in. And we've done that a couple of times in the last six months. I mean, we did this deal, which was very unique because this was actually essentially attached to the balance of the center. You know, we essentially didn't own the Sprouts box or the Total Wine box, and now we do. What happened there is you took a center that was non-grocery anchored, and not only did you essentially bring in one vis-a-vis Sprouts, but you brought in two because of Total Wine, which, you know, Total Wine will do $25-$30 million. So the halo effect we referred to, Linda, is a significant cap rate compression. I mean, it could be 100 basis points, it could be 75, 100. So that's how we track that and we look at that from a, you know, from a terminal value perspective as well, terminal IRR values. Yeah. Then, for example, we did another one where here in Indianapolis, we acquired two shop pad buildings out front that we didn't own when we acquired the center, and now we own them, and it gives us much more leasing leverage across the whole portfolio, right? You don't have a built-in competitor. Any place that we think that we could do that, we would absolutely look to do it. It's generally gonna be a better risk-adjusted return on capital because we already know everything there is to know about the particular property, right? Love to do it, and we'll continue to where the opportunity presents itself. Thanks for that. Then back to the earlier exchange you had with Alex, one of your open-air peers discussed occupancy costs changing since e-commerce has a halo effect to the physical store and it's helping retention rates. You know, how do you think landlords are trying to better understand the real sales productivity of a physical store in an omni-channel environment? Yeah. you know, landlords can better capture the generated value? Well, there's two things there. One is in the case that, you know, if you can receive percentage rent, you're extremely focused on it. And two is just to understand the performance of the retailer, as it relates to, you know, our ability to continue to price the space appropriately. So it is a big deal. It's hard to get to the bottom of right now. I think over time it'll become more and more natural. I think it's clearly a big part of a retailer's success today, is their ability to tap into the omni-channel that they all have tapped into. But they also need us for that. They need us to be, you know, providing the right real estate where that works, you know, where it's attractive enough for people to utilize the store in that distribution format, and we're fortunate that we have that, right? I think stay tuned because I think it becomes more and more part of what we're doing. Right now, we're just happy that, you know, the retailers are performing so well and they're driving more and more traffic. Great. Thank you. Thank you. Thank you. As a reminder, ladies and gentlemen, if you have a question at this time, please press star then one. Our next question comes from the line of Craig Schmidt from Bank of America. Your question, please. Yeah. Thanks. I just, you know, with April pretty much in the books, I see it happening next month. I just wonder if the above- average leasing activity will continue into Q2. I mean, how will you do relative to that 1.1 million you did in the past? I mean, I'm not exactly sure how we're gonna do yet since it hasn't happened, but I think we're off to a good start, Craig, for sure. ICSC is a nice opportunity to get in front of a lot of people in a concentrated period of time, but that's just the cherry on the top. I mean, we're always driving these relationships and these conversations, and it feels like you know, we use the word tailwind for a reason. We're very busy. We're very active, and there's no reason to believe that we can't keep pushing that leasing momentum. Tom, you wanna add anything? Yeah. I mean, Craig, we track every day through our Salesforce format exactly how many deals are through the real estate committee, and more importantly, in lease draft. I will tell you, we feel very, very good about that number in comparison to where we are today. We're expecting a very strong finish to Q2. Great. Thanks. Then I saw recently you leased to Top Shelf. I'm wondering, is this a more attractive alternative to Dollar General for your centers' merchant mix? It's more suburban- focused. I mean, it really depends on the particular property, Craig. We think Top Shelf is a pretty cool concept. It's pretty modern. It's clean. It does a lot in a small space. You know, we don't particularly have a lot of Dollar Generals, just straight up Dollar Generals. I mean, I know we have some Dollar Trees, but if we have, I think maybe no Dollar Generals as I think about it on the top of my head. Our portfolio would be much more, you know, in tune to a Top Shelf deal. Yeah, I mean, it's just another example. We said all these other names, you know, and there's Top Shelf doing deals all over the place and great credit. you know, we feel like we have this really, really good balance right now, and we think that, you know, the merger put us in a position to be in the exact right space at the exact right time across the genre of product that we own. It's a significant variance to Dollar Tree, Dollar General. The stores, they are impressive, and I encourage you to take a look at them. Well, my understanding is the demographic is younger, wealthier, and more suburban, which would seem like. I mean, yeah, I think you know the reason you don't have any Dollar Generals is you know it's a lower customer. It's more rural. I was just curious if this was an opportunity for you. I mean, I guess 9,000 sq ft, not quite. Yeah. an anchor space, but an opportunity for you to, you know, fill up some of that vacancy. It is absolutely an opportunity, and we will absolutely lean into it. Okay. Thanks a lot. Thank you. Thank you. This does conclude the Q&A session of today's program. I'd like to hand the program back to John Kite for any further remarks. Well, I just wanna take the opportunity to thank everybody for joining us today. Again, I wanna thank our KRG team and family who produced fabulous results, and we will continue to push, and we look forward to talking to everyone soon. Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.