Kite Realty Group To Buy $307 Million Portfolio Of Shopping Centers

(RTTNews) - Kite Realty Group Trust (KRG) has reached a purchase and sale agreement to acquire a portfolio of nine retail operating properties with an aggregate owned gross leasable area or GLA of around 2.0 million square feet for a gross aggregate purchase price of some $307 million cash.

Seven of the properties to be purchased are situated in the firm's existing markets of Florida, Georgia, and Texas, while two are in a new market, Birmingham, Alabama. The firm said expansion in these markets enables it to build on its strong presence and significant operating experience. As of September 30, 2013, the portfolio to be acquired was 93.2% leased.

The portfolio would complement the company's existing portfolio in terms of asset quality, tenant base and geographic distribution. The portfolio's nine retail properties are located in four states in the southern United States. The portfolio acquisition, and the method by which the company plans to fund it, are likely to increase the company's equity float and reduce its leverage.

The transaction may close in late 2013 or early 2014. Kite Realty Group plans to fund the purchase price via. the net proceeds from a common share offering, cash on hand including from the dispositions of two retail properties the company is currently marketing for sale, and borrowings under its unsecured revolving credit facility.

In a separate press release, Kite Realty Group announced that it has begun an underwritten public offering of 32 million shares of beneficial interest. BofA Merrill Lynch, KeyBanc Capital Markets, Barclays and Wells Fargo Securities would be serving as the joint book-running managers for this offering. The underwriters would be granted a 30-day option to buy up to an additional 4.8 million shares of beneficial interest.