Kite Realty Group Trust (KRG)

During the fourth quarter, the Company issued 4,750,000 shares of common equity at $10.55 per share. Net proceeds of approximately $48 million after offering expenses were used to pay down borrowings under the Company’s revolving line of credit.

In July, the Company obtained $30 million under an unsecured loan agreement arranged by KeyBanc Capital Markets. In August, the Company obtained an additional $25 million under this agreement. Both borrowings mature on July 15, 2011 and bear interest at LIBOR plus 265 basis points. The proceeds from these loans were used to pay down the Company’s unsecured revolving line of credit and other variable rate debt. Also during the quarter, the Company entered into a hedge against the $55 million with a fixed rate of 5.92%.

In October, the Company issued 4,750,000 shares of common equity at $10.55 per share. Net proceeds from the offering of approximately $48 million were used to pay down borrowings under the Company's revolving line of credit. As a result of this offering, the Company has approximately $100 million of total available capital, including approximately $85 million of availability under the revolving line of credit.

In July 2008, the Company entered into a $30 million unsecured loan agreement with KeyBanc Capital Markets which has an accordion feature that enables the Company to increase the loan amount up to a total of $60 million, subject to certain conditions, including syndication of the facility. The loan matures on July 15, 2011 and bears interest at LIBOR plus 265 basis points. A portion of the initial $30 million of proceeds from this loan was used to pay down the Company’s revolving line of credit. The Company is seeking to utilize the accordion feature and draw down the additional $30 million by August 31, 2008. The Company has received a commitment for $25 million of the additional $30 million and is in discussions with other lenders to fund the remaining $5 million. The Company expects to use the remaining proceeds to pay down its revolving line of credit and other variable rate debt.

As of June 30, 2008, the Company owned interests in seven retail properties in the current development pipeline that are expected to total approximately 1.3 million square feet. Approximately 618,000 square feet are anticipated to be owned directly by the Company or through joint ventures upon completion of the projects. The remaining square footage will be owned by anchor tenants upon completion of the developments. The total estimated cost of these projects is $160 million, of which approximately $102 million had been incurred as of June 30, 2008. Approximately 78% of the owned GLA at properties in the development pipeline is currently leased or in various stages of lease negotiations with tenants.

During the quarter, construction commenced on the first phase at South Elgin Commons, located in a western suburb of Chicago, Illinois. The property is shadow anchored by a SuperTarget, and LA Fitness has executed a lease for 45,000 square feet, representing the entire first phase of the project.

During the second quarter, The Fresh Market at 54^th & College in Indianapolis, Indiana opened for business. The Company has a long term ground lease with the single tenant at this location.

In addition, the Company transferred Bolton Plaza in Jacksonville, Florida from the operating portfolio to the redevelopment pipeline as of the end of the quarter. The Company’s lease with Wal-Mart expired during the second quarter and, as planned, the Company is actively pursuing a redevelopment plan for this property.

In July 2008, the Company signed a lease for 45,600 square feet with Publix at Delray Marketplace, located in Delray Beach, Florida. Publix will join a 55,400 square foot Frank Theater as the anchors for this center. The anticipated total GLA of the mixed-use development is 318,000 square feet.

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The Company extended the maturity dates for eight loans totaling approximately $83 million during the first quarter. The weighted average interest rates on these loans were comparable to the previous rates. Included in the first quarter activity was an eighteen-month extension of the $55 million Parkside Town Commons loan at a loan rate of LIBOR plus 0.85%.

The Company financed the acquisition of Rivers Edge Shopping Center in Indianapolis with proceeds from the November 2007 sale of a single-tenant property in Puyallup, Washington and loan proceeds bearing interest at a rate of LIBOR plus 1.25%.

As of March 31, 2008, the Company owned interests in 7 retail properties in the current development pipeline that are expected to total approximately 1.3 million square feet. Approximately 559,000 square feet are anticipated to be owned directly by the Company or through joint ventures. The remaining square footage will be owned by anchor tenants or joint venture partners upon completion of the developments. The total estimated cost of these projects is $185 million, of which approximately $92 million had been incurred as of March 31, 2008. Approximately 71.5% of the owned GLA at properties in the development pipeline is currently leased or in various stages of lease negotiations with tenants.

The first phase of the Eddy Street Commons project at the University of Notre Dame was transitioned to the current development pipeline as of the end of the quarter. Phase I is expected to total 165,000 square feet of retail, office, and multi-family components and is anticipated to cost $70 million. The Company will own the retail and office portions of the project with an estimated total cost to complete of $35 million. Tax Increment Financing (“TIF”) bonds of $30 million have been sold and fully funded to finance a 1,281 space parking facility and all site infrastructure improvements. The City of South Bend is funding an additional $5 million of project incentives.

During the first quarter, the Company transferred two properties from the development pipeline to the operating portfolio. Naperville Marketplace is a 169,600 square foot community shopping center located in the western suburbs of Chicago. The property is anchored by TJ Maxx, PetSmart, and a non-owned Caputo’s Fresh Market. Bridgewater Marketplace I is a 50,820 square foot center anchored by a Walgreens that was previously developed and sold by the Company.

On February 20, 2007, the Company entered into a four-year $200 million unsecured revolving credit facility to replace the Company’s secured revolving credit facility. Terms of the agreement include pricing at LIBOR plus 115 to 135 basis points depending on the Company’s leverage and an expansion feature allowing up to $400 million of total borrowing capacity, subject to certain conditions. Initial proceeds were used to repay the $118 million principal amount outstanding under the Company’s $150 million secured revolving credit facility and retire the secured revolving credit facility.

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