Kite Realty Expands in Southeast

John Kite, chairman and CEO of Kite Realty Group Trust (NYSE: KRG), joined REIT.com for a CEO Spotlight video interview in Chicago at REITWeek 2013: NAREIT’s Investor Forum.

Kite discussed his company’s recent foray into the Nashville, Tenn., market and why that market was appealing.

“Nashville was a great market for us to go into,” he said. “It’s a very vibrant market. You’re probably familiar with Nashville from the standpoint of the country and western music industry, which is very large in Nashville, but also Vanderbilt University is based in downtown Nashville, and there’s a lot of ancillary business, along with the healthcare industry, which is very big in Nashville. So, it’s just a very vibrant market.  The suburb that we acquired the asset in is in the southern part of the market, which is very high-income. I think one of the biggest things for us is we look at markets that are strong on the face, but also from a disposable income perspective.”

Kite Realty Group Trust is active in both development and acquisition. Kite shared his opinion regarding the most effective path to growth.

“I think both are important to us,” he said. “Development obviously is just tough. There’s a long process to getting developments done. The returns on cost we see in development today are still generally not as high as we’d like them to be relative to the risk associated with delivering the development. The positive of that is we do have development going on, so the value creation we have is strong, because there is not a lot of people developing.”

Kite also described the potential impact the Mainstreet Fairness Act will have on his business and tenants.

“I don’t know that it will significantly give a boost to the brick-and-mortar retailers in terms of their sales, but it puts them on an equal playing field,” he said. “I think the traditional brick-and-mortar retailers are doing a great job of bringing the Internet into their stores.”