1286043--3/16/2009--KITE_REALTY_GROUP

related topics

{investment, property, distribution}

{acquisition, growth, future}

{debt, indebtedness, cash}

{condition, economic, financial}

{interest, director, officer}

{tax, income, asset}

{loan, real, estate}

{provision, law, control}

{loss, insurance, financial}

{stock, price, share}

{cost, contract, operation}

{cost, regulation, environmental}

{personnel, key, retain}

{capital, credit, financial}

RISKS RELATED TO OUR OPERATIONS Current challenging conditions in the United States and global economy, the challenges being faced by our retail tenants and non-owned anchor tenants and the decrease in demand for retail space may have a material adverse affect on our financial condition and results of operations. Because of our geographical concentration in Indiana, Florida and Texas, a prolonged economic downturn in these states could materially and adversely affect our financial condition and results of operations. Recent disruptions in the financial markets could affect our ability to obtain financing for development of our properties and other purposes on reasonable terms, or at all, and have other material adverse effects on our business. We had approximately $678 million of consolidated indebtedness outstanding as of December 31, 2008, which may have a material adverse effect on our results of operations and reduce our ability to incur additional indebtedness to fund our growth. Agreements with lenders supporting our revolving credit facility, unsecured term loan and various other loan agreements contain default provisions which, among other things, could result in the acceleration of principal and interest payments or the termination of the facilities. Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. Our performance and value are subject to risks associated with real estate assets and with the real estate industry. Failure by any major tenant with leases in multiple locations to make rental payments to us, because of a deterioration of its financial condition or otherwise, could have a material adverse effect on our results of operations. We face potential material adverse effects from increasing numbers of tenant bankruptcies and we may be unable to collect balances due from any tenant bankruptcy. Our financial covenants may restrict our operating and acquisition activities. Our current and future joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners. We face significant competition, which may impede our ability to renew leases or re-let space as leases expire, require us to undertake unbudgeted capital improvements, or impede our ability to make future developments or acquisitions or increase the cost of these developments or acquisitions. Our future developments and acquisitions may not yield the returns we expect or may result in shareholder dilution. We may not be successful in identifying suitable development projects or acquisitions that meet our investment criteria, which may impede our growth. Redevelopment activities may be delayed or otherwise may not perform as expected and, in the case of an unsuccessful redevelopment project, our entire investment could be at risk for loss. We may not be able to sell properties when appropriate and could, under certain circumstances, be required to pay certain tax indemnities related to the properties we sell. Potential losses may not be covered by insurance. Insurance coverage on our properties may be expensive or difficult to obtain, exposing us to potential risk of loss. Rising operating expenses could reduce our cash flow and funds available for future distributions, particularly if such expenses are not off-set by corresponding revenues. We could incur significant costs related to government regulation and environmental matters. Our efforts to identify environmental liabilities may not be successful. Inflation may adversely affect our financial condition and results of operations. Our share price could be volatile and could decline, resulting in a substantial or complete loss on our shareholders investment. A substantial number of common shares eligible for future sale could cause our common share price to decline significantly. RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE Certain provisions of Maryland law could inhibit changes in control. Certain officers and trustees may have interests that conflict with the interests of shareholders. Certain members of our executive management team have outside business interests that could require time and attention. Departure or loss of our key officers could have an adverse effect on us. We depend on external capital to fund our capital needs. Our rights and the rights of our shareholders to take action against our trustees and officers are limited. Our shareholders have limited ability to prevent us from making any changes to our policies that they believe could harm our business, prospects, operating results or share price. Failure of our company to qualify as a REIT would have serious adverse consequences to us and our shareholders. We will pay some taxes even if we qualify as a REIT.

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1286043--3/16/2009--KITE_REALTY_GROUP_TRUST