1286043--3/17/2008--KITE_REALTY_GROUP

related topics

{investment, property, distribution}

{acquisition, growth, future}

{loan, real, estate}

{interest, director, officer}

{tax, income, asset}

{condition, economic, financial}

{debt, indebtedness, cash}

{loss, insurance, financial}

{provision, law, control}

{stock, price, share}

{capital, credit, financial}

{cost, regulation, environmental}

{personnel, key, retain}

{cost, contract, operation}

RISKS RELATED TO OUR OPERATIONS Our results of operations are significantly influenced by the United States economy and the market for retail space generally. Because of our geographical concentration in Indiana, Florida and Texas, an economic downturn in these states could adversely affect our financial condition and results of operations. We had approximately $647 million of consolidated indebtedness outstanding as of December 31, 2007, which may impede our operating performance and reduce our ability to incur additional indebtedness to fund our growth. Recent uncertainty in the credit markets could make it difficult for us to refinance our existing indebtedness or obtain additional financing on favorable terms, if at all. We expect to continue to experience rapid growth and may not be able to adapt our management and operational systems to respond to the integration of additional properties without significant disruption or expense. Our future developments and acquisitions may not yield the returns we expect or may result in shareholder dilution. 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 financial covenants may restrict our operating and acquisition activities. 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 seriously harm our performance. We may be unable to collect balances due from any tenants in bankruptcy. 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. We may not be successful in identifying suitable development projects or acquisitions that meet our criteria, which may impede our growth. Redevelopment activities may be delayed or otherwise may not perform as expected. 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. Our performance and value are subject to risks associated with real estate assets and with the real estate industry. 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. 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. 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--3/17/2008--KITE_REALTY_GROUP_TRUST