Operator: Thank you for standing by. Welcome to the Kite Realty Group's Second Quarter 26 Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you will need to press Star 11 on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press Star 11 again. As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program, Bryan McCarthy, senior vice president corporate marketing and-- Please go ahead, sir.

Bryan McCarthy: Thank you, and good afternoon, everyone. Welcome to Kite Realty Group's second quarter earnings call. Some of today's comments contain forward-looking statements that are based on assumptions of future events, and are subject to inherent risks and uncertainties. Actual results may differ materially from these statements. For more information about the factors that can adversely affect the company's results, please see our SEC filings, including our most recent Form 10-K, Todd's remarks also include certain non GAAP financial measures. Please refer to today's earnings press release available on our website for reconciliation of these non GAAP performance measures to our GAAP financial results. On the call with me today from Kite Realty Group, are Chairman and Chief Executive Officer, John A. Kite; President and Chief Operating Officer, Thomas K. McGowan; President and Chief Financial Officer, Heath R. Fear. Senior Vice President and Chief Accounting Officer, Adam Jaworski; and Senior Vice President, Capital Markets and Investor Relations, Tyler Henshaw. Given the number of participants on the call, we ask that you limit yourself to 1 question and 1 follow-up. If you have additional questions, we ask that you please rejoin the queue. I will now turn the call to John.

John A. Kite: All right. Thanks, Bryan, and hello, everyone, and thanks for joining us today. Halfway through 2026, KRG's tenant demand remains healthy, Our signed not open pipeline remains elevated. And the fundamentals underpinning our portfolio have never been more durable. The financial strength and flexibility we created has become 1 of our most valuable strategic assets. Over the past 18 months, our capital allocation initiatives collectively referred to internally as project elevate have focused on pruning lower growth noncore assets to enhance the quality, growth profile, and resilience of our portfolio and cash flows. We have redeployed the resulting capital into higher conviction opportunities that offer the most attractive risk adjusted returns. While also investing meaningfully in our organization through strategic additions across the platform all aimed at improving our long term growth. Since the start of 2025, we have sold 22 noncore assets for nearly $1 billion. With each disposition, we reduced our exposure to lower growth formats and at risk anchors. While concentrating the portfolio in grocery anchored lifestyle and mixed use assets. As detailed on page 6 of our investor presentation, we have grown our weighted ABR in lifestyle, mixed use, and neighborhood centers by 900 basis points since the start of 2023. Matched by a 900 basis point reduction in power and large format community centers during the same period. Our portfolio enhancement is reflected in our tenant base. Which we have strengthened from both ends. Our top tenant roster is increasingly concentrated in durable high credit operators. Brochures now represent a third of our top 15 tenant list. Just as telling, 4 watch list tenants have rolled off our top-25 list entirely. By virtue of the dispositions related to Project Elevate, we eliminated 58 at risk tenant locations representing over 1 million square feet and more than 200 basis points of ABR. Tenants like these carry a cost on both sides of the ledger. They put the consistency of our earnings at risk and each 1 is a potential claim on our capital. We have been equally disciplined about where we put our capital to use. During the quarter, we acquired 2 high quality neighborhood centers Founders Square in Naples, and Chastain Market, a Trader Joe's anchor center in Atlanta, for $136 million through 31 exchanges. That brings our acquisitions since the start of 2025 to approximately $612 million, all of it recycled into fast growing assets. When our stock trades at a discount to net asset value, buying it back is among the most accretive uses of capital available to us. We acted decisively during the quarter purchasing approximately 2.8 million common shares at an average price of $27.48 per share, for approximately $75 million Across 2025 and 2026, we have now repurchased 19.6 million shares for approximately $475 million at an average price of $24.20. Well inside consensus NAV. Our reshaped portfolio is performing. Same property NOI grew 3.7% in the second quarter. We executed 128 new and renewal leases totaling approximately 1 million square feet with blended cash spreads of 15.9%, including 28.4% on comparable new leases. Our lease rate reached 94.8%, up 150 basis points year over year, led by a 210-basis-point improvement in our anchor lease rate. ABR per square foot climbed to $23.41, up 2.3% sequentially,, and 6.3% year-over-year. Our embedded rent growth climbed to 185 basis points, up nearly 30 basis points. Since the start of 2024. And our signed not open pipeline increased to approximately $37 million of NOI representing a 350-basis-point spread between our leased and occupied rates. We also continue to unlock embedded value across our mixed use platform. This quarter, we commenced the second phase of luxury multifamily at 1 Loudoun. A 429-unit development within our existing residential joint venture. That will begin delivering in 2029. The latest example of the self funding growth built into our portfolio. Given the strength of the first half, we are raising our full year same property NOI guidance by 50 basis points at the midpoint to a range of 3% to 4%. We are maintaining our FFO guidance as we prioritize flexibility and optionality over the immediate redeployment of proceeds generated through project Elevate. In the near term, our focus is on further strengthening and fortifying our balance sheet reducing leverage enhancing liquidity, and maintaining dry powder for attractive investment opportunities. All the heavy lifting on project Elevate is behind us. We still have some work to do, Our guidance continues to assume a meaningful amount of gross transactional activity remaining in 2026. Split between the sale of noncore assets associated with tax losses and 31 acquisitions, which Heath will detail in a moment. Simply put, KRG has never been in a stronger position. We have a higher quality portfolio, a more durable growth profile, and 1 of the best balance sheets in the business. And a team that executes with discipline and urgency I want to thank the entire KRG team for getting us here and having the energy and conviction it takes to keep raising the bar. Turn it over to Heath.

Heath R. Fear: Thank you, and good afternoon. Coming off an extraordinarily active quarter, KRG is on plan and operating from a position of strength. We generated $0.52 of core FFO per share and $0.53 of NAREIT FFO per share in the second quarter. Our same property NOI meaningfully outperformed our internal estimates in the first half of 2026, growing 3.7% in the second quarter and year to date. The outperformance was broad based across better tenant retention, lower bad debt, higher overage rent and stronger net recoveries. At the same time, we are maintaining our full year core FFO and NAREIT FFO guidance of $2.06 to $2.12 per share. This guidance assumes a 2026 same property NOI growth range of 3% to 4%. which is a 50-basis-point increase at the midpoint and reflects our year to date outperformance. We are assuming a bad debt reserve of 90 basis points of total revenues at the midpoint, As a reminder, our 90 basis point bad debt assumption applies to the full year and reflects a blend of actual bad debt incurred during the first half of the year and an assumed bad debt rate of 100 basis points of revenue for the second half of the year. We are further assuming interest expense net of interest income excluding unconsolidated joint ventures of $114.7 million at the midpoint. A nearly $7 million sequential decline is largely attributable to 2 factors. Higher interest income generated from Project Elevate proceeds being held in 31 accounts and the deconsolidation of our 1 Loudoun residential joint venture, which I will address in a moment. As for the remaining transactional activity in 2026, we are assuming approximately $225 million of noncore tax loss sale assets and $110 million of 31 acquisitions. When considering core FFO guidance in the context of our accelerating same property assumptions, it is important to refer to page 5 of our investor deck. On the quarter over quarter FFO bridge, you will see a 2-cent drag in the line labeled change in our transaction activity and assumptions. That line item reflects our decision to capitalize on a constructive transaction environment by expanding Project Elevate to the second portfolio sale that occurred in the second quarter while also pursuing the sale of additional tax loss assets. it is worth taking a step back to consider this context. Project Elevate contemplates recycling roughly 14% of our enterprise value, resulting in a platform transformation and an upgraded portfolio quality and improved the durability of our cash flow while maintaining our fortress balance sheet and having remarkably little impact to our earnings. This is only made possible by our disciplined sources and uses capital allocation strategy. More specifically, since the start of 2025, we have generated approximately $1.1 billion of proceeds including approximately $973 million from noncore dispositions and approximately $112 million from the sale of 48% interest in 3 of our operating assets. We currently expect an additional $225 million of non core tax loss sales which will bring total proceeds to approximately $1.3 billion. Against those sources, we have been disciplined and opportunistic with uses of capital. The start of 2025, we have repurchased approximately $470 million of common shares. Funded $250 million for our share of equity for Legacy West, completed approximately $204 million of acquisitions and paid a $31 million special dividend. We also expect to complete approximately $110 million of additional 31 acquisitions, which would bring total capital deployment to approximately $1.1 billion when you roll all of that together our expected sources exceed our uses by $240 million. We intend to be patient and flexible with that remaining capacity. We will continue to evaluate acquisitions, repurchases, and other uses through the same return focused lens we always have, but in the current environment, our preference is toward balance sheet strength. I want to spend a moment on the structure behind our new 429-unit luxury multifamily development in 1 Loudoun. As it is a great example of capital efficiency we strive for through a Through a tax free recapitalization debenture that owns the existing 378 multifamily unit development, we are reducing our ownership from 90% to 55%. The proceeds of that recapitalization together with a contribution of land we already own will fund the majority of our 55% equity interest in the new 429-unit development. Importantly, that step down in our ownership of the existing stabilized project occurs over time as the new building is constructed. At quarter end, our ownership stood at 77%. The $60 million gain you will see in our financials relate to the recapitalization and deconsolidation of the existing joint venture and is entirely non cash. It is a modest transaction in the context of our enterprise but reflects the creativity and discipline we bring to every dollar of capital we deploy. Our balance sheet remains 1 of the strongest in the sector. As of June 30, our net debt to EBITDA was 5.1x. Near the low end of our long term targeted range. During the quarter, we priced $345 million of 3.25% exchangeable senior notes due 2032. With proceeds funded on July 2nd. In connection with the notes, we entered into capped call transaction that raised the effective conversion price to $41.91. We intend to use the majority of those proceeds to retire our $300 million of unsecured notes due October 2026., The remaining $100 million maturity coming due in September 2026 will be retired with cash on hand. We have access to over $1.2 billion in total liquidity providing us with significant flexibility to continue pursuing value enhanced opportunities. Thank you to the entire TRG team for their relentless effort in driving our results. Operator, this concludes our prepared remarks. Please open the lines for questions.

Operator: Certainly. And as a reminder, we ask that you please limit yourself to 1 question and 1 follow-up. Our first question comes from the line of Todd Thomas from KeyBanc. Your question please.

Sean Glass: This is Sean Glass on for Todd. Can you speak to the impact or improvement on the same store NOI outlook that can be attributed to the dispositions completed so far year to date? Like, how much of the same store NOI growth improvement is from dispositions versus operational upside?

Heath R. Fear: Yeah. The contribution from the elimination of those assets is pretty modest. it is only 3 basis points. So think about it, that pool was 98% leased. But it had several spaces that were had some rent coming online. So, this particular period of time, they were not dilutive of same store. But in general, reminder, these assets have, you know, $18 of ABR They grow slower and they have higher watch list concentration. So in the long run, they would detractive for same store. But for this current year they were only a small contribution. Again, just 3 basis points.

Sean Glass: Okay. that is helpful. And then you may have touched on this, but, is there any expected capitalized interest related to the 1 Loudoun residential product Any notable impact that may have on interest expense as we think about 2027?

Heath R. Fear: Yeah, Yeah, as we are heading into 2027,, you will see the capitalized interest related to that project step up. So, you will see some capitalized interest. Thank you.

Operator: Thank you. And our next question comes from the line of Andrew Reale from Bank of America. Your question please.

Andrew Reale: Good afternoon. Thanks for taking my questions. Heath, you had some helpful color in your prepared remarks. But I guess just going back to the guidance to confirm, could you maybe just walk through exactly what is driving the 2 cent of dilution this quarter in the guidance bridge? I mean, sounds like a lot of that is just from the timing of the recycling. Just wondering if there might be any other moving pieces? Andrew, you are exactly right.

Heath R. Fear: Listen, we led with the disposition. We had the largest position in the second quarter. And it takes time to put those proceeds to use. So over the course of the next 6 months, we will do our best. And we have got another $110 million of to buy. We have to sell another $225 million And all of that, when you put it to the mix of the timing, has that being 2 cents dilutive. Into 2026.

Andrew Reale: Okay. And then maybe just for the 31 recycling in the most recent quarter, what was the cap rate spread on those transactions?

John A. Kite: Cap rate spread? You just mean what-- go ahead. I am sorry. Say that again?

Andrew Reale: Just the spread, right? Just cap rates on what you are buying versus what you are selling. Just to give us a sense.

John A. Kite: Yeah. Yeah. I think I mean, as we have said, obviously, we have been without specifics to each individual deal. The-- you know, the project Elevate in terms of selling the lower growth in a larger format deals have been kind of in the low to mid-7 cap range, and then the acquisitions have been closer in the low-6 range. But it is really more about unlevered IRR that we are looking at because there is a lot of moving pieces in these deals. So we are still continuing to get between 8% and 9%. You know, that is our goal. In terms of unlevered IRRs. Very helpful. Thank you.

Operator: Thank you. Thank you. And our next question comes from the line of Jamie Feldman from Wells Fargo. Your question please.

Jamie Feldman: Great. Thanks for taking the question. So thinking about your economic occupancy at the end of Q2 is about 91.2%, which is about 250 basis points below your historic highs, and, many of your peers are at their historic highs. Can you talk about the opportunity set there longer term and how much the SNO pipeline may contribute to higher absolute occupancy levels in the second half of 26? And into 2027 as we think about more regular weight churn going forward.

John A. Kite: Sure. Sure. Jamie, I think you know, obviously, we are we have been very diligent in how we have gone about releasing the portfolio. We have kinda talked in the past about what led us to those lower, leased rates versus the peer group, you know, going back to the COVID era. And now we are obviously getting very close to where we were. And in fact, the small shops are basically right there. And we are a couple hundred basis points under our you know, high watermark on the anchor lease percentage. I think more importantly, it is kind of the composition of those tenants that we are focused on, and I think that is the whole point of this elevate exercise and I hope you take a minute to kind of study our top-25, tenant list and particularly our top 15 and compare that to where it was in the past, it is changed significantly, for the good. And so I feel very good that we have done what we needed to do there, and now we are very focused on just executing the leasing platform. Demand remains strong. Supply is low. And our portfolio is better. So it is a it is a real opportunity to push that.

Jamie Feldman: Okay. And then given the progress on Elevate year to date and into the back half, what are your thoughts on how much longer it continues into 2027? And you have got the 2¢ drag on 2026, do you think drags continue into next year?

John A. Kite: No. I think I think as kind of Heath mentioned, I think, in his prepared remarks, and I did as well, I think I think we are you know, the heavy lifting there is done. there is there is more transactional activity in the back half of 2026, which is really more about harvesting some tax losses and doing some 40 ones. But the composition of the portfolio that we have today we are you know, we feel very good about it. So as we move into 2027, I think we are back to the historical kind of pairing a handful of sales and buys per year. The large scale stuff is pretty much worked its way through. And, again, that is why we talk about the composition of our of our top tenant list and how it is changed so much. So I think I think the real issue on that kind of dilution, if you will, is the fact that we are sitting on $240 million of cash that we have not deployed. We do not know how that will be deployed. We are going to be opportunistic in terms of what is the most highest return for us there. As he said in his remarks, you know, that could be acquisitions. It could be buybacks. there is multiple things we could do. It could be reduction of leverage depending on how we feel about the environment. Even, you know, even as we sit here today, as we get to the end of the year, you know, we will we will likely be sub-5. So we are we are in a really good position, but we are not looking to continue any kind of dilution throughout you know, remaining years from selling. That said, we have we have sold over $1 billion and we basically kind of remained flat, which is kind of unbelievable. So, you know, we will build it from there. Okay. Thank you.

Operator: Thank you. Thank you. And our next question comes from the line of Floris van Dijkum from Ladenburg Thalmann. Your question please.

Floris Van Dykem: Hey, thanks guys. I love your cruising speed continues to inch higher. You mentioned something about your the $225 million of additional noncore sales. Maybe if you could touch upon are they more of the power center assets you also still have I believe, 2 big parcels of land that, you know, currently yield 0. That potentially could get sold? Maybe you can give us an update and potentially touch on some of your ground rent income as well as being a potential candidate for disposal going forward?

John A. Kite: Sure. Well, in terms of in terms of the remaining sales, you should expect it to be similar to what we have been selling it is essentially just noncore. Obviously, we mentioned that there is some tax loss harvesting opportunities, which would indicate, you know, that the property is gonna create is gonna generate a loss. So I think it is similar. Each deal is a little bit different in size, but similar to what we have been selling in terms of land, that is not contemplated in that number. But as we have talked about before, we are always looking to maximize value on any kind of land parcel, and we are working on a couple opportunities there. So in terms of the you mentioned ground leases. I mean, again, nothing is really in that number that would represent ground leases. We are we are always looking at that. We it is about I believe it is about 10% of our revenue. it is a pretty substantial number. You know? So it is it is always a possibility to utilize that as in terms of cost effective capital. But right now, that is is not contemplated in that in that $200-plus million of future sales. Heath, do you wanna add anything to that?

Heath R. Fear: I think you hit it perfectly.

Floris Van Dykem: Okay. And maybe my follow-up, it is if I may, on the on the acquisitions front, I know in the you know, over the past quarter, there were a number of larger mixed use type you know, legacy 1 type assets in the market? What is your appetite for doing additional transactions and what is the upside of your partner potentially if you were to use that in your in your in your JV structure?

John A. Kite: Sure. You know, our appetite is it remains healthy, and but that is that is that is paired against a very rigorous underwriting process. And you know, the market is aggressive, but when you have an opportunity for a generational type asset, that is what happens. We are certainly aware of the properties that are in the market. We are we are always engaged. Know, we would love to add you know, other very, very high quality assets like Legacy West and Southlake and Legacy East and 1 Loudoun. Downtown Crown, just a few for an example. You know, we are always looking to add to that As far as our partner that you referred to, we have a great relationship. They are also very interested in expanding that portfolio. But are like minded in the way that we diligently underwrite. Thanks, John.

Operator: Thank you. And our next question comes from the line of Michael Mueller from JPMorgan. Your question please.

Nahum: Hey, guys, Thanks for taking the question. You have Nahum on for Michael this afternoon. Just a quick 1 from us. It looks like your blended cash lease and spreads have been in the low teens, it seems, for the last 12 months. I guess, what is that roughly translating to on a GAAP basis? Thank you.

John A. Kite: On a GAAP basis? I mean, we do not we do not really give the GAAP number. But generally speaking, it is probably an additional 10% on a GAAP basis, generally speaking. I mean, if you look at what we have been doing in on our small shop portfolio, right, it is it is you know, 34% growth. So I would say 10% is a is a pretty reasonable gap you know, spread addition. Got it. Thank you.

Operator: Thank you. And our next question comes from the line of Paulina Alejandra Rojas-Schmidt from Green Street. Your question please.

Paulina Rojas Schmidt: Good afternoon. And my question is about retailer health. Most REITs are describing their tenant rosters as healthier than historically. So do you say we are entering a period of structurally lower tenant failures? Or do you view this year as a experience generally bad debt below expectations more as a good year, more as an anomaly?

John A. Kite: Hey, Paulina. You know, from my perspective, I think we are definitely in a healthier environment for retailers. And I think this has just been a long build since COVID. Which we talked about a lot in terms of how retail rebuilt their enterprises and became much healthier from a balance sheet perspective. But, obviously, you know, in this business, there is always in my personal opinion, there are only there will always be periods of time where, you know, outside forces would create a situation that would put more strain on a retailer. And there is also periods of time where retailers themselves put strain on their own business models, whether that be operational or balance sheet pressure. So it is a great question because it is really a part of why we are doing what we are doing in project Elevate, which is as we know, slightly different than maybe what some others are doing. And I think our objective internally is that, you know, we do not think that hoping is a good strategy. We wanna take you know, intense action around creating a portfolio that is, you know, independent and withstands any of those outcomes. So I think yes, we are in a much better environment. Yes. there is very low supply, and the majority of our retailers have rebuilt their businesses and good platforms and balance sheets. But you know, we do not we wanna be kind of independent of that. And that is a real big part of what we have been doing.

Thomas K. McGowan: And, Paulina, I would add 1 thing that John talked about the evolution of the retailer how they have been far more efficient working on margins profitability, etcetera. But we have been doing a much better job spending time with these retailers and understanding what their next store evolution looks like and how we can help them. And then understanding if that is different than what we have in the portfolio how can then we can, you know, basically potentially get rid of some of those stores. So knowledge based on our side of the business has been equally important, Paulina, to see that.

John A. Kite: I will add 1 more thing.

Heath R. Fear: So it is not only about us trying to concentrate our ABR and strong retailers during a good part of the cycle. But the other side of that coin is making sure that we are just not filling up those spaces with tenants that have equally suspect credit later on. So it is-- 1 is, can we can we shed some assets and get our exposure to the right place? And number 2, let's be super disciplined on underwriting in the way in. And making sure that we are taking our time and putting the best balance sheet and the best use in our space. Thank you.

Paulina Rojas Schmidt: Another question that I have is when I think of the 2 buckets, that you like the most, neighborhood centers and lifestyle, mixed-use centers. For the specific level of quality and type of location you are pursuing in each, How does the return profile compare between the 2 buckets? And to the extent that you see that they differ, where do you think the difference typically stems from? Is it just the entry pricing? Is it the growth profile, CapEx?

Heath R. Fear: Heath, you wanna start with that? Yeah. I just Paulina, yeah, I think they are the return profile on both is fairly similar. Obviously, we are looking at super high quality grocery in a good MSA. You are looking at super high quality lifestyle and a good MSA. Those cap rates of we have seen those converge recently. Particularly, you have seen a tremendous amount of compression in lifestyle. Over the past probably, I do not know, a year as that product type has become very popular. Not surprising enough, think we were part of the reason why it became so popular with Legacy West, gave people price discovery. So again, I think their initial yields are fairly similar. And of course, our return hurdles, are the same. We are looking for somewhere between 8% to 9% unlevered return based on the quality asset, the location, etcetera. So yeah, they are behaving fairly similarly in the transactional markets right now.

John A. Kite: I think Paulina the thing I would add is you are right. Those are those are right now our kind of favorite places to invest capital. And as he said, the return characteristics are similar. there is a lot of differences obviously in the operational side of the business for both of those. And, you know, I think it is important that you have the capacity to be able to operate assets of the magnitude of, as I said, of a Legacy West to the Southlake. it is quite different operating those assets than it is a neighborhood grocery anchored shopping center. Also, the embedded rent growth profiles are different. You have an opportunity to stretch that out, you know, in the lifestyle mixed use. And in the smaller neighborhood centers, you know, we are we are doing our best we can to get those above you know, a 165 basis point, you know, cruising speed. So it is interesting. They are similar, but they are different. And then, again, I think the just the operational fortitude it takes to run you know, a very high quality, lifestyle center is different. So I think it is important that the market, you know, understands that. Thank you.

Operator: Thank you. Thank you. And our next question comes from the line Alexander Goldfarb from Piper Sandler. Your question please.

Alexander Goldfarb: Hey, good morning out there. John, you guys have been, you know, repositioning the portfolio, for a while. And in the current environment, especially since COVID in the past few years, the strength of the landlord's hand has really improved tremendously. Has that changed at all? Like, I know you are talking about selling centers have weaker tenants in them. But are not those weaker tenants? Does not that provide you know, future GLA to be able to lease to stronger ones? Like, how do you balance selling a center that could have upcoming vacancy that could go to better retailer versus exiting it and then not having to deal with, you know, I guess, the year or 2 you know, when the tenant does go out, but you have to be able to get it.

John A. Kite: Yeah. that is a great question, Alexander. And, again, it is you are right that, you know, we have been underway on this for the last 2 years. But as we as we said on the call, we are nearing the end of that So I think we have been making you know, you have to look at this from a macro perspective and a micros perspective. Right? I think you are kind of referring to the micro which is each individual asset having you know, a potential vacancy and what is the what is the upside and, you know, what potential does that have to ret give us better returns over time. But it is also, as we mentioned, you know, as we focused on this and we looked at what we viewed as the future at risk tenancy, you know, it was not really just about you know, rent. It was also about capital. Right? And to the extent and that is why we said in the prepared remarks, you know, that this was kind of a dual headed exercise in the sense that you know, this is a potential future interruption to earnings. And a latent kind of claim on our capital. Right? So I agree with you that the market is better. The retail environment is better. But we wanted to position ourselves with a portfolio over the next 5-plus years, not over the next 5-plus quarters. So I think that is the decision we made and have made. And I think it is reflective when you look at you know, for example, if you if you just look at the last 5 quarters, as this activity has been occurring, you know, are I think this is off top of my head, but if you look at our renewal rents, I think they average, like, $28, our non option renewal rents. And then you look at our new rents, they average $30, and that is against the backdrop of a $23 average portfolio. So everything we are doing is improving, and our growth is going to improve. So I will give you that it is a you know, it is a somewhat short term shuffle for a long term gain. But we feel very strong in that long term gain.

Alexander Goldfarb: And then, John, as you look at the assets that you are selling, and I assume that you have owned these for quite some time. Is it the market that has changed, the submarket has changed? Or what is changed in the underwriting from when you originally you know, bought or developed these assets to now that you are selling them? Just trying to understand if it is market, tenant, submarket, or just where your future money's been put, you just realize there is faster growth elsewhere.

John A. Kite: You know, I think it is more of the latter. I think it is more about that we think we can place that capital better growing environment with lower risk you know, on a risk adjusted basis. But it is also there are individual situations where the market has changed. And you know, that is something that we gotta stay ahead of. I think again, I meant I mentioned hope's not a great strategy. I think people when things get going well, people are like, they like to ride that and say, oh, it is all great. But you gotta think way ahead. And, you know, we have been doing this for a very long time. We have been through a lot of different cycles. You know? And we have been through the worst cycles. So I think what we are saying is our portfolio will be able to withstand those and grow throughout them. So I think that is it, Alexander. it is just, like, really trying to think ahead. And I know the market has you know, intense pressure to be short term, and I get it. We are we all live in it. But we are we are trying to make decisions that will pay dividends for everybody literally. For a very long time. Thank you.

Operator: Thanks. Thank you. And our next question comes from the line of Connor Mitchell from UBS. Your question, please.

Conor Mitchell: Hey. Thanks for taking my question. Just kind of following up on that line of thinking, actually. I was curious about the prior and the future dispositions in Project Elevate. Kind of looking at it from a different angle. Where do you kind of start with the thought of the asset disposition, whether it is the growth outlook, which you have touched upon, or more of the format type or even a reduction in the watch list tenant exposure.

John A. Kite: I mean, I hate to say it. it is all of them. And I think I think we do start with the idea that our goal is to have the highest quality portfolio that has an embedded growth rate that is exceeding you know, our competition. That is our goal. And as you know, you know, having raised our embedded growth rate 50 basis points in 2 years, I think that is right. Or is it today? 30. 30. Too many basis points in my head. 30 basis points in 2 years. You know, I think that is hard to do on a portfolio of our magnitude. And, you know, so we start there. But then it does become an exercise around the quality of the tenancy, the durability of that cash flow, and the capital associated with owning those. I mean, everybody likes to talk about, rent spreads, but, you know, capital is a very big part of that when you are looking at new rent spreads. So we are trying to say we are we wanna have the portfolio that is gonna generate the most you know, strongest risk adjusted cash flow. So it is all of those. I hate to be cute with that. I do not I would not rank any 1 of them. But in the end, we are trying to get, you know, that growth rate up to 2%. Know, our embedded growth rate. that is our goal.

Heath R. Fear: This is the I have to say, listen. I am a member. Figuring out disposition pool, it is very much a scoring exercise. And some of the things that we are looking at are the things you are mentioning. what is the growth like? You know, how many watch list tenants we have? Is it a market that we like or not like? All these things, you know, we go into a blender and then we rank them and say, okay. This seems to be the part of the portfolio that makes the most sense for us to transact on. Is it ready to sell? Is it a saleable asset right now? So those are the things that go into it. But to John's point, the main goal here was to ensure that we are going to loft our growth to keep having that embedded growth pile improve over time, and to make sure that we are not having earnings hiccups by having problems with watch list tenants.

Thomas K. McGowan: Yeah. I will also point back to what Tom said earlier. You know, what feedback are we getting from our customers, our tenants? Right? And where are they positioned to grow? And you know, we are we are talking to them, as Tom said, you know, well in advance of these decisions.

John A. Kite: And, you know, we might learn some things from 2 or 3 tenants over a few meetings that would say, you know what? Maybe the long term prospect for that property is not as good as we thought it was.

Conor Mitchell: Okay. Really appreciate all the color there. And then just kinda switching gears a little bit. The, the same property NOI has been pretty strong in the past couple of quarters, 3.7%, 3.6%. You raised guidance But just looking at kind of the implications for the back half, the midpoint of it seem that we would expect a deceleration. And, Heath, I know you gave a lot of color in your opening remarks. Can you just dive back into some of those assumptions, whether that is the 100 bps of bad debt assumed in the back half or something else that I may have missed?

Heath R. Fear: Yeah. I mean, the slight deceleration, let's call it flat, into the back half of the year is simply this idea that we outperformed in the first part of the year. So nothing happened in the back half that we were not expecting. But again, and the great thing about the first half outperformance that it was really organic. It was core items. It was our It was better retention. It was better net recoveries, better overage. So we were just firing on all cylinders across the portfolio, which allowed us to print that 3.7% number. I did say at the beginning of the year, thought we would be moderating it to the first half and accelerating to the back half. However, we did really well in the first half and going to continue that momentum into the back half. Yeah. Slight deceleration. Thank you. Appreciate it.

Operator: Thanks. Thank you. Thank you. This does conclude the question and answer session of today's program. I would like to hand the program back to John A. Kite, CEO, for any further remarks.

John A. Kite: Again, I just want to thank everybody for know, taking the time today, and we really appreciate your interest in the company. Look forward to seeing you soon.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.