Kite Realty To Launch Stock Offer, Lowers Outlook

INDIANAPOLIS (AP) — Shares of Kite Realty Group Trust dropped in after-hours trading Tuesday after the Indianapolis-based real estate investment trust said it expects 2009 funds from operations between 65 cents to 72 cents per share, which is below its prior guidance.

On May 7, the company had forecast funds from operations between 83 cents and 93 cents per share. Analysts surveyed by Thomson Reuters have forecast full-year FFO of 84 cents per share, on average.

Funds from operations, or FFO, adds such items as amortization and depreciation to net income. It is considered a key measure of REIT strength because it gives a more accurate picture of cash performance.

The company said it updated its guidance to give effect to a stock offer it launched. Kite said it has launched an underwritten public offering of 25 million shares of beneficial interest. The offering has an overallotment option for 3.75 million additional shares.

Kite said it plans to use the proceeds from this offering to repay debt and for working capital and other general corporate purposes.

Shares fell 49 cents, or 12.3 percent, to $3.51 in after-hours trading. The stock had closed down 11 cents at $4 in the regular session before the outlook and offering were announced.