KRG Stock Down Over 70% From Highs: What This Major Exit Signals for Investors
Key Points
New York City-based HGI Capital Management sold its entire stake of 150,618 shares in Kite Realty Group Trust during the third quarter.
The resulting net position change was about $3.4 million.
HGI's Kite Realty position was 4.6% of AUM in the previous quarter.
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New York City-based HGI Capital Management fully exited its position in Kite Realty Group Trust (NYSE:KRG), reducing assets by approximately $3.4 million, according to a November 14 SEC filing.
What Happened
According to a U.S. Securities and Exchange Commission (SEC) filing dated November 14, HGI Capital Management sold out its entire holding of Kite Realty Group Trust during the third quarter. The transaction amounted to an estimated $3.4 million based on quarterly average prices. The exit comes as the fund is undergoing a substantial reduction in its total reportable U.S. equity holdings.
What Else to Know
Top holdings after the filing:
- NASDAQ: EQIX: $2.4 million (6.6% of AUM)
- NYSE: CBRE: $2.3 million (6.3% of AUM)
- NYSE: FR: $2 million (5.6% of AUM)
- NYSE: DLR: $2 million (5.5% of AUM)
- NYSE: HD: $2 million (5.5% of AUM)
As of Friday, shares of KRG were priced at $22.64, down 16% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Market Capitalization | $5.1 billion |
| Revenue (TTM) | $856.8 million |
| Net Income (TTM) | $139.7 million |
| Dividend Yield | 5.1% |
Company Snapshot
- Kite Realty Group Trust operates and manages a diversified portfolio of neighborhood, community, and lifestyle shopping centers, generating revenue primarily from property leasing and management services.
- The company employs a vertically integrated REIT business model focused on optimizing asset value through operational expertise, development, and redevelopment initiatives.
- It serves a broad base of national and regional retail tenants, providing shopping destinations for consumers in urban and suburban markets across the United States.
Kite Realty Group Trust is a leading retail-focused real estate investment trust with a presence in key U.S. markets. The company leverages integrated management and development capabilities to maximize property performance and shareholder returns.
Foolish Take
A sweeping repositioning away from a crop of office and retail REITs is taking shape across HGI’s portfolio, and the full exit from Kite Realty Group underscores how dramatically the fund might be rethinking exposure to structurally challenged real estate. For those curious, the move highlights a broader question: Even with improving fundamentals, is the multi-year reset in such REITs enough to offset a decade-long erosion in equity value?
Kite’s fundamentals did show progress in the latest quarter, giving the sale added weight. The company raised its 2025 funds from operations guidance and delivered same-property net operating income growth of 2.1% while bringing blended cash leasing spreads up 18.9% year-over-year. Core FFO reached $116.3 million, or $0.53 per diluted share, and retail occupancy ticked up to 93.9% — notable resilience given macro pressure on discretionary retail. Yet despite these gains, shares remain down more than 70% from highs over a decade ago, leaving investors to assess whether operational momentum can ultimately translate into durable equity returns.
Glossary
13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their U.S. equity holdings.
AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm on behalf of clients.
Dividend yield: The annual dividend payment divided by the stock price, expressed as a percentage.
Trailing twelve months (TTM): The financial performance covering the most recent 12 consecutive months.
Vertically integrated REIT: A real estate investment trust that manages all aspects of property ownership, from acquisition to leasing and management.
REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-producing real estate, often paying most income as dividends.
52-week high: The highest price at which a stock has traded during the past year.
Stake: The amount of ownership or shares held in a company by an investor or fund.
Quarterly average prices: The average price of a security over a specific quarter, used to estimate transaction values.
Net position change: The difference in the value of a fund's holding in a security before and after a transaction.
TTM: The 12-month period ending with the most recent quarterly report.
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Annie Dean, Chief Strategy Officer at CBRE, is a member of The Motley Fool’s board of directors. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Equinix, and Home Depot. The Motley Fool has a disclosure policy.
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